Exhibit 10.2

 

 

 

LOAN AGREEMENT

Dated as of July 26, 2011

Between

EMPIRE STATE LAND ASSOCIATES L.L.C. and

EMPIRE STATE BUILDING ASSOCIATES L.L.C.,

collectively, as Borrower

and

HSBC BANK USA, NATIONAL ASSOCIATION,

as Agent,

and

THE LENDERS NAMED HEREIN,

as Lenders

and

HSBC BANK USA, NATIONAL ASSOCIATION,

and

DEKABANK DEUTSCHE GIROZENTRALE

as Lead Arrangers

 

 

 

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TABLE OF CONTENTS

 

         Page   I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION    Section 1.1      

Definitions

     1    Section 1.2  

Principles of Construction

     33    II. THE LOAN    Section 2.1  

The Loan

     33     

2.1.1 Agreement to Lend and Borrow

     33     

2.1.2 Initial Advance; Subsequent Advances

     33     

2.1.3 The Note

     36     

2.1.4 No Reborrowings

     36     

2.1.5 Use of Proceeds

     36     

2.1.6 Loan Term and Extension Options

     36     

2.1.7 Borrowing Procedures

     38    Section 2.2  

Interest Rate

     39     

2.2.1 Interest

     39     

2.2.2 Maximum Number of Interest Periods

     39     

2.2.3 Certain Notices

     40     

2.2.4 Additional Costs

     40     

2.2.5 LIBOR Rate

     42     

2.2.6 Illegality

     43     

2.2.7 Breakage Costs

     43     

2.2.8 Withholding Taxes

     44    Section 2.3  

Usury Savings

   Section 2.4  

Loan Payments

     48     

2.4.1 Payment Before Maturity Date

     49     

2.4.2 Payment on Maturity Date

     49     

2.4.3 Late Payment Charge

     49     

2.4.4 Interest Rate and Payment After Default

     49     

2.4.5 Method and Place of Payment

     49     

2.4.6 Business Day Convention

     49    Section 2.5  

Prepayment

     50     

2.5.1 Voluntary Prepayments

     50     

2.5.2 Mandatory Prepayments

     50     

2.5.3 Prepayment Waivers

     51    Section 2.6  

Payments Not Conditional

     51    Section 2.7  

Accordion Feature

     51   

 

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         Page   III. REPRESENTATIONS AND WARRANTIES    Section 3.1  

Borrower Representations

     52     

3.1.1 Organization

     52     

3.1.2 Proceedings

     52     

3.1.3 No Conflicts

     53     

3.1.4 Litigation

     53     

3.1.5 Governmental Orders

     53     

3.1.6 Consents

     53     

3.1.7 Title

     53     

3.1.8 No Plan Assets

     54     

3.1.9 Compliance

     54     

3.1.10 Financial and Other Information

     54     

3.1.11 Condemnation

     55     

3.1.12 Utilities and Public Access

     55     

3.1.13 Separate Lots

     55     

3.1.14 Assessments

     55     

3.1.15 Enforceability

     55     

3.1.16 Assignment of Leases

     55     

3.1.17 Insurance

     55     

3.1.18 Flood Zone

     56     

3.1.19 Physical Condition

     56     

3.1.20 Boundaries

     56     

3.1.21 Leases

     56     

3.1.22 Filing and Recording Taxes

     56     

3.1.23 Single Purpose (Backwards Representations)

     57     

3.1.24 Tax Filings

     60     

3.1.25 Solvency

     60     

3.1.26 Federal Reserve Regulations

     61     

3.1.27 Affiliate Debt

     61     

3.1.28 Offices; Location of Books and Records

     61     

3.1.29 Trade Name; Other Intellectual Property

     61     

3.1.30 No Default

     61     

3.1.31 Zoning

     61     

3.1.32 Full and Accurate Disclosure

     62     

3.1.33 Foreign Person

     62     

3.1.34 Investment Company Act

     62     

3.1.35 Organizational Structure

     62     

3.1.36 Management Agreement

     62     

3.1.37 Indebtedness

     62     

3.1.38 Ground Lease

     62     

3.1.39 Sublease

     63     

3.1.40 Observatory Lease

     63     

3.1.41 No Pledge

     64     

3.1.42 Affiliate Contracts

     64     

3.1.43 Internal Revenue Code

     64     

3.1.44 Patriot Act Compliance

     64   

 

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         Page    

3.1.45 Anti-Terrorism Compliance

     64     

3.1.46 German Anti-Money Laundering Compliance

     65     

3.1.47 No Default

     65     

3.1.48 No Registration

     65     

3.1.49 Intentionally Omitted

     65     

3.1.50 Certificate of Occupancy; Licenses

     65     

3.1.51 No Subsidiaries

     65     

3.1.52 Intentionally Omitted

     65     

3.1.53 Trigger Period; Debt Yield Collateral Period

     65     

3.1.54 Appraisal

     65     

3.1.55 Taxpayer Identification Number

     65     

3.1.56 Labor

     66     

3.1.57 No Bankruptcy Filing

     66    Section 3.2  

Continuing Effectiveness and Survival of Representations

     66   

IV. BORROWER COVENANTS

   Section 4.1  

Borrower Affirmative Covenants

     66     

4.1.1 Existence; Compliance with Legal Requirements

     66     

4.1.2 Taxes and Other Charges

     67     

4.1.3 Tax Filings

     67     

4.1.4 Litigation

     67     

4.1.5 Access to Property

     67     

4.1.6 Further Assurances; Supplemental Mortgage Affidavits

     67     

4.1.7 Financial Reporting

     68     

4.1.8 Title to the Property

     70     

4.1.9 Estoppel Statement

     70     

4.1.10 Leases

     70     

4.1.11 Alterations

     73     

4.1.12 Intentionally Omitted

     73     

4.1.13 Updated Appraisal

     73     

4.1.14 Origination Fee, the Arrangement Fee, the Unused Fee and Administrative
Fee

     73     

4.1.15 Interest Rate Protection Agreement

     73     

4.1.16 Insurance

     76     

4.1.17 Fees

     76     

4.1.18 Books and Records

     76     

4.1.19 Indebtedness

     77     

4.1.20 Maintain Existence

     77     

4.1.21 Short Term Repairs

     77     

4.1.22 Easements and Restrictions; Zoning

     77     

4.1.23 Ownership of Personalty

     78     

4.1.24 Comply with Other Loan Documents

     78     

4.1.25 Purchase of Material Under Conditional Sale Contract

     78     

4.1.26 Operating and Project Accounts

     78     

4.1.27 Patriot Act Compliance

     78   

 

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         Page    

4.1.28 Anti-Terrorism Compliance

     79     

4.1.29 Estoppel Certificates

     79     

4.1.30 Notice

     79     

4.1.31 Customer Due Diligence Requirements

     80    Section 4.2  

Borrower Negative Covenants

     80     

4.2.1 Due on Sale and Encumbrance; Transfers of Interests

     80     

4.2.2 Liens

     80     

4.2.3 Dissolution

     80     

4.2.4 Change in Business

     80     

4.2.5 Debt Cancellation

     81     

4.2.6 Affiliate Transactions

     81     

4.2.7 Zoning

     81     

4.2.8 Assets

     81     

4.2.9 No Joint Assessment

     81     

4.2.10 Principal Place of Business

     81     

4.2.11 ERISA

     82     

4.2.12 No Distributions

     83     

4.2.13 Indebtedness

     83     

4.2.14 Organizational Documents

     84     

4.2.15 Air and Development Rights

     84     

4.2.16 Ground Lease, Sublease and Observatory Lease

     84     

4.2.17 Government Regulation

     85     

4.2.18 No Pledge

     85     

4.2.19 SPE Covenants

     85   

V. INSURANCE, CASUALTY AND CONDEMNATION

   Section 5.1  

Insurance

     88     

5.1.1 Insurance Policies

     88     

5.1.2 Insurance Carrier Ratings

     96     

5.1.3 Captive Insurance Company

     96     

5.1.4 Compliance by Operating Company

     97    Section 5.2  

Casualty and Condemnation

     97     

5.2.1 Casualty

     97     

5.2.2 Condemnation

     98    Section 5.3  

Delivery of Net Proceeds

     98     

5.3.1 Minor Casualty or Condemnation

     98     

5.3.2 Major Casualty or Condemnation

     99     

5.3.3 Application of Net Proceeds

     103     

5.3.4 Ground Lease/Sublease

     103   

VI. RESERVE FUNDS

   Section 6.1  

Tax Funds

     104     

6.1.1 Deposits of Tax Funds

     104     

6.1.2 Release of Tax Funds

     104     

6.1.3 Waiver; Trigger Event

     104   

 

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         Page   Section 6.2  

Insurance Funds

     105     

6.2.1 Deposits of Insurance Funds

     105     

6.2.2 Release of Insurance Funds

     105     

6.2.3 Waiver; Trigger Event

     105    Section 6.3  

Lease Termination Rollover Funds

     106     

6.3.1 Deposits of Lease Termination Rollover Funds

     106     

6.3.2 Release of Lease Termination Rollover Funds

     106     

6.3.3 Compliance by Operating Company

     107    Section 6.4  

Security Interest in Funds

     107     

6.4.1 Grant of Security Interest

     107     

6.4.2 Prohibition Against Further Encumbrance

     108     

6.4.3 Permitted Investments

     108     

6.4.4 Application of Funds

     108    Section 6.5  

Cash Management

     108     

6.5.1 Establishment of Accounts

     108     

6.5.2 Pledge of Account Collateral

     110     

6.5.3 Maintenance of HSBC Collection Account and JP Collection Account

     111     

6.5.4 Maintenance of Collateral Accounts

     111     

6.5.5 Transfer to Borrower’s Account

     111     

6.5.6 Payments to Accounts

     112     

6.5.7 Borrower’s Account Representations, Warranties and Covenants

     113     

6.5.8 Account Collateral and Remedies

     114     

6.5.9 Transfers and Other Liens

     115     

6.5.10 Reasonable Care

     115     

6.5.11 Agent’s and Lenders’ Liability

     115     

6.5.12 Continuing Security Interest

     116     

6.5.13 Debt Yield Collateral Event; Debt Yield Collateral Period

     116    Section 6.6  

Letters of Credit

     117     

6.6.1 Delivery of Letters of Credit

     117     

6.6.2 Security for Debt

     117     

6.6.3 Additional Rights of Agent

     117   

VII. PROPERTY MANAGEMENT

   Section 7.1 The Management Agreement      118    Section 7.2 Prohibition
Against Termination or Modification      118    Section 7.3 Replacement of
Manager      118   

VIII. TRANSFERS

   Section 8.1 Agent’s and Lenders’ Reliance      119    Section 8.2 No
Transfers      119    Section 8.3 Permitted Transfers      119   

 

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IX. DEFAULTS

   Section 9.1  

Events of Default

     123    Section 9.2  

Rights and Remedies of Agent and Lenders

     126    Section 9.3  

Power of Attorney

     128    Section 9.4  

Remedies Cumulative

     128    Section 9.5  

Annulment of Defaults

     128    Section 9.6  

Waivers

     129    Section 9.7  

Course of Dealing, Etc.

     129    Section 9.8  

Remedies Cumulative

     129    X. MISCELLANEOUS      129    Section 10.1  

Successors and Assigns

     129    Section 10.2  

Agent’s and Lenders’ Discretion

     130    Section 10.3  

Governing Law, Jurisdiction and Agent for Service

     130    Section 10.4  

Modification, Waiver in Writing

     131    Section 10.5  

Delay Not a Waiver

     132    Section 10.6  

Notices

     132    Section 10.7  

Trial by Jury

     133    Section 10.8  

Headings

     133    Section 10.9  

Severability

     133    Section 10.10  

Preferences

     134    Section 10.11  

Waiver of Notice

     134    Section 10.12  

Remedies of Borrower

     134    Section 10.13  

Expenses; Indemnity

     134    Section 10.14  

Schedules and Exhibits Incorporated

     137    Section 10.15  

Offsets, Counterclaims and Defenses

     137    Section 10.16  

No Joint Venture or Partnership; No Third Party Beneficiaries

     137    Section 10.17  

Publicity

     138    Section 10.18  

Approvals and Consents

     138    Section 10.19  

Waiver of Offsets/Defenses/Counterclaims

     138    Section 10.20  

Conflict; Construction of Documents; Reliance

     138    Section 10.21  

Brokers and Financial Advisors

     139    Section 10.22  

Exculpation

     139    Section 10.23  

Prior Agreements

     142    Section 10.24  

Joint and Several Liability

     143    Section 10.25  

Assignments/Information Sharing

     143    Section 10.26  

Participations

     147    Section 10.27  

Agent Minimum Hold

     147    Section 10.28  

Cooperation

     148    Section 10.29  

Component Notes

     149    Section 10.30  

Adjustments; Set-Off

     149    Section 10.31  

Counterparts

     150    Section 10.32  

WAIVER OF SPECIAL DAMAGES

     150    Section 10.33  

USA Patriot Act Notification

     150   

 

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         Page   Section 10.34  

Assignment Upon Payment

     151    Section 10.35  

No Liability

     151    XI. AGENT    Section 11.1  

Performance by Agent

     152    Section 11.2  

Actions

     152    Section 11.3  

Nonliability of Agent and Lenders

     152    Section 11.4  

Authorization and Action

     153    Section 11.5  

Agent as a Lender

     153    Section 11.6  

Successor Agent

     153      11.6.1 Resignation      153      11.6.2 Appointment of Successor
     154   

 

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SCHEDULES

 

Schedule I

  

-

  

List of Affiliate Contracts

Schedule II

  

-

  

Funding Statement

Schedule III

  

-

  

The Land

Schedule IV

  

-

  

Lenders’ Ratable Share

Schedule V

  

-

  

Short Term Repairs

Schedule VI

  

-

  

Intentionally Omitted

Schedule VII

  

-

  

Rent Roll

Schedule VIII

  

-

  

Estoppels and Subordination, Nondisturbance and Attornment Agreements

Schedule IX

  

-

  

Borrower’s Chief Executive Office Address, Jurisdiction of Organization and
Federal Employer’s Identification Number

Schedule X

  

-

  

Borrower’s Organizational Chart

Schedule XI

  

-

  

Approved Alterations

Schedule XII

  

-

  

Estoppel Certificates

Schedule XIII

  

-

  

Standard Form of Lease

Schedule XIV

  

-

  

Collective Bargaining Agreements and Union Contracts

Schedule XV

  

-

  

Intentionally Omitted

Schedule XVI

  

-

  

Ground Lease

Schedule XVII

  

-

  

Sublease

Schedule XVIII

  

-

  

Accounts

Schedule XIX

  

-

  

REIT Assets

EXHIBITS

 

EXHIBIT A

  

-

  

Form of Agreement Regarding Instructions Given by Telephone or Facsimile

EXHIBIT B

  

-

  

Form of Sublease Amendment

EXHIBIT C

  

-

  

Form of Section 2.2.8 Certificate

EXHIBIT D

  

-

  

Form of Assignment and Acceptance

EXHIBIT E

  

-

  

Form of Draw Request and Borrower’s Certificate

EXHIBIT F

  

-

  

Form of Subordination, Non-Disturbance and Attornment Agreement

EXHIBIT G

  

-

  

Form of Assignment of Interest Rate Cap Agreement

EXHIBIT H

  

-

  

Form of Tenant Direction Letter

EXHIBIT I

  

-

  

Form of Requisition Authorization Statement

EXHIBIT J

  

-

  

Form of Subordination Agreement

 

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LOAN AGREEMENT

THIS Loan Agreement, dated as of July 26, 2011 (as amended, restated, replaced,
supplemented or otherwise modified from time to time, this “Agreement”), between
EMPIRE STATE LAND ASSOCIATES L.L.C., a New York limited liability company,
having its principal place of business c/o Malkin Holdings LLC, One Grand
Central Place, 60 East 42nd Street, New York, New York 10165 (“ESLA”), EMPIRE
STATE BUILDING ASSOCIATES L.L.C., a New York limited liability company, having
its principal place of business c/o Malkin Holdings LLC, One Grand Central
Place, 60 East 42nd Street, New York, New York 10165 (“ESBA” and together with
ESLA, collectively, “Borrower”), and HSBC BANK USA, NATIONAL ASSOCIATION, a bank
organized under the laws of the United States of America (“HSBC”), having an
address at 452 Fifth Avenue, New York, New York 10018, as administrative agent
(including any of its successors and assigns, “Agent”) for itself and the other
Lenders signatory hereto (collectively, together with such other co-lenders as
may exist from time to time, “Lenders” and individually, each a “Lender”).

All capitalized terms used herein shall have the respective meanings set forth
in Article I hereof.

W I T N E S S E T H:

WHEREAS, Borrower desires to obtain the Loan from Lenders; and

WHEREAS, each Lender is severally willing to make such Lender’s Ratable Share of
the Loan to Borrower, subject to and in accordance with the conditions and terms
of this Agreement and the other Loan Documents.

NOW, THEREFORE, in consideration of the covenants set forth in this Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree, represent and warrant
as follows:

I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION

Section 1.1 Definitions.

For all purposes of this Agreement, except as otherwise expressly provided:

“Account” or “Accounts” shall have the meaning as set forth in Section 6.5.1.

“Account Collateral” shall have the meaning set forth in Section 6.5.2(a).

“Accordion” shall have the meaning set forth in Section 2.7.

“ADA” shall mean the Americans with Disabilities Act of 1992, as amended from
time to time.

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“Additional Costs” shall have the meaning as set forth in Section 2.2.4(a).

“Additional Interest” shall mean any and all amounts which may become due and
payable by Borrower pursuant to Section 2.2.4, Section 2.2.7 or Section 2.2.8.

“Administrative Fee” shall mean that portion of the “Administrative Fee” under
(and as defined in) the Loan Fee Letter allocable to the Loan.

“Advance” or “Advances” shall mean any disbursement of the proceeds of the Loan
by Lenders pursuant to the terms of this Agreement.

“Advance Pay Rent” shall have the meaning as set forth in Section 6.5.1.

“Affiliate” shall mean, as to any Person, any other Person that (a) directly or
indirectly, owns more than ten percent (10%) of such Person, (b) is in Control
of, is Controlled by or is under common ownership or Control with such Person or
(c) is a director or officer of such Person or of an Affiliate of such Person
and/or spouse, issue or parent; provided, however that, as to any Credit Party,
the only Affiliates shall be the other Credit Parties and any officers,
directors and agents thereof regardless of Control and any Malkin Controlled
Person meeting any of the above criteria, and any officers, directors or agents
thereof regardless of Control.

“Affiliate Contracts” shall mean those contracts listed on Schedule I.

“Affiliate Debt” shall mean any and all Indebtedness owed by Borrower to an
Affiliate of Borrower.

“Agent” shall have the meaning as set forth in the Preamble hereto.

“Agent Minimum Hold” shall mean $50,000,000.00.

“Agent’s Register” shall have the meaning as set forth in Section 10.25(f).

“Agreement Regarding Instructions Given by Telephone or Facsimile” shall mean
the Agreement Regarding Instructions Given by Telephone or Facsimile, dated the
date hereof, which shall be in the form attached hereto as Exhibit A and shall
be executed and delivered by Borrower to Agent contemporaneously herewith, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.

“ALTA” shall mean American Land Title Association, or any successor thereto.

“Annual Budget” shall mean, collectively, Borrower’s operating and capital
budget for the Property and Operating Company’s operating and capital budget for
the Property setting forth Borrower’s and Operating Company’s good faith
estimate of Gross Revenue, Operating Expenses, Capital Expenditures and tenant
improvement and leasing commissions for the applicable Fiscal Year.

 

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“Applicable Interest Rate” shall mean (a) the LIBOR Fixed Rate with respect to
any period when the Loan (or the applicable portion thereof) is a LIBOR Fixed
Rate Tranche(s), (b) the LIBOR Floating Rate with respect to any period when the
Loan (or the applicable portion thereof) is a LIBOR Floating Rate Tranche, or
(c) the Reference Rate plus the Reference Rate Margin when the Loan (or the
applicable portion thereof) is a Reference Rate Loan.

“Applicable Lending Office” shall mean the related “Lending Office” of each
Lender (or of an Affiliate of such Lender) designated for such Lender on the
signature page hereof or such other Office of Lender (or of an Affiliate of
Lender) as each Lender may from time to time specify to Borrower as the office
by which the Loan is to be made and/or maintained by such Lender.

“Appraisal” means a written statement (including an updating letter) setting
forth an opinion of the market value of the Property that (a) has been
independently and impartially prepared by a member of the American Institute of
Real Estate Appraisers directly engaged by Agent, (b) meets the minimum
appraisal standards for national banks promulgated by the Comptroller of the
Currency pursuant to Title XI of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989, as amended (FIRREA), and (c) has been reviewed as
to form and content and approved by Agent in its sole discretion.

“Appraised Value” means the value of the Property, as determined by Agent based
upon the most current Appraisal.

“Approval”, “Approved”, “approval” or “approved” shall mean, as the context so
determines, an approval in writing given to the party seeking approval after
delivery to the party from which approval is sought of such materials as may
reasonably be required by such party from which such approval is sought in order
to determine whether approval should be granted.

“Approved Accountant” shall mean Ernst & Young LLP or any independent certified
public accounting firm of recognized standing approved by Agent; provided,
however, that any other of the “Big Four” certified public accounting firm is
deemed approved.

“Approved Annual Budget” shall have the meaning set forth in Section 4.1.7(d).

“Assignee” shall have the meaning as set forth in Section 10.25(b).

“Assignment” shall have the meaning in Section 10.25.

“Assignment and Acceptance” shall have the meaning as set forth in
Section 10.25.

“Assignment of Contracts” shall mean that certain Assignment of Contracts,
Licenses and Permits dated as of the date hereof from Borrower, as assignor, to
Agent, for the ratable benefit of the Lenders, as assignee, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

“Assignment of Interest Rate Protection Agreement” shall mean, collectively,
that (those) certain Assignment(s) of Interest Rate Protection Agreement(s)
among Borrower, Agent, for the ratable benefit of the Lenders, and the
Counterparty to the Interest Rate Protection Agreement to be entered into
pursuant to Section 4.1.15(c), as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

 

3

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“Assignment of Leases” shall mean that certain first priority Assignment of
Leases and Rents, dated as of the date hereof, from Borrower as assignor, to
Agent, for the ratable benefit of the Lenders, as assignee, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

“Assignment of Management Agreement” shall mean any assignment of management
agreement and subordination of management fees hereafter entered into by
Borrower and/or Operating Company pursuant to Section 7.3, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

“Authorized Representatives” shall mean those Persons authorized pursuant to the
Requisition Authorization Statement to execute and deliver on behalf of Borrower
Borrower’s Draw Request.

“Award” shall mean any compensation paid by any Governmental Authority in
connection with a Condemnation in respect of all or any part of the Property.

“Bankruptcy Code” shall mean Title 11 of the United States Code entitled
“Bankruptcy”, as amended from time to time, and any successor statute or
statutes and all rules and regulations from time to time promulgated thereunder,
and any comparable state laws relating to bankruptcy, insolvency or creditors’
rights.

“Basel Accord” shall have the meaning as set forth in Section 2.2.4.

“Basic Carrying Costs” shall mean the sum of the following costs associated with
the Property for the relevant Fiscal Year or payment period: (a) Taxes,
(b) Other Charges and (c) Insurance Premiums.

“BBA LIBOR Daily Floating Rate” means a fluctuating rate of interest per annum
equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”) as published
by Reuters (or the successor thereto) or as published by Bloomberg or other
commercially available source providing quotations of BBA LIBOR as selected by
Agent from time to time as determined for each Business Day at approximately
11:00 a.m. (London time) two (2) Business Days prior to the date in question,
for U.S. Dollar deposits (for delivery on the first day of such interest period)
with a one month term, subject to adjustment from time to time for reserve
requirements, deposit insurance assessment rates and other regulatory costs as
set forth herein. If such rate is not available at such time for any reason,
then the rate will be determined by such alternate method as reasonably selected
by Agent. Interest hereunder based on the BBA LIBOR Daily Floating Rate shall be
computed for the actual number of days which have elapsed, on the basis of a
360-day year.

“Benefited Lender” shall have the meaning as set forth in Section 10.30(a).

“Borrower” shall mean, collectively, ESLA and ESBA.

 

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“Borrower’s Account” shall mean that certain account of Operating Company at
HSBC having account number XXXXXXXXX.

“Borrower’s Certificate” shall have the meaning set forth in Section 2.1.7(a).

“Borrowing Date” shall have the meaning set forth in Section 2.1.7(a).

“Broadcasting Lease” shall mean a Lease which provides to the Tenant thereunder
space in the tower of the Improvements to place equipment for the purpose of
broadcasting.

“Business Day” shall mean any day that is not a Saturday or Sunday or other day
on which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a LIBOR Loan, the
term “Business Day” shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market. For purposes of
Section 2.2.4(d) and Section 2.5 only, the term “Business Day” shall exclude
days on which banks in Frankfurt, Germany are not open for domestic or
international business.

“Capital Expenditures” shall mean any amount incurred in respect of capital
items which in accordance with GAAP would not be included in any Credit Party’s
annual financial statements for an applicable period as an operating expense of
the Property and is not reasonably expected by any Credit Party to be a
regularly recurring operating expense of the Property.

“Captive Insurer” shall have the meaning as set forth in Section 5.1.3.

“Cash” shall mean the legal tender of the United States of America.

“Cash Management Agreement” shall mean that certain Cash Management Agreement of
even date herewith among Agent, for the ratable benefit of the Lenders, each
Credit Party and Cash Management Bank, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

“Cash Management Bank” shall mean HSBC or any successor Eligible Institution
acting as Cash Management Bank under the Cash Management Agreement.

“Casualty” shall mean the occurrence of any casualty, damage or injury, by fire
or otherwise, to the Property or any part thereof.

“Casualty Consultant” shall have the meaning as set forth in Section 5.3.2(c).

“Casualty Retainage” shall have the meaning as set forth in Section 5.3.2(d).

“Claim” shall have the meaning as set forth in Section 10.13(c).

“Closing Date” shall mean the date of this Agreement.

 

5

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“Code” shall mean 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.

“Co-Lender Agreement” shall mean that certain Co-Lender Agreement of even date
herewith between Agent and the Lenders.

“Collateral Accounts” shall have the meaning as set forth in Section 6.5.1.

“Commonly Controlled Entity” shall mean an entity, whether or not incorporated,
which is under common control with any Credit Party within the meaning of
Section 4001 of ERISA or is part of a group which includes any Credit Party and
which is treated as a single employer under Section 414(b) or (c) of the Code
or, for purposes of the Code, Section 414(m) or (o) of the Code.

“Condemnation” shall mean a temporary or permanent taking by any Governmental
Authority as the result or in lieu or in anticipation of the exercise of the
right of condemnation or eminent domain, of all or any part of the Property, or
any interest therein or right accruing thereto, including any right of access
thereto or any change of grade affecting the Property or any part thereof.

“Consolidated Mortgage” shall have the meaning ascribed thereto within the
definition of “Mortgage”.

“Contest Right” shall mean if any Credit Party is in good faith, and by proper
legal proceedings, where appropriate, diligently contesting the validity, amount
or application of any Taxes or Other Charges or Lien, provided that in each
case, at the time of the commencement of any such action or proceeding, and
during the pendency of such action or proceeding (a) no Event of Default shall
exist and be continuing hereunder, (b) Borrower shall keep Agent informed of the
status of such contest at reasonable intervals, (c) adequate reserves with
respect to any contest with respect to Taxes or Other Charges are maintained on
Borrower’s books in accordance with GAAP or in the Tax Reserve Account, as
applicable, (d) such contest operates to suspend collection or enforcement, as
the case may be, of the contested Taxes and Charges or Lien and such contest is
maintained and prosecuted continuously and with diligence and (e) if required by
Legal Requirement, as a condition to maintaining such proceeding, the applicable
Credit Party shall pay any such Taxes, other Charges or Lien or post collateral,
as applicable. Notwithstanding the foregoing or the creation of any such
reserves, the applicable Credit Party shall promptly pay any contested Taxes and
Other Charges or Lien, and compliance therewith or payment thereof shall not be
deferred, if, at any time the Property or any portion thereof shall be, in
Agent’s reasonable judgment, in imminent or immediate danger of being forfeited
or lost or Agent or any Lender is likely to be subject to civil or criminal
damages as a result thereof. If such action or proceeding is terminated, decided
or discontinued adversely to the applicable Credit Party, Borrower shall deliver
to Agent reasonable evidence of such Credit Party’s compliance with such
contested Taxes and Other Charges or Lien, as the case may be.

 

6

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“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise (and
Control shall not be deemed absent solely because a non-managing member, partner
or shareholder shall have veto rights with respect to major decisions). The
terms Controlled, Controlling and Common Control shall have correlative
meanings.

“Counterparty” shall mean each counterparty to, or issuer of, any Interest Rate
Protection Agreement other than Borrower or an Affiliate of Borrower.

“Counterparty Opinion” shall have the meaning as set forth in Section 4.1.15(d).

“Coverage Loss Condition” shall have the meaning set forth in
Section 5.1.1(a)(ii)(E).

“Coverage Loss Condition Appraisal” shall have the meaning set forth in
Section 5.1.1(a)(ii)(E).

“Credit Party” and “Credit Parties” shall mean individually and collectively
Borrower, Operating Company and Observatory Tenant.

“Debt” shall mean the outstanding principal amount of the Loan together with all
interest accrued and unpaid thereon and all other sums (including, without
limitation, any amounts payable to Lenders pursuant to Section 2.2) due to
Lenders in respect of the Loan under this Agreement, the Mortgage, the
Environmental Indemnity or any other Loan Document.

“Debt Service” shall mean, with respect to any particular period of time,
scheduled principal (if applicable) and interest payments under the Note for
such period.

“Debt Service Reserve Account” shall have the meaning as set forth in
Section 6.5.1(b).

“Debt Yield” shall mean, as of any date of determination, the percentage
obtained by dividing (a) the NOI for a trailing twelve (12) month period, by
(b) the sum of (i) the then principal balance of the Loan (or the Loan Amount
where specified) plus, if the Loan Amount is to be used for purposes of
clause (i), then (ii) the total amount of the Accordion if the Accordion is in
place regardless of the amount of the Accordion which may have been advanced at
such time.

“Debt Yield Collateral Event” shall mean, as of any Determination Date, the
failure by Borrower, as reasonably determined by Agent, to maintain a Debt Yield
greater than nine percent (9%) at the end of two (2) consecutive calendar
quarters completed immediately prior to such Determination Date.

“Debt Yield Collateral Period” shall mean any period commencing upon any
Determination Date as of which Agent reasonably determines that a Debt Yield
Collateral Event has occurred and is continuing until such subsequent
Determination Date, if any, as Agent reasonably determines that the Debt Yield
has been greater than eleven percent (11%) for two (2) consecutive calendar
quarters immediately preceding such Determination Date (provided that the
Remargining Collateral, if any, shall not be used in determining any such Debt
Yield).

 

7

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“Default” shall mean the occurrence of any event hereunder or under any other
Loan Document which, but for the giving of notice or passage of time, or both,
would be an Event of Default.

“Defaulting Advancing Lender” shall have the meaning set forth in
Section 2.1.7(d).

“Default Rate” shall mean, with respect to the Loan, a rate per annum equal to
the lesser of (a) the Maximum Legal Rate, or (b) four percent (4%) above the
then effective Applicable Interest Rate; provided, however, that upon the
Maturity Date, the Default Rate shall mean, with respect to the Loan, a rate per
annum equal to the lesser of (i) the Maximum Legal Rate, or (ii) at Agent’s
election, four percent (4%) above the Reference Rate plus the Reference Rate
Margin or four percent (4%) above the then effective Applicable Interest Rate.

“Deficiency” or “Deficiencies” shall have the meaning set forth in
Section 2.1.7(d).

“DekaBank” shall mean DekaBank Deutsche Girozentrale.

“Demolition Cost” shall have the meaning set forth in Section 5.1.1(a)(ii)(B).

“Deposit Account” shall have the meaning set forth in Section 6.5.1(a).

“Determination Date” shall mean the date that is forty-five (45) days following
the end of each calendar quarter occurring during the term of the Loan.

“Dollars” or “$” shall mean lawful money of the United States of America.

“Draw Request” shall have the meaning set forth in Section 2.1.7(a).

“Electing Lender” shall have the meaning set forth in Section 2.1.7(d).

“Eligibility Requirements” means, as to any Person, such Person (a) has total
assets (in name or under management) in excess of $2,000,000,000 and (except
with respect to a pension advisory firm or similar fiduciary) capital/statutory
surplus or shareholder’s equity of $500,000,000 and (b) is regularly engaged in
the business of making or owning commercial real estate loans or commercial
loans secured by a pledge of interests in a mortgage borrower or by real estate.

“Eligible Account” shall mean a separate and identifiable account from all other
funds held by the holding institution that is either (a) an account or accounts
maintained with a federal or state-chartered depository institution or trust
company which complies with the definition of Eligible Institution or (b) a
segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to

 

8

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regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a
combined capital and surplus of at least Fifty Million and 00/100 Dollars
($50,000,000.00) and subject to supervision or examination by federal and state
authority. An Eligible Account will not be evidenced by a certificate of
deposit, passbook or other instrument.

“Eligible Assignee” shall mean (a) a real estate investment trust, bank,
investment bank, financial institution, insurance company, trust company,
commercial credit corporation, pension plan, pension fund or pension advisory
firm which satisfies the Eligibility Requirements; (b) 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, which satisfies the Eligibility Requirements; (c) an
investment fund, limited liability company, limited partnership or general
partnership (a “Permitted Investment Fund”) where an Eligible Assignee or a
Permitted Fund Manager acts as the general partner, managing member or fund
manager and at least fifty percent (50%) of the equity interests in such
Permitted Investment Fund are owned, directly or indirectly, by one or more of
the following: an Eligible Assignee, an institutional “accredited investor”,
within the meaning of Regulation D promulgated under the Securities Act of 1933,
as amended, and/or a “qualified institutional buyer” within the meaning of
Rule 144A promulgated under the Securities Exchange Act of 1934, as amended
(provided each institutional “accredited investor” or “qualified institutional
buyer” satisfies the financial tests set forth in clause (i) of the definition
of “Eligibility Requirements”); (d) any other lender or Person (including any
opportunity funds) regularly engaged in the business of making loans secured by
real estate which satisfies the Eligibility Requirements; (e) a Person
substantially similar to any of the foregoing entities described in clauses (a)
or (b) of this definition which otherwise satisfies the Eligibility
Requirements; (f) a public law entity which may be established by the German
Financial Market Stabilisation Agency (Finanzmarktstabilisierungsanstalt)
pursuant to Section 8a of the German Financial Market Stabilisation Funds Act
(Finanzmarktstabilisierungsanstalt); or (g) any Person Controlled by any one or
more of the Persons described in this definition. Notwithstanding anything
contained in this definition of “Eligible Assignee” to the contrary, under no
circumstances shall any Person be an Eligible Assignee if (i) such Person is the
Borrower, Operating Company, Guarantor or any Affiliate of any of the foregoing,
(ii) such Person or an Affiliate of such Person is then actively engaged in any
suit, action or other proceeding as a party adverse to the Agent or an Affiliate
of the Agent or, so long as no Event of Default exists, any Credit Party or
Malkin Controlled Person or (iii) so long as no Event of Default exists, such
Person is a real estate investment trust, hedge fund, private equity company or
opportunity fund or an Affiliate of the foregoing.

“Eligible Institution” shall mean a depository institution or trust company
insured by the Federal Deposit Insurance Corporation the short term unsecured
debt obligations or commercial paper of which are rated at least A-1 by S&P, P-1
by Moody’s, and F-1+ by Fitch, Inc. 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 “A-” by Fitch and S&P and
“A3” by Moody’s.

 

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“Environmental Indemnity” shall mean that certain Environmental Indemnity
Agreement, dated as of the date hereof, executed by Borrower and Guarantor, for
the benefit of Agent and Lenders, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

“Equipment” shall have the meaning as set forth in the granting clause of the
Mortgage.

“ERISA” shall have the meaning as set forth in Section 4.2.11.

“ESB Captive” shall have the meaning as set forth in Section 4.2.19(b).

“Estoppel Certificates” shall have the meaning as set forth in Section 4.1.29.

“Event of Default” shall have the meaning as set forth in Section 9.1.

“Excess Cash Flow” shall have the meaning as set forth in Section 6.5.6(a)(vii).

“Excess Cash Flow Account” shall have the meaning as set forth in
Section 6.5.1(g).

“Excluded Taxes” shall have the meaning as set forth in Section 2.2.8(e).

“Extension Fee” shall mean, with respect to each of the First Extension Period
and the Second Extension Period, one-quarter of one percent (0.25%) of the Loan
Amount (plus the total amount of the Accordion if the Accordion is in place
regardless of the amount of the Accordion which may have been advanced at such
time), payable in connection with Borrower’s option, subject to and in
accordance with the terms of this Agreement, to extend the term of the Loan for
the First Extension Period or the Second Extension Period, as applicable.

“Extraordinary Expenses” shall mean extraordinary operating expenses, tenant
improvement costs, leasing commissions or Capital Expenditures not set forth in
the Approved Annual Budget.

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of
this Agreement, and any current or future regulations or official
interpretations.

“Fee Threshold” shall have the meaning as set forth in Section 6.3.1.

“First Exercise Date” shall have the meaning set forth in Section 2.1.6(b).

“First Extended Maturity Date” shall mean July 26, 2015 or such earlier date on
which the final payment of principal of the Note becomes due and payable as
therein or herein provided whether at such stated extended maturity date, by
declaration of acceleration or otherwise.

“First Extension Notice” shall have the meaning set forth in Section 2.1.6(b).

 

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“First Extension Period” shall mean a period of twelve (12) consecutive months
following the Initial Maturity Date.

“Fiscal Year” shall mean each twelve (12) month period commencing on January 1
and ending on December 31 during each year of the term of the Loan.

“Force Majeure Event” shall mean any event or condition beyond the control of
any Credit Party, including, without limitation, strikes, labor disputes, acts
of God, the elements, governmental restrictions, regulations or controls, enemy
action, civil commotion, fire, casualty, accidents, mechanical breakdowns or
shortages of, or inability to obtain, labor, utilities or materials, which
causes delay; provided, however, that any lack of funds shall not be deemed to
be a condition beyond the control of Borrower and provided, further, that any
extension on account of a Force Majeure Event shall not exceed sixty (60) days
without the reasonable approval of Agent.

“Funding Statement” shall mean that certain funding statement to be executed and
delivered by Borrower in connection with the closing of the Loan in the form
attached hereto as Schedule II.

“Funds” shall have the meaning as set forth in Section 6.4.1.

“GAAP” shall mean generally accepted accounting principles as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or in such
other statements by such entity as may be in general use by significant segments
of the U.S. accounting profession.

“Government Lists” shall have the meaning as set forth in Section 3.1.44.

“Governmental Authority” shall mean any court, board, agency, commission,
office, authority, department, bureau or instrumentality of any nature
whatsoever or any governmental unit (federal, state, county, district,
municipal, city or otherwise) whether now or hereafter in existence.

“Gross Revenue” shall mean, without duplication, all revenue of Borrower and
Operating Company, derived from its leasehold interest in and operation of the
Property from whatever source, including, but not limited to, its ownership
interest in the Tenant under the Observatory Lease, sales of merchandise and
licensing rights, Rents, but excluding sales, use and occupancy or other taxes
on receipts required to be accounted for by any Credit Party to any Governmental
Authority, non-recurring revenues as reasonably determined by Agent, security
deposits (except to the extent properly utilized to offset a loss of Rent
pursuant to the applicable Lease), refunds and uncollectible accounts, proceeds
of casualty insurance, Awards (other than business interruption or other loss of
income insurance related to business interruption or loss of income for the
period in question) and any disbursements to Operating Company or Borrower of
any funds established by the Loan Documents (including, without limitation, the
proceeds of an Advance).

 

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“Ground Lease” shall mean that certain ground lease more particularly described
in Schedule XVI attached hereto.

“Ground Rent” shall mean rent (however denominated) and other sums and charges,
now or hereafter, due and payable under the Ground Lease.

“Guarantor” shall mean Anthony E. Malkin, an individual with an address c/o
Malkin Holdings LLC, One Grand Central Place, 60 East 42nd Street, New York, New
York 10165.

“Guaranty” shall mean shall mean that certain Guaranty of Recourse Obligations
from Guarantor in favor of Agent, for the ratable benefit of the Lenders, dated
as of the date hereof, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

“Hazardous Substances” shall have the meaning as set forth in the Environmental
Indemnity.

“HSBC” shall mean HSBC Bank USA, National Association.

“HSBC Account Control Agreement” shall mean, that certain Account Control
Agreement, dated as of the date hereof, between Agent, for the ratable benefit
of the Lenders, Borrower and Operating Company and HSBC Collection Bank, as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.

“HSBC Collection Account” shall have the meaning as set forth in Section 6.5.1.

“HSBC Collection Bank” shall mean HSBC, and any successor bank approved by
Agent, acting as deposit bank under the HSBC Account Control Agreement.

“Improvements” shall have the meaning set forth in the Granting Clauses of the
Mortgage.

“Increased Cost of Construction” shall have the meaning set forth in
Section 5.1.1(a)(ii)(B).

“Indebtedness” shall mean, for any Person, without duplication: (a) all
indebtedness of such Person for borrowed money, for amounts drawn under a letter
of credit, or for the deferred purchase price of property for which such Person
or its assets is liable, (b) all unfunded amounts under a loan agreement, letter
of credit, or other credit facility for which such Person would be liable if
such amounts were advanced thereunder, (c) all amounts required to be paid by
such Person as a guaranteed payment to partners or a preferred or special
dividend, including any mandatory redemption of shares or interests, (d) all
indebtedness guaranteed by such Person, directly or indirectly, (e) all
obligations under leases that constitute capital leases for which such Person is
liable, and (f) all obligations of such Person under interest rate swaps, caps,
floors, collars and other interest hedge agreements, in each case whether such
Person is liable contingently or otherwise, as obligor, guarantor or otherwise,
or in respect of which obligations such Person otherwise assures a creditor
against loss.

 

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“Indemnified Liabilities” shall have the meaning as set forth in
Section 10.13(b).

“Indemnified Party” shall have the meaning as set forth in Section 10.13(b).

“Initial Advance” shall have the meaning as set forth in Section 2.1.2.

“Initial Maturity Date” shall mean July 26, 2014 or such earlier date on which
the final payment of principal of the Note becomes due and payable as therein or
herein provided, whether at such stated maturity date, by declaration of
acceleration, or otherwise.

“Insolvency” shall mean, with respect to any Multiemployer Plan, the condition
that such plan is insolvent within the meaning of Section 4245 of ERISA.

“Insolvent” shall mean pertaining to a condition of Insolvency.

“Institution” shall mean (a) a commercial bank organized under the laws of the
United States, or any State thereof, or a commercial bank organized under the
laws of another country and acting through a branch or agency located in the
United States, in any case having total assets of not less than ten billion
Dollars, any holding company thereof and any affiliate having total assets of
not less than ten billion Dollars of any such holding company; (b) a savings and
loan association or savings bank organized under the laws of the United States,
or any State thereof and having total assets of not less than ten billion
Dollars, any holding company thereof and any affiliate having total assets of
not less than ten billion Dollars of any such holding company; and (c) any
insurance company, pension fund or investment fund having total assets of not
less than ten billion Dollars.

“Insurance Funds” shall have the meaning as set forth in Section 6.2.1

“Insurance Premiums” shall have the meaning as set forth in Section 5.1.1(b).

“Insurance Reserve Account” shall have the meaning set forth in
Section 6.5.1(d).

“Intellectual Property” shall mean, all (a) trademarks, trademark rights, trade
names, trade name rights, service marks, service mark rights, logos, trade
dress, domain names, web sites, and all other indicia of origin or quality, and
goodwill associated therewith and arising therefrom; (b) patents and patent
rights; and (c) works of authorship and copyrights therein, and all common law
rights in all of the foregoing, and registration and applications for all of the
foregoing issued by or filed with the US Patent and Trademark Office, any State
of the US, the US Copyright Office, or any foreign equivalent thereof, and all
of the foregoing (a)-(c) used in, at, or in connection with and/or necessary for
the (i) conduct of any Credit Party’s business and/or (ii) use and/or operation
of the Property.

“Intellectual Property Security Agreement” shall mean that certain Intellectual
Property Security Agreement, dated as of the date hereof, from Borrower and
Operating Company in favor of Agent, for the ratable benefit of the Lenders,
with respect to the Intellectual Property, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

 

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“Interest Determination Date” shall mean, with respect to each Interest Period,
the date that is two (2) Business Days immediately prior to the commencement
date of each Interest Period hereunder.

“Interest Period” shall mean, with respect to any LIBOR Fixed Rate Tranche(s):

 

  (a)

initially, the period commencing on the first day of the calendar month
following the date of the Initial Advance and ending one month thereafter; and

 

  (b)

thereafter, each period commencing on the last day of the then expiring Interest
Period applicable to such LIBOR Fixed Rate Tranche(s) and ending one month
thereafter;

provided that, all of the foregoing provisions (a) and (b) relating to Interest
Periods are subject to the following:

 

  (i)

if the Initial Advance is on a day other than the first day of the calendar
month, the Initial Advance shall be a LIBOR Floating Rate Tranche until the last
day of the calendar month of such Initial Advance;

 

  (ii)

if the borrowing date for any other Advance is on a day other than the first day
of the calendar month, such Advance shall be a LIBOR Floating Rate Tranche until
the last day of the calendar month of such Advance, at which time the next LIBOR
Fixed Rate Tranche shall include such Advance;

 

  (iii)

if any Interest Period pertaining to a LIBOR Fixed Rate Tranche(s) would
otherwise end on a day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day;

 

  (iv)

any Interest Period that would otherwise extend beyond the Maturity Date shall
end on the Maturity Date; and

 

  (v)

if the Interest Period ends less than one (1) month prior to the Maturity Date,
that portion of the Loan with respect to the outstanding principal balance for
such period shall be a LIBOR Floating Rate Tranche.

“Interest Rate Protection Agreement” shall mean one or more interest rate caps
(together with the schedules relating thereto) in form and substance reasonably
satisfactory to Agent, with a confirmation from the Counterparty thereto,
between Borrower and, subject to the Loan Agreement, a Lender, or other
Counterparty reasonably acceptable to Agent, each with a Minimum Counterparty
Rating, and all amendments, restatements, replacements, supplements and
modifications thereto.

“IPO” shall have the meaning set forth in Section 8.3(a)(v).

“JP Account Control Agreement” shall mean that certain Account Control
Agreement, dated as of the date hereof, between Agent, for the ratable benefit
of the Lenders, Borrower and Observatory Tenant and JP Collection Bank, as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.

 

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“JP Collection Account” shall have the meaning as set forth in Section 6.5.1.

“JP Collection Bank” shall mean JPMorgan Chase Bank, National Association, and
any successor bank approved by Agent, acting as deposit bank under the HSBC
Account Control Agreement.

“Land” shall mean the land more particularly described on Schedule III and
includes all rights appurtenant thereto, including, without limitation, all
development rights and subsurface rights, if any, acquired by Borrower pursuant
to any air rights agreements pertaining thereto, and any and all beneficial
easements or use agreements for the use of or rights to common facilities or
amenities.

“Lease” shall mean (a) the Ground Lease, (b) the Sublease, (c) to the fullest
extent of ESBA’s right, title and interest therein, the Observatory Lease, and
(d) all other leases, subleases, licenses, franchises, concessions or grants of
other possessory interests, tenancies, and any other agreements affecting the
use, possession or occupancy of the Property or any part thereof, whether now or
hereafter existing or entered into (including, without limitation, any use or
occupancy arrangements created pursuant to Section 365(d) of the Bankruptcy Code
or otherwise in connection with the commencement or continuance of any
bankruptcy, reorganization, arrangement, insolvency, dissolution, receivership
or similar proceedings, or any assignment for the benefit of creditors, in
respect of any tenant or occupant of any portion of the Property) and all
amendments, modifications, supplements, extensions or renewals thereof, whether
now or hereafter existing and all amendments, modifications, supplements,
extensions or renewals thereof.

“Lease Termination Fee” shall have the meaning as set forth in Section 6.3.1.

“Lease Termination Fee Reserve Account” shall have the meaning as set forth in
Section 6.5.1(e).

“Lease Termination Rollover Funds” shall have the meaning as set forth in
Section 6.3.1.

“Legal Requirements” shall mean all federal, state, county, municipal and other
governmental statutes, laws, treaties, rules, orders, regulations, ordinances,
judgments, decrees, injunctions, permits or requirements of Governmental
Authorities affecting Borrower or the Property or any part thereof or the
construction, use, alteration or operation thereof, or any part thereof, whether
now or hereafter enacted and in force, including, without limitation, the ADA,
the Prescribed Laws, and all permits, licenses and authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments, either of record or known to
Borrower, at any time in force affecting the Property or any part thereof,
including, without limitation, any which may (a) require repairs, modifications
or alterations in or to the Property or any part thereof, or (b) in any way
limit the use and enjoyment thereof.

 

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“Letter of Credit” shall mean an irrevocable, unconditional, transferable, clean
sight draft letter of credit acceptable to Agent (either an evergreen letter of
credit or one which does not expire until at least thirty (30) Business Days
after the Maturity Date) in favor of Agent for the ratable benefit of the
Lenders and entitling Agent 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. If at any time the bank issuing any such Letter of Credit shall
cease to be an Eligible Institution, Agent shall have the right upon ten (10)
days’ prior notice to Borrower to draw down the same in full and hold the
proceeds of such draw in accordance with the applicable provisions hereof unless
within such ten (10) day period Borrower has delivered a replacement Letter of
Credit meeting the requirements set forth herein issued by an Eligible
Institution. Borrower shall not have or be permitted to have any liability or
other obligations under any reimbursement agreement with respect to any Letter
of Credit or otherwise in connection with reimbursement to the approved Eligible
Institution for draws on such Letter of Credit.

“LIBOR Base Rate” shall mean, with respect to each Interest Period, the rate for
deposits in U.S. dollars (with respect to the period equal or comparable to the
applicable Interest Period) that appears on Reuters Screen LIBOR01 Page (or the
successor thereto) as of 11:00 a.m. (London time) on the related Interest
Determination Date. If such rate does not appear on Reuters Screen LIBOR01 Page
as of 11:00 a.m. (London time) on such Interest Determination Date, LIBOR shall
be the arithmetic mean of the offered rates (expressed as a percentage per
annum) for deposits in U.S. dollars (with respect to the period equal or
comparable to the applicable Interest Period) that appear on the Reuters Screen
LIBOR01 Page as of 11:00 a.m. (London time) on such Interest Determination Date,
if at least two (2) such offered rates so appear. If fewer than two (2) such
offered rates appear on the Reuters Screen LIBOR01 Page as of 11:00 a.m. (London
time) on such Interest Determination Date, Agent shall request the principal
London Office of any four (4) major reference banks in the London interbank
market selected by Agent to provide such bank’s offered quotation (expressed as
a percentage per annum) to prime banks in the London interbank market for
deposits in U.S. dollars (with respect to the period equal or comparable to the
applicable Interest Period) as of 11:00 a.m. (London time) on such Interest
Determination Date for the then outstanding principal amount of the Loan. If at
least two (2) such offered quotations are so provided, LIBOR shall be the
arithmetic mean of such quotations. If fewer than two (2) such quotations are so
provided, Agent shall request any three (3) major banks in New York City
selected by Agent to provide such bank’s rate (expressed as a percentage per
annum) for loans in U.S. dollars to leading European banks for a one-month
period as of approximately 11:00 a.m. (New York City time) on the applicable
Interest Determination Date for the then outstanding principal amount of the
Loan. If at least two (2) such rates are so provided, LIBOR shall be the
arithmetic mean of such rates. LIBOR shall be determined by Agent and at
Borrower’s request, Agent shall provide Borrower with the basis for its
determination in each such instance.

“LIBOR Fixed Rate” shall mean, for any Interest Period, a rate per annum
determined by Agent to be equal to the LIBOR Base Rate plus the LIBOR Margin for
such Interest Period divided by (1 minus the Reserve Requirement) for such
Interest Period.

“LIBOR Fixed Rate Tranche(s)” shall mean the Loan or any portion thereof at any
time in which the Applicable Interest Rate for the Loan or such portion thereof
is calculated with reference to the LIBOR Fixed Rate in accordance with the
provisions of Article II.

 

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“LIBOR Floating Rate” shall mean a rate equal to the BBA LIBOR Daily Floating
Rate plus the LIBOR Margin.

“LIBOR Floating Rate Tranche(s)” shall mean the Loan or any portion thereof at
any time in which the Applicable Interest Rate for the Loan or portion thereof
is calculated with reference to the LIBOR Floating Rate.

“LIBOR Loan(s)” shall mean the Loan or any portion thereof at any time in which
the Applicable Interest Rate thereon is calculated at a LIBOR Fixed Rate or a
LIBOR Floating Rate.

“LIBOR Margin” shall mean two hundred fifty (250) basis points.

“License” shall have the meaning set forth in Section 3.1.50.

“Lien” shall mean any mortgage, deed of trust, lien, pledge, hypothecation,
assignment, security interest, or any other encumbrance, charge or transfer of,
on or affecting the Property, or any portion thereof, the Ground Lease, the
Sublease, the Observatory Lease or the Operating Company’s interest, as
landlord, in any Lease or any Credit Party, or any interest in any Credit Party,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, the filing of any financing statement, and mechanic’s,
materialmen’s and other similar liens and encumbrances against the Property or
any portion thereof, the Ground Lease, the Sublease, the Observatory Lease or
Operating Company’s interest, as landlord, in any Lease or any Credit Party or
any interest in any Credit Party.

“Listing Agreements” shall mean, collectively, (a) that certain Leasing
Agreement between Operating Company and Newmark & Company Real Estate, Inc.
d/b/a Newmark Knight Frank (“Newmark”), dated October 22, 2009, as amended by
that certain First Amendment to Leasing Agreement, between Operating Company and
Newmark, dated December 1, 2009, and (b) that certain Leasing Agreement between
Operating Company and CB Richard Ellis, Inc., dated October 22, 2009.

“LMH” shall mean LMH EBC LLC.

“Loan” shall mean the loan in the original principal amount of Two Hundred
Thirty-Five Million and 00/100 Dollars ($235,000,000.00) made by Lenders to
Borrower pursuant to this Agreement.

“Loan Agreement” shall mean this Agreement.

“Loan Amount” shall mean Two Hundred Thirty-Five Million and 00/100 Dollars
($235,000,000.00).

“Loan Documents” shall mean, collectively, this Agreement, the Note, the
Mortgage, the Assignment of Leases, the Assignment of Contracts, the
Environmental Indemnity, the Assignment of Management Agreement, the Funding
Statement, the Agreement Regarding Instructions Given by Telephone or Facsimile,
the HSBC Account Control

 

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Agreement, the JP Account Control Agreement, the Cash Management Agreement, the
Guaranty, any Assignment of Interest Rate Protection Agreement, the
Subordinations, the Negative Pledges, the Operations and Maintenance Agreement,
the Requisition Authorization Statement, the Intellectual Property Security
Agreement, as well as all other documents now or hereafter executed and/or
delivered by Borrower or a Guarantor with respect to the Loan.

“Loan Fee Letter” shall mean that certain letter agreement dated as of the date
hereof between Agent and Borrower pertaining to the fees payable by Borrower to
Agent and/or Lenders.

“Loan Parties” shall mean, collectively, Borrower and Guarantor.

“Loan-to-Value Ratio” shall mean, as of any date, the ratio of (a) the Loan
Amount (plus the total amount of the Accordion if the Accordion is in place
regardless of the amount of the Accordion which may have been advanced at such
time) to (b) the Appraised Value of the Property evidenced by an Appraisal as of
such date.

“Lockout Period” shall mean the period commencing on the Closing Date and
terminating fifteen (15) months thereafter.

“Losses” shall have the meaning as set forth in Section 10.13(b).

“Major Lease” shall mean (a) the Observatory Lease, (b) any Lease (i) demising
more than 150,000 rentable square feet at the Property, or (ii) made with a
Tenant that is a Tenant under another Lease at the Property or that is an
Affiliate of any other Tenant under a Lease at the Property, if the Leases
together demise more than 150,000 rentable square feet (c) any Lease with an
Affiliate of Borrower or Guarantor, and (d) any retail Lease which provides for
Rent which is equal to or exceeds $3,000,000 per year.

“Major Lease Modification” shall have the meaning as set forth in
Section 4.1.10(c).

“Malkin Controlled Person” shall mean, any Person that is Controlled by
Guarantor or Peter L. Malkin or that is an owner of interests in or a supervisor
of any Credit Party, including, without limitation, Malkin Holdings LLC and 1273
Realty Co.

“Malkin Family” shall mean Anthony E. Malkin, Peter L. Malkin and each of their
respective parents, brothers, sisters, spouses, children and any lineal
descendants of any of the foregoing, any estates of any of the foregoing and any
trusts now or hereafter established for the benefit of the foregoing, and any
beneficial or constructive owner of shares of any classes or series of stock of
the REIT as described in Section 8.3(a)(v), which shares are also deemed to be
beneficially or constructively owned by any other member of the Malkin Family.

“Management Agreement” shall mean any management agreement entered into by
Borrower or Operating Company in accordance with Section 7.1 with a Manager
approved by Agent in its sole discretion), pursuant to which such Manager is to
provide management and other services with respect to the Property.

 

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“Manager” shall mean any property manager, if any, as shall have been approved
by Agent in its sole discretion, in accordance with Section 7.1.

“Material Adverse Effect” shall mean a material adverse effect on (a) the
ability of any Credit Party to perform its obligations under the Loan Documents
to which it is a party, (b) the validity or enforceability of any of the Loan
Documents, the lien of the Mortgage or the rights and remedies of Agent and/or
Lenders under any of the Loan Documents (except to the extent caused solely by
an act or omission of Agent or the Lenders, respectively), (c) the ability of
Guarantor to perform its obligations under the Guaranty or (d) the Property, its
use, operation and value or any other collateral for the Loan.

“Maturity Date” shall mean the Initial Maturity Date or such earlier date on
which the final payment of principal of the Note becomes due and payable as
therein or herein provided, whether at such stated maturity date, by declaration
of acceleration, or otherwise; provided, however, that if Borrower exercises its
right to extend the term of the Loan (a) for the First Extension Period and,
subject to and in accordance with the terms of this Agreement, the term of the
Loan is so extended, from and after such extension of the term of the Loan
“Maturity Date” shall mean the First Extended Maturity Date or such earlier date
on which the final payment of principal of the Note becomes due and payable as
therein or herein provided, whether at such stated maturity date, by declaration
of acceleration, or otherwise and (b) for the Second Extension Period and,
subject to and in accordance with the terms of this Agreement, the term of the
Loan is so extended, from and after such extension of the term of the Loan
“Maturity Date” shall mean the Second Extended Maturity Date or such earlier
date on which the final payment of principal of the Note becomes due and payable
as therein or herein provided, whether at such stated maturity date, by
declaration of acceleration, or otherwise

“Maximum Commitment” shall mean, for each Lender, an amount equal to each
Lender’s Ratable Share of the Loan.

“Maximum Legal Rate” shall mean the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the indebtedness evidenced by the Note and as provided
for herein or the other Loan Documents, under the laws of such state or states
whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.

“Minimum Counterparty Rating” shall mean a credit rating from S&P or Fitch of at
least “AA” or from Moody’s of at least “Aa2”.

“Minimum Disbursement Amount” shall mean Twenty-Five Thousand and No/100 Dollars
($25,000.00).

“Monetary Default” shall mean a Default in any obligation to pay money hereunder
or under any Loan Document.

“Monthly Insurance Reserve Deposit” shall have the meaning as set forth in
Section 6.2.1.

 

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“Monthly Tax Reserve Deposit” shall have the meaning as set forth in
Section 6.1.1.

“Mortgage” shall mean, collectively, (a) that certain Consolidated, Amended, and
Restated Mortgage, Assignment of Leases and Rents and Security Agreement dated
as of the date hereof, between Borrower and Agent, for the ratable benefit of
the Lenders (the “Consolidated Mortgage”), and (b) the Series Mortgages, which
shall be delivered by Borrower to Agent for the ratable benefit of the Lenders
from time to time as security for the Loan.

“Multiemployer Plan” shall mean a Plan which is a “multiemployer plan” as
defined in Section 4001(a)(3) of ERISA and which is subject to Title IV of
ERISA, with respect to which any Credit Party or any Commonly Controlled Entity
could have any obligation or liability.

“Net Observatory Deck Revenue” shall mean the Gross Receipts (as defined in the
Observatory Lease) minus normal and customary operating expenses incurred by the
Observatory Tenant in operating and maintaining the Observation Deck (including
Rent payable under the Observatory Lease) and Permitted Indebtedness as provided
in Section 4.2.13.

“Negative Pledges” shall mean, collectively, (a) that certain Negative Pledge of
even date herewith by Operating Company in favor of Agent, for the benefit of
the Lenders, as the same may be amended, restated, replaced, supplemented or
otherwise modified form time to time and (b) that certain Negative Pledge of
even date herewith by Observatory Tenant in favor of Agent, for the benefit of
the Lenders, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

“Net Proceeds” shall mean all Proceeds payable as a result of a Casualty or a
Condemnation to the Property or any portion thereof, after deduction of
reasonable costs and expenses (including, but not limited to, reasonable
attorneys’ fees), if any, in collecting such Proceeds.

“Net Proceeds Deficiency” shall have the meaning as set forth in
Section 5.3.2(f).

“Net Worth” shall mean, (a) with respect to a Person who is not an individual,
the excess of total assets over total liabilities, each determined in accordance
with GAAP provided that depreciation and amortization of equipment and goodwill
shall not be deducted from total assets and (b) with respect to a Person who is
an individual, the excess, as reasonably determined by Agent, of the total
assets of such Person over the total liabilities of such Person.

“Newmark” shall have the meaning as set forth in the definition of “Listing
Agreements”.

“NOI” shall mean the excess of Gross Revenue over Operating Expenses. NOI
(including the determination of items that do not qualify as Gross Revenue or
Operating Expenses) shall be calculated by Borrower and subject to verification
and final determination by Agent in its reasonable judgment.

 

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“Non-Disturbance Agreement” shall have the meaning as set forth in
Section 4.1.10.

“Non-Exempt Lender” shall have the meaning as set forth in Section 2.2.8(e).

“Note” shall mean that certain Consolidated, Amended and Restated Promissory
Note, dated the date hereof, between Borrower and Lenders in the original
principal amount of One Hundred Fifty-Nine Million and 00/100 Dollars
($159,000,000.00) (the “Original Note”), which Original Note shall be split on
the date hereof pursuant to that certain Note Splitter and Modification
Agreement between Borrower and Lenders into the following Replacement Notes:
that certain Promissory Note A-1, dated of even date herewith, in the principal
amount of $91,340,425.53 and Promissory Note A-2, dated of even date herewith,
in the principal amount of $67,659,574.47 (as each of the same may be amended,
supplemented, restated, increased, extended and consolidated, substituted or
replaced from time to time, collectively, the “Replacement Notes”), which
Replacement Notes shall as of the date hereof replace and supersede in its
entirety the Original Note. In addition, the term Note shall include the Series
Notes, as applicable.

“Notice” shall have the meaning as set forth in Section 10.6.

“Obligations” shall mean the unpaid principal amount of, and interest
(including, without limitation, interest accruing after the maturity of the Loan
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) on the Loan, and all other obligations and
liabilities of the Loan Parties to Agent and the Lenders, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, or out of or in connection with this
Agreement, the Note, the Guaranties and any other Loan Documents and any other
document made, delivered or given in connection therewith or herewith, whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees and disbursements of
counsel to Agent or to the Lenders that are required to be paid by a Credit`
Party pursuant to the terms of the Loan Documents) or otherwise; provided,
however, that for purposes of determining a Person’s ability or capacity to pay
or perform his/her/its Obligations or his/her/its Solvency, only the respective
amounts of the Loan and other Indebtedness then outstanding shall be considered.

“Observation Deck” shall mean that portion of the Improvements demised to the
Observatory Tenant pursuant to the Observatory Lease.

“Observatory Lease” shall mean that certain Agreement of Lease, dated January 1,
2011, between Operating Company, as landlord, and the Observatory Tenant, as
tenant, with respect to the Observation Deck.

“Observatory Tenant” shall mean ESB Observatory LLC, a New York limited
liability company.

“OFAC” shall have the meaning as set forth in Section 3.1.44.

 

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“Officer’s Certificate” shall mean a certificate delivered to Agent by Borrower
which is signed by an authorized senior officer of Borrower.

“OP” shall have the meaning in Section 8.3(a)(v).

“OP Sub” shall have the meaning in Section 8.3(a)(v).

“Operating Company” shall mean Empire State Building Company L.L.C., a New York
limited liability company.

“Operating Company Consent” shall mean, collectively, (a) a consent from the
requisite members of the Operating Company in connection with any Advance or
advance of the Accordion, as applicable, which shall include an agreement by the
Operating Company that the proceeds of such Advance or advance of the Accordion,
as applicable, are to be paid to Borrower or as Borrower may direct and an
agreement as to the use of such funds, in form and substance acceptable to Agent
in its reasonable discretion; and (b) an amendment to the Sublease in connection
with any Advance, or any advance of the Accordion (if the amount of the
Accordion had not been reflected in a prior amendment to the Sublease), as
applicable, substantially in the form attached hereto as Exhibit B and otherwise
reasonably acceptable to Agent and which provides that the Operating Company
will increase the Rent payable under the Sublease in an amount necessary to pay
Debt Service hereunder (and under the Accordion, as applicable (or any requested
advance thereunder if the amount of the Accordion had not been reflected in a
prior amendment to the Sublease)) on the then outstanding principal balance of
the Loan (through the Maturity Date (as it may be extended) (including, without
limitation, interest at the Default Rate) or the increase thereof as reflected
in the pending Draw Request, which outstanding principal balance may be
increased to include the Tax Funds and Insurance Funds, as applicable,
protective advances or the obligations to pay costs related thereto, accrued but
unpaid interest on the Debt, legal expenses, costs of collections and all other
amounts due and payable hereunder and under the other Loan Documents
(collectively, the “Imputed Debt Service”). Any such amendment to the Sublease
shall also provide that Operating Company shall be responsible to (a) pay such
Imputed Debt Service at any time prior to the payment in full of the Debt,
whether or not the Mortgage continues to be a Lien on the Property or (b) to
repay such Imputed Debt Service, with interest, over a twenty-five (25) year
term in equal monthly payments, whether or not the Mortgage continues to be a
Lien on the Property. In addition, pursuant to one or more of such Sublease
amendments, Operating Company shall require ESBA to expend $65,000,000.00 in the
aggregate of proceeds of the Loan for Capital Expenditures, tenant improvement
costs and leasing commissions and for reimbursement to Operating Company with
respect to Capital Expenditures, tenant improvement costs and leasing
commissions. The parties acknowledge and agree that the execution and delivery
by Operating Company of an Operating Company Consent or an amendment to the
Sublease shall not constitute, in any instance, a waiver by Operating Company
with respect to the necessity of an Operating Company Consent and Sublease
amendment with respect to subsequent Advances or advances with respect to the
Accordion.

“Operating Expenses” shall mean, without duplication, all costs and expenses
incurred by any Credit Party and any subsidiary thereof and relating to the
operation, maintenance and management of the Property, including, without
limitation, utilities, repairs and maintenance, Insurance Premiums, Taxes and
Other Charges, advertising expenses, professional

 

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fees, payroll and related taxes, equipment lease payments, and a management fee
equal to the greater of two percent (2%) of gross annual rents or the actual
management fee, and customary and reasonable reserves for tenant improvements,
leasing commissions and other anticipated customary leasing costs but excluding
actual Capital Expenditures, tenant improvement costs and leasing commissions to
the extent not typically expensed by Borrower or Operating Company,
depreciation, amortization, interest expense, deposits made to the reserve funds
by Borrower pursuant to Article VI and other similar non-cash items; provided,
however, such costs and expenses shall be subject to adjustment by Agent to
normalize such costs and expenses. The term “Operating Expenses” shall not
include Rent payable by Operating Company to ESBA under the Sublease or Rent
paid by ESBA to ESLA under the Ground Lease.

“Operation of Building Laws” shall have the meaning set forth in
Section 5.1.1(a)(ii)(B).

“Operations and Maintenance Agreement” shall mean that certain Operations and
Maintenance Agreement of even date herewith from Borrower and Operating Company
in favor of Agent, for the benefit of the Lenders, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

“Organizational Documents” shall mean, as to any Person, its certificate of
formation and operating agreement, its partnership agreement and certificate of
limited partnership or doing business certificate, as applicable, its articles
or certificate of incorporation and by-laws, and/or the other organizational or
governing documents of such Person. Organizational Documents of a Person shall
include, to the extent applicable, incumbency certificates, resolutions,
certificates of good standing and consents of members, partners or shareholders,
as applicable.

“Origination Fee” shall mean the “Origination Fee” under (and as defined in) the
Loan Fee Letter allocable to the Loan.

“Other Charges” shall mean all ground rents, maintenance charges, impositions
other than Taxes, and any other charges, including, without limitation, vault
charges and license fees for the use of vaults, chutes and similar areas
adjoining the Property, now or hereafter levied or assessed or imposed against
the Property or any part thereof.

“Other Taxes” shall have the meaning as set forth in Section 2.2.8(b).

“Participant” shall have the meaning as set forth in Section 10.26.

“Patriot Act” shall mean 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).

“Patriot Act Offense” shall have the meaning as set forth in Section 3.1.44.

“Payment Date” shall mean, subject to the provisions of Section 2.4.6, the first
(1st) day of each calendar month, being the date on which, pursuant to
Section 2.4.1, Borrower is obligated to make an interest payment hereunder.

 

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“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.

“Permitted Encumbrances” shall mean, collectively, (a) the Liens and security
interests created by the Loan Documents or otherwise permitted by the Loan
Documents, (b) all Liens, encumbrances and other matters disclosed in the Title
Insurance Policy, (c) Liens, if any, for Taxes imposed by any Governmental
Authority not yet due or delinquent, (d) such other title and survey exceptions
as Agent has approved or may approve in writing in Agent’s sole discretion, and
(e) except in connection with any Advance or either extension option set forth
in Section 2.1.6, liens for claims, judgments and similar matters prior to the
date by which any such matter must be bonded, paid or otherwise removed of
record in accordance with the terms of this Agreement.

“Permitted Fund Manager” shall mean any Person which is not subject to a
bankruptcy proceeding and is a nationally recognized manager of investment funds
investing in debt or equity interests relating to commercial real estate which
is investing through a fund which has committed capital of at least
$250,000,000.

“Permitted Investment Fund” shall have the meaning set forth in the definition
of “Eligible Assignee”.

“Permitted Investments” shall mean any one or more of the following obligations
or securities acquired at a purchase price of not greater than par 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 meeting one of the appropriate standards set forth below:

 

  (a)

obligations of, or obligations directly and unconditionally guaranteed as to
principal and interest by, the U.S. government or any agency or instrumentality
thereof, when such obligations are backed by the full faith and credit of the
United States of America and have maturities not in excess of one year;

 

  (b)

federal funds, unsecured certificates of deposit, time deposits, banker’s
acceptances, and repurchase agreements having maturities of not more than
90 days of any commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia, the short-term debt
obligations of which are rated (i) “A-1+” (or the equivalent) by S&P and, if it
has a term in excess of three months, the long-term debt obligations of which
are rated “AAA” (or the equivalent) by S&P, and that (A) is at least “adequately
capitalized” (as defined in the regulations of its primary Federal banking
regulator) and (B) has Tier 1 capital (as defined in such regulations) of not
less than $1,000,000,000, (ii) in one of the following Moody’s rating
categories: (A) for maturities less than one month, a long-term rating of “A2”
or a short-term rating of “P-1”, (B) for maturities between one and three
months, a long-term rating of “A1” and a short-term rating of “P-1”, (C) for
maturities between three months to six months, a long-term rating of “Aa3” and a
short-term rating of “P-1” and (D) for maturities over six months, a long-term
rating of “Aaa” and a short-term rating of “P-1”;

 

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  (c)

deposits that are fully insured by the Federal Deposit Insurance Corp.;

 

  (d)

commercial paper rated (i) “A–1+” (or the equivalent) by S&P and having a
maturity of not more than 90 days and (ii) in one of the following Moody’s
rating categories: (A) for maturities less than one month, a long-term rating of
“A2” or a short-term rating of “P-1”, (B) for maturities between one and three
months, a long-term rating of “A1” and a short-term rating of “P-1”, (C) for
maturities between three months to six months, a long-term rating of “Aa3” and a
short-term rating of “P-1” and (D) for maturities over six months, a long-term
rating of “Aaa” and a short-term rating of “P-1”; or

 

  (e)

any money market fund that (i) has substantially all of its assets invested
continuously in the types of investments referred to in clause (a) above,
(ii) has net assets of not less than $5,000,000,000, and (iii) has the highest
rating obtainable from S&P and Moody’s.

Notwithstanding the foregoing, “Permitted Investments” (A) shall exclude any
security with the S&P’s “r” symbol attached to the rating (indicating high
volatility or dramatic fluctuations in their expected returns because of market
risk), as well as any mortgage-backed securities and any security of the type
commonly known as “strips”; (B) shall be limited to those instruments that have
a predetermined fixed dollar of principal due at maturity that cannot vary or
change; (C) shall only include instruments that qualify as “cash flow
investments” (within the meaning of Section 860G(a)(6) of the Code); and
(D) shall exclude any investment where the right to receive principal and
interest derived from the underlying investment provides a yield to maturity in
excess of one hundred twenty percent (120%) of the yield to maturity at par of
such underlying investment. Interest may either be fixed or variable, and any
variable interest must be tied to a single interest rate index plus a single
fixed spread (if any), and move proportionately with that index. No investment
shall be made which requires a payment above par for an obligation if the
obligation may be prepaid at the option of the issuer thereof prior to its
maturity. All investments shall mature or be redeemable upon the option of the
holder thereof on or prior to the earlier of (x) three months from the date of
their purchase and (y) the Business Day preceding the day before the date such
amounts are required to be applied hereunder.

“Permitted Transfers” shall have the meaning set forth in Section 8.3.

“Person” shall mean any individual, corporation, partnership, limited liability
company, joint venture, estate, trust, unincorporated association, any other
entity, any federal, state, county or municipal government or any bureau,
department or agency thereof and any fiduciary acting in such capacity on behalf
of any of the foregoing.

“Personal Property” shall mean materials, furnishings, fixtures, machinery,
equipment and all items of tangible and intangible personal property now or
hereafter owned by Borrower, wherever located, and either (a) to be incorporated
into the Improvements, or (b) to be used in connection with the operation of the
Property.

 

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“Plan” shall mean, at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which any of Credit Party or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5)
of ERISA.

“Policies” shall have the meaning as set forth in Section 5.1.1(b).

“Prescribed Laws” shall mean, collectively, (a) the USA Patriot Act,
(b) 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, (c) the
International Emergency Economic Power Act, 50 U.S.C. §1701 et. seq. and (d) all
other Legal Requirements relating to money laundering or terrorism.

“Proceeds” shall mean: (a) the amount of all insurance proceeds payable as a
result of a Casualty to the Property or any portion thereof, or (b) the amount
of the Award payable as a result of a Condemnation to the Property or any
portion thereof.

“Proceeds Reserve Account” shall have the meaning set forth in Section 6.5.1(f).

“Property” shall mean the Land, the Improvements now or hereafter erected
thereon and all personal property owned by Borrower and encumbered by the
Mortgage, together with all rights pertaining to such property and Improvements,
as more particularly described in the Granting Clauses of the Mortgage.

“Qualified Manager” shall mean (a) Malkin Holdings LLC, (b) a reputable and
experienced management company which manages multiple properties having an
aggregate minimum of 10,000,000 net rentable square feet of office space
(exclusive of the Property) including at least ten (10) office buildings of the
same or higher class as the Property and which management company shall have at
least ten (10) years of experience managing office space of the same or higher
class to the Property and one or more buildings of at least 1,000,000 rentable
square feet, or (c) any Person with respect to which Borrower shall have
obtained the prior written consent of Agent, which consent shall not be
unreasonably withheld or delayed.

“Ratable Share” or “ratably” shall mean, with respect to any Lender, the
percentage that such Lender’s Maximum Commitment then constitutes of the Loan
Amount. The Ratable Share of each Lender on the date of this Agreement is set
forth on Schedule IV.

“Rating Agencies” shall mean 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”), and any other nationally-recognized
statistical rating agency which has been designated by Agent.

 

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“Reference Rate” shall mean, for any day, the rate of interest for such day from
time to time announced by HSBC at its New York City Main Branch as its prime
rate (being a base rate for calculating interest on certain loans), each change
in any interest rate hereunder based on the Reference Rate to take effect at the
time of such change in the prime rate. The Reference Rate is not necessarily the
lowest rate for commercial or other types of loans and Lenders have not
committed to charge interest hereunder at any lower or lowest rate at which HSBC
may now or in the future make loans to Borrower or other borrowers.

“Reference Rate Loan” shall mean the Loan or any portion thereof at any time in
which the Applicable Interest Rate for the Loan or such portion thereof is
calculated with reference to the Reference Rate plus the Reference Rate Margin
in accordance with the provisions of Article II.

“Reference Rate Margin” shall mean two hundred fifty (250) basis points.

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System from time to time in effect, including any successor or other
Regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.

“Regulatory Change” shall mean any change after the date of this Agreement in
Federal, state or foreign law or regulations (including, without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) or the
adoption or making after such date of any interpretation, directive or request
of or under any Federal, state or foreign law or regulations (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful) by any court or government or monetary authority charged with the
interpretation or administration thereof.

“Reinsurance Policies” shall have the meaning as set forth in Section 5.1.3(c).

“REIT” shall have the meaning as set forth in Section 8.3(a)(v).

“Remargining Collateral” shall have the meaning as set forth in Section 6.5.13.

“Rent Deficiency” shall have the meaning as set forth in Section 6.3.2.

“Rents” shall mean all rents, rent equivalents, moneys payable as damages or in
lieu of rent or rent equivalents, issues, profits, royalties (including all oil
and gas or other mineral royalties and bonuses), earnings, receipts, revenues,
accounts, accounts receivable, Borrower’s and Operating Company’s rights in any
security deposits and other deposits (subject to the prior right of the Tenants
making such deposits) and income, including, without limitation, fixed,
additional and percentage rents, and all operating expense reimbursements,
reimbursements for increases in taxes, sums paid by Tenants, whether to Borrower
or Operating Company to reimburse Borrower or Operating Company for amounts
originally paid or to be paid by Borrower or Operating Company or Borrower’s or
Operating Company’s agents or affiliates for which such Tenants were liable, as,
for example, Tenant improvements costs in excess of any work letter, lease
takeover costs, moving expenses and tax and operating expense pass-throughs for
which a Tenant is solely liable, parking, maintenance, common area, tax,
insurance, utility and service charges and contributions, proceeds of sale of
electricity, gas, heating, air-conditioning and other utilities and services,
deficiency rents and liquidated damages, and other

 

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benefits now or hereafter derived from any portion of the Property or otherwise
due and payable or to become due and payable as a result of any ownership, use,
possession, occupancy or operation thereof and/or services rendered, goods
provided and business conducted in connection therewith (including any payments
received pursuant to Section 502(b) of the Bankruptcy Code or otherwise in
arrangement, insolvency, dissolution, receivership or similar proceedings, or
any assignment for the benefit of creditors, in respect of any Tenant or other
occupants of any portion of the Property and all claims as a creditor in
connection with any of the foregoing), all receivables, customer obligations,
installment payment obligations and other obligations now existing or hereafter
arising created out of the sale, lease, sublease, license, concession or other
grant of the right of the use and/or occupancy of the Property and Proceeds, if
any, from rent or business interruption insurance or other loss of income
insurance required to be paid pursuant to the Ground Lease, Sublease,
Observatory Lease or any Lease, all cash or security deposits, advance rentals,
and all deposits or payments of a similar nature relating thereto, now or
hereafter, including during any period of redemption, derived from the Property
or any portion thereof and all proceeds from the cancellation, surrender, sale
or other disposition of the Leases but as to insurance and payments in respect
of damage claims and other lump sum amounts, applied appropriately over the
relevant period to which they relate. The Rents shall include the Ground Rent
payable under the Ground Lease and Rent payable under the Sublease. With respect
to the Observatory Lease, the term “Rents” shall include all Net Observatory
Deck Revenue but such characterization is solely for purposes and convenience of
this Agreement and is not otherwise binding as between the Credit Parties.

“Reorganization” shall mean, with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.

“Repayment Amount” shall have the meaning as set forth in
Section 5.1.1(a)(ii)(E).

“Replacement Carve-out Obligor” shall have the meaning as set forth in
Section 8.3.

“Replacement Lease” shall have the meaning as set forth in Section 6.3.2.

“Reportable Event” shall mean any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty (30) day notice period is
waived under PBGC regulations.

“Required Financial Item” shall have the meaning as set forth in
Section 4.1.7(e).

“Requisition Authorization Statement” shall mean the Requisition Authorization
Statement dated as of the date hereof, which shall be in the form attached
hereto as Exhibit I and shall be executed and delivered by Borrower to Agent,
for the ratable benefit of the Lenders, contemporaneously herewith, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time
to time.

 

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“Reserve Requirements” shall mean, for any day as applied to a LIBOR Fixed Rate
Tranche(s) or a LIBOR Floating Rate Tranche(s), the aggregate (without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on such day, if any, (including, without limitation, any
supplemental, marginal, supplemental and emergency reserves) under any
regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as “Eurocurrency liabilities” in Regulation D) required to be maintained by the
applicable Lender or its Loan participants, if any. Without limiting the effect
of the foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by any Lender or any Lender’s respective Loan
participants, if any, by reason of any Regulatory Change against (a) any
category of liabilities that includes deposits by reference to which the LIBOR
Base Rate or BBA LIBOR Daily Floating Rate is to be determined as provided in
this Agreement or (b) any category of extensions of credit or other assets that
includes the loans the interest rate on which is determined on the basis of
rates used in determining the LIBOR Base Rate or BBA LIBOR Daily Floating Rate.

“Restoration” shall have the meaning as set forth in Section 5.2.1.

“Restoration Threshold” shall mean (a) $5,000,000.00 and/or (b) any Casualty
which is expected to result in the closing of the Observation Deck for more than
ten (10) days or otherwise prevents public access thereto for a period of
ten (10) consecutive days.

“Revised Appraised Amount” shall have the meaning set forth in
Section 5.1.1(a)(ii)(E).

“Second Exercise Date” shall have the meaning set forth in Section 2.1.6(c).

“Second Extended Maturity Date” shall mean July 26, 2016 or such earlier date on
which the final payment of principal of the Note becomes due and payable as
therein or herein provided whether at such stated extended maturity date, by
declaration of acceleration or otherwise.

“Second Extension Notice” shall have the meaning set forth in Section 2.1.6(c).

“Second Extension Period” shall mean a period of twelve (12) consecutive months
following the First Extended Maturity Date.

“Secondary Market Transaction” shall have the meaning as set forth
Section 10.28.

“Section 2.2.8 Certificate” shall have the meaning as set forth in
Section 2.2.8(e).

“Series Mortgages” shall mean, collectively, those certain Mortgages,
Assignments of Leases and Rents and Security Agreements entered into after the
date hereof by Borrower in favor of Agent, for the ratable benefit of the
Lenders, and securing a portion of the Debt, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

 

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“Series Notes” shall mean, with respect to each Advance, those certain notes,
substantially in the form of the Replacement Notes, executed by Borrower in
favor of the Lenders, each in an amount equal to such Lender’s Ratable Share of
the applicable Advance, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

“Severed Loan Documents” shall have the meaning as set forth in Section 9.2(c).

“Single Employer Plan” shall mean any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.

“Solvency Certificate” shall mean a certificate from an authorized senior
officer of Operating Company and Observatory Tenant in form and substance
reasonably satisfactory to Agent, confirming that Operating Company and
Observatory Tenant are Solvent (both prior to the making of the Advance and
after giving effect to the same).

“Solvent” means, when used with respect to any Person, that (a) the fair value
of the property of such Person, on a going concern basis, is greater than the
total amount of liabilities (including, without limitation, contingent
liabilities) of such Person; (b) the present fair saleable value of the assets
of such Person, on a going concern basis, is not less than the amount that will
be required to pay the probable liabilities of such Person on its debts as they
become absolute and matured; (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability to
pay as such debts and liabilities mature; (d) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person’s property would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged; and (e) such Person has sufficient
resources, provided that such resources are prudently utilized, to satisfy all
of such Person’s obligations. Contingent liabilities will be computed at the
amount that, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

“Spread Maintenance Premium” shall mean an amount equal to (a) the principal
amount of any prepayment, multiplied by (b) an interest rate equal to the LIBOR
Margin or Reference Rate Margin, as applicable, divided by 365 multiplied by
(c) the number of calendar days from the date of any prepayment until the last
day of the Lockout Period.

“State” shall mean the State or Commonwealth in which the Property or any part
thereof is located.

“Sublease” shall mean that certain sublease as more particularly described on
Schedule XVII attached hereto.

“Subordinations” shall mean, collectively, (a) that certain Subordination
Agreement of even date herewith from Operating Company in favor of Agent, for
the ratable benefit of the Lenders, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time and (b) that
certain Subordination Agreement of even date herewith from Observatory Tenant in
favor of Agent, for the ratable benefit of the Lenders, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

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“Survey” shall mean an ALTA survey of the Property prepared by a surveyor
licensed in the State and satisfactory to Agent and the Title Company issuing
the Title Insurance Policy, and containing a certification of such surveyor
satisfactory to Agent and the Title Company issuing the Title Insurance Policy.

“TAB” shall have the meaning as set forth in Section 4.1.10(c).

“Tax Funds” shall have the meaning as set forth in Section 6.1.1.

“Tax Reserve Account” shall have the meaning as set forth in Section 6.5.1(c).

“Taxes” shall mean all real estate and personal property taxes, assessments,
water rates or sewer rents, now or hereafter levied or assessed or imposed
against the Property or part thereof, together with all interest and penalties
thereon.

“Tenant” shall mean any Person obligated by contract or otherwise to pay monies
(including a percentage of gross income, revenue or profits) under any Lease now
or hereafter affecting all or any part of the Property.

“Termination Space” shall have the meaning as set forth in Section 6.3.1.

“Terrorism Insurance Period” shall have the meaning as set forth in
Section 5.1(a)(ii)(E).

“Terrorism Insurance Period Collateral” shall have the meaning as set forth in
Section 5.1(a)(ii)(E).

“Terrorism Premium Limit” shall mean, for each calendar year, an annual
Insurance Premium that is equal to the lesser of (a) $0.25 per $100 of the
“total insured value” of the Property (where “total insured value” shall mean
the one hundred percent (100%) replacement cost of the Improvements and the
personal property on the Property and the required business income value) and
(b) $0.25 per $100 of the Loan Amount (which shall include the amount of the
Accordion to the extent that the Accordion is in effect regardless of the amount
of the Accordion which may have been advanced at such time). The parties hereto
hereby agree that the Terrorism Premium Limit shall only apply to that portion
of the terrorism coverage maintained by Borrower in excess of the Loan Amount
(plus the amount of the Accordion to the extent that the Accordion is in effect
and regardless of the amount of the Accordion which may have been advanced at
such time).

“Third Party Lease” shall have the meaning set forth in Section 4.1.9(b).

“Title Company” shall mean Chicago Title Insurance Company, First American Title
Insurance Company, Commonwealth Land Title Insurance Company, Stewart Title
Insurance Company and Old Republic National Title Insurance Company, which are
insuring the Lien of the Mortgage.

 

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“Title Insurance Policy” shall mean, collectively, those ALTA mortgagee title
insurance policies issued by the Title Company in the form acceptable to Agent
issued with respect to the Property and insuring the Lien of the Mortgage and
the Series Mortgages, as applicable.

“Tranche(s)” shall mean a portion or portions of the Loan.

“Transfer” shall have the meaning as set forth in the Mortgage.

“Transferee” shall have the meaning as set forth in Section 10.25(i).

“TRIPRA” shall have the meaning as set forth in Section 5.1.3(a).

“TRIPRA Repeal Date” shall have the meaning as set forth in
Section 5.1(a)(ii)(e).

“Trigger Event” shall mean, as of any Determination Date, the Debt Yield shall
have fallen below eleven percent (11%) for two (2) consecutive calendar
quarters.

“Trigger Period” shall mean any period commencing upon any Determination Date as
of which Agent reasonably determines that a Trigger Event has occurred and is
continuing until such subsequent Determination Date, if any, as Agent reasonably
determines that the Debt Yield has been greater than eleven percent (11%) for
two (2) consecutive calendar quarters immediately preceding such Determination
Date.

“2.2.8 Taxes” shall have the meaning set forth in Section 2.2.8(a).

“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in
effect in the State from time to time.

“U.S. Government Obligations” shall mean any direct obligations of, or
obligations guaranteed as to principal and interest by, the United States
Government or any agency or instrumentality thereof, provided that such
obligations are backed by the full faith and credit of the United States. Any
such obligation must be limited to instruments that have a predetermined fixed
dollar amount of principal due at maturity that cannot vary or change. If any
such obligation is rated by S&P, it shall not have an “r” highlighter affixed to
its rating. Interest must be fixed or tied to a single interest rate index plus
a single fixed spread (if any), and move proportionately with said index. U.S.
Government Obligations include, but are not limited to: U.S. Treasury direct or
fully guaranteed obligations, Farmers Home Administration certificates of
beneficial ownership, General Services Administration participation
certificates, U.S. Maritime Administration guaranteed Title XI financing, Small
Business Administration guaranteed participation certificates or guaranteed pool
certificates, U.S. Department of Housing and Urban Development local authority
bonds, and Washington Metropolitan Area Transit Authority guaranteed transit
bonds. In no event shall any such obligation have a maturity in excess of
365 days.

 

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“USA Patriot Act” shall mean 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).

Section 1.2 Principles of Construction.

All references to sections and schedules are to sections and schedules in or to
this Agreement unless otherwise specified. Any reference in this Agreement or in
any other Loan Document to any Loan Document shall be deemed to include
references to such documents as the same may hereafter be amended, modified,
supplemented, extended, replaced and/or restated from time to time (and, in the
case of any note or other instrument, to any instrument issued in substitution
therefor). Unless otherwise specified, the words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all meanings attributed to defined terms
herein shall be equally applicable to both the singular and plural forms of the
terms so defined. To the extent not specified herein, wherever herein the
Borrower’s compliance with the provisions herein is subject to compliance
thereof by the Operating Company and/or the Observatory Tenant, Borrower shall
be obligated hereunder to cause the Operating Company and/or the Observatory
Tenant, as applicable, to so comply.

II. THE LOAN

Section 2.1 The Loan.

2.1.1 Agreement to Lend and Borrow. (a) Subject to and upon the terms and
conditions set forth herein, on the Closing Date the Lenders shall make the Loan
to Borrower and Borrower shall accept the Loan from Lenders.

(b) No Lender is obligated to fund amounts in excess of the amount of its
Maximum Commitment as set forth on Schedule IV, but if the aggregate amount of
all Lenders’ Maximum Commitments is increased or Agent makes funds available in
excess of the total Maximum Commitment amount, each Lender shall have the right
to elect at its own and absolute discretion whether to provide funds to Agent to
fund amounts in excess of its Maximum Commitment. If and to the extent any
Lender shall fund amounts in excess of its Maximum Commitment for any purpose,
such Lender’s Ratable Share of the Loan shall be adjusted from time to time
based on the total amounts advanced by all of Lenders from time to time in
respect of the Loan.

2.1.2 Initial Advance; Subsequent Advances. On the date hereof, the Borrower
shall receive an initial advance in the amount of One Hundred Fifty-Nine Million
and No/100 Dollars ($159,000,000.00) (the “Initial Advance”). Subject to and
upon the terms and conditions set forth herein, Lenders severally and not
jointly agree to fund each Lender’s Ratable Share of Advances of the Loan to
Borrower from time to time, each in the principal amount of at least $10,000,000
and any additional amounts thereover in increments of $5,000,000 (or, at any
time, the unfunded balance), and in the aggregate, when added to the Initial
Advance, not to exceed Two Hundred Thirty-Five Million and 00/100 Dollars
($235,000,000.00), in accordance with and subject to the provisions hereof,
during the period from the date hereof to the Maturity Date, and Borrower shall
accept such Advances of the Loan from each Lender. The obligation of the Lenders
to make their Ratable Share of any Advance after the Initial Advance shall be
subject to the following conditions precedent:

 

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(a) Draw Request. Borrower shall submit a Draw Request in accordance with the
provisions of this Agreement;

(b) No Default. On the date of such Advance, no Monetary Default or Event of
Default shall have occurred which is continuing;

(c) Debt Yield. The NOI for the Property (using, as the determination date, the
first day of the calendar month immediately preceding the date of the Draw
Request) provides for a Debt Yield of at least sixteen percent (16%) based on
the outstanding principal balance of the Loan on the date in question including
the amount requested in the applicable Draw Request. Agent hereby agrees that
if, in Agent’s reasonable determination, Agent determines that the Debt Yield is
less than sixteen percent (16%) and Agent used a lower NOI to calculate such
Debt Yield than the NOI which was calculated by Borrower, Agent shall review the
same with Borrower and/or its representatives, including Agent’s adjustment (if
any) to Gross Revenues and/or Operating Expenses, as applicable, to provide to
Borrower and/or its representatives the basis for and details surrounding such
determination (provided, however, that the duration of such review and the
provision of such basis for and details surrounding Agent’s determination shall
be reasonably determined by Agent and the final determination of the Debt Yield
shall be unilaterally made by Agent);

(d) Operating Company Consent and Solvency Certificate. Borrower shall have
delivered to Agent the Operating Company Consent and a Solvency Certificate with
respect to each of Operating Company and Observatory Tenant;

(e) Series Notes. There shall have been executed and delivered to Agent Series
Notes in favor of the Lenders in an amount equal to each Lender’s Ratable Share
of such Advance;

(f) Series Mortgage and Assignment of Leases. The applicable Series Mortgage and
an amendment to the Assignment of Leases increasing the amount of the Debt
secured thereby by the amount of such Advance, shall have been executed and
delivered to Agent for recordation in the City Register’s Office and all
appropriate mortgage recording tax and recording charges in connection therewith
shall have been paid by Borrower. To the extent that there are in excess of
four (4) additional Advances after the Initial Advance, in connection with the
fifth (5th) Series Mortgage, Borrower shall be required to consolidate such
fifth (5th) Series Mortgage with the Consolidated Mortgage and all existing
Series Mortgages;

(g) Ratification of Guaranty, Environmental Indemnity, Negative Pledges and
Subordinations. Guarantor shall deliver to Agent a ratification of the Guaranty
in form and substance reasonably acceptable to Agent and a ratification of the
Environmental Indemnity in form and substance reasonably acceptable to Agent.
Each of Operating Company and Observatory Tenant shall deliver to Agent a
ratification of its Subordination and Negative Pledge in form and substance
reasonably acceptable to Agent;

 

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(h) Title Insurance Policy. Borrower shall cause to be delivered to Agent a paid
Title Insurance Policy, in all respects satisfactory to Agent, with an insured
amount equal to the amount of the applicable Advance (or when aggregated with
the corresponding co-insurance endorsements equals the amount of the applicable
Advance), which Title Insurance Policy shows the Series Mortgage which is being
insured as a first lien on the Property, subject only to (i) the Permitted
Encumbrances, and (ii) any other Liens or encumbrances consented to in writing
by Agent. To the extent that Borrower is required to consolidate the existing
Consolidated Mortgage and Series Mortgages in accordance with subsection (f)
above, the Title Insurance Policy delivered in connection herewith shall be for
an insured amount equal to the aggregate Debt then secured by the consolidated
mortgages including the then contemplated Advance;

(i) Representations and Warranties. The representations and warranties made by
Borrower in the Loan Documents shall have been true and correct in all material
respects on the date on which made and shall also be true and correct in all
material respects on the date of such Advance (except that for this purpose the
representations and warranties set forth in Section 3.1.21 shall be updated by
Borrower so that the same are true and correct in all material respects to
within thirty (30) days of the date such representations and warranties are
made);

(j) Estoppel Certificates. If any Estoppel Certificate delivered by any Tenant
subsequent to the Closing Date pursuant to Section 4.1.29 hereof contains any
material exception to the statements and certifications contained thereon, as
determined by Agent in its reasonable discretion, then Borrower shall have
remedied the same and shall have obtained a new Estoppel Certificate from such
Tenant which contains no material exceptions to any of the statements and
certifications contained therein. In addition, Borrower shall deliver an
estoppel certificate from each of Operating Company and Observatory Tenant,
substantially in the form of the estoppel certificate delivered by each of them
on the Closing Date and otherwise reasonably acceptable to Agent;

(k) No Damage. The Improvements shall not have been injured or damaged by fire,
explosion, accident, flood or other Casualty, unless there shall be available
for restoration, whether from insurance proceeds or other resources reasonably
available for such purpose, monies sufficient in the reasonable judgment of
Agent to effect the satisfactory restoration of the Improvements;

(l) Opinions. Borrower shall deliver to Agent such legal opinions regarding the
matters covered by the opinions delivered in connection herewith as may
reasonably be required by Agent in connection with such Advance;

(m) Compliance Certificate. Borrower shall have furnished to Agent a certificate
from an authorized senior officer of Borrower, certifying as to compliance with
the foregoing conditions to such Advance and certifying as to (i) Borrower’s
intended use of the proceeds of such Advance and (ii) Borrower’s use of the
prior Advances; provided, that, with respect to items (i) and (ii) such
certifications shall provide for broad categories of use and approximate amounts
and shall not include any supporting documentation; and

(n) Expenses. Borrower shall have paid all of Agent’s costs and expenses,
including reasonable attorney’s fees, incurred in connection with such Advance.

 

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2.1.3 The Note. The Loan shall be evidenced by the Note and shall be repaid in
accordance with the terms of this Agreement and the Note.

2.1.4 No Reborrowings. Any amount borrowed and repaid hereunder in respect of
the Loan may not be reborrowed.

2.1.5 Use of Proceeds. Borrower shall use the Initial Advance to (a) pay and
discharge any existing secured mortgage loans relating to the Property, (b) pay
all past-due Basic Carrying Costs, if any, in respect of the Property, (c) pay
costs and expenses incurred in connection with the closing of the Loan, (d) fund
any working capital requirements of the Property, and (e) retain the balance, if
any, or make a distribution to its members. Borrower may use up to
$85,000,000.00 of the Loan Amount for (i) general working capital purposes with
respect to the Property and (ii) a one-time distribution by Borrower to its
members.

2.1.6 Loan Term and Extension Options. (a) The term of the Loan shall commence
on the Closing Date and shall end on the Initial Maturity Date.

(b) Notwithstanding the foregoing, Borrower shall have an option to extend the
term of the Loan until the First Extended Maturity Date, subject to satisfaction
of the following conditions: (i) Borrower shall have given Agent written notice
(the “First Extension Notice”) of such extension by no later than May 31, 2014
nor any earlier than April 30, 2014 (the date of the delivery of the Extension
Notice, the “First Exercise Date”); (ii) on the First Exercise Date, Borrower
shall have paid or caused to be paid to Agent the non-refundable Extension Fee,
for the ratable benefit of the Lenders; (iii) no Default shall have occurred and
be continuing at the time of, or any time after, the delivery of the First
Extension Notice; (iv) Agent shall have received, at Borrower’s expense, an
updating report to its Title Insurance Policy indicating no change in the
condition of title to the Property; (v) Borrower shall have paid all costs and
expenses actually incurred by Agent in connection with such extension, including
reasonable legal fees and costs; (vi) the Loan-to-Value Ratio, based upon an
updated Appraisal ordered by Agent in accordance with Section 4.1.6, shall not
exceed fifty percent (50%) on an “as is” basis; (vii) the NOI of the Property
provides for a Debt Yield of not less than sixteen percent (16%) based on the
Loan Amount; (viii) Borrower shall have delivered an Operating Company Consent;
(ix) Borrower shall deliver to Agent an estoppel from the Operating Company and
the Observatory Tenant substantially in the form delivered on the Closing Date
and otherwise reasonably acceptable to Agent; (x) Borrower shall certify to
Agent, both on the First Exercise Date, and prior to the commencement of the
First Extension Period, that the representations and warranties made by Borrower
in the Loan Documents remain true and correct in all material respects (except
that representations regarding financial statements of a Credit Party shall be
with reference to the most recent financial statements delivered by such Credit
Party pursuant hereto provided that the same have been timely delivered by the
applicable Credit Party); (xi) prior to the commencement of the First Extension
Period, the Improvements shall not have been injured or damaged by fire,
explosion, accident, flood or other Casualty, unless Agent shall have received
insurance proceeds or other monies sufficient in the reasonable judgment of
Agent to effect the satisfactory restoration of the Improvements; and
(xii) Borrower shall deliver to Agent such legal opinions as shall be reasonably
requested by Agent.

 

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(c) In addition, notwithstanding the foregoing, provided that the Initial
Maturity Date had been extended to the First Extended Maturity Date, Borrower
shall have an option to extend the term of the Loan until the Second Extended
Maturity Date, subject to satisfaction of the following conditions: (i) Borrower
shall have given Agent written notice (the “Second Extension Notice”) of such
extension by no later than May 31, 2015 nor any earlier than April 30, 2015 (the
date of the delivery of the Extension Notice, the “Second Exercise Date”);
(ii) on the Second Exercise Date, Borrower shall have paid or caused to be paid
to Agent the non-refundable Extension Fee, for the ratable benefit of the
Lenders; (iii) no Default shall have occurred and be continuing at the time of,
or any time after, the delivery of the Extension Notice; (iv) Agent shall have
received, at Borrower’s expense, an updating report to its Title Insurance
Policy indicating no change in the condition of title to the Property;
(v) Borrower shall have paid all costs and expenses actually incurred by Agent
in connection with such extension, including reasonable legal fees and costs;
(vi) the Loan-to-Value Ratio, based upon an updated Appraisal ordered by Agent
in accordance with Section 4.1.6, shall not exceed fifty percent (50%) on an “as
is” basis; (vii) the NOI of the Property provides for a Debt Yield of not less
than sixteen percent (16%) based on the Loan Amount; (viii) Borrower shall have
delivered an Operating Company Consent; (ix) Borrower shall deliver to Agent an
estoppel from the Operating Company and the Observatory Tenant substantially in
the form delivered on the Closing Date and otherwise reasonably acceptable to
Agent; (x) Borrower shall certify to Agent, both on the Second Exercise Date,
and prior to the commencement of the Second Extension Period, that the
representations and warranties made by Borrower in the Loan Documents remain
true and correct in all material respects (except that representations regarding
financial statements of a Credit Party shall be with reference to the most
recent financial statements delivered by such Credit Party pursuant hereto
provided that the same have been timely delivered by the applicable Credit
Party); (xi) prior to the commencement of the Second Extension Period, the
Improvements shall not have been injured or damaged by fire, explosion,
accident, flood or other Casualty, unless Agent shall have received insurance
proceeds or other monies sufficient in the reasonable judgment of Agent to
effect the satisfactory restoration of the Improvements; and (xii) Borrower
shall deliver to Agent such legal opinions as shall be reasonably requested by
Agent.

(d) In connection with this Section 2.1.6, Agent hereby agrees that if, in
Agent’s reasonable determination, Agent determines that the Debt Yield is less
than sixteen percent (16%) and Agent used a lower NOI to calculate such Debt
Yield than the NOI which was calculated by Borrower, Agent shall review the same
with Borrower and/or its representatives, including Agent’s adjustment (if any)
to Gross Revenues and/or Operating Expenses, as applicable, to provide to
Borrower and/or its representatives the basis for and details surrounding such
determination (provided, however, that the duration of such review and the
provision of such basis for and details surrounding Agent’s determination shall
be reasonably determined by Agent and the final determination of the Debt Yield
shall be shall be unilaterally made by Agent). In addition, in connection with
this Section 2.1.6, Agent hereby agrees that if Agent determines that the
Loan-to-Value Ratio exceeds fifty (50%) and the Appraised Value, based on
Agent’s determination thereof is lower than the Appraised Value as reflected on
the Appraisal then delivered to Agent in connection with the applicable Loan
extension, Agent shall review the basis for and details surrounding such
determination of the Appraised Value by Agent with Borrower and/or its
representatives (provided, however, that the duration of such review and the
provision of such basis for and details surrounding Agent’s determination shall
be reasonably determined by Agent and the final determination of the Appraised
Value shall be unilaterally made by Agent).

 

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2.1.7 Borrowing Procedures.

(a) Borrower shall submit to Agent a Draw Request (substantially in the form
attached hereto as Exhibit E) which shall be executed by one of the Authorized
Representatives (“Draw Request”) not less than ten (10) Business Days prior to
the date upon which a disbursement of the Loan is requested (the “Borrowing
Date”) and no more frequently than once in each calendar month. As part of each
Draw Request, the Borrower shall submit an irrevocable notice of its intention
to borrow funds and a Borrower’s Certificate in the form set forth in Exhibit E
(“Borrower’s Certificate”), which shall be executed by one of the Authorized
Representatives.

(b) Not less than three (3) Business Days prior to the Borrowing Date, Agent
shall deliver written notice to each Lender at the address specified by each
Lender from time to time which notice shall include the Borrowing Date and such
Lender’s Ratable Share of such Advance. Agent shall include with such notice a
copy of the Draw Request and Borrower’s Certificate. Lenders shall make the
requested Advance on the Borrowing Date so long as all conditions to such
Advance are satisfied or waived. Unless otherwise notified by Agent, each Lender
may assume that all conditions to such Advance are satisfied or waived on the
Borrowing Date. If, for any reason, Agent determines that the requested Advance
will not be made by the Lenders, Agent shall provide notice to Borrower of the
same and shall state the reasons why such Advance shall not be made.

(c) Not later than 11:00 a.m. (New York City time) on the Borrowing Date, each
Lender shall make available for the account of Agent at its address referred to
in Section 10.6, in same day funds, such Lender’s ratable portion of such
Advance. After Agent’s receipt of such funds and upon fulfillment of the
applicable conditions in Section 2.1.2, Agent will make such funds available to
Borrower by wire transfer of immediately available funds to the United States
account directed by Borrower in the applicable Draw Request.

(d) Unless Agent shall have received notice from a Lender prior to the Borrowing
Date that such Lender will not make available to Agent such Lender’s ratable
portion of such Advance, Agent may assume that such Lender has made such portion
available to Agent on the Borrowing Date in accordance with this Section 2.1.7,
and Agent may, in reliance upon such assumption, make available to Borrower on
the Borrowing Date a corresponding amount. If and to the extent that any of
Lenders (the “Defaulting Advancing Lender”) shall not have so made such ratable
portion available to Agent (individually, a “Deficiency”, and collectively,
“Deficiencies”), and Agent has advanced such amount to Borrower, such Defaulting
Advancing Lender and Borrower agree to repay to Agent forthwith on demand such
corresponding amount together in the case of the Defaulting Lender but not
Borrower) with interest thereon, for each day from the date such amount is made
available to Borrower until the date such amount is repaid to Agent at the
Default Rate. If such Defaulting Advancing Lender shall repay to Agent such
corresponding amount, such amount (excluding interest) so repaid shall
constitute such Defaulting Advancing Lender’s ratable portion of the Advance.
Each of the Lenders agrees that Borrower or any of the other Lenders shall have
the right to proceed directly against any

 

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Defaulting Advancing Lender in respect of any right or claim arising out of the
default of such Defaulting Advancing Lender hereunder. If there shall be a
Deficiency in respect of any Lender, the other Lenders, or any of them, shall
have the right, but not the obligation, to elect to advance all or any part of
the ratable portion of an Advance that should have been made by the Defaulting
Advancing Lender, and the Defaulting Advancing Lender agrees to repay upon
demand to each of the Lenders (each, an “Electing Lender”) who has advanced a
portion of the Deficiency the amount advanced on behalf of the Defaulting
Advancing Lender, together with interest thereon at the Default Rate. If more
than one Lender elects to advance a portion of the Deficiency such Lenders’
advances shall be made based on the relative Ratable Shares of the Loan of each
Electing Lender or as otherwise agreed to by such Lenders. In the event the
Defaulting Advancing Lender fails to advance or repay the Deficiency (with
interest at the Default Rate, if applicable) on or prior to the date of the next
succeeding Advance, the entire interest of said Defaulting Advancing Lender in
the Loan shall be subordinate to the interests of the other Lenders and all
payments otherwise payable to the Defaulting Advancing Lender shall be used to
advance or repay the Deficiency, as applicable, until such time such Defaulting
Advancing Lender advances or repays all Deficiencies (including interest at the
Default Rate, if applicable) and Agent shall have the right (but not the
obligation) to require such Defaulting Advancing Lender to assign its interest
in the Loan to an Eligible Assignee or other assignee satisfactory to Agent in
its sole discretion.

(e) The failure of any Lender to pay any Deficiency shall not relieve any other
Lender of its obligation, if any, hereunder to make its ratable portion of the
Advance on the Borrowing Date, but no Lender shall be responsible for the
failure of any Lender to make its ratable portion of the Advance to be made by
such other Lender on the Borrowing Date.

Section 2.2 Interest Rate.

2.2.1 Interest.

(a) Applicable Interest Rate. The outstanding principal amount of the Loan shall
bear interest, as provided below, at the Applicable Interest Rate from time to
time in effect based upon the LIBOR Fixed Rate or when specifically so provided
in this Agreement, based upon either the Reference Rate plus the Reference Rate
Margin or the LIBOR Floating Rate.

(b) Computation of Interest and Fees. Accrued interest and fees on the Loan
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed during the applicable calendar month and shall be payable
in arrears. Any change in the BBA LIBOR Daily Floating Rate or the Reference
Rate shall be effective as of the day on which such change in rate occurs. Each
determination of an interest rate by Agent pursuant to any provision of this
Agreement shall be conclusive and binding on Borrower in the absence of manifest
error. Notwithstanding the foregoing, interest payable at the Default Rate
following an Event of Default shall be payable from time to time on demand of
Agent. In any event, upon the payment or prepayment of any principal of any
portion of the Loan, accrued, unpaid interest on the principal amount so paid or
prepaid shall be due and payable.

2.2.2 Maximum Number of Interest Periods. No more than one (1) LIBOR Fixed Rate
Tranche with respect to the Loan may exist at any time.

 

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2.2.3 Certain Notices. Notices by Borrower to Agent of optional prepayment of
the Loan shall be irrevocable and shall be effective only if received by Agent
in writing or telephonically not later than 11:00 a.m. (New York time) (and if
telephonically, also confirmed in writing by 5:00 p.m. (New York time)) on the
number of Business Days prior to the date of the relevant occurrence specified
below:

 

September 30,

Notice

     Prior Notice Requirements  

Optional Prepayment

       10 Business Days   

Each notice of optional prepayment shall specify the amount of the Loan to be
prepaid, the date of prepayment (which shall be a Business Day) and such other
details as Agent may reasonably request. Notwithstanding the foregoing or
anything else to the contrary contained herein or any contrary designation by
Borrower, Agent and Lenders shall have the right to apply any prepayment of the
Loan, regardless of how specified by Borrower, in such order and priority as
Agent shall designate in its sole discretion.

2.2.4 Additional Costs. (a) Borrower shall pay to Agent, for the ratable benefit
and account of the Lenders, from time to time, within ten (10) days after demand
therefor by Agent, such amounts as each Lender may reasonably determine to be
sufficient to compensate such Lender on an after-tax basis for any increase in
costs that such Lender reasonably determines are attributable to its making or
maintaining of any portion of the Loan or its obligation to make any portion of
the Loan hereunder, or any reduction in any amount receivable by such Lender
hereunder or such obligation (such increases in costs and reductions in amounts
receivable being herein called “Additional Costs”), in each case resulting from
and limited to the amounts necessary to compensate each Lender for any
Regulatory Change (i) which affects similarly situated banks or financial
institutions generally and is not applicable to such Lender primarily by reason
of such Lender’s particular conduct or condition and (ii) which:

(A) does or shall subject any Lender to any 2.2.8 Tax or increased 2.2.8 Tax of
any kind whatsoever (other than any (I) Non-Excluded Tax with respect to which
indemnification or additional payments have been paid pursuant to
Section 2.2.8(a) or Section 2.2.8(c), (II) Excluded Tax (including, for the
avoidance of doubt, 2.2.8 Tax described in clause (w), clause (x), clause (y) or
clause (z) of Section 2.2.8(a), or (III) Other Tax) on its loans, loan
principal, letters of credit, commitments, or other obligations, or its
deposits, reserves, other liabilities or capital attributable thereto, or change
the basis or rate of taxation of payments to such Lender in respect thereof; or

(B) imposes or modifies any reserve, special deposit or similar requirements
(other than the Reserve Requirement utilized in the determination of the LIBOR
Rate) relating to any extensions of credit or other assets of, or any deposits
with or other liabilities of, such Lender (including, without limitation, any
such deposits referred to in the definition of “LIBOR Base Rate”), or any
commitment of such Lender (including, without limitation, the commitment of such
Lender hereunder); or

 

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(C) imposes any other condition affecting this Agreement or the Note (or any of
such extensions of credit or liabilities referred to in subdivision (B) above).

Notwithstanding anything to the contrary contained in this Section 2.2.4,
Additional Costs may be imposed on Borrower by Agent on behalf of each Lender
only if such Additional Costs are generally being imposed by such Lender on
similarly situated borrowers (as reasonably determined by such Lender).

(b) Without limiting the effect of the provisions of clause (a) of this
Section 2.2.4 (but without duplication), in the event that, by reason of any
Regulatory Change which affects similarly situated banks or financial
institutions generally and is not applicable to a Lender primarily by reason of
such Lender’s particular conduct or condition, any Lender incurs Additional
Costs based on or measured by the excess above a specified level of the amount
of a category of deposits or other liabilities of such Lender that includes
deposits by reference to which the LIBOR Base Rate is determined as provided in
this Agreement or a category of extensions of credit or other assets of such
Lender that includes the portion of the Loan evidenced by such Lender’s Note,
then, if such Lender so elects by notice to Agent and Borrower, the obligation
of such Lender to make or continue such portion of the Loan based on the LIBOR
Base Rate hereunder shall be suspended effective on the last day of the then
current Interest Period, until such Regulatory Change ceases to be in effect and
the portion of the Loan evidenced by such Lender’s Note shall, during such
suspension, bear interest at the Reference Rate plus the Reference Rate Margin.

(c) Without limiting the effect of the foregoing provisions of this
Section 2.2.4 (but without duplication), Borrower shall pay to each Lender from
time to time on request such amounts as such Lender may reasonably determine to
be necessary to compensate such Lender (or, without duplication, the bank or
bank holding company of which such Lender is a subsidiary) on an after-tax basis
for any increase in costs that it determines are attributable to the maintenance
by such Lender (or any Applicable Lending Office or such parent bank or bank
holding company of such Lender), pursuant to any law or regulation or any
interpretation, directive or request (whether or not having the force of law) of
any Governmental Authority (i) following any Regulatory Change or
(ii) implementing any capital guideline or other requirement (whether or not
having the force of law) applying to a class of banks including such Lender,
hereafter issued by any government or governmental or supervisory authority
implementing at the national level the provisions of the Dodd-Frank Wall Street
Reform and Consumer Protection Act and/or the Basel Accord (including, without
limitation, the various capital guidelines of the Board of Governors of the
Federal Reserve System (12 C.F.R. Part 208, Appendices 12 C.F.R. Part 225,
Appendices), the various capital guidelines of the office of the Comptroller of
the Currency (12 C.F.R. Part 3, Appendices), and the Prompt Corrective Action
provisions (12 C.F.R. Part 303)), of capital in respect of the commitment to
lend or the Ratable Share of the Loan of such Lender (such compensation to
include, without limitation, an amount equal to any reduction of the rate of
return on assets or equity of such Lender (or any Applicable Lending Office or
such parent bank or bank holding company of such Lender) to a level below that
which such Lender (or any Applicable Lending Office or such parent bank or bank
holding company of such Lender) could have achieved but for such law,
regulation, interpretation, directive or request). For purposes of this
Section 2.2.4(c), “Basel Accord” shall mean the

 

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various recommendations for capital and liquidity standards issued by the Bank
for International Settlement’s Basel Committee on Banking Supervision, including
without limitation those recommendations known informally as “Basel I,”
“Basel II,” and “Basel III,” as amended, modified and supplemented and in effect
from time to time or any replacement thereof.

(d) Each Lender shall notify Agent and Borrower of any event occurring after the
date of this Agreement entitling Lender to compensation under clause (a) or
(c) of this Section 2.2.4 as promptly as practicable, and shall use commercially
reasonable efforts to designate a different Applicable Lending Office for the
Loan if such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the opinion of such Lender, subject such Lender to
any unreimbursed cost or expense and would not otherwise be disadvantageous to
such Lender. Such Lender shall furnish to Borrower a certificate setting forth
the basis and amount of each request by such Lender for compensation under
clause (a) or (c) of this Section 2.2.4. Determinations and allocations by each
Lender for purposes of this Section 2.2.4 of the effect of any Regulatory Change
pursuant to clause (a) or (b) of this Section 2.2.4, or of the effect of capital
maintained pursuant to clause (c) of this Section 2.2.4, on its costs or rate of
return of maintaining its Ratable Share of the Loan or its obligation to make
such Loan, or on amounts receivable by it in respect of the Loan, and of the
amounts required to compensate each Lender under this Section 2.2.4, shall
constitute prima facie evidence thereof. Each Lender shall confirm to Borrower
at the time it makes any claim under this Section 2.2.4 that the methods of
determination and allocation used by it in determining the amount of such claim
are reasonably consistent with such Lender’s treatment of customers similar to
Borrower (as reasonably determined by such Lender). In the event any Lender
makes a request for compensation under clause (a) or (c) of this Section 2.2.4,
Borrower shall, upon payment of the amount of compensation so requested, have
the right to prepay the Loan in full on the last day of any then current
Interest Period with respect to which such compensation has been requested.

2.2.5 LIBOR Rate. Anything herein to the contrary notwithstanding, if, on or
prior to the determination of any LIBOR Base Rate or BBA LIBOR Daily Floating
Rate for any Interest Period,

(a) any Lender reasonably determines that quotations of interest rates for the
relevant deposits referred to in the definition of “LIBOR Base Rate” or “BBA
LIBOR Daily Floating Rate” are not being provided in the relevant amounts or for
the relevant maturities for purposes of determining rates of interest for any
LIBOR Fixed Rate Tranche(s) or LIBOR Floating Rate Tranche(s) as provided
herein; or

(b) any Lender determines that by reason of circumstances affecting the London
interbank market the relevant rates of interest referred to in the definition of
“LIBOR Base Rate” upon the basis of which the rate of interest for the LIBOR
Loan for such Interest Period is to be determined are not likely to adequately
to cover the cost to such Lender of making or maintaining a LIBOR Loan for such
Interest Period;

then such Lender shall give Borrower and Agent prompt notice thereof and, so
long as such condition remains in effect, such Lender shall be under no
obligation to make its Ratable Share of any such LIBOR Loan but shall remain
obligated to make its Ratable Share of a Reference Rate Loan for a corresponding
amount, or if any portion of the Loan is already outstanding as a

 

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LIBOR Loan, such portion shall, commencing immediately after the end of the then
current Interest Period, bear interest at the Reference Rate plus the Reference
Rate Margin. Each such Lender shall promptly notify Borrower and Agent upon the
cessation of any facts and circumstances which resulted in suspension under this
Section 2.2.5, whereupon Borrower’s right to cause the Loan or any portion
thereof to be a LIBOR Loan shall be reinstated.

2.2.6 Illegality. Notwithstanding any other provision of this Agreement, in the
event that it becomes unlawful for any Lender or its Applicable Lending Office
to honor its obligation to make or maintain its Ratable Share of the Loan, then
such Lender shall promptly notify Borrower and Agent thereof and such Lender’s
obligation to make its Ratable Share of the Loan shall be suspended (provided
that, if requested by Borrower, such Lender’s Ratable Share of the Loan shall
automatically be converted to a Reference Rate Loan if doing so would enable
such Lender to lawfully honor its obligation to make or maintain its Ratable
Share of the Loan) until such time as such Lender may again make its Ratable
Share of the Loan and Borrower shall, if required by applicable law, upon the
request of such Lender, prepay a portion of the Loan equal to the Ratable Share
of such Lender together with accrued interest thereon, but without payment of
the Spread Maintenance Premium or compensation to such Lender pursuant to
Section 2.2.7. If Borrower has a Draw Request pending with Agent at such time as
any Lender notifies Borrower that it is unable to make its Ratable Share of the
Loan, Borrower shall have the right to revoke such Draw Request. Notwithstanding
the foregoing, such Lender shall, as promptly as practicable, designate a
different Applicable Lending Office for the Loan if doing so would enable it to
lawfully honor its obligation to make or maintain its Ratable Share of the Loan.
In addition, notwithstanding the foregoing, Borrower shall be permitted to
replace any Lender which cannot make its Ratable Share of the Loan pursuant to
Section 2.2.4 or this Section 2.2.6, provided that (a) such replacement does not
conflict with any Legal Requirements, (b) no Event of Default shall have
occurred and be continuing at the time of such replacement, (c) the replacement
financial institution shall purchase, at par, such Lender’s Ratable Share and
other amounts owing to such replaced Lender on or prior to the date of
replacement, (d) the Borrower shall pay all increased costs (if any) required
pursuant to Section 2.2.4 in respect of any period prior to the date on which
such replacement shall be consummated and for which Borrower received timely
notice hereof in accordance with said provisions, (e) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to Agent
(unless Agent is the Lender being replaced), (f) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of
Section 10.25, (g) any such replacement shall not be deemed to be a waiver of
any rights that the Borrower, Agent or any other Lender shall have against the
replaced Lender; and (h) unless a Lender then party to this Agreement or the
replacement Lender is willing to assume the rights and obligations of the Agent
hereunder, in no event shall Borrower be permitted to replace a Lender which is
the Agent.

2.2.7 Breakage Costs. (a) Borrower agrees to indemnify and compensate each
Lender on an after-tax basis for any loss, cost or actual expense incurred by it
(but excluding loss of anticipated profit) as a result of (i) a default by
Borrower in making a borrowing of, payment of, conversion into or continuation
of a LIBOR Loan after such Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, including, without limitation,
any such loss or expense arising from interests or fees payable by any Lender to
lenders of funds obtained by it in order to maintain a LIBOR Loan hereunder,
(ii) a default by Borrower in making any prepayment after such Borrower has
given a notice

 

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thereof in accordance with the provisions of this Agreement, (iii) the making of
a prepayment (mandatory or optional) of a LIBOR Loan for any reason (including,
without limitation, the acceleration of the maturity of the Loan pursuant to
Section 9.2) on a day that is not the last day of an Interest Period with
respect thereto, or (iv) the early termination of any swap or other interest
rate hedging arrangements, including without limitation, any such loss, cost or
expense arising from the reemployment of funds obtained by it, from fees payable
to terminate the deposits from which such funds were obtained or from reversing
any swap or other interest rate hedging arrangements. In no event shall the
compensation to be paid by Borrower under Section 2.2.7(a) be less than Five
Hundred Dollars and 00/100 ($500.00) in the aggregate on each such occurrence.
The parties hereto acknowledge and agree that the damages that Agent and the
Lenders would suffer as a result of the Loan being prepaid are difficult or
impossible to ascertain and, therefore, agree that the aforesaid losses, costs
or expenses are a reasonable approximation of such damages and do not constitute
a penalty.

(b) Each such Lender will furnish to Borrower a certificate setting forth the
basis and amount of each request by Lender for compensation under this
Section 2.2.7, which certificate shall provide reasonable detail as to the
calculation of such loss, cost or expense. Such certificate shall constitute
prima facie evidence, in the absence of manifest error, of the amount of such
loss, cost or expense, which shall be calculated by such Lender on a reasonable
and customary basis, consistent with the basis on which such calculations are
then being made by similarly situated banks or financial institutions generally.

2.2.8 Withholding Taxes. (a) Any and all payments by or on behalf of Borrower
under or in respect of this Agreement or any other Loan Documents to which
Borrower is a party shall be made free and clear of, and without deduction or
withholding for or on account of, any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities (including
penalties, interest and additions to tax) with respect thereto, whether now or
hereafter imposed, levied, collected, withheld or assessed by any taxation
authority or other Governmental Authority (collectively, “2.2.8 Taxes”), unless
required by law. If Borrower shall be required under any applicable requirements
of law to deduct or withhold any 2.2.8 Taxes from or in respect of any sum
payable under or in respect of this Agreement or any of the other Loan Documents
to the Agent or any Lender (including for purposes of Section 2.2.4 and this
Section 2.2.8, any assignee, successor, or participant), (i) Borrower shall make
all such deductions and withholdings in respect of 2.2.8 Taxes, (ii) Borrower
shall pay the full amount deducted or withheld in respect of 2.2.8 Taxes to the
relevant taxation authority or other Governmental Authority in accordance with
any Requirement of Law, and (iii) the sum payable by Borrower shall be increased
as may be necessary so that, after Borrower has made all required deductions and
withholdings (including deductions and withholdings applicable to additional
amounts payable under this Section 2.2.8), Agent and/or applicable Lender
receives an amount equal to the sum it would have received had no such
deductions or withholdings been made in respect of Non-Excluded Taxes. For
purposes of this Agreement the term “Non-Excluded Taxes” means 2.2.8 Taxes other
than (w) U.S. federal backup withholding taxes, (x) U.S. federal income taxes
imposed on a Lender that provides a U.S. Internal Revenue Service Form W-8ECI
pursuant to Section 2.2.8(e), (y) 2.2.8 Taxes that are imposed on the Agent’s
and Lenders’ net income or profits (and franchise taxes or a branch profits tax
imposed in lieu thereof) by the jurisdiction under the laws of which such Agent
or such Lender is organized or, in the case of a Lender, of its Applicable
Lending Office, or any

 

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political subdivision thereof; provided, that any unless such 2.2.8 Taxes that
are imposed as a result of such Agent or such Lender having executed, delivered
or performed its obligations or received payments under, or enforced, this
Agreement or any of the other Loan Documents will be treated as Non-Excluded
Taxes and (z) 2.2.8 Taxes imposed by FATCA (including amounts withheld under
Section 1471(b)(3) of the Code). For the avoidance of doubt, if, immediately
prior to becoming a party to this Agreement, Agent or any Lender is subject to
2.2.8 Taxes described in clause (y) of the immediately preceding sentence (other
than 2.2.8 Taxes described in the proviso to such clause), the proviso to such
clause shall not apply with respect to such 2.2.8 Taxes.

(b) In addition, Borrower hereby agrees to pay or, at the option of the Agent,
timely reimburse it for payment of, any present or future stamp, recording,
documentary, excise, filing, intangible, property or value-added taxes, or
similar taxes, charges or levies that arise from any payment made under or in
respect of this Agreement or any other Loan Document or from the execution,
delivery, enforcement or registration of, any performance, receipt or perfection
of a security interest under, or otherwise with respect to, this Agreement or
any other Loan Document (collectively, “Other Taxes”).

(c) Borrower hereby agrees to indemnify Agent and each Lender (including its
direct or indirect beneficial owners) for, and to hold it harmless against, the
full amount of Non-Excluded Taxes and Other Taxes, and the full amount of
2.2.8 Taxes of any kind imposed by any jurisdiction on amounts payable under
this Section 2.2.8 imposed on or paid by such Lender or Agent (or any direct or
indirect beneficial owner thereof) and any liabilities (including penalties,
additions to tax, interest and expenses) arising therefrom or with respect
thereto. A certificate as to the amount of such 2.2.8 Taxes or liabilities
delivered to Borrower by a Lender or Agent shall be conclusive absent manifest
error, and amounts payable by Borrower under the indemnity set forth in this
Section 2.2.8(c) shall be paid within ten (10) days from the date on which a
Lender or Agent makes written demand therefor. The indemnity by Borrower
provided for in this Section 2.2.8(c) shall apply and be made whether or not the
Non-Excluded Taxes or Other Taxes for which indemnification hereunder is sought
have been correctly or legally asserted.

(d) Within thirty (30) days after the date of any payment of 2.2.8 Taxes,
Borrower (or any person making such payment on behalf of Borrower) shall furnish
to Agent for its own account a certified copy of the original official receipt
evidencing payment thereof.

(e) For purposes of this Section 2.2.8, the terms “United States” and “United
States person” shall have the meanings specified in Section 7701 of the Code.
For purposes of this Section 2.2.8(e), the terms “beneficial owner” and
“flow-through entity” shall have the meanings specified in U.S. Treasury
Regulations under Section 1441 of the Code. Each Lender (including for avoidance
of doubt any assignee, successor or participant) that either (i) is not
organized under the laws of the United States, any State thereof, or the
District of Columbia or (ii) whose name does not include “Incorporated,” “Inc.,”
“Corporation,” “Corp.,” “P.C.,” “insurance company,” or “assurance company” (a
“Non-Exempt Lender”), that is legally entitled to do so, shall deliver or cause
to be delivered to Borrower not later than the earlier of ten (10) Business days
of becoming a Lender (assignee, successor or participant) or five (5) Business
Days before the next Payment Date, the following properly completed and duly
executed documents:

 

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(i) in the case of a Non-Exempt Lender that is not a United States person or is
a disregarded entity for U.S. federal income tax purposes owned by a person that
is not a United States person, a complete and executed (x) U.S. Internal Revenue
Service Form W-8BEN with Part II completed in which such Lender claims the
benefits of a tax treaty with the United States providing for a zero or reduced
rate of withholding (or any successor forms thereto), including all appropriate
attachments or (y) a U.S. Internal Revenue Service Form W-8ECI (or any successor
forms thereto); or

(ii) in the case of a Non-Exempt Lender that is an individual, (x) for
non-United States persons, a complete and executed U.S. Internal Revenue Service
Form W-8BEN (or any successor forms thereto) and a certificate substantially in
the form of Exhibit C (a “Section 2.2.8 Certificate”) or (y) for United States
persons, a complete and executed U.S. Internal Revenue Service Form W-9 (or any
successor forms thereto); or

(iii) in the case of a Non-Exempt Lender that is organized under the laws of the
United States, any State thereof, or the District of Columbia and that is not a
disregarded entity owned by a person that is not a United States person, a
complete and executed U.S. Internal Revenue Service Form W-9 (or any successor
forms thereto); or

(iv) in the case of a Non-Exempt Lender that (x) is not organized under the laws
of the United States, any State thereof, or the District of Columbia and (y) is
treated as a corporation for U.S. federal income tax purposes, a complete and
executed U.S. Internal Revenue Service Form W-8BEN (or any successor forms
thereto) and a Section 2.2.8 Certificate; or

(v) in the case of a Non-Exempt Lender that (A) is treated as a partnership or
other flow-through entity, and (B) is not a United States Person, (x)(i) a
complete and executed U.S. Internal Revenue Service Form W-8IMY (or any
successor forms thereto) (including all required documents and attachments) and
(ii) a Section 2.2.8 Certificate, and (y) in the case of a non-withholding
foreign partnership or trust, without duplication, with respect to each of its
beneficial owners and the beneficial owners of such beneficial owners looking
through chains of owners to individuals or entities that are treated as
corporations for U.S. federal income tax purposes (all such owners, “beneficial
owners”), the documents that would be provided by each such beneficial owner
pursuant to this Section 2.2.8(e) if such beneficial owner were a Lender; or

(vi) in the case of a Non-Exempt Lender that is disregarded for U.S. federal
income tax purposes, the document that would be required by clause (i), (ii),
(iii), (iv), (v), (vii) and/or this clause (vi) ) of this Section 2.2.8(e) with
respect to its beneficial owner if such beneficial owner were the Lender; or

(vii) in the case of a Non-Exempt Lender that (A) is not a United States person
and (B) is acting in the capacity of an “intermediary” (as defined in U.S.
Treasury Regulations), (x)(i) a U.S. Internal Revenue Service Form W-8IMY (or
any successor

 

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form thereto) (including all required documents and attachments) and (ii) a
Section 2.2.8 Certificate, and (y) if the intermediary is a “non-qualified
intermediary” (as defined in U.S. Treasury Regulations), from each person upon
whose behalf the “non-qualified intermediary” is acting the documents that would
be required by clause (i), (ii), (iii), (iv), (v), (vi), and/or this
clause (vii) with respect to each such person if each such person were a Lender.

If a Lender provides a form pursuant to subsection (e)(i)(x) and the form
provided by the Lender at the time such Lender first becomes a party to this
Agreement or, with respect to a grant of a participation, the effective date
thereof, indicates a United States interest withholding tax rate under the tax
treaty in excess of zero, withholding tax at such rate shall be treated as Taxes
other than “Non-Excluded Taxes” (“Excluded Taxes”) and shall not qualify as
Non-Excluded Taxes unless and until such Lender provides the appropriate form
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate shall be considered Excluded Taxes solely for the periods governed by such
form. If, however, on the date a person becomes an assignee, successor or
participant to this Agreement, a Lender transferor was entitled to
indemnification or additional amounts under this Section 2.2.8 (for the
avoidance of doubt, including Section 2.2.8(f)), then the Lender assignee,
successor or participant shall be entitled to indemnification or additional
amounts to the extent that the Lender transferor was entitled to such
indemnification or additional amounts for Non-Excluded Taxes, and the Lender
assignee, successor or participant shall be entitled to additional
indemnification or additional amounts for any other or additional Non-Excluded
Taxes.

(f) For any period with respect to which a Lender has failed to provide Borrower
the appropriate form, certificate or other document described in subsection (e)
of this Section 2.2.8 or such form, certificate or other document becomes
inaccurate as a result of an action by such Lender (other than if such failure
or inaccuracy is due to a change in any requirement of law, or in the
interpretation or application thereof, occurring after the date on which a form,
certificate or other document originally was required to be provided), or if,
under the law as of the date hereof, a Lender is ineligible to provide the
Borrower with any of the forms described in subsection (e) of this Section 2.2.8
such Lender shall not be entitled to indemnification or additional amounts under
subsection (a) or (c) of this Section 2.2.8 with respect to Non-Excluded Taxes
imposed by the United States by reason of such failure; provided, however, that
should a Lender become subject to Non-Excluded Taxes because of its failure to
deliver a form, certificate or other document required hereunder, Borrower shall
take such steps as such Lender shall reasonably request, to assist such Lender
in recovering such Non-Excluded Taxes.

(g) If a payment made to a Lender under this Agreement or any Loan Document
would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender
were to fail to comply with the applicable reporting requirements of FATCA
(including those contained in section 1471(b) or 1472(b) of the Code, as
applicable), such Lender shall deliver to the Borrower and Agent at the time or
times prescribed by law and at such time or times reasonably requested by the
Borrower or Agent such documentation prescribed by applicable law (including
prescribed by section 1471(b)(3)(C)(i) of the Code) and such additional
documentation reasonably requested by the Borrower or Agent as may be necessary
for the Borrower and Agent to comply with their obligations under FATCA and to
determine that such

 

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Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (g), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

(h) Upon the occurrence of any circumstances entitling any Lender to additional
amounts pursuant to this Section 2.2.8, such Lender shall use reasonable efforts
(consistent with its internal policy and legal regulatory restrictions), at the
sole expense of the Borrower, to designate a different Applicable Lending Office
if the making of such a chance would avoid the need for, or materially reduce
the amount of, any such additional amounts that may thereafter accrue and would
not be, in the sole judgment of such Lender, legally inadvisable or commercially
or otherwise disadvantageous to such Lender in any respect.

(i) If any Lender is entitled to additional compensation under any of the
foregoing provisions of this Section 2.2.8 and shall fail to designate a
different Applicable Lending Office as provided in subsection (h) of this
Section 2.2.8, then, so long as no Default or Event of Default shall have
occurred and be continuing, Borrower may cause such Lender to (and, if Borrower
so demands, such Lender shall) assign all of its rights and obligations under
this Agreement to an Eligible Assignee identified by Borrower and reasonably
acceptable to Agent; provided that if, upon such demand by Borrower, such Lender
elects to waive its request for additional compensation pursuant to this
Section 2.2.8, the demand by Borrower for such Lender to so assign all of its
rights and obligations under this Agreement shall thereupon be deemed withdrawn.
Nothing in subsection (h) of this Section 2.2.8 or this Section 2.2.8(i) shall
affect or postpone any of the rights of Lender or any of the Obligations of
Borrower under any of the foregoing provisions of this Section 2.2.8 in any
manner.

(j) Without prejudice to the survival of any other agreement of Borrower
hereunder, the agreements and obligations of Borrower contained in this
Section 2.2.8 shall survive the termination of this Agreement and the other Loan
Documents. Nothing contained in Section 2.2.4 or this Section 2.2.8 shall
require a Lender to complete, execute or make available any of its tax returns
or any other information that it deems to be confidential or proprietary, or
whose completion, execution or submission would, in such Lender’s judgment,
materially prejudice such Lender’s legal or commercial position.

Section 2.3 Usury Savings.

This Agreement and the other Loan Documents are subject to the express condition
that at no time shall Borrower be required to pay interest on the principal
balance of the Loan at a rate which could subject Lenders to either civil or
criminal liability as a result of being in excess of the Maximum Legal Rate. If
by the terms of this Agreement or the other Loan Documents, Borrower is at any
time required or obligated to pay interest on the principal balance due
hereunder at a rate in excess of the Maximum Legal Rate, the Applicable Interest
Rate or the Default Rate, as the case may be, shall be deemed to be immediately
reduced to the Maximum Legal Rate and all previous payments in excess of the
Maximum Legal Rate shall be deemed to have been payments in reduction of
principal and not on account of the interest due hereunder. All sums paid or
agreed to be paid to Agent or Lenders for the use, forbearance, or detention of
the sums due under the Loan, shall, to the extent permitted by applicable law,
be amortized, prorated, allocated, and spread throughout the full stated term of
the Loan until payment in full so that the rate or amount of interest on account
of the Loan does not exceed the Maximum Legal Rate from time to time in effect
and applicable to the Loan for so long as the Loan is outstanding.

 

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Section 2.4 Loan Payments.

2.4.1 Payment Before Maturity Date. Borrower shall make a payment to Agent, for
the ratable benefit of the Lenders, of interest only at the Applicable Interest
Rate on the Closing Date for the period from the Closing Date through July 31,
2011. On the Payment Date occurring in September, 2011 and on each Payment Date
thereafter to and including the Maturity Date, Borrower shall make a payment to
Agent, for the ratable benefit of the Lenders, of interest only at the
Applicable Interest Rate; each payment to be calculated in the manner set forth
in Section 2.2.1.

2.4.2 Payment on Maturity Date. Borrower shall pay to Agent, for the ratable
benefit of the Lenders, the outstanding principal balance of the Loan, all
accrued and unpaid interest and all other amounts due hereunder and under the
Note, the Mortgage and the other Loan Documents on the Maturity Date.

2.4.3 Late Payment Charge. If any principal, interest or any other sum due under
the Loan Documents is not paid by Borrower within three (3) days of the date on
which it is due, Borrower shall pay to Agent, for the ratable benefit of the
Lenders, upon demand an amount equal to the lesser of three percent (3%) of such
unpaid sum or the maximum amount permitted by applicable law in order to defray
the expense incurred by Agent in handling and processing such delinquent payment
and to compensate Lenders for the loss of the use of such delinquent payment.
Any such amount shall be secured by the Mortgage and the other Loan Documents.

2.4.4 Interest Rate and Payment After Default. In the event that, and for so
long as, any Event of Default shall have occurred and be continuing, the
outstanding principal balance of the Loan shall accrue interest at the Default
Rate, calculated from the date the Default occurred which led to such an Event
of Default without regard to any grace or cure periods contained herein.

2.4.5 Method and Place of Payment. Except as otherwise specifically provided
herein, all payments and prepayments under this Agreement and the Note shall be
made to Agent not later than 11:00 a.m. (New York City time) on the date when
due and shall be made in lawful money of the United States of America in
immediately available funds at Agent’s office, and any funds received by Agent
after such time shall, for all purposes hereof, be deemed to have been paid on
the next succeeding Business Day.

2.4.6 Business Day Convention. Notwithstanding anything to the contrary set
forth herein, if any payment to be made hereunder or under any other Loan
Document shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be the Business Day immediately succeeding such day.

 

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Section 2.5 Prepayment.

2.5.1 Voluntary Prepayments. (a) Agent, for the ratable benefit and account of
the Lenders, will accept a prepayment, in whole or in part, of the Loan during
the Lockout Period if, Borrower gives to Agent not less than ten (10) days’
prior notice, and concurrently with, and as a condition to such prepayment,
Borrower pays to Agent, for the ratable benefit and account of the Lenders,
(i) the Spread Maintenance Premium, (ii) if less than the entire principal
balance is then being prepaid, the principal amount prepaid is not less than
$10,000,000.00 and is in increments of $10,000,000.00; (iii) all accrued and
unpaid interest to and including the date of such prepayment on the amount being
prepaid is then paid; (iv) any amounts payable pursuant to Sections 2.2.7 and
2.4.3 are then paid; (v) any sums payable by Borrower to the Counterparty in
connection with the early termination or partial termination of the Interest
Rate Protection Agreement are then paid, and (vi) all fees and expenses incurred
by Agent in connection with the Loan and/or with the prepayment are then paid.

(b) From and after the expiration of the Lockout Period Borrower may prepay the
Loan, in whole or in part, without premium or penalty, provided that Borrower
gives to Agent not less than ten (10) days’ prior notice, which notice shall be
irrevocable and shall specify (i) the date and amount of the prepayment and
(ii) in the case of prepayment of LIBOR Loans, the expiration date of the
applicable LIBOR Loan. Prepayment of all or any portion of the Loan may be made
in accordance with this paragraph provided that: (A) if less than the entire
principal balance is then being prepaid, the principal amount prepaid is not
less than $10,000,000.00 and is in increments of $10,000,000.00; (B) all accrued
and unpaid interest to and including the date of such prepayment on the amount
being prepaid is then paid; (C) any amounts payable pursuant to Sections 2.2.7
and 2.4.3 are then paid; (D) if the Counterparty is a Lender, any sums payable
by Borrower to the Counterparty in connection with the early termination or
partial termination of the Interest Rate Protection Agreement are then paid, and
(E) all fees and expenses incurred by Agent in connection with the Loan and/or
with the prepayment are then paid.

(c) In each instance of prepayment permitted under this Section 2.5.1, Borrower
shall be required to pay all other sums due hereunder (including under
Section 2.2.7) and no principal amount repaid may be reborrowed.

(d) All prepayments are to be made on a Payment Date. If any prepayment is
received by Agent on a date other than a Payment Date the same shall be held by
Agent as collateral security for the Loan and shall be applied by the Lenders on
the next Payment Date.

(e) Except as otherwise expressly permitted herein, the principal balance of the
Note may not be prepaid in whole or in part.

2.5.2 Mandatory Prepayments. (a) On each date on which Agent actually receives a
distribution of Net Proceeds and if Agent is not required to make such Net
Proceeds available to Borrower for the Restoration of the Property pursuant to
Section 5.3, Agent may, in its sole and absolute discretion, elect to either
make the Net Proceeds available for Restoration pursuant to Section 5.3 or use
the Net Proceeds to prepay, without premium or penalty (including the Spread
Maintenance Premium), the outstanding principal balance of the Note in an amount

 

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equal to one hundred percent (100%) of such Net Proceeds. Any prepayment
received by Agent for the ratable benefit and account of the Lenders and
pursuant to this Section 2.5.2 on a date other than a Payment Date shall be held
by Agent as collateral security for the Loan in an interest bearing account,
with such interest accruing to the benefit of Borrower, and shall be applied by
Agent on the next Payment Date.

(b) In addition, Borrower shall prepay without premium or penalty, including,
without limitation, the Spread Maintenance Premium, the principal balance of the
Note in an amount equal to the amount required by Agent due to changes in tax
and debt credit pursuant to Section 5.3 of the Mortgage or if Borrower prepays a
portion of the Loan pursuant to Section 6.5.6.

(c) In each instance of prepayment under this Section 2.5.2, Borrower shall be
required to pay all other sums due hereunder (including under Sections 2.2.7 and
2.4.3) and no principal amount repaid may be reborrowed.

(d) All prepayments are to be made on a Payment Date. If any prepayment is
received by Agent on a date other than a Payment Date the same shall be held by
Agent as collateral security for the Loan and shall be applied by the Lenders on
the next Payment Date.

2.5.3 Prepayment Waivers. Borrower acknowledges that the inclusion of the waiver
of prepayment rights and agreement to pay the Spread Maintenance Premium, as
applicable herein, was separately negotiated with Agent, that the economic value
of the various elements of this waiver and agreement were discussed and that the
consideration given by Borrower for the Loan was adjusted to reflect the
specific waiver and agreement negotiated between Borrower, Agent and Lenders and
contained herein.

Section 2.6 Payments Not Conditional.

All payments required to be made by Borrower hereunder or under the Note or the
other Loan Documents shall be made irrespective of, and without deduction for,
any setoff, claim or counterclaim and shall be made irrespective of any defense
thereto, but any such payment shall not constitute a waiver of any such claim,
counterclaim or other right.

Section 2.7 Accordion Feature. Provided no Default or Event of Default has
occurred and is then continuing, upon the request of Borrower, Agent shall use
commercially reasonable efforts to arrange for additional commitments from the
Lenders (and, if necessary, lenders who are not a party hereto, provided that
any such new lender is approved by Borrower in its reasonable discretion) in an
aggregate amount equal to $200,000,000.00 (the “Accordion”). Notwithstanding the
foregoing, the decision of any Lender to provide such additional commitment
shall be subject to the sole and absolute discretion of such Lender. Such
Accordion shall be subject to new pricing by Agent and the Lenders, or the
lenders a party thereto, and such other terms and conditions which are
acceptable to Borrower, Agent, the Lenders, or the lenders thereto, each in its
respective sole and absolute discretion and to the credit committee approval of
each Lender as lender thereto. In addition, the advance of any such Accordion
shall be conditioned upon, among other things, (a) the Loan-to-Value Ratio,
based upon an updated Appraisal ordered by Agent at Borrower’s expense, not
exceeding fifty

 

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percent (50%) on an “as is” basis, (b) the NOI of the Property providing for a
Debt Yield of not less than sixteen percent (16%) based on the Loan Amount, and
(c) Borrower paying all costs and expenses of Agent and the Lenders in
connection therewith. The Accordion feature shall be available, in accordance
with the provisions of this Section 2.7, during the entire term of the Loan
including the extension periods. Notwithstanding the foregoing, to the extent
that Borrower has repaid any portion of the Loan Amount, Borrower shall not be
entitled to re-borrow the same. Agent hereby agrees that if, in Agent’s
reasonable determination, Agent has determined that the Debt Yield is less than
sixteen percent (16%) and Agent used a lower NOI to calculate such Debt Yield
than the NOI which was calculated by Borrower, Agent shall review the same with
Borrower and/or its representatives, including Agent’s adjustment (if any) to
Gross Revenues and/or Operating Expenses, as applicable, to provide to Borrower
and/or its representatives the basis for and details surrounding such
determination (provided, however, that the duration of such review and the
provision of such basis for and details surrounding Agent’s determination shall
be reasonably determined by Agent and the final determination of the Debt Yield
shall be shall be unilaterally made by Agent). In addition, Agent hereby agrees
that if Agent determines that the Loan-to-Value Ratio exceeds fifty (50%) and
the Appraised Value, based on Agent’s determination thereof is lower than the
Appraised Value as reflected on the Appraisal then delivered to Agent in
connection with the proposed Accordion, Agent shall review the basis for and
details surrounding such determination of the Appraised Value by Agent with
Borrower and/or its representatives (provided, however, that the duration of
such review and the provision of such basis for and details surrounding Agent’s
determination shall be reasonably determined by Agent and the final
determination of the Appraised Value shall be shall be unilaterally made by
Agent).

III. REPRESENTATIONS AND WARRANTIES

Section 3.1 Borrower Representations.

Borrower represents and warrants that:

3.1.1 Organization. The Credit Parties are each duly organized, validly existing
and in good standing with full power and authority to own its assets and conduct
its business and is duly qualified in all jurisdictions in which the ownership
or lease of its property or the conduct of its business requires such
qualification. Each Credit Party has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the other Loan
Documents by it, and has the power and authority to execute, deliver and perform
under this Agreement, the other Loan Documents and all the transactions
contemplated hereby.

3.1.2 Proceedings. This Agreement and the other Loan Documents have been duly
authorized, executed and delivered by Borrower, and, to the extent a party, the
other Credit Parties, and constitute a legal, valid and binding obligation of
Borrower and, to the extent a party, the other Credit Parties enforceable
against Credit Parties in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors’ rights generally,
and by general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).

 

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3.1.3 No Conflicts. The execution and delivery of this Agreement and the other
Loan Documents by Borrower (and to the extent a party, the other Credit Parties)
and the performance of its Obligations hereunder and thereunder will not
conflict with any provision of any law or regulation to which a Credit Party is
subject, or conflict with, result in a breach of, or constitute a default under,
any of the terms, conditions or provisions of any Credit Party’s organizational
documents or any agreement or instrument to which such Credit Party is a party
or by which it is bound, the result of which breach or default of any such
agreement or instrument would reasonably be expected to have, or does have a
Material Adverse Effect, or any order or decree applicable to such Credit Party
or result in the creation or imposition of any lien, in a material amount, on
any of such Credit Party’s assets or property (other than pursuant to the Loan
Documents).

3.1.4 Litigation. There is no action, suit, proceeding or investigation pending
or, to Borrower’s knowledge, threatened against any Credit Party or Guarantor in
any court or by or before any other Governmental Authority, or labor controversy
affecting any Credit Party or Guarantor or any of their respective properties,
businesses, assets or revenues, individually or in the aggregate) that would be
reasonably likely to have a Material Adverse Effect. In addition, there is no
material action, suit or proceeding between or among the Credit Parties and
Guarantor or their respective members and Affiliates.

3.1.5 Governmental Orders. No Credit Party nor Guarantor is in default with
respect to any order or decree of any court or any order, regulation or demand
of any Governmental Authority, which default might have a Material Adverse
Effect.

3.1.6 Consents. No consent, approval, authorization or order of any court or
Governmental Authority or other Person is required for the execution, delivery
and performance by any Credit Party or Guarantor of, or compliance by a Credit
Party or Guarantor with, this Agreement or the other Loan Documents or the
consummation of the transactions contemplated hereby and thereby, other than
those which have been obtained by such Credit Party or Guarantor.

3.1.7 Title. ESLA has good, marketable and insurable fee simple title to the
real property comprising part of the Property and good title to the balance of
the Property, to the extent owned by ESLA, free and clear of all Liens
whatsoever except the Permitted Encumbrances. ESBA has a good, marketable and
insurable leasehold interest in the real property comprising part of the
Property and good title to the balance of the Property, to the extent owned by
ESBA, free and clear of all Liens whatsoever except the Permitted Encumbrances.
Together, ESLA and ESBA have good title to the balance of the Property that is
not real property or a leasehold interest in real property. The Mortgage, when
properly recorded in the appropriate records and any Uniform Commercial Code
financing statements required to be filed in connection therewith, will create
(a) a valid, first priority, perfected lien on the Property, subject only to
Permitted Encumbrances and (b) a valid, first priority perfected security
interests in and to, and perfected collateral assignments of, all the tangible
and intangible personalty (including the Leases) in which a security interest
can be perfected by the filing of Uniform Commercial Code financing statements,
and any Leases, all in accordance with the terms thereof, in each case subject
only to any Permitted Encumbrances. There are no mechanics’, materialmen’s or
other similar liens or claims which have been filed for work, labor

 

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or materials affecting the Property. None of the Permitted Encumbrances,
individually or in the aggregate, would reasonably be expected to result in, or
have resulted in, a Material Adverse Effect. There has been no material adverse
change to the Property, including to the Rents.

3.1.8 No Plan Assets. As of the date hereof and throughout the term of the Loan
(a) the Credit Parties are not and will not be an “employee benefit plan,” as
defined in Section 3(3) of ERISA, subject to Title I of ERISA, (b) none of the
assets of any Credit Party constitutes or will constitute “plan assets” of one
or more such plans within the meaning of 29 C.F.R. Section 2510.3-101,
(c) Credit Parties are not and will not be a “governmental plan” within the
meaning of Section 3(32) of ERISA and (d) transactions by or with the Credit
Parties are not and will not be subject to state statutes regulating investment
of, and fiduciary obligations with respect to, governmental plans.

3.1.9 Compliance. The Credit Parties and the Property and the use thereof comply
in all material respects with all applicable Legal Requirements, including,
without limitation, building and zoning ordinances and codes. No Credit Party is
in default or violation of any order, writ, injunction, decree or demand of any
Governmental Authority, the violation of which might materially adversely affect
the condition (financial or otherwise) or business of any Credit Party. No
Credit Party has committed any act which may give any Governmental Authority the
right to cause the Borrower to forfeit the Property or any part thereof or any
monies paid in performance of Borrower’s obligations under any of the Loan
Documents. No Credit Party has committed any act which may give any Governmental
Authority the right to cause Operating Company to forfeit any monies (a) paid by
Operating Company to ESBA as Rent or (b) paid by Tenants to Operating Company
under Leases. Borrower has no knowledge of any violations or notices of
violations of any Legal Requirements relating to the Credit Parties, Guarantor
and/or the Property other than as disclosed in the Title Insurance Policy. All
easements, restrictions, covenants or operating agreements which benefit or
burden the Property are in full force and effect, and to the best of Borrower’s
knowledge there are no defaults thereunder by any party thereto which would
reasonably be expected to result in, or does result in a Material Adverse
Effect.

3.1.10 Financial and Other Information. All financial data, including, without
limitation, the statements of cash flow and income and operating expense, if
any, that have been delivered to Agent and/or Lenders by or on behalf of the
Credit Parties in respect of the Property (a) are true, complete and correct in
all material respects, (b) accurately represent the financial condition of the
Property as of the date of such reports, and (c) have been prepared in
accordance with GAAP throughout the periods covered, except as disclosed
therein. No Credit Party has any contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments that are known to Borrower and reasonably
likely to have or do have a Material Adverse Effect, except as referred to or
reflected in said financial statements or other data. Since the date of the
financial statements, there has been no material adverse change in any
condition, fact, circumstance or event that would make the financial statements,
reports, certificates or other documents submitted in connection with the Loan
inaccurate, incomplete or otherwise misleading in any material respect or would
reasonably be expected to result in, or does result in a Material Adverse
Effect. All documents furnished to Agent by or on behalf of a Credit Party or
Guarantor, as part of or in support of the Loan application or pursuant to this
Agreement or

 

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any of the other Loan Documents, are true, correct, complete in all material
respects and accurately represent the matters to which they pertain as of the
dates made and there have been no materially adverse changes with respect to
such matters since the respective dates thereof. In addition, there is no fact
or circumstance presently known to Borrower which has not been disclosed to
Agent and which is reasonably likely to have or does have a Material Adverse
Effect.

3.1.11 Condemnation. No Condemnation or other similar proceeding has been
commenced or, to Borrower’s best knowledge, is contemplated with respect to all
or any portion of the Property or for the relocation of roadways providing
access to the Property.

3.1.12 Utilities and Public Access. The Property has rights of access to public
ways and is served by water, sewer, sanitary sewer and storm drain facilities
adequate for the construction, development and operation of the Property for its
intended uses. All roads and streets necessary for the construction and full
utilization of the Improvements for their intended purpose have been completed
and with respect to all roads and streets, the necessary rights of way therefor
have either been acquired by the appropriate Governmental Authority or have been
dedicated to public use and accepted by said Governmental Authority allowing for
the construction, use and operation of, and access to the Improvements.

3.1.13 Separate Lots. The Property is comprised of one (1) or more parcels that
constitute separate tax lots and do not constitute a portion of any other tax
lot not a part of the Property.

3.1.14 Assessments. Borrower has no knowledge that there are any pending or
proposed special or other assessments for public improvements or otherwise
affecting the Property, or that there are any contemplated improvements to the
Property that may result in such special or other assessments.

3.1.15 Enforceability. The Loan Documents are not subject to any right of
rescission, set-off, counterclaim or defense by Borrower, including the defense
of usury, nor would the operation of any of the terms of the Loan Documents, or
the exercise of any right thereunder, render the Loan Documents unenforceable,
and Borrower has not asserted any right of rescission, set-off, counterclaim or
defense with respect thereto.

3.1.16 Assignment of Leases. The Assignment of Leases creates a valid assignment
of, or a valid security interest in, certain rights of Borrower under the
related Leases, to the extent that any Leases exist, subject only to a license
granted to Borrower to exercise certain rights and to perform certain
obligations of the lessor under such Leases. No Person other than Agent (on
behalf of Lenders) has any interest in or assignment of any Credit Party’s right
in, to and under the Leases or any portion of the Rents due and payable or to
become due and payable thereunder.

3.1.17 Insurance. Borrower or Operating Company has obtained and Borrower has
delivered to Agent original or certified copies of all of the Policies (or
Acord 27 certificates satisfactory to Agent evidencing the existence of the
same), with all premiums prepaid thereunder, reflecting the insurance coverages,
amounts and other requirements set forth in this Agreement. No claims have been
made under any of the Policies, and no Person, including Borrower and Operating
Company, has done, by act or omission, anything which would impair the coverage
of any of the Policies.

 

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3.1.18 Flood Zone. None of the Improvements on the Property are located in an
area identified by the Federal Emergency Management Agency as a special flood
hazard area.

3.1.19 Physical Condition. Neither the Property nor any portion thereof is now
damaged or injured in any material respect as result of any fire, explosion,
accident, flood or other casualty. There are no proceedings pending, or, to the
best of Borrower’s knowledge, threatened, to acquire by power of condemnation or
eminent domain, the Property, or any interest therein, or to enjoin or similarly
prevent the construction or use of the Improvements. Neither Borrower nor
Operating Company has received notice from any insurance company or bonding
company of any material defects or material inadequacies in the Property, or any
part thereof, which would adversely affect the insurability of the same in any
material respect or cause the imposition of extraordinary premiums or charges
thereon or of any termination or threatened termination of any policy of
insurance or bond.

3.1.20 Boundaries. All of the Improvements which are located on the Property lie
wholly within the boundaries and building restriction lines of the Property, and
no improvements on adjoining properties encroach upon the Property, and no
easements or other encumbrances affecting the Property encroach upon any of the
improvements, so as to affect the value or marketability of the Property except
those which are insured against by title insurance.

3.1.21 Leases. With respect to any existing Leases that: (a) the rent roll
attached hereto as Schedule VII is true, complete and correct and the Property
is not subject to any Leases other than the Leases described in Schedule VII,
(b) the Leases identified on Schedule VII are in full force and effect and there
are no defaults thereunder by either party, (c) the copies of the Leases
delivered to Agent are true and complete, and there are no oral agreements with
respect thereto, (d) no Rent has been paid more than one (1) month in advance of
its due date, (e) except as set forth on Schedule VII, all work to be performed
by Borrower and/or Operating Company, as applicable, under each Lease has been
performed as required as of the date that this representation is being made (or
deemed remade pursuant to Section 3.1.57) and all such work has been accepted by
the applicable Tenant, (f) except as set forth on Schedule VII, any payments,
free rent, partial rent, rebate of rent or other payments, credits, allowances
or abatements required to be given by Borrower or Operating Company, as
applicable, to any Tenant as of the date that this representation is being made
(or deemed remade pursuant to Section 3.1.57) has already been received by such
Tenant, and (g) each Lease includes an attornment provision from the Tenant for
the benefit of the landlord thereunder (without qualification or condition
thereto). In connection with the closing of the Loan, Borrower has delivered to
Lender estoppels and Subordination, Nondisturbance and Attornment Agreements
from those tenants listed on Schedule VIII attached hereto.

3.1.22 Filing and Recording Taxes. All transfer taxes, deed stamps, intangible
taxes, personal property taxes or other amounts in the nature of transfer or
debt taxes required to be paid under applicable Legal Requirements in connection
with the transfer of or debt on the Property to Borrower have been paid. All
mortgage, mortgage recording, stamp,

 

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intangible, personal property or other similar taxes required to be paid under
applicable Legal Requirements in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement of any of the Loan
Documents, including, without limitation, the Mortgage, have been paid or are
being paid simultaneously herewith. All taxes and governmental assessments due
and owing in respect of the Property have been paid, or an escrow of funds in an
amount sufficient to cover such payments has been established hereunder or are
insured against by the Title Insurance Policy to be issued in connection with
the Mortgage.

3.1.23 Single Purpose (Backwards Representations).

(a) (i) with respect to ESLA, since it was converted to a limited liability
company on April 10, 2002, (ii) with respect to ESBA, since it was converted to
a limited liability company on September 30, 2001, (iii) with respect to
Operating Company, since it was converted to a limited liability company on
December 17, 2001 and (iv) with respect to Observatory Tenant, since it was
converted to a limited liability company on December 16, 2010:

(A) it is and always has been duly formed, validly existing, and, as to ESLA and
Observatory Tenant, since its inception, and, as to ESBA and Operating Company,
since its conversion, in good standing in the state of its incorporation or
establishment and in all other jurisdictions where it is qualified to do
business;

(B) it has no judgments or liens of any nature against it except for tax liens
not yet due or as disclosed in the Title Insurance Policy;

(C) it is in material compliance with all laws, regulations, and orders
applicable to it and, except as otherwise disclosed in this Agreement, has
received all permits necessary for it to operate;

(D) it is not involved in any dispute with any taxing authority except for tax
certiori proceedings;

(E) it has paid all taxes which it owes;

(F) (1) with respect to ESLA, it has never owned any real property other than
the Property and Personal Property necessary or incidental to the ownership or
operation thereof and has never engaged in any business other than the ownership
and operation of the Property, (2) with respect to ESBA, it has never held an
interest in any real property other than the Property and Personal Property
necessary or incidental to its interest in the Property and has never engaged in
any business other than the ownership of its leasehold interest in and operation
of such leasehold interest in the Property and its ownership interest in ESLA,
(3) with respect to Operating Company, it has never held an interest in any real
property other than the Property and Personal Property necessary or incidental
to its interest in the Property and has never engaged in any business other than
the ownership of its leasehold interest in and operation of such leasehold
interest in the Property, its ownership interest in Observatory Tenant,

 

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ESB 102 Corporation, and ESB Captive and the licensing of its Intellectual
Property from time to time, and (4) with respect to Observatory Tenant, it has
never held an interest in any real property other than the Property and Personal
Property necessary or incidental to its interest in the Property and has never
engaged in any business other than the ownership of its leasehold interest in
and operation of such leasehold interest in the Property and operation of the
Observation Deck;

(G) it is not now, nor has ever been, party to any lawsuit, arbitration,
summons, or legal proceeding that is still pending or that resulted in a
judgment against it and which would, in any such event, have a Material Adverse
Effect;

(H) intentionally omitted;

(I) with respect to Borrower, has obtained a current Phase I environmental site
assessment (or, if applicable, a current Phase II environmental assessment)
(ESA) for the Property prepared consistent with ASTM Practice E 1527 and the ESA
has not identified any recognized environmental conditions that require further
investigation or remediation except as disclosed therein; and

(J) it has no material contingent or actual obligations not related to the
Property or its leasehold interest therein, as applicable.

(b) Borrower hereby represents and warrants to Agent that: (i) with respect to
ESLA, since it was converted to a limited liability company on April 10, 2002,
(ii) with respect to ESBA, since it was converted to a limited liability company
on September 30, 2001, (iii) with respect to Operating Company, since it was
converted to a limited liability company on December 17, 2001 and (iv) with
respect to Observatory Tenant, since it was converted to a limited liability
company on December 16, 2010::

(A) except for the Ground Lease, the Sublease and the Observatory Lease, it has
not entered into any contract or agreement with any of its Affiliates,
constituents, or owners, or any guarantors of any of its obligations or any
Affiliate of any of the foregoing (individually, a “Related Party” and
collectively, the “Related Parties”), except upon terms and conditions that are
commercially reasonable and substantially similar to those available in an
arm’s-length transaction with an unrelated party;

(B) it has paid all of its debts and liabilities from its own assets including
borrowed funds;

(C) it has done or caused to be done all things necessary to observe all
organizational formalities applicable to it and to preserve its existence;

(D) since 2005, it has maintained all of its books, records, financial
statements and bank accounts separate from those of any other Person;

 

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(E) it has not had its assets listed as assets on the financial statement of any
other Person;

(F) it has filed its own tax returns (except to the extent that it has been a
tax-disregarded entity not required to file tax returns under applicable law)
and, if it is a corporation, has not filed a consolidated federal income tax
return with any other Person;

(G) it has been, and since 2005 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);

(H) since 2005 it has corrected any misunderstanding of which it has received
written notice regarding its status as a separate entity;

(I) since 2005 it has conducted all of its business and held all of its assets
in its own name;

(J) it has not identified itself or any of its affiliates as a division or part
of the other except with respect to ESLA, which is a wholly-owned subsidiary of
ESBA, and ESBA;

(K) since 2005 it has maintained and utilized separate stationery, invoices and
checks bearing its own name;

(L) since 2005 except as between ESLA, ESBA, Operating Company and Observatory
Tenant as permitted in prior loan documents and except in connection with the
making of distributions, it has not commingled its assets with those of any
other Person except for funds distributed to participants from time to time and
cross-marketing expenses and has held all of its assets in its own name;

(M) it has not guaranteed or become obligated for the debts of any other Person;

(N) it has not held itself out as being responsible for the debts or obligations
of any other Person;

(O) except with respect to ESLA, which is a wholly-owned subsidiary of ESBA, and
ESBA, and except with respect to Observatory Tenant which is ultimately
wholly-owned by ESBC and ESBC, it has allocated fairly and reasonably any
overhead expenses that have been shared with an Affiliate, including paying for
office space and services performed by any employee of an Affiliate or Related
Party;

(P) it has not pledged its assets to secure the obligations of any other Person
and no such pledge remains outstanding except, with respect to Borrower and
Operating Company, in connection with the Loan the Loan and the prior mortgage
loans being consolidated into the Loan;

 

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(Q) it has maintained adequate capital in light of its contemplated business
operations;

(R) it 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;

(S) ESLA has not owned any subsidiary or any equity interest in any other
entity;

(T) it has not incurred any indebtedness that is still outstanding other than
indebtedness that is permitted under the Loan Documents;

(U) it has not had any of its obligations guaranteed by an Affiliate, except for
guarantees that have been either released or discharged (or that will be
discharged as a result of the closing of the Loan) or, with respect to Borrower,
guarantees that are expressly contemplated by the Loan Documents; and

(V) Except for Operating Company and Observatory Tenant, none of the tenants
holding leasehold interests with respect to the Property are affiliated with the
Borrower.

3.1.24 Tax Filings. During the last seven (7) Fiscal Years, each Credit Party
has timely filed (or has obtained effective extensions for filing) all federal,
state, local and foreign tax returns (if any) required to be filed by it and has
timely paid all federal, state, local and foreign Taxes, charges and assessments
payable by each Credit Party, respectively, (other than any taxes the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of the applicable Credit Party). Borrower believes that
its tax returns (if any) and other Credit Parties’ tax returns (if any) properly
reflect the income and Taxes of Borrower, the Guarantor and each other Credit
Party, as applicable, for the periods covered thereby, subject only to
reasonable adjustments required by the Internal Revenue Service or other
applicable Tax authority upon audit. There are no Liens for taxes and no claim
is being asserted with respect to taxes, except for statutory Liens for taxes
not yet due and payable or for taxes the amount or validity of which are
currently being contested in good faith by appropriate proceedings and, in each
case, with respect to which reserves in conformity with GAAP have been provided
on the books of the Borrower or the other Credit Parties, as applicable.

3.1.25 Solvency. The Credit Parties (a) have not entered into the transaction or
any Loan Document (including any lease amendment) with the actual intent to
hinder, delay, or defraud any creditor and (b) have received reasonably
equivalent value in exchange for its Obligations under the Loan Documents (and
the lease amendments). Giving effect to the Loan, the fair saleable value of the
Credit Parties’ respective assets exceeds and will, immediately following the
making of the Loan, exceed each Credit Party’s respective total liabilities,
including, without limitation, subordinated, unliquidated, disputed and
contingent liabilities. The fair saleable value of each Credit Party’s assets is
and will, immediately following the making of the Loan, be greater than each
Credit Party’s probable liabilities, including the maximum amount

 

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of its contingent liabilities on its debts as such debts become absolute and
matured. Borrower’s assets do not and, immediately following the making of the
Loan will not, constitute unreasonably small capital to carry out its business
as conducted or as proposed to be conducted. No Credit Party intends to, or
believes that it will, incur Indebtedness and liabilities (including contingent
liabilities and other commitments) beyond its ability to pay such Indebtedness
and liabilities as they mature (taking into account the timing and amounts of
cash to be received by such Credit Party and the amounts to be payable on or in
respect of obligations of such Credit Party).

3.1.26 Federal Reserve Regulations. No part of the proceeds of the Loan will be
used for the purpose of purchasing or acquiring any “margin stock” within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
or for any other purpose which would be inconsistent with such Regulation U or
any other Regulations of such Board of Governors, or for any purposes prohibited
by Legal Requirements or by the terms and conditions of this Agreement or the
other Loan Documents.

3.1.27 Affiliate Debt. There is no Affiliate Debt owed or outstanding.

3.1.28 Offices; Location of Books and Records. The chief executive office or
chief place of business and the jurisdiction of organization (as such terms are
used in Revised Article 9 of the UCC as in effect in the State of New York from
time to time) of each Credit Party is set forth on Schedule IX or as otherwise
described in a notice from Borrower to Agent, together with the organization
number assigned to each Credit Party in such jurisdiction and each Credit
Party’s federal employer identification number. Borrower’s books of accounts and
records are located at its chief executive office or the chief place of
business.

3.1.29 Trade Name; Other Intellectual Property. Either Borrower or Operating
Company owns and possesses or licenses, and has the right to use (as the case
may be), all Intellectual Property, without, individually or in the aggregate,
any infringement upon rights of other Persons, in each case except as could not
reasonably be expected to (a) result in a Material Adverse Effect on the value
or use and operation of the Property or (b) impair Borrower’s or Operating
Company’s ability to pay its obligations in a timely manner, and there is no
individual Intellectual Property the loss of which would (i) have a Material
Adverse Effect on the value or use and operation of the Property, or (ii) impair
Borrower’s or Operating Company’s ability to pay its obligations in a timely
manner.

3.1.30 No Default. No Default or Event of Default exists.

3.1.31 Zoning. All easements, restrictions, covenants or operating agreements
which benefit or burden the Property are in full force and effect, and to the
best of Borrower’s knowledge there are no defaults thereunder by any party
thereto. The Property is zoned C5-3 (Restricted Central Commercial) and C6-4.5
(Restricted Central Commercial) within MiD (Special Midtown District) within
Manhattan Community District 5.

 

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3.1.32 Full and Accurate Disclosure. The Rent Roll and all other financial
statements submitted by Borrower in connection with the Loan are accurate,
complete and correct in all material respects. To the best of Borrower’s
knowledge, no other information contained in this Agreement, the other Loan
Documents, or any written statement furnished by or on behalf of each Credit
Party, Manager or Guarantor pursuant to the terms of this Agreement contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained herein or therein not misleading in light of
the circumstances under which they were made. To the best of Borrower’s
knowledge, there has been no material adverse change in any condition, fact,
circumstance or event that would make the financial statements, rent rolls,
reports, certificates or other documents submitted in connection with the Loan
inaccurate, incomplete or otherwise misleading in any material respect or that
otherwise materially and adversely, or is reasonably likely to have a Material
Adverse Effect. In addition, there is no fact or circumstance presently known to
Borrower which has not been disclosed to Agent and which has a Material Adverse
Effect, or is reasonably likely to have a Material Adverse Effect.

3.1.33 Foreign Person. No Credit Party is a “foreign person” within the meaning
of Section 1445(f)(3) of the Code.

3.1.34 Investment Company Act. No Credit Party is (a) an “investment company” or
a company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended; or (b) subject to any other federal
or state law or regulation which purports to restrict or regulate its ability to
borrow money.

3.1.35 Organizational Structure. Borrower’s organizational structure is
accurately reflected on its organizational chart, which is annexed hereto as
Schedule X.

3.1.36 Management Agreement. There is no Management Agreement in place on the
date hereof between Borrower or Operating Company with a Manager or other Person
other than the Listing Agreements.

3.1.37 Indebtedness. No Credit Party has incurred any Indebtedness, other than
Indebtedness permitted pursuant to Section 4.2.13.

3.1.38 Ground Lease. (a) The Ground Lease has been duly recorded. The Ground
Lease permits the interest of both ESLA and ESBA to be encumbered by a mortgage.
There have not been amendments or modifications to the terms of the Ground Lease
since its recordation, with the exception of written instruments which have been
recorded.

(b) Except for the Permitted Encumbrances, Borrower’s interest in the Ground
Lease is not subject to any Liens or encumbrances.

(c) Borrower’s interest in the Ground Lease is assignable to Agent, for the
benefit of the Lenders and their successors and assigns, pursuant to the Loan
Documents as collateral for the Loan.

(d) As of the date hereof, the Ground Lease is in full force and effect and no
default has occurred under the Ground Lease and there is no existing condition
which, but for the passage of time or the giving of notice, could result in a
default under the terms of the Ground Lease.

(e) The Ground Lease expires on January 5, 2076 and there are no renewal options
thereunder.

 

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3.1.39 Sublease.

(a) The Sublease has been duly recorded. The Sublease permits the interest of
ESBA to be encumbered by a mortgage and does not preclude ESBA from entering
into this Agreement and the other Loan Documents. There have not been amendments
or modifications to the terms of the Sublease since its recordation, with the
exception of written instruments which have been recorded.

(b) Except for the Permitted Encumbrances, neither ESBA’s or Operating Company’s
interest in the Sublease is subject to any Liens or encumbrances. There is no
mortgage, lien, pledge, charge, encumbrance, hypothecation, security interest or
other security device on Operating Company’s leasehold interest in the Property
or the Leases.

(c) ESBA’s interest in the Sublease is assignable to Agent, for the benefit of
the Lenders and their successors and assigns, pursuant to the Loan Documents as
collateral for the Loan.

(d) As of the date hereof, the Sublease is in full force and effect and no
default has occurred under the Sublease and there is no existing condition
which, but for the passage of time or the giving of notice, or both, could
result in a default under the terms of the Sublease.

(e) The Sublease expires on January 5, 2076 and there are no renewal options
thereunder.

(f) The Operating Company has no right (whether a right of first offer, refusal
or otherwise) or option pursuant to the Sublease or otherwise to purchase all or
any part of the Property or to obtain a direct lease with ESLA.

3.1.40 Observatory Lease.

(a) Neither Operating Company’s nor Observatory Tenant’s interest in the
Observatory Lease is subject to any Liens or encumbrances. There is no mortgage,
lien, pledge, charge, encumbrance, hypothecation, security interest or other
security device on either the Operating Company’s or Observatory Tenant’s
interest in the Observatory Lease.

(b) As of the date hereof, the Observatory Lease is in full force and effect and
no default has occurred under the Observatory Lease and there is no existing
condition which, but for the passage of time or the giving of notice, or both,
could result in a default under the terms of the Observatory Lease.

(c) The Observatory Lease expires on December 31, 2015 and there are no renewal
options thereunder.

(d) The Observatory Tenant has no right (whether a right of first offer, refusal
or otherwise) or option pursuant to the Observatory Lease or otherwise to
purchase all or any part of the Property or to obtain a direct lease with
Borrower.

 

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3.1.41 No Pledge. Other than the Permitted Encumbrances, there is no lien,
pledge, charge, encumbrance, hypothecation, security interest or other security
device on (a) any direct or indirect ownership interests in any Credit Party
owned by any other Credit Party, LMH or any Malkin Controlled Person, or (b) any
Rents payable to any Credit Party.

3.1.42 Affiliate Contracts. Borrower represents that the Affiliate Contracts
listed on Schedule I are the only Affiliate Contracts on the date hereof.

3.1.43 Internal Revenue Code. Borrower represents that, to the best of its
knowledge, the transaction described herein is not and does not form part of a
transaction that the Internal Revenue Service has identified as a listed
transaction or a transaction that is substantially similar to a listed
transaction within sections 6011, 6111 or 6112 of the Internal Revenue Code.

3.1.44 Patriot Act Compliance. None of the Credit Parties nor the Guarantor
(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, or (c) has been previously indicted for or convicted
of any Patriot Act Offense (as defined below). 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 (i) the criminal laws against
terrorism, (ii) the criminal laws against money laundering, (iii) the Bank
Secrecy Act, as amended, (iv) the Money Laundering Control Act of 1986, as
amended, or (v) the 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 (A) the
Specially Designated Nationals and Blocked Persons Lists maintained by Office of
Foreign Assets Control (“OFAC”), (B) any other list of terrorists, terrorist
organizations or narcotics traffickers maintained pursuant to any of the Rules
and Regulations of OFAC that Agent notified Borrower in writing is now included
in “Governmental Lists”, or (C) 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”.

3.1.45 Anti-Terrorism Compliance. No portion of the proceeds of the Loan will be
used, are needed, or will be invested by the Credit Parties or any Affiliates
thereof in order to support international terrorism or activities that may
contravene U.S. federal, state as well as, to Borrower’s knowledge, German or
European Union anti-money laundering laws and regulations.

 

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3.1.46 German Anti-Money Laundering Compliance. Each of the Credit Parties, the
Credit Parties’ Affiliates and the Guarantor is acting solely for its own
account and not for the account or upon the initiative (Veranlassung) of any
economic beneficiary (wirtschaftlich Berechtigter) within the meaning of
Section 1 (6) of the German Money Laundering Act (Gesetz über das Aufspüren von
Gewinnen aus schweren Straftaten (Geldwäschegesetz)) of the Loan.

3.1.47 No Default. No Default or Event of Default under the Loan Documents has
occurred or is continuing or will result from the entry into of, or the
performance of any transaction contemplated by, any Loan Document.

3.1.48 No Registration. Except for recordation of the Mortgage and the
Assignment of Leases and the filing of any Uniform Commercial Code financing
statements required by Agent in connection with the Loan, it is not necessary to
file, register or record any Loan Documents in any public place or elsewhere,
except as may be required by applicable securities laws and regulations,
including applicable stock exchange rules.

3.1.49 Intentionally Omitted.

3.1.50 Certificate of Occupancy; Licenses. All certifications, permits, licenses
and approvals, including without limitation, certificates of completion and
occupancy permits required of each Credit Party for the legal use, occupancy and
operation of the Property as an office and retail building with the Observation
Deck (collectively, the “Licenses”), have been obtained and are in full force
and effect, except for those the failure of which to obtain and maintain in full
force and effect would not reasonably be expected to have and does not have a
Material Adverse Effect. Borrower shall keep and maintain and cause the other
Credit Parties to keep and maintain all Licenses necessary for the operation of
the Property as an office and retail building, except where the failure to
maintain a License would not reasonably be expected to cause or does not cause a
Material Adverse Effect. The use being made of the Property is in conformity
with the certificate or certificates of occupancy issued for the Property in all
material respects.

3.1.51 No Subsidiaries. As of the Closing Date, no Credit Party has any
subsidiaries except as disclosed in Schedule X.

3.1.52 Intentionally Omitted.

3.1.53 Trigger Period; Debt Yield Collateral Period. On the date hereof, no
Trigger Period or Debt Yield Collateral Period exists.

3.1.54 Appraisal. In connection with the Appraisal delivered to Agent and
Lenders on or prior to the Closing Date, all information supplied by the Credit
Parties or on their behalf to the Appraiser for the purposes of such Appraisal
was true and accurate as at its date or (if appropriate) as at the date (if any)
at which it is stated to be given.

3.1.55 Taxpayer Identification Number. The Taxpayer Identification number for
ESLA is 04-3641193, for ESBA is 13-6084254, for Operating Company is 13-1957295
and for Observatory Tenant is 27-4317468.

 

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3.1.56 Labor. No Credit Party (a) is involved in or, to the best of Borrower’s
knowledge, threatened with any (i) labor dispute, work stoppage or labor strike
or (ii) any grievance or litigation relating to labor matters involving any
employees or other laborers at the Property, including, without limitation,
violation of any federal, state or local labor, safety or employment laws
(domestic or foreign) and/or charges of unfair labor practices or discrimination
complaints which, if determined adversely to any Credit Party, would reasonably
be expected to result in, or does result in a Material Adverse Effect, (b) has
knowingly engaged, nor, to the best of Borrower’s knowledge, has there been any
allegations in any proceeding that any Credit Party has engaged in any unfair
labor practices within the meaning of the National Labor Relations Act or the
Railway Labor Act which would have a Material Adverse Effect, and (c) is a party
to, or bound by, any collective bargaining agreement or union contract with
respect to employees and other laborers at the Property, except as set forth on
Schedule XIV (the parties acknowledging that the contract with Local 30 has
expired and that the same is currently being re-negotiated), or is negotiating
any new agreement or contract with respect to the Property. .

3.1.57 No Bankruptcy Filing. None of the Credit Parties intend either the filing
of a petition by it under any state or federal bankruptcy or insolvency laws or
the liquidation of all or a major portion of any such entity’s assets or
property, and none of the Credit Parties have any knowledge of any Person having
filed or intending to file any such petition against it.

Section 3.2 Continuing Effectiveness and Survival of Representations. All
representations and warranties contained in any documents furnished to Agent
and/or Lenders by or on behalf of Borrower as part of or in support of the Loan
application or pursuant to this Agreement or any of the other Loan Documents
shall be deemed continuing and in effect at all times while Borrower remains
indebted to Lenders but have only been made by Borrower as of the date hereof
and as of the date that the same are required to be re-made pursuant to this
Agreement, including, without limitation, as a condition to Advances. The
representations and warranties set forth in Section 3.1 shall survive, and any
covenants contained in Section 3.1 shall continue, for so long as any amount
remains payable to Agent and/or Lenders under this Agreement or any of the other
Loan Documents but are only effective as of the date made or re-made.

IV. BORROWER COVENANTS

Section 4.1 Borrower Affirmative Covenants.

Borrower hereby covenants and agrees that:

4.1.1 Existence; Compliance with Legal Requirements. Borrower shall do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its existence, and all material rights, licenses, permits and franchises
and comply in all material respects with all Governmental Authorities applicable
to it and the Property, including, without limitation, the Landmarks
Preservation Commission, and all Legal Requirements applicable to it and the
Property, including, without limitation, the ADA and Prescribed Laws. Borrower
shall cause Operating Company and Observatory Tenant to do or cause to be done
all things necessary to preserve, renew and keep in full force and effect its
respective existence, rights, licenses,

 

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permits and franchises and comply in all material respects with all Governmental
Authorities applicable to it and the Property, including, without limitation,
the Landmarks Preservation Commission, and all Legal Requirements applicable to
it and the Property, including, without limitation, the ADA and Prescribed Laws.
If any such compliance is the obligation of a Tenant under a Lease (excluding
for this purpose the Sublease and the Observatory Lease), then Borrower shall be
in compliance with its obligations hereunder so long as Borrower or Operating
Company is proceeding with reasonable diligence and in a commercially reasonable
manner to enforce such Tenant’s obligations and the on-going failure of
compliance by such Tenant would not reasonably be expected to have, and does not
have a Material Adverse Effect.

4.1.2 Taxes and Other Charges. Borrower shall pay or cause the Operating Company
to pay all Taxes and Other Charges now or hereafter levied or assessed or
imposed against the Property or any part thereof as the same become due and
payable; provided, however, that, so long as neither a Monetary Default or an
Event of Default exists, Borrower’s obligation to directly pay Taxes shall be
suspended during a Trigger Period so long as Borrower complies with the terms
and provisions of Section 6.1.1 Borrower shall furnish to Agent receipts for the
payment of the Taxes and the Other Charges prior to the date the same shall
become delinquent. Borrower shall not permit or suffer and shall promptly
discharge any Lien (other than Permitted Encumbrances) against the Property, by
payment, bonding or otherwise within sixty (60) days after Borrower is notified
of such Lien (regardless of source). The provisions of this Section 4.1.2 are
subject to the Credit Parties’ Contest Right.

4.1.3 Tax Filings. Borrower and Operating Company shall timely file and shall
cause Operating Company to timely file all federal, state, local and foreign tax
returns required to be filed by it and shall timely pay all federal, state,
local and foreign taxes due and payable by it (other than any taxes the amount
or validity of which is being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have been provided on
the books of the Borrower or Operating Company, as applicable).

4.1.4 Litigation. Borrower shall and shall cause Operating Company to give
prompt notice to Agent of any litigation or governmental proceedings pending or
threatened against any Credit Party or Guarantor which might reasonably be
expected to result in, or does result in a Material Adverse Effect.

4.1.5 Access to Property. Borrower shall and shall cause Operating Company and
Observatory Tenant to permit agents, representatives and employees of Agent and
each Lender, accompanied by representatives of one or more Credit Parties, to
inspect the Property or any part thereof at reasonable hours upon reasonable
advance notice, subject to rights of Tenants.

4.1.6 Further Assurances; Supplemental Mortgage Affidavits. Borrower shall and
shall cause Operating Company and Observatory Tenant, at Borrower’s sole cost
and expense, to:

(a) execute and deliver to Agent 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 Obligations of Borrower under the Loan Documents, as
Agent may reasonably require, provided that the same shall be subject to
Section 10.22;

 

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(b) do and execute all and such further lawful and reasonable acts, conveyances
and assurances for the better and more effective carrying out of the intents and
purposes of this Agreement and the other Loan Documents, as Agent shall
reasonably require from time to time; and

(c) furnish to Agent all instruments, documents, certificates, plans and
specifications, appraisals, title and other insurance, reports and agreements
and each and every other document and instrument required to be furnished by the
terms of this Agreement or the other Loan Documents, all at Borrower’s
reasonable expense.

4.1.7 Financial Reporting. (a) Borrower shall and shall cause Operating Company
and Observatory Tenant to keep and maintain or will cause to be kept and
maintained proper and accurate books and records, in accordance with GAAP,
reflecting the financial affairs of the Credit Parties. Agent shall have the
right from time to time during normal business hours upon reasonable notice to
Borrower to examine such books and records at the office of Borrower or other
Person maintaining such books and records and to make such copies or extracts
thereof as Agent shall desire.

(b) Borrower shall furnish Agent annually, within one hundred twenty (120) days
following the end of each Fiscal Year, a complete copy of each Credit Party’s
annual financial statements audited by the Approved Accountant or other
independent certified public accountant acceptable to Agent prepared in
accordance with GAAP, including, without limitation, statements of (i) assets
and liabilities and Net Worth, (ii) income and expense and (iii) a cash flow
statement for the Credit Parties and the Property, together with an unaudited
combining balance sheet and income statement for the Credit Parties.

(c) Borrower will furnish to Agent on or before the forty-fifth (45th) day after
the end of each fiscal quarter (based on a Fiscal Year) commencing with the
third fiscal quarter of 2011 the following items:

(i) unaudited financial statements for each Credit Party, internally prepared
including, with respect to each Person, a balance sheet and statement of
operations as of the end of such quarter and for the corresponding quarter of
the previous year and a contingent liability schedule, and Borrower’s
calculation of the Debt Yield as of the end of such quarter and all background
information reasonably required by Agent, including, without limitation, a
detailed statement of NOI, to substantiate Borrower’s calculation of the same.
Such statements for each quarter shall be accompanied by a certificate from an
authorized signatory of Borrower that is familiar with the financial condition
of the Credit Parties and the operation of the Property certifying to the best
of the signer’s knowledge, (A) that such statements fairly represent the
financial condition and results of operations of each Credit Party, (B) that as
of the date of such Officer’s Certificate, no Default exists under this
Agreement, the Note or any other Loan Document or, if so, specifying the nature
and status of each such Default and the action then being taken by Borrower or
proposed to be taken to remedy such Default, (C) that as of the date of each

 

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Officer’s Certificate, no litigation exists involving any Credit Party or the
Property in which the amount involved is One Million Five Hundred Thousand
Dollars ($1,500,000.00) (in the aggregate) or more in which all or substantially
all of the potential liability is not covered by insurance, or, if so,
specifying such litigation and the actions being taking in relation thereto, and
(D) Borrower’s calculation of the Debt Yield for the then relevant period.
Notwithstanding the foregoing, Borrower hereby acknowledges and agrees that
Agent shall unilaterally determine the Debt Yield as of the end of for each
calendar quarter, in its reasonable discretion, but subject to the terms of this
Agreement. Such financial statements shall contain such other information as
shall be reasonably requested by Agent for purposes of any calculations to be
made by Agent pursuant to the terms hereof; and

(ii) a leasing report and rent roll/occupancy summaries for all Leases affecting
the Property, including, without limitation, aging schedules, schedules of
tenant receivables, tenant defaults and tenant sales, as applicable and
available, dated as of the last month of such fiscal quarter. Such rent roll and
schedule of aged receivables shall be accompanied by an Officer’s Certificate
certifying that such rent roll and schedule of aged receivables is true, correct
and complete in all material respects as of its date;

(d) Within sixty (60) days after the end of each Fiscal Year, Borrower shall and
shall cause Operating Company to deliver to Agent the Annual Budget for the next
Fiscal Year. Such Annual Budget will be for informational purposes; provided,
however, that during a Trigger Period, Borrower shall deliver to Agent within
ten (10) days of the commencement of such period the Annual Budget for Agent’s
review and approval of the discretionary items and Capital Expenditures, tenant
improvements and leasing commissions contained therein (which approval shall not
be unreasonably withheld, conditioned or delayed and is deemed given if not
withheld in writing, including the basis for disapproval within ten (10)
Business Days after request). The Annual Budget submitted pursuant to this
Section 4.1.7(d) and, if required pursuant hereto, approved or deemed approved
by Agent, for any calendar year shall be referred to herein as the “Approved
Annual Budget”. In addition, during a Trigger Period, in the event that Borrower
or Operating Company wishes to incur any Extraordinary Expenses, then Borrower
shall promptly deliver to Agent a reasonably detailed explanation of such
proposed Extraordinary Expense for Agent’s approval, which approval shall not be
unreasonably withheld, delayed or conditioned and is deemed given if not
withheld in writing, including the basis for disapproval, within ten (10)
Business Days after request. If Borrower, Operating Company or Manager, if
applicable, shall materially change or modify the Approved Annual Budget,
Borrower shall deliver to Agent an amended Annual Budget reflecting such change
or modification or, if such change or modification is being made during a period
requiring approval of the then applicable Annual Budget pursuant to this
Section 4.1.7(d), Borrower shall obtain the prior written consent of Agent,
which consent shall not be unreasonably withheld, conditioned or delayed and is
deemed given if not withheld in writing, including the basis for disapproval
within ten (10) Business Days after request. If Borrower shall fail to deliver
the Annual Budget and/or obtain Agent’s approval if required pursuant to this
Section 4.1.7(d), the Approved Annual Budget for the preceding calendar year, as
increased by any actual increase in non-discretionary expenses, shall constitute
the Approved Annual Budget for the then applicable fiscal year until Borrower
submits a new Annual Budget and, if applicable, obtains Agent’s approval
thereof, for such fiscal year as required pursuant to this Section 4.1.7(d).

 

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(e) Borrower shall furnish to Agent, within five (5) Business Days after request
(or as soon thereafter as may be reasonably possible), such further detailed
information with respect to the operation of the Property and the financial
affairs of Borrower as may be reasonably requested by Agent.

(f) ESBA shall timely make all filings required by the Securities & Exchange
Commission and shall promptly deliver a copy of the same to Agent.

4.1.8 Title to the Property. Borrower will warrant and defend the validity and
priority of the Liens of the Mortgage, the Assignment of Leases on the Property,
and the Lien created pursuant to Section 6.1 against the claims of all Persons
whomsoever, subject with respect to the Property only to Permitted Encumbrances.

4.1.9 Estoppel Statement. (a) After request by Agent, Borrower shall within
five (5) Business Days furnish Agent with a statement, duly acknowledged and
certified, stating (i) the unpaid principal amount of the Note, (ii) the
Applicable Interest Rate of the Note, (iii) the date installments of interest
and/or principal were last paid on the Note, (iv) any offsets or defenses to the
payment of the Debt, if any, (v) that this Agreement and the other Loan
Documents have not been modified or if modified, giving particulars of such
modification and (vi) that no Default or Event of Default exists, or if a
Default or Event of Default does exist, specifying such Default or Event of
Default, as applicable, and the steps, if any, being taken to remedy such
Default or Event of Default.

(b) Borrower shall deliver to Agent, upon request, an estoppel certificate from
each of Operating Company with respect to the Sublease and Observatory Tenant
with respect to the Observatory Lease and Borrower shall use commercially
reasonable efforts to deliver to Agent, upon request, an estoppel certificate
from each Tenant (i) with an office Lease in excess of 25,000 rentable square
feet, and (ii) with a Broadcasting Lease or retail lease providing for Rent in
excess of $900,000 per year (a “Third Party Lease”); provided that such
certificate may be in the form required under such Lease; provided, further,
that Borrower shall not be required to deliver such certificates with respect to
the Third Party Leases more frequently than one (1) time prior to the Initial
Maturity Date and one (1) time during the aggregate period of the First
Extension Period and the Second Extension Period.

4.1.10 Leases. (a) All Leases and all renewals of Leases executed after the date
hereof shall (i) contain market rate terms and conditions, (ii) provide that
such Lease is subordinate to the Mortgage and that, upon the foreclosure of the
Mortgage, sale by power of sale thereunder or deed-in-lieu of foreclosure, the
Tenants, at Agent’s discretion, will attorn to the transferee of the Property,
(iii) be prepared on the standard form of lease attached hereto as Schedule XIII
with such modifications as are consistent with the market and that result from
arms-length negotiations that Borrower conducts in good faith and (iv) not
include any option in favor of Tenant to acquire all or any portion of the
Property.

(b) Borrower may or may cause Operating Company to enter into new Leases which
are not Major Leases without Agent’s consent provided that no Event of Default
then exists, the Lease complies with the requirements set forth in
subsection (a) above, and the Tenant thereunder is not an Affiliate of Borrower
or Operating Company. In addition, Borrower may

 

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enter into renewals, amendments, extensions, restatements, expansions and
modifications of Leases which are not Major Leases without the consent of Agent
provided that no Event of Default then exists, any such renewal, amendment,
extension, restatement, expansion or modification complies with the requirements
set forth in subsection (a) above, and the Tenant thereunder is not an Affiliate
of Borrower or Operating Company. Borrower may terminate any Lease which is not
a Major Lease without the consent of Agent.

(c) All Major Leases and all renewals, amendments, extensions, restatements,
expansions, modifications and terminations thereof (a “Major Lease
Modification”) executed after the date hereof shall, prior to execution, be
subject to Agent’s approval which shall not be unreasonably withheld, delayed or
conditioned. Borrower shall not permit or consent to the assignment of any Major
Lease without Agent’s prior consent, which shall not be unreasonably withheld,
delayed or conditioned, unless and except to the extent the right to assign
without Borrower’s consent is already reserved to the tenant thereunder in any
Major Lease in existence on the date of this Agreement or is included in any
Major Lease hereafter entered into in compliance with the terms of this
Section 4.1.10(c). Each request for approval and consent of a Major Lease or
Major Lease Modification shall contain a legend in capitalized bold letters on
the top of the cover page stating: “THIS IS A REQUEST FOR CONSENT TO A [MAJOR
LEASE] [MAJOR LEASE MODIFICATION]. AGENT’S RESPONSE IS REQUESTED WITHIN FIVE (5)
BUSINESS DAYS. AGENT’S FAILURE TO RESPOND WITHIN SUCH TIME PERIOD SHALL RESULT
IN AGENT’S CONSENT BEING DEEMED TO HAVE BEEN GRANTED.” Each such request shall
include the following documentation with such request: (i) the Major Lease or
Major Lease Modification, as applicable, and (ii) all other materials reasonably
necessary in order for Agent to evaluate such Major Lease or Major Lease
Modification. In the event that Agent fails to grant or withhold its approval
and consent to such Major Lease or Major Lease Modification within such five (5)
Business Day period (and, in the case of a withholding of consent, stating the
grounds therefor in reasonable detail), then Agent’s approval and consent shall
be deemed to have been granted. In addition, Borrower may, at Borrower’s option,
prior to delivering to Agent any such Major Lease or Major Lease Modification
for Agent’s approval, first deliver to Agent for Agent’s approval a tenant
application and budget setting forth the major economic and other business terms
(the “TAB”) of such proposed Major Lease or Major Lease Modification, provided,
however, that a TAB shall only be deemed delivered from the date additional
information reasonably required for evaluation of the TAB is delivered to Agent;
provided, further, that a TAB shall be deemed delivered as of the date received
if Agent does not request additional information with respect thereto within
three (3) Business Days following its initial receipt thereof. Each such request
for approval and consent of a TAB for a Major Lease or Major Lease Modification
shall contain a legend in capitalized bold letters on the top of the cover page
stating: “THIS IS A REQUEST FOR CONSENT TO THE TAB FOR A [MAJOR LEASE] [MAJOR
LEASE MODIFICATION]. AGENT’S RESPONSE IS REQUESTED WITHIN FIVE (5) BUSINESS
DAYS. AGENT’S FAILURE TO RESPOND WITHIN SUCH TIME PERIOD SHALL RESULT IN AGENT’S
CONSENT BEING DEEMED TO HAVE BEEN GRANTED.” In the event that Agent fails to
grant or withhold its approval and consent to such TAB within such five (5)
Business Day period (and, in the case of a withholding of consent, stating the
grounds therefor in reasonable detail), then Agent’s approval and consent shall
be deemed to have been granted. Subject to the approval time periods set forth
above with respect to Major Leases and Major Lease Modifications, so long as any
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contain material business terms which differ more than five percent (5%) on a
net effective basis from the material business terms set forth in the TAB
approved or deemed approved by Agent and otherwise does not contain any lease
terms which deviate materially from the terms of the standard form of Lease used
for the Property and approved by Agent, Agent’s consent to such Major Lease or
Major Lease Modification shall not be required but shall be deemed given for
purposes of Sections 4.1.11 and 6.3.2 hereof. All Major Lease, Major Lease
Modifications and TABs being sent to Agent for approval in accordance with this
Section 4.1.10(c) shall be sent in accordance with the notice provisions set
forth in Section 10.6 and shall, in addition, be sent to Ms. Barbara E. Isaacman
at the following address: HSBC Bank USA, National Association, 452 Fifth Avenue,
4th Floor, New York, New York 10018.

(d) Notwithstanding the foregoing, Borrower shall have the right to terminate
any Major Lease and no consent of Agent shall be required in respect of such
termination, provided that (i) Borrower simultaneously replaces such terminated
Lease with a Lease or Leases (for all or substantially all of the space which
was covered by the Lease being terminated) that either (A) has been approved or
deemed approved by Agent if required in accordance with Section 4.1.10(b) or
(B) otherwise meets the requirements of this Section 4.1.10, or (ii) the
applicable Tenant is in default thereunder beyond any applicable notice and
grace periods.

(e) Borrower shall and shall cause Operating Company to (i) promptly perform and
observe all of the material terms, covenants and conditions required to be
performed and observed by Borrower or Operating Company under the Leases, and
(ii) not collect any of the Rents more than one (1) month in advance (except
that Borrower may collect (A) such security deposits and last month’s Rents as
are permitted by Legal Requirements and are commercially reasonable in the
prevailing market, (B) pre-paid estimates of recoveries of operating expenses
and taxes, and other charges in accordance with the terms of each Lease).

(f) Upon request, Borrower shall furnish Agent with executed copies of all
Leases, certified as true and complete by Borrower.

(g) Intentionally omitted.

(h) Agent shall enter into a subordination, non-disturbance and attornment
agreement, in form and substance substantially similar to the form attached
hereto as Exhibit F (a “Non-Disturbance Agreement”), and otherwise acceptable to
Agent in its reasonable discretion, with any Tenant under a Major Lease (other
than the Operating Company under the Sublease and the Observatory Tenant under
the Observatory Lease), with any Tenant under a Lease for more than 25,000
square feet of space or for retail or broadcast use (other than the Operating
Company and the Observatory Tenant) and with respect to other Leases as may be
reasonably requested by the Borrower. All reasonable third-party costs and
expenses incurred by Agent in connection with the negotiation, preparation,
execution, delivery and recordation of any Non-Disturbance Agreement, including,
without limitation, reasonable attorneys’ fees and disbursements, shall be paid
by Borrower or another Credit Party.

(i) Borrower shall cause the Operating Company to comply with the terms and
provisions of this Section 4.1.10.

 

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4.1.11 Alterations.

(a) Agent’s prior approval shall be required in connection with any alterations
to any Improvements that may (i) have a Material Adverse Effect, or (ii) result
in a reduction of the square footage of the Improvements by more than five
percent (5%). The provisions of this Section 4.1.11 shall not pertain to (1) a
Restoration for which the provisions of Article V are intended to govern and
(2) any alterations set forth on Schedule XI attached hereto or for any
alteration provided for in any Lease other than a Major Lease or any Major Lease
approved pursuant to Section 4.1.10 hereof, for which Agent’s consent shall not
be required and the Borrower shall not be required to post security. Borrower
shall cause the Operating Company to comply with the provisions of this
Section 4.1.11.

(b) Borrower shall not, and shall not permit the Operating Company, Observatory
Tenant or any other Tenant to commence any alterations to the Improvements
without obtaining a permit or waiver, if applicable, from the Landmarks
Preservation Commission.

4.1.12 Intentionally Omitted.

4.1.13 Updated Appraisal. Agent shall have the right to order new Appraisals of
the Property from time to time. Borrower hereby agrees, upon demand, to pay to
Agent the cost and expense for such Appraisals and a fee for Agent’s review of
each Appraisal; provided, however, that Borrower’s obligation to pay such cost
and expense shall be limited to one Appraisal of the Property every two (2)
years, unless the Appraisal is ordered after the occurrence of an Event of
Default, is required by any Legal Requirement or is required hereunder in
connection with the election of Borrower to extend the term of the Loan for the
Extension Period.

4.1.14 Origination Fee, the Arrangement Fee, the Unused Fee and Administrative
Fee. Borrower shall pay to Agent the Origination Fee, the Arrangement Fee, the
Unused Fee and the Administrative Fee in accordance with the Loan Fee Letter.

4.1.15 Interest Rate Protection Agreement. (a) Borrower, at its option may, at
or prior to each Advance of the Loan, enter into one or more Interest Rate
Protection Agreements which shall effectively cap the LIBOR Rate on the entire
outstanding principal balance of the Loan until the Maturity Date at a rate less
than or equal to four and one-half percent (4.5%) per annum, calculated on an
annual basis. The obligations of Borrower under any Interest Rate Protection
Agreements shall not be secured by or encumber any of the collateral securing
Borrower’s obligations under the Loan Documents nor shall it be a recourse
obligation of any Credit Party. Promptly upon obtaining any Interest Rate
Protection Agreement, Borrower shall deliver the same to Agent.

(b) Borrower shall comply with all of its obligations under the terms and
provisions of the Interest Rate Protection Agreement. Borrower shall take all
action reasonably requested by Agent to enforce Agent’s rights under the
Interest Rate Protection Agreements in the event of a default by Counterparty
and shall not waive, amend or otherwise modify any of its rights thereunder.
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amend or supplement the terms of the Interest Rate Protection Agreement,
(ii) without the prior written consent of Agent, cause the termination of the
Interest Rate Protection Agreement prior to its stated maturity date,
(iii) without the prior written consent of Agent, waive or release any
obligation of the Counterparty (or any successor or substitute party to the
Interest Rate Protection Agreement) under the Interest Rate Protection
Agreement, (iv) without the prior written consent of Agent, consent or agree to
any act or omission to act on the part of the Counterparty (or any successor or
substitute party to the Interest Rate Protection Agreement) which, without such
consent or agreement, would constitute a default under the Interest Rate
Protection Agreement, (v) fail to exercise promptly and diligently each and
every material right which it may have under the Interest Rate Protection
Agreement, (vi) take or omit to take any action or suffer or permit any action
to be omitted or taken, the taking or omission of which would result in any
right of offset against sums payable under the Interest Rate Protection
Agreement or any defense by the Counterparty (or any successor or substitute
party to the Interest Rate Protection Agreement) to payment or (vii) fail to
give prompt notice to Agent of any notice of default given by or to Borrower
under or with respect to the Interest Rate Protection Agreement, together with a
complete copy of such notice.

(c) Borrower shall collaterally assign to Agent for the ratable benefit of the
Lenders, pursuant to an Assignment of Interest Rate Protection Agreement
substantially in the form attached hereto as Exhibit G, all of Borrower’s right,
title and interest to receive any and all payments under the Interest Rate
Protection Agreement (and any related guarantee, if any) and shall deliver to
Agent an executed counterpart of such Interest Rate Protection Agreements,
notify the Counterparty of such collateral assignment and obtain the agreement
(either in such Interest Rate Protection Agreement or by separate instrument) of
such Counterparty to make any payments to become payable under or pursuant to
the Agreement directly to Agent until such time as the Assignment of Interest
Rate Protection Agreement is terminated or otherwise canceled. Notwithstanding
the foregoing, except during such time as a Trigger Period or Event of Default
exists, Borrower shall be entitled to receive any payments under the Interest
Rate Protection Agreement (other than a payment by reason of a termination event
thereunder, and the Counterparty shall continue to make such payments directly
to Borrower until such time as the Counterparty shall have been given notice by
Agent that a Trigger Period or an Event of Default shall have occurred and is
continuing. At such time as the Loan is repaid in full, all of Agent’s right,
title and interest in the Interest Rate Protection Agreement shall terminate and
Agent shall execute and deliver at Borrower’s sole, reasonable cost and expense,
such documents as may be required to evidence Agent’s release of the Interest
Rate Protection Agreements and to notify the Counterparty of such release. If
Agent receives any payments under the Interest Rate Protection Agreement (other
than a payment by reason of a termination event or any other payment during the
existence of an Event of Default or Trigger Period), Agent shall deliver the
same to Borrower. If Agent receives any payments under the Interest Rate
Protection Agreement during the existence of an Event of Default or Trigger
Period or by reason of a termination event under the Interest Rate Protection
Agreement, Agent shall have the right to hold the same, to deposit the same in a
cash collateral account as additional security for the Loan or, if an Event of
default exists, to apply same to any portion of the Debt in any order it desires
or, if the Interest Rate Protection Agreement has been partially or wholly
terminated, to apply same, with prior approval of Borrower, to the cost of
acquiring another interest rate protection agreement in form and substance, and
from a counterparty, satisfactory to Agent in all respects.

 

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(d) Intentionally omitted.

(e) In connection with an Interest Rate Protection Agreement, unless Agent is
the Counterparty thereunder, Borrower shall obtain and deliver to Agent an
opinion of counsel from counsel for the Counterparty thereunder (upon which
Agent and Lenders and their respective successors and assigns may rely) (the
“Counterparty Opinion”), under New York law and, if the Counterparty is a
non-U.S. entity, the applicable foreign law, substantially in compliance with
the requirements set forth below:

(i) The Counterparty Opinion shall be addressed to Agent, for itself and
Lenders, and their respective successors and assigns and shall state that it may
be relied upon by (A) successor Agent, (B) any assignee of any Lender’s interest
in the Loan, (C) any Participant, and (D) any servicer of the Loan,

(ii) The Counterparty Opinion shall be in form and substance reasonably
acceptable to Agent and shall contain the following opinions:

(A) the Counterparty under the Interest Rate Protection Agreement is duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation and has the organizational power and authority to
execute and deliver, and to perform its obligations under, the Interest Rate
Protection Agreement;

(B) the execution and delivery of the Interest Rate Protection Agreement by the
Counterparty thereunder, and any other agreement (including, without limitation,
the Assignment of Interest Rate Protection Agreement) which such Counterparty
has executed and delivered pursuant thereto, and the performance of its
obligations thereunder have been and remain duly authorized by all necessary
action and do not contravene any provision of its certificate of incorporation
or by-laws (or equivalent organizational documents) or any law, regulation or
contractual restriction binding on or affecting it or its property;

(C) all consents, authorizations and approvals required for the execution and
delivery by the Counterparty of the Interest Rate Protection Agreement, and any
other agreement (including, without limitation, the Assignment of Interest Rate
Protection Agreement) which such Counterparty has executed and delivered
pursuant thereto, and the performance of its obligations thereunder have been
obtained and remain in full force and effect, all conditions thereof have been
duly complied with, and no other action by, and no notice to or filing with any
governmental authority or regulatory body is required for such execution,
delivery or performance; and

(D) the Interest Rate Protection Agreement, and any other agreement (including,
without limitation, the Assignment of Interest Rate Protection Agreement) which
the Counterparty thereunder has executed and delivered pursuant thereto, have
been duly executed and delivered by such Counterparty and constitute the legal,
valid and binding obligation of such Counterparty,

 

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enforceable against such Counterparty in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors’ rights
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).

(iii) Depending on the nature of the transaction, the Counterparty Opinion shall
contain such additional opinions on such other matters relating to the Interest
Rate Protection Agreement and/or and any other agreement (including, without
limitation, the Assignment of Interest Rate Protection Agreement) which the
Counterparty thereunder has executed and delivered pursuant thereto, as Agent
shall reasonably require so long as then customary, including, without
limitation, the following additional opinions if the Counterparty is a foreign
entity:

(A) Jurisdiction where Counterparty is located will respect and give effect to
the choice of law provisions of the Interest Rate Protection Agreement and any
other agreement (including, without limitation, the Assignment of Interest Rate
Protection Agreement) which the Counterparty thereunder has executed and
delivered pursuant thereto, and

(B) A judgment obtained in the courts of the State of New York is enforceable in
the jurisdiction where Counterparty is located.

4.1.16 Insurance. Borrower shall and shall cause Operating Company and
Observatory Tenant to maintain in effect at all times while Borrower is indebted
to Lenders the insurance policies required by this Agreement.

4.1.17 Fees. Borrower shall pay when due all reasonable costs and expenses,
including, without limitation, appraisal fees (only if required by law after the
initial appraisal, in connection with any extension of the Loan or pursuant to
Section 4.1.13 hereof), recording fees and charges, abstract fees, title policy
fees, escrow fees, reasonable attorneys’ fees, environmental consultants to the
extent provided in the Mortgage, mortgage servicing fees and expenses, and all
other reasonable costs and expenses of every character which have been incurred
or which may hereafter be incurred by Agent in connection with the preparation
and execution of the Loan Documents, including any extension, amendment or
modification thereof; the funding of the Loan, the administration and
enforcement of this Agreement, the Mortgage, the Note, and the other Loan
Documents, including, without limitation, reasonable attorneys’ fees in any
action for the foreclosure of the Mortgage and the collection of the Loan, and
all such fees incurred in connection with any bankruptcy or insolvency
proceeding; and Borrower will, within twenty (20) days after demand by Agent
(together with reasonable evidence of incurrence of such expenses), reimburse
Agent for all such reasonable expenses which have been incurred. All amounts
incurred or paid by Agent under this Section 4.1.17, together with interest
thereon at the Default Rate from the due date until paid by Borrower, shall be
added to the Debt and shall be secured by the lien of the Mortgage.

4.1.18 Books and Records. Borrower shall keep and maintain and cause Operating
Company to keep and maintain detailed, complete and accurate books, records and
accounts reflecting all items of income and expense of Borrower and Operating
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connection with the Property and the results of the operation thereof in
accordance with past practice; and, upon the request of Agent, to make such
books, records and accounts available to Agent for inspection or independent
audit at reasonable times upon reasonable advance notice to Borrower and
Operating Company. Any independent audit conducted hereunder shall be at Agent’s
expense unless such audit shall uncover a material error in statements
previously delivered to Agent, in which case Borrower shall pay all reasonable
costs related thereto. Agent hereby agrees to keep, and to use reasonable
efforts to cause its agents, employees and consultants to keep, any information
acquired hereby confidential unless already known to the general public or as
required by law.

4.1.19 Indebtedness. Borrower shall duly and promptly pay all of Borrower’s
Obligations to Lenders according to the terms of this Agreement, the Note and
the other Loan Documents, and shall incur no other Indebtedness in any form,
whether direct, indirect, primary, secondary, or contingent, without Agent’s
prior written consent, other than such Indebtedness contemplated hereunder in
connection with operating the Improvements and the Indebtedness (if any)
permitted pursuant to Section 4.2.13, which other Indebtedness in each case is
paid on a timely basis.

4.1.20 Maintain Existence. Borrower shall maintain its existence in good
standing and make no changes in its organization, except to the extent permitted
under Article VIII; shall not convey, transfer, or lease any substantial part of
its property, assets, or business to any other person or entity in a single
transaction or series of related transactions except as provided under
Article VIII; shall not engage in any business enterprise other than as provided
in this Agreement; shall not merge or consolidate with or into any other firm or
corporation or enter into any partnership or joint venture with any other person
or entity other than as permitted in this Agreement; and shall not make any
loans or advances to any other person or entity, except extensions of credit in
the normal course of business. Borrower shall cause the other Credit Parties to
maintain their existence in good standing and make no changes in its
organization. Operating Company shall not convey, transfer, or lease any
substantial part of its property, assets, or business to any other person or
entity in a single transaction or series of related transactions, engage in any
business enterprise other than as provided in this Agreement; shall not merge or
consolidate with or into any other firm or corporation or enter into any
partnership or joint venture with any other person or entity; and shall not make
any loans or advances to any other person or entity other than as permitted in
the Agreement, except extensions of credit in the normal course of business.

4.1.21 Short Term Repairs. Borrower shall complete the repairs with respect to
the Property set forth on Schedule V within twelve (12) months of the Closing
Date.

4.1.22 Easements and Restrictions; Zoning. Borrower shall and shall cause
Operating Company to submit to Agent for Agent’s approval prior to the execution
thereof by Borrower or Operating Company, as applicable, all proposed easements,
restrictions, covenants, permits, licenses, and other similar instruments which
would affect the title to the Property, accompanied by a Survey showing the
exact proposed location thereof and such other information as Agent shall
reasonably require. Except as permitted under Article VIII, Borrower shall not
and shall not permit Operating Company to subject the Property or any part
thereof to any easement, restriction or covenant (including any restriction or
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lease or other occupancy agreement) without the prior approval of Agent (not to
be unreasonably withheld or delayed in the case of utility easements only). With
respect to any and all existing easements, restrictions, covenants or operating
agreements which benefit or burden the Property and any easement, restriction or
covenant to which the Property may hereafter be subjected in accordance with the
provisions hereof, Borrower shall or shall cause the other Credit Parties to:
(a) observe and perform the obligations imposed upon the Borrower, Operating
Company or the Property; (b) not alter, modify or change the same without the
prior approval of Agent; (c) enforce its rights thereunder in a commercially
reasonable manner so as to preserve for the benefit of the Property the full
benefits of the same; and (d) deliver to Agent a copy of any notice of default
or other material notice received by any Credit Party in respect of the same
promptly after such Credit Party’s receipt of such notice.

4.1.23 Ownership of Personalty. Borrower shall and shall cause Operating Company
to furnish to Agent, if Agent so requests, photocopies of the fully executed
contracts, bills of sale, receipted vouchers and agreements, or any of them,
under which Borrower or Operating Company claims title to the materials,
articles, fixtures and other Personal Property used or to be used in the
renovation or operation of the Improvements.

4.1.24 Comply with Other Loan Documents. Borrower shall perform all of
Borrower’s Obligations under the Note and the other Loan Documents and cause the
other Credit Parties to perform all of its obligations under the Loan Documents
to which it is a party.

4.1.25 Purchase of Material Under Conditional Sale Contract. No Credit Party
shall permit any materials, equipment, fixtures or any other part of the
Improvements to be purchased or installed under any security agreement or other
arrangements wherein the seller reserves or purports to reserve the right to
remove or to repossess any such items unless authorized by Agent in writing or
as provided in Section 4.2.13 hereof.

4.1.26 Operating and Project Accounts. Borrower shall and shall cause Operating
Company to maintain HSBC as their principal depository bank for Borrower’s and
Operating Company’s accounts, including, without limitation, Borrower’s Account.

4.1.27 Patriot Act Compliance. Borrower will use and shall cause the other
Credit Parties to use its good faith and commercially reasonable efforts to
comply with the Patriot Act and all applicable requirements of Governmental
Authorities having jurisdiction over each Credit Party and the Property, which
relate to money laundering and terrorism. If, at any time, Agent has a
reasonable belief that a Credit Party or any of their Affiliates are not in
compliance with the Patriot Act or any applicable requirement of Governmental
Authorities having jurisdiction over such Credit Party or the Property which
relates to money laundering and/or terrorism, upon ten (10) days’ notice to
Borrower, Agent shall have the right to audit the Credit Parties’ compliance
(which Borrower shall cause Operating Company and Operating Tenant to cooperate
to permit) with the Patriot Act and all applicable requirements of Governmental
Authorities having jurisdiction over the Credit Parties and the Property, which
relate to money laundering and terrorism. In the event that Borrower fails and
fails to cause Operating Company to comply with the Patriot Act or any such
requirements of Governmental Authorities relating to money laundering and
terrorism, then Agent may, at its option, cause Borrower to comply or cause
Borrower to cause the Operating Company and Observatory Tenant to comply
therewith and any and all reasonable costs and expenses incurred by Agent in
connection therewith shall be secured by the Mortgage and the other Loan
Documents and shall be immediately due and payable.

 

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4.1.28 Anti-Terrorism Compliance. No portion of the proceeds of the Loan will be
used, are needed, or will be invested by the Credit Parties, any Affiliates of
Borrower, or Guarantor, in order to support international terrorism or
activities that may contravene U.S. federal, state as well as, to Borrower’s
knowledge, German or European Union anti-money laundering laws and regulations.
Borrower understands and hereby acknowledges that Agent and Lenders have certain
anti-money laundering responsibilities under various laws and regulations of the
United States of America, the Federal Republic of Germany and the European Union
and shall deliver to Agent, in each case, as reasonably requested by Agent
and/or any Lender or, to the extent any Credit Party has the right to obtain
such information, as requested by governmental entities administering such laws
and regulations, information regarding any Credit Party’s direct and indirect
beneficial owners’ identities or sources of funds or other similar information
and may seek to ensure that representatives or direct or indirect beneficial
owners of Borrower and Operating Company are not named on one of the Government
Lists or similar lists maintained by the Federal Republic of Germany or by the
European Union. Borrower agrees, upon the reasonable request of Agent and/or any
Lender, to provide and to cause the other Credit Parties to provide to Agent
and/or such Lender additional information as may be necessary or advisable in
order to satisfy their anti-money laundering responsibilities under various laws
and regulations of the United States of America, the Federal Republic of Germany
and the European Union.

4.1.29 Estoppel Certificates. Within one hundred twenty (120) days of the date
hereof, Borrower shall cause Operating Company to deliver to Agent estoppel
certificates with respect to each of the Tenants listed on Schedule XII attached
hereto (collectively, the “Estoppel Certificates”). If any Estoppel Certificate
delivered by any Tenant contains any material exception to the statements and
certifications contained thereon, as determined by Agent in its reasonable
discretion, then Borrower shall remedy the same and shall have obtained a new
Estoppel Certificate from such Tenant which contains no material exceptions to
any of the statements and certifications contained therein.

4.1.30 Notice. Borrower shall and shall cause Operating Company to give prompt
notice to Agent of:

(a) Defaults of which Borrower has knowledge and a proposed remedy for such
Default;

(b) the commencement of any suit, action or proceeding against Borrower,
Guarantor, Operating Company or Observatory Tenant that would reasonably be
expected to have a Material Adverse Effect; and

(c) the following events: (i) the occurrence or expected occurrence of any
Reportable Event with respect to any Single Employer Plan, a failure to make any
required contribution to a Plan when such contributions have become due, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or
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Insolvency of, any Multiemployer Plan in which the Borrower, any Credit Party or
any Commonly Controlled Entity is reasonably expected to have a liability that
is reasonably expected to have, or does have, a Material Adverse Effect, or
(ii) the institution of proceedings or the taking of any action by the PBGC to
terminate any Single Employer Plan.

4.1.31 Customer Due Diligence Requirements. Borrower shall, promptly after
written request by Agent (whether for itself, on behalf of any Lender or any
prospective new Lender), furnish or cause to be furnished to Agent any
documentation and such other information or evidence as may be reasonably
requested by Agent to enable Agent, such Lender or such prospective Lender to
carry out and be satisfied with the results of all applicable customer due
diligence requirements. Agent shall keep any such information confidential and
use reasonable efforts to cause its agents, employees and consultants to keep
any such information confidential unless already known to the general public or
as required by Legal Requirements. In addition, Agent shall notify any Lender or
any prospective Lender to whom Agent discloses any such information to keep any
such information confidential and use reasonable efforts to cause its agents,
employees and consultants to keep any such information confidential unless
already known to the general public or as required by Legal Requirements.

Section 4.2 Borrower Negative Covenants.

Borrower covenants and agrees that:

4.2.1 Due on Sale and Encumbrance; Transfers of Interests. Borrower shall not
permit or suffer and shall not permit any other Credit Party to permit or suffer
any Transfer, other than Permitted Transfers, without the prior written consent
of Agent.

4.2.2 Liens. Borrower shall not and shall not permit any other Credit Party to
create, incur, assume or suffer to exist any Lien on any portion of the
Property, any Lease or any interest, direct or indirect, in any Credit Party
except for Permitted Encumbrances. Any Lien against any portion of the Property
or any Lease shall be bonded or otherwise removed as a Lien against the Property
or Lease within thirty (30) days of the date such Lien was filed. The provisions
of this Section 4.2.2 are subject to the Credit Parties’ Contest Right.

4.2.3 Dissolution. No Credit Party shall engage in any dissolution, liquidation
or consolidation or merger with or into any other business entity, or transfer,
lease or sell, in one transaction or any combination of transactions, all or
substantially all of the property or assets of a Credit Party, as applicable,
except to the extent expressly permitted by the Loan Documents.

4.2.4 Change in Business. Borrower shall not enter into any line of business
other than the ownership, management, development and operation of the Property.
Operating Company shall not enter into any line of business other than the
ownership of its leasehold interest in the Property and its ownership of
interests in Observatory Tenant and ESB 102 Corporation and the management,
leasing and operation of the Property. Observatory Tenant shall not enter into
any line of business other than the ownership of the leasehold interest in the
Observatory Lease and the operation of the business conducted at the premises
demised thereunder.

 

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4.2.5 Debt Cancellation. Neither Borrower nor Operating Company shall cancel or
otherwise forgive or release any claim or debt (other than termination of Leases
in accordance herewith) owed to Borrower or Operating Company by any Person,
except for adequate consideration or in the ordinary course of Borrower’s or
Operating Company’s business.

4.2.6 Affiliate Transactions. Subject to the provisions of Section 8.3(a)(v) and
except for the Affiliate Contracts, the Ground Lease, Operating Lease,
Observatory Lease and existing supervisory arrangements, Borrower shall not and
shall not permit any other Credit Party to enter into, or be a party to, any
transaction with an Affiliate of Borrower or any of the constituent members of
Borrower except if such transaction is a de minimis transaction or in the
ordinary course of business and on terms which are fully disclosed to Agent in
advance and are no less favorable to Borrower or such Affiliate than would be
obtained in a comparable arm’s-length transaction with an unrelated third party.
Borrower shall not amend or permit the amendment of any Affiliate Contracts
without the prior consent of Agent.

4.2.7 Zoning. Borrower shall not and shall not permit Operating Company to
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-conforming use under any zoning ordinance or any other
applicable land use law, rule or regulation, without the prior consent of Agent.
Borrower will promptly notify Agent of any anticipated or proposed change in the
zoning for the Property or any portion thereof. If any such proposed change
would reasonably be expected to have, or does have a Material Adverse Effect,
Agent shall have the right to participate (at Borrower’s sole cost and expense)
in any and all proceedings, judicial, administrative or otherwise, with respect
to or in any way affecting the Property, including, without limitation, zoning,
environmental and other matters using counsel of Agent’s choosing. Borrower
shall not violate and shall cause the other Credit Parties, and shall cause
Operating Company to use commercially reasonable efforts to cause all Tenants
not to violate the certificate of occupancy for the Improvements.

4.2.8 Assets. Borrower shall not purchase or own any property other than (a) the
Property and (b) Personal Property necessary for the ownership or operation of
the Property. Neither Operating Company nor Observatory Tenant shall purchase or
own any property other than (a) its leasehold interest in the Property,
(b) Personal Property necessary for the ownership or operation of its leasehold
interest in the Property and (c) in the case of Operating Company, its interest
in Observatory Tenant and ESB 102 Corporation.

4.2.9 No Joint Assessment. Borrower shall not and shall not permit Operating
Company to suffer, permit or initiate the joint assessment of the Property
(a) with any other real property constituting a tax lot separate from the
Property, and (b) 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.

4.2.10 Principal Place of Business. Borrower shall not and shall not permit
Operating Company to change its chief executive office or chief place of
business or its jurisdiction of organization as set forth on Schedule IX without
first giving Agent thirty (30) days’ prior notice.

 

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4.2.11 ERISA. (a) Borrower shall not and shall not permit any Credit Party to
engage in any transaction which would cause any obligation, or action taken or
to be taken, hereunder (or the exercise by Agent 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 the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

(b) Neither a Reportable Event nor a failure to satisfy the minimum funding
requirements of Section 412 or 430 of the Code has occurred during the six
(6) year period prior to the date on which this representation is made or deemed
made or is reasonably expected to occur with respect to any Single Employer
Plan, and, to the knowledge of the Credit Parties, each Plan (including a
Multiemployer Plan or a multiemployer welfare plan maintained pursuant to a
collective bargaining agreement) has complied in all respects with the
applicable provisions of ERISA, the Code and the constituent documents of such
Plan, except for instances of non-compliance that, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. No termination of a
Single Employer Plan has occurred during such six-year period or is reasonably
expected to occur (other than a termination described in Section 4041(b) of
ERISA), and no Lien in favor of the PBGC or a Plan has arisen during such
six-year period or is reasonably expected to arise. Except to the extent that
any such excess could not reasonably be expected to have a Material Adverse
Effect, the present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits. Except to the extent that such liability could not
reasonably be expected to have a Material Adverse Effect, neither the Credit
Parties nor any Commonly Controlled Entity have had, or could reasonably be
expected to have, a complete or partial withdrawal from any Multiemployer Plan.
To the knowledge of the Credit Parties, no such Multiemployer Plan is in
Reorganization, Insolvent or terminating or is reasonably expected to be in
Reorganization, become Insolvent or be terminated. Except to the extent that any
such excess could not reasonably be expected to have a Material Adverse Effect,
the present value (determined using actuarial and other assumptions which are
reasonable in respect of the benefits provided and the employees participating)
of the liability of the Credit Parties and each Commonly Controlled Entity for
post retirement benefits to be provided to their current and former employees
under Plans which are welfare benefit plans (as defined in Section 3(1) of
ERISA, but excluding welfare benefit plans in which their current or former
collective bargaining employees participate) other than such liability disclosed
in the financial statements of the Credit Parties does not, in the aggregate,
exceed the assets under all such Plans allocable to such benefits. Neither the
Credit Parties nor any Commonly Controlled Entity has engaged in a prohibited
transaction under Section 406 of ERISA and/or Section 4975 of the Code in
connection with any Plan that would subject any Credit Party to liability under
ERISA and/or Section 4975 of the Code that could reasonably be expected to have
a Material Adverse Effect. There is no other circumstance which may give rise to
a liability in relation to any Plan that could reasonably be expected to have a
Material Adverse Effect.

 

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(c) Borrower shall deliver to Agent such certifications or other evidence from
time to time throughout the term of the Loan, as reasonably requested by Agent
in its sole discretion, that (i) no Credit Party is or maintains a “governmental
plan” within the meaning of Section 3(32) of ERISA; (ii) no Credit Party is
subject to state statutes regulating investments and fiduciary obligations with
respect to governmental plans; and (iii) one or more of the following
circumstances is true:

(A) Equity interests in each Credit Party are publicly offered securities,
within the meaning of 29 C.F.R. §2510.3-101(b)(2);

(B) Less than twenty-five percent (25%) of each outstanding class of equity
interests in each Credit Party are held by “benefit plan investors” within the
meaning of 29 C.F.R. §2510.3-101(f)(2); or

(C) Each Credit Party 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).

4.2.12 No Distributions. Except as set forth in Section 2.1.5, Borrower shall
not and shall not permit any Credit Party to make any distributions or other
disbursements to its shareholders, partners or members or Persons owned by or
related to any of its shareholders, partners or members until all Operating
Expenses with respect to the Property for the current month (including, without
limitation, Taxes and Other Charges, Insurance Premiums, and Debt Service), as
applicable, have been paid or provided for by Borrower or Operating Company,
except for payments made pursuant to the Affiliate Contracts.

4.2.13 Indebtedness. Borrower will not incur any Indebtedness, secured or
unsecured, direct or indirect, absolute or contingent (including guaranteeing
any obligation) other than (a) the Debt, (b) unsecured trade payables and
operational debt not evidenced by a note and in an aggregate amount, when
aggregated with the trade payables of the other Credit Parties, not exceeding
$10,000,000 at any one time, subject to amounts being contested in accordance
with the provisions of this Section 4.2.13 and (c) Indebtedness incurred in the
financing of equipment and other Personal Property used on the Property with
annual payments not exceeding, when aggregated with such financings by the other
Credit Parties, $2,500,000 in the aggregate; provided that any Indebtedness
incurred pursuant to subclauses (b) and (c) shall be (i) not more than
sixty (60) days’ past due and (ii) incurred in the ordinary course of business.
Neither Operating Company nor Observatory Tenant will incur any Indebtedness,
secured or unsecured, direct or indirect, absolute or contingent (including
guaranteeing any obligation) other than (A) unsecured trade payables and
operational debt not evidenced by a note and in an aggregate amount not
exceeding, when aggregated with the trade payables of the other Credit Parties
$10,000,000 at any one time, subject to amounts being contested in accordance
with the provisions of this Section 4.2.13 and (B) Indebtedness incurred in the
financing of equipment and other Personal Property used on the Property with
annual payments not exceeding, when aggregated with such financings by the other
Credit Parties, $2,500,000 in the aggregate; provided that any Indebtedness
incurred pursuant to subclauses (A) and (B) shall be (1) not more than
sixty (60) days’ past due and (2) incurred in the ordinary course of business.
Notwithstanding the foregoing, the Credit Parties shall not be required to pay a
trade payable within the sixty (60) day time frame herein if the applicable
Credit Party is, in good faith and at

 

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its own expense, diligently contesting the validity, amount or application of
the same thereof; provided, that, in each case, at the time of commencement of
any such action or proceeding and during the pendency thereof, (v) no Monetary
Default or Event of Default shall exist and be continuing hereunder, (w) no
portion of the Property will be in material danger of being sold or forfeited,
(x) such Credit Party shall promptly upon final determination thereof pay the
amount of any such trade payable determined to be payable, (y) the same shall
not constitute a Lien or shall have been bonded or otherwise removed pursuant to
Section 4.2.2 hereof; and (z) such contest shall operate to suspend collection
or enforcement, as the case may be, of the contested amount.

4.2.14 Organizational Documents. No Credit Party will amend, modify or otherwise
change its Organizational Documents without the prior consent of Agent in any
manner that (a) violates the covenants set forth in Section 4.2.19, or
(b) amends, modifies or otherwise changes any provision thereof that by its
terms cannot be modified at any time when the Loan is outstanding or by its
terms cannot be modified without Agent or the Lenders’ consent.

4.2.15 Air and Development Rights. No Credit Party shall sell, assign encumber,
lease, mortgage, pledge, charge, hypothecate, grant a security interest in or
otherwise transfer any interest which a Credit Party has in air, subsurface or
development rights with respect to the Property.

4.2.16 Ground Lease, Sublease and Observatory Lease.

(a) The Ground Lease, Sublease and Observatory Lease shall not be amended,
modified, supplemented or restated without the prior written consent of Agent,
subject, in the case of the Observatory Lease, to Section 4.2.16(f).

(b) The Ground Lease, Sublease and Observatory Lease shall not be assigned or
further (as applicable) master leased or master subleased. In addition, the
Observatory Lease shall not be subleased without the prior written consent of
Agent.

(c) Neither Operating Company nor Observatory Tenant shall place a mortgage,
lien, pledge, charge, encumbrance, hypothecation, security interest or other
security device on their respective leasehold interests in the Property.

(d) ESBA shall not waive any Rent payable to ESBA under the Sublease. ESBA shall
cause Operating Company to not waive any Rent payable to Operating Company under
the Observatory Lease.

(e) At no time during the term of the Loan shall the Observation Deck be closed
during normal business hours or inaccessible except in connection with a
Casualty or Condemnation or other event of Force Majeure Event and only to the
extent that such Casualty or Condemnation or other event of Force Majeure Event
directly affects the Observation Deck or access thereto or makes opening the
Observation Deck commercially unviable.

(f) At least six (6) months prior to the Initial Maturity Date of the Loan,
Borrower shall cause Operating Company either to (i) enter into an extension of
the Observatory

 

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Lease for a term of at least five (5) additional years, which extension shall be
subject to Agent’s consent in accordance with Section 4.1.10 hereof or
(ii) terminate the Observatory Lease and provide for the direct operation of the
Observation Deck by the Operating Company.

4.2.17 Government Regulation. No Credit Party shall (a) be or become subject at
any time to any law, regulation, or list of any Governmental Authority
(including, without limitation, the U.S. Office of Foreign Asset Control list)
that prohibits or limits Agent or Lenders from making any advance or extension
of credit to a Credit Party or from otherwise conducting business with a Credit
Party, or (b) fail to provide documentary and other evidence of a Credit Party’s
identity as may be requested by Agent or Lenders at any time to enable Agent or
Lenders to verify each Credit Party’s identity or to comply with any applicable
law or regulation, including, without limitation, Section 326 of the USA Patriot
Act.

4.2.18 No Pledge. No lien, pledge, charge, encumbrance, hypothecation, security
interest or other security device shall be placed on (a) any direct or indirect
ownership interest in any Credit Party owned by another Credit Party or any
Malkin Controlled Person or (b) on any Rents.

4.2.19 SPE Covenants. Borrower hereby covenants that as of the date hereof and
until such time as the Debt shall be paid in full:

(a) ESLA will not own any asset or property other than (i) the Property and
(ii) incidental Personal Property necessary for the ownership or operation of
the Property.

(b) ESBA, Operating Company and Observatory Tenant will not own any asset or
property other than (i) their respective leasehold interests in the Property,
(ii) with respect ESBA, its 100% ownership interest in ESLA, (iii) with respect
to Operating Company, its 99% ownership interest in Observatory Tenant and 100%
ownership interest in ESB 102 Corporation, (iv) their respective interests in
ESB Captive Insurance Company L.L.C. (“ESB Captive”), (v) Operating Company’s
interest in the Intellectual Property, and (vi) incidental Personal Property
necessary for the ownership and operation of such leasehold interest;

(c) ESLA will not engage in any business other than the ownership, management
and operation of the Property and ESLA will conduct and operate its business as
presently conducted and operated;

(d) ESBA and Operating Company will not engage in any business other than its
respective leasehold ownership of the Property, except, in the case of Operating
Company, to license its Intellectual Property from time to time, and will
conduct and operate its business substantially as presently conducted and
operated. Observatory Tenant will not engage in any business other than in
connection with its leasehold ownership of the Property and will conduct and
operate its business substantially as presently conducted and operated;

(e) Except for capital contributions or capital distributions permitted under
the terms and conditions of its organizational documents and properly reflected
on its books and records and supervisory fees, Borrower, Operating Company and
Observatory Tenant will not enter into any contract or agreement with any
Affiliate of Borrower, Operating Company or Observatory Tenant, any constituent
party of Borrower, Operating Company or Observatory

 

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Tenant or any Affiliate of any constituent party except with respect to ESB
Captive, except upon terms and conditions that are intrinsically fair and
substantially similar to those that would be available on an arm’s-length basis
with third parties other than any such party.

(f) Except for (i) intercompany loans properly reflected on their respective
financial statements, including, with respect to ESBA, a loan to ESBC in the
amount of $8,900,000 and, with respect to ESB Captive, a loan to Operating
Company in the amount of $4,250,000, and (ii) de minimis loans to employees, the
Credit Parties will not make any loans to any third party (including any
Affiliate or constituent party), and shall not acquire obligations or securities
of its Affiliates. Any intercompany loan made to ESLA and/or ESBA shall be
expressly subordinate to the Loan and any such junior lender shall enter into a
subordination agreement with Agent, for the benefit of the Lenders,
substantially in the form of Exhibit J attached hereto.

(g) Borrower, Operating Company and Observatory Tenant will remain Solvent and
will pay their respective debts and liabilities (including, as applicable,
shared personnel and overhead expenses) from their respective assets in the
ordinary course subject to good faith disputes.

(h) Except as permitted pursuant to Section 8.3, Borrower, Operating Company and
Observatory Tenant will do all things necessary to observe organizational
formalities and preserve their respective separate existence, and Borrower,
Operating Company and Observatory Tenant will not, nor will Borrower, Operating
Company and Observatory Tenant permit any constituent party to, amend, modify or
otherwise change the partnership certificate, partnership agreement, articles of
incorporation and bylaws, operating agreement, trust or other organizational
documents of Borrower, Operating Company or Observatory Tenant without the prior
consent of Agent in any manner that (i) violates the covenants set forth in this
Section 4.2.19 or (ii) with respect to Borrower, amends, modifies or otherwise
changes any provision thereof that by its terms cannot be modified at any time
when the Loan is outstanding or by its terms cannot be modified without Agent’s
consent.

(i) Borrower, Operating Company and Observatory Tenant will each maintain all of
its books, records, financial statements and bank accounts separate from those
of its Affiliates and any constituent party. Borrower’s, Operating Company’s and
Observatory Tenant’s assets will not be listed as assets on the financial
statement of any other Person, provided, however, that Borrower’s, Operating
Company’s and Observatory Tenant’s assets may be included in a consolidated
financial statement of its Affiliates provided that (i) appropriate notation
shall be made on such consolidated financial statements to indicate the
separateness of Borrower, Operating Company or Observatory Tenant, as
applicable, and such Affiliates and to indicate that Borrower’s, Operating
Company’s or Observatory Tenant’s, assets and credit, as applicable, are not
available to satisfy the debts and other obligations of such Affiliates or any
other Person and (ii) such assets shall be listed on Borrower’s, Operating
Company’s or Observatory Tenant’s own separate balance sheet, as applicable.
Borrower, Operating Company and Observatory Tenant shall each maintain its
books, records, resolutions and agreements as official records.

 

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(j) Each Credit Party will be, and at all times will hold itself out to the
public as, a legal entity separate and distinct from any other entity (including
any Affiliate thereof or any constituent party thereof), shall correct any known
misunderstanding regarding its status as a separate entity, shall conduct
business in its own name, shall not identify itself or any of its Affiliates as
a division or part of the other and shall maintain and utilize a separate
telephone number and separate stationery, invoices and checks bearing its own
name.

(k) Each Credit Party will each maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations.

(l) Except as permitted pursuant to Section 8.3, neither Borrower, Operating
Company or Observatory Tenant nor any constituent party thereof will seek or
effect the liquidation, dissolution, winding up, liquidation, consolidation or
merger, in whole or in part, of Borrower, Operating Company or Observatory
Tenant, as applicable, or transfer or otherwise dispose of all or substantially
all of its assets.

(m) Except with respect to the Cash Management Agreement, each of Borrower,
Operating Company and Observatory Tenant will not commingle the funds and other
assets of Borrower, Operating Company and Observatory Tenants with those of any
Affiliate or constituent party or any other Person, and will hold all of its
assets in its own name, respectively.

(n) Each Credit Party has and, subject to Section 8.3, will maintain its assets
in such a manner that it will not be costly or difficult to segregate, ascertain
or identify its individual assets from those of any Affiliate or constituent
party or any other Person.

(o) No Credit Party will guarantee or become obligated for the debts of any
other Person and does not and will not hold itself out to be responsible for or
have its credit available to satisfy the debts or obligations of any other
Person.

(p) Other than its agent or supervisor, no Credit Party will permit any
Affiliate or constituent party independent access to its bank accounts.

(q) Each Credit Party will pay the salaries of its own employees (if any) from
its own funds and maintain a sufficient number of employees (if any) in light of
its contemplated business operations or fairly allocate costs of any shared
employees, as applicable.

(r) Each Credit Party will compensate each of its consultants and agents from
its funds for services provided to it and pay from its own assets all
obligations of any kind incurred.

(s) Subject to Section 8.3, each Credit Party will file its own tax returns
separate from those of any other Person, except to the extent that Borrower or
any other Credit Party is treated as a “disregarded entity” for tax purposes and
is not required to file tax returns under applicable law, and pay any taxes
required to be paid under applicable law.

 

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(t) Each Credit Party will allocate fairly and reasonably any overhead expenses
that are shared with an Affiliate, including for shared office space and for
services performed by an employee of an Affiliate.

(u) No Credit Party will pledge its assets to secure the obligations of any
other Person.

(v) No Credit Party will buy or hold evidence of indebtedness issued by any
other Person (other than cash or investment-grade securities).

(w) No Credit Party will form, acquire or hold any subsidiary (whether
corporate, partnership, limited liability company or other) or own any equity
interest in any other entity, except as described in Schedule X.

(x) The Credit Parties will consider the interests of their respective creditors
in connection with all limited liability company or limited partnership actions.

(y) Except as provided in the Guaranty and the Environmental Indemnity, no
Credit Party has or will have any of its obligations guaranteed by any
Affiliate.

V. INSURANCE, CASUALTY AND CONDEMNATION

Section 5.1 Insurance.

5.1.1 Insurance Policies. (a) Borrower, at its sole cost and expense, shall
obtain and maintain, or cause to be maintained, and deliver to Agent the
following insurance Policies:

(i) Liability insurance shall be maintained at all times during the term of the
Loan:

(A) Commercial general liability insurance applicable to claims for personal
injury and/or bodily injury including death or property damage occurring upon,
in or about the Property; occurring as a result of the construction and use and
occupancy of facilities located at or on the Property; or as a result of
construction thereof. Coverage shall be provided on an occurrence basis pursuant
to the ISO Commercial General Liability Coverage Form (CG 00 01 10 01) or its
equivalent, and for personal and/or bodily injury or property damage as now are
or hereafter incorporated into such form and its endorsements. Such coverage
shall be in amounts of not less than $1,000,000 per occurrence bodily injury and
property damage combined, $1,000,000 per occurrence personal & advertising
injury, $2,000,000 aggregate products and completed operations liability,
$100,000 fire legal liability and $2,000,000 general aggregate limit per
location. The policy may contain deductibles reasonably acceptable to Agent.
Such coverage shall name Agent as an additional insured and provide such
additional insured coverage on a primary and non-contributory basis;

 

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(B) Commercial automobile liability insurance providing bodily injury and
property damage coverage of no less than $1,000,000 combined single limit
covering all owned, non-owned and hired vehicles. Such coverage shall name Agent
as an additional insured and provide such additional insured coverage on a
primary and non-contributory basis;

(C) Commercial umbrella/excess liability coverage of not less than $100,000,000
per occurrence and $100,000,000 in the annual aggregate on per location basis.
Commercial umbrella/excess liability insurance shall provide additional coverage
over all limits and coverages noted in paragraph (A), (B) and employers
liability per (D). This limit may be increased, from time to time, to reflect
what a reasonably prudent owner or lessee of buildings or improvements similar
in type and locality to that of the Property would carry. This policy shall be
written on an “occurrence” form basis and provide follow-form coverage including
primary and non-contributory additional insured coverage in favor of Agent.

(D) If applicable, workers compensation and disability insurance to the full
extent as required by applicable law; and employer’s liability coverage subject
to a limit of no less than $500,000 per accident, $500,000 disease per employee
and $1,000,000 disease policy limit. Such workers compensation, disability and
employers liability insurance shall cover Borrower and its employees engaged in
any work for or related to the Property.

(E) The policies described in paragraphs (A), (B) and (C) shall cover, without
limitation: elevators, escalators, independent contractors, contractual
liability (covering, to the maximum extent permitted by law, Borrower’s
obligation to indemnify Agent and the Lenders as required under this Agreement
and to the extent specified in the terms of these policies), products and
completed operations liability coverage.

(F) If applicable, fidelity/crime insurance providing coverage against loss due
to employee dishonesty, forgery & alteration, money & securities, funds transfer
and other prudent crime coverages in an amount as may be required by Agent, and
with a deductible not greater than One Hundred Thousand and No/100 Dollars
($100,000.00), provided that maintenance of such deductible shall be
commercially reasonable and shall be maintained by owners of properties similar
in type, location and quality as the Property.

(G) So-called dram shop insurance or other liability insurance required in
connection with the sale of alcoholic beverages.

(H) Such other types and amounts of insurance with respect to the Property and
the operation thereof which are commonly maintained in the case of other
property and buildings similar to the Property in nature, use, location, height
and type of construction as may from time to time be reasonably required by
Agent.

 

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(ii) Property insurance shall be maintained at all times during the term of the
Loan:

(A) Insurance against loss customarily included under standard “all risk”
policies including flood, earthquake, windstorm/named windstorm, terrorism,
vandalism, and malicious mischief, comprehensive equipment breakdown, and such
other insurable hazards as, under good insurance practices, from time to time
are insured against for other property and buildings similar to the Property in
nature, use, location, height, and type of construction. The amount of such
insurance shall be not less than one hundred percent (100%) of the insurable
value replacement cost value of the Property, including Improvements &
betterments at the Property except for sublimits as permitted by Agent for the
perils of flood, earthquake and windstorm and as are provided in the insurance
renewal for the period from June 30, 2011 through June 30, 2012. The current
sub-limits for the aforesaid insurance are acceptable to Agent. Each such
insurance Policy shall either contain an agreed amount replacement cost
endorsement or be provided in such amount so as to avoid coinsurance penalty
application and shall cover, without limitation, all tenant improvements and
betterments (except to the extent that the Tenant is required to insure the same
pursuant to the applicable Lease) on a replacement cost basis. Agent shall be
named Mortgagee on a standard mortgagee endorsement and Lender loss payee.

If the Property is located in an area having special flood and/or earthquake
and/or named windstorm perils or if such area hereafter shall be designated by
the United States Government, or any agency thereof, as having special flood or
earthquake or windstorm perils, the coverages provided by coverage extensions
and/or policies insuring against flood, earthquakes and windstorm/named
windstorms in amounts, applicable to each peril separately, in amounts as may be
reasonably required by Agent. Wind/named windstorm deductibles in high hazard
counties shall not be greater than five percent (5%) of the total insured value
per loss of the subject property. Regardless of the earthquake, flood or wind
hazard zone, Agent may require earthquake, flood and/or wind insurance coverage
in a minimum amount acceptable to Agent.

(B) Law & ordinance coverage including, Demolition Cost, debris removal,
Operations of Building Laws, and Increased Cost of Construction, including
increased costs arising out of changes in applicable laws and codes.

(1) “Demolition Cost” means the cost incurred to demolish all or part of the
Property, including the cost to clear the site, if any law or ordinance that
exists at the time of loss requires such demolition. Coverage is provided in
such amount as is reasonably required by Agent;

(2) “Operation of Building Laws” means the cost to rebuild at the same location
any undamaged part of the Property, which is required by law to be demolished
after a covered loss;

 

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(3) “Increased Cost of Construction” includes the increased cost Borrower incurs
for materials and labor required to rebuild the damaged portion of the Property
at the same location and in a manner that satisfies the minimum requirement of
the applicable law or ordinance at the time of the loss.

Operation of Building Laws and Increased Cost of Construction are required in
such amounts as may be reasonably required by Agent, but in no event less than
$200,000,000.

(C) Time element coverages, including extra expense coverage, for indirect loss
or damage by all risks covered by the insurance provided for in (A) above. Such
coverage shall provide for a recovery on an actual loss sustained basis
commencing at the time of loss and which shall also provide an extended period
of indemnity endorsement as to be reasonably required by Agent but in no event
less than 365 days. Agent shall be named as first lender loss payee as respects
this coverage. All coinsurance provisions shall be waived or such coverage shall
be in such amounts as to avoid the application of a coinsurance penalty. The
amount of such time element coverage shall be determined prior to the Closing
Date and at least once each year thereafter based on Borrower’s reasonable
estimate of the annual amount of NOI and fixed expenses payable for the
succeeding twelve (12) month period. In the event that all or any portion of the
Property shall be damaged or destroyed, Borrower shall assign to Agent all
claims under the policies of such insurance and all amounts payable and all net
amounts, when collected by Borrower under such policies.

(D) Comprehensive boiler and machinery coverage with limits with respect to any
one accident as may be reasonably requested by Agent, but in no event less than
$100,000,000. Such coverage shall insure against direct and indirect loss or
damage to all tenant improvements and betterments that Borrower is required to
insure pursuant to this Agreement by explosion or breakdown of mechanical and
electrical equipment, including steam boiler, air conditioning equipment,
pressure vessels or similar apparatus, with exclusions for testing removed, now
or hereafter installed on the Property. Coverage for indirect loss/rental
interruption insurance for a period of at least 12 months from the date of loss
as is reasonably required by Agent.

(E) Terrorism Coverage: If the “all risk” commercial property insurance required
under subsection (i) above and the “all risk” commercial property insurance and
the rent loss and/or business interruption insurance Policies required under
subsection (ii) above do not cover perils of terrorism or acts of terrorism,
Borrower shall maintain commercial property and rent loss and/or business
interruption insurance for loss resulting from perils and acts of terrorism on
terms (including amounts) consistent with those required under subsections (i)
and (ii)) above.

 

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For the purposes of this Agreement, “terrorism” shall mean any certified act of
terrorism as defined in TRIPRA.

Notwithstanding the foregoing, for any portion of terrorism coverage maintained
by Borrower, as applicable, in excess of the Loan Amount (plus the amount of the
Accordion, to the extent that the Accordion has been effected and regardless of
whether the Accordion has been advanced), the same shall be subject to the
Terrorism Premium Limit. The parties hereby acknowledge and agree that there
shall be no premium limit with respect to the terrorism coverage required
hereunder with respect to that portion of such coverage equal to the Loan Amount
(plus the amount of the Accordion, to the extent that the Accordion has been
effected and regardless of whether the Accordion has been advanced) and that
terrorism coverage (regardless of the price of the premium therefore) shall, at
all times, be maintained in an amount equal to the Loan Amount (plus the amount
of the Accordion, to the extent that the Accordion has been effected and
regardless of whether the Accordion has been advanced).

Notwithstanding the foregoing, if, at any time prior to the Initial Maturity
Date, (x) TRIPRA is no longer in effect (the “TRIPRA Repeal Date”), and (y) if
Borrower does not then maintain terrorism insurance coverage in an amount equal
to the amount of the Loan then outstanding (the “Coverage Loss Condition”),
which coverage shall not be subject to the Terrorism Premium Limit (Borrower
agreeing that it may not request an Advance and the Lenders have no obligation
to make an Advance during the period a Coverage Loss Condition exists), Borrower
shall have a period of six (6) months from the TRIPRA Repeal Date (the
“Terrorism Insurance Period”) to purchase terrorism coverage in an amount equal
to the amount of the Loan then outstanding, which coverage shall not be subject
to the Terrorism Premium Limit; provided, that (a) a Trigger Event shall be
deemed to occur effective five (5) Business Days following the occurrence of a
Coverage Loss Condition and a Trigger Period shall continue to exist so long as
the Coverage Loss Condition continues to exist, and (b) if, during the Terrorism
Insurance Period, the Property fails to maintain a Loan-to-Value Ratio of
seventy percent (70%) or less based on the Land only value, as determined by
Agent in its reasonable discretion based on an Appraisal ordered by Agent, at
Borrower’s expense, upon the occurrence of the Coverage Loss Condition (the
“Coverage Loss Condition Appraisal”), then, within five (5) Business Days of
notice from Agent to Borrower of the Repayment Amount (as hereinafter defined)
which shall be determined by Agent in its reasonable discretion, Borrower shall
either (i) pay down the Loan in an amount such that the Loan-to-Value Ratio
based on the Land value only, as set forth in the most recent Appraisal, is not
greater than seventy percent (70%) (the “Repayment Amount”) or post Cash with
Agent or deliver a Letter of Credit to Agent in the amount of the Repayment
Amount (the “Terrorism Insurance Period Collateral”), or (ii) purchase terrorism
coverage in accordance with this Section 5.1 in an amount equal to the Repayment
Amount (which coverage shall not be subject to the Terrorism Premium Limit).
During any Terrorism Insurance Period, Agent shall have the right, at Borrower’s
expense, to order a new Appraisal. If, in connection with this paragraph of

 

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Section 5.1(a)(ii)(E), Agent determines that the Loan-to-Value Ratio based on
the Land only value exceeds seventy percent (70%) and the Appraised Value of the
Land, based on Agent’s reasonable determination thereof, is lower than the
Appraised Value of the Land as reflected on the Appraisal then delivered to
Agent in connection with this paragraph of this Section 5.1(a)(ii)(E), Agent
shall review the basis for and details surrounding such determination of the
Appraised Value of the Land by Agent with Borrower and/or its representatives
(provided, however, that the duration of such review and the provision of such
basis for and details surrounding Agent’s determination shall be reasonably
determined by Agent and the final determination of the Appraised Value of the
Land shall be unilaterally made by Agent. If, as a result of any Appraisal
completed during the Terrorism Insurance Period after the Coverage Loss
Condition Appraisal there is a change in the Repayment Amount (the “Revised
Appraised Amount”), then Borrower shall have five (5) Business Days from the
date it receives notice from Agent of the Revised Appraised Amount to comply
with the requirements of clause (i) or (ii) above, as Borrower may elect, with
respect to the Revised Appraised Amount. During any period the Borrower is
required to comply with the requirements of clause (i) or (ii) above, as
Borrower may elect, Borrower may elect to prepay the Loan in its entirety. Any
prepayments of the Loan (in whole or in part) pursuant to this paragraph may be
made without the payment of the Spread Maintenance Premium.

In addition, Borrower hereby acknowledges and agrees that the Agent’s and
Lenders’ right to collect insurance proceeds hereunder in an amount up to the
Loan Amount (plus the amount of the Accordion, to the extent that the Accordion
has been effected and regardless of whether the Accordion has been advanced),
shall not be impaired by any payment of business interruption insurance.

The failure of Borrower to (1) comply with clause (i) or (ii) above, as
applicable, during the Terrorism Insurance Period and/or (2) to purchase
terrorism coverage by the end of the Terrorism Insurance Period shall constitute
an Event of Default hereunder.

Upon expiration of the Terrorism Insurance Period, provided that no Event of
Default then exists, Agent shall return the Terrorism Insurance Period
Collateral to Borrower.

(F) Such other types and amounts of insurance with respect to the Property and
the operation thereof which are commonly maintained in the case of other
property and buildings similar to the Property in nature, use, location, height
and type of construction as may from time to time be reasonably required by
Agent.

(G) During any construction and/or renovation period, coverage as required in
subsection (ii)(A), (B), (C), (D), (E) and (F) shall be extended to include any
insurable hard and/or soft costs.

 

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(b) Requirements of Insurance Policies:

(i) Acceptable Evidence of Insurance & Premiums: All insurance provided for in
Section 5.1.1(a) shall be obtained under valid and enforceable policies
(collectively, the “Policies” or in the singular, the “Policy”), and, to the
extent not specified above, shall be subject to the approval of Agent as to
deductibles, lender loss payees, loss payees, additional insureds, joint loss
payee/beneficiary and insureds. Five (5) Business Days prior to the expiration
dates of the Policies theretofore furnished to Agent, binding evidence of
insurance evidencing the Policies and within twenty-five (25) days after
commencement of the new or renewal Policy evidence satisfactory to Agent of
payment of the premiums due thereunder (the “Insurance Premiums”), shall be
delivered by Borrower to Agent in accordance with paragraph (v) below. “Binding
Evidence” means signed binders of insurance issued by each insurer and/or its
agent. An evidence of commercial property form (Acord 28 or its equivalent)
and/or Acord 25 (or equivalent) certificates of liability insurance are not
considered Binding Evidence. In addition, Borrower must provide Agent with
evidence of commercial property form (Acord 28 or its equivalent), including
specified signed primary policy endorsements requested by Agent for all
first-party related coverages and Acord 25 (or equivalent) certificates of
liability insurance including specified signed primary policy endorsements
requested by Agent within twenty-four (24) hours of policy renewal. In addition,
Borrower must provide Agent with copies of the primary all-risk property,
terrorism, boiler & machinery, DIC (if applicable), and captive and captive
reinsurance policies as soon as possible but no later than ninety (90) days
following renewal.

(ii) Blanket Policies: Prior to the renewal or replacement of the existing
Policy, any required insurance may be procured under a blanket insurance Policy
covering the Property and other properties or assets of Borrower or its
affiliates, provided that any such blanket insurance Policy shall otherwise
provide the same protection as has been provided in the insurance renewal for
the period from June 30, 2011 through June 30, 2012 and is in compliance with
the provisions of Section 5.1.1(a).

(iii) Insurable Interest of Agent & Lenders: Unless otherwise specified, all
Policies of insurance provided for or contemplated by Section 5.1.1(a) shall, in
the case of first-party property damage, builder’s risk, boiler and machinery,
flood and earthquake and terrorism insurance, name Borrower as the insured and
Agent (for the ratable benefit of Lenders and their successors and/or assigns)
as the mortgagee under a New York standard non-contributing mortgagee clause or
its equivalent in favor of Agent (including Agent as first mortgagee and first
lender loss payee) providing that the loss thereunder shall be payable to Agent
for the ratable benefit of Lenders and providing thirty (30) days’ advance
notice of cancellation to Agent. Loss of rental income, business income and
other applicable time element insurance shall name Agent (for the ratable
benefit of Lenders and their successors and/or assigns) as lender loss payee
pursuant to the ISO loss payable form (CP 1218 0695) or an equivalent form
reasonably acceptable to Agent in form and content.

 

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(iv) Cancellation, Material Modification, Non-Renewal, Severability of Agent &
Lenders’ Interests: Borrower agrees that such Policy shall not be canceled or
terminated; the coverage, deductible, and limits of such Policy shall not be
materially modified; other provisions of such Policy shall not be materially
modified if such Policy, after giving effect to such modification, would not
satisfy the requirements of this Agreement, and such Policy shall not be so
modified, canceled or fail to be renewed, without in each case, at least
thirty (30) days’ prior written notice to Agent. Each Policy shall contain a
provision whereby the insurer: (A) agrees that such Policy shall not be canceled
or terminated or fail to be renewed, without in each case, at least thirty (30)
days’ prior written notice to Agent; (B) waives any right to claim any Insurance
Premiums and commissions against Agent or any Lender, provided that the Policy
need not waive the requirement that the Insurance Premiums be paid in order for
a claim to be paid to the insured and (C) provides that Agent and the Lenders
are permitted to make payments to effect the continuation of such policy upon
notice of cancellation due to non-payment of premiums. In the event any Policy
(except for general public and other liability and workers compensation
insurance) shall contain breach of warranty provisions, such Policy shall not be
invalidated by and shall insure to the benefit of Agent for the benefit of
Lenders regardless of (A) any act, failure to act or negligence of or violation
of warranties, declarations or conditions contained in such Policy by any named
insured, (B) the occupancy or use of the Property for purposes more hazardous
than permitted by the terms thereof, or (C) any foreclosure or other action or
proceeding taken by Agent or the Lenders pursuant to any provision of the
Mortgage or any other Loan Document.

(v) Premiums, Evidence & Policies: Borrower shall pay the Insurance Premiums for
the Policies as the same become due and payable. When required by Agent,
Borrower shall deliver to Agent binders and the Policies required to be
maintained pursuant to Section 5.1.1(a); provided, however, Agent and Lenders
shall not be deemed by reason of the custody of such Policies to have knowledge
of the contents thereof. Borrower also shall deliver to Agent within twenty-five
(25) days after binding coverage or five (5) days prior to when the insurer
requires payment, whichever is sooner, a statement setting forth the particulars
as to all such Policies, indicating that all Insurance Premiums due thereon have
been paid and that the same are in full force and effect at Closing and upon
renewal. At least five (5) Business Days prior to the expiration date of each
Policy, Borrower shall deliver to Agent binding evidence of coverage as
specified in Section 5.1.1(b) evidencing renewal of coverage as required herein.
Not later than twenty-five (25) days after the renewal or replacement of each of
the Policies, Borrower shall deliver to Agent evidence of payment of Insurance
Premiums for such renewal or replacement Policies satisfactory to the Agent and
upon request not later than twenty-five (25) days after the renewal or
replacement of each of the Policies, Borrower shall deliver to Agent a cd rom
(as required pursuant to this paragraph) of a renewal or replacement Policy or
Policies.

(vi) Agent’s Right to Procure Insurance: If at any time Agent is not in receipt
of written evidence that all insurance required hereunder is maintained in full
force and effect, Agent and the Lenders shall have the right (but not the
obligation), upon notice to Borrower, to take such action as Agent deems
necessary to protect Lenders’ interest in the Property, including, without
limitation, the obtaining of such insurance coverage as Lenders in its sole
discretion deems appropriate and all Insurance Premiums

 

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incurred by Agent and the Lenders in connection with such action or in obtaining
such insurance and keeping it in effect shall be paid by Borrower to Agent upon
demand and until paid shall be secured by the mortgagee and shall bear interest
at the Default Rate.

(vii) Foreclosure: Upon written notice to and written approval from insurance
carriers, in the event of foreclosure of the Mortgage or other transfer of title
to the Property in extinguishment in whole or in part of the Debt, all right,
title and interest of Borrower in and to the Policies that are not blanket
Policies then in force concerning the Property and all proceeds payable
thereunder shall thereupon vest in the purchaser at such foreclosure, Agent,
Lender, or other transferee in the event of such other transfer of title.

5.1.2 Insurance Carrier Ratings. All insurance Policies must be obtained under
valid and enforceable Policies from an insurance company with a claim paying
ability rating of “A” or better from S&P (or AM Best’s equivalent rating of
A:X). Notwithstanding the foregoing, if such Policies will be provided by a
syndicate of five (5) or more insurance companies, then:

(a) at least sixty percent (60%) of the insurance coverage (100% of the primary
layer), shall be provided by an insurance company with a claim paying ability
rating of “A” or better from S&P, or one other Rating Agency approved by Agent;

(b) at least thirty percent (30%) of the insurance coverage shall be provided by
an insurance company with a claim paying ability rating of “BBB” or better from
S&P or with a rating of “A-” and a financial class of “X” or better by A.M.
Best; and

(c) at least ten percent (10%) of the insurance coverage shall be provided by an
insurance company with a claim paying ability rating of “A-” or better from S&P
or with a rating of “A-” and a financial class of “X” or better by A.M. Best.

In addition, notwithstanding the foregoing, if such Policies will be provided by
a syndicate of four (4) or fewer members, then:

(i) at least seventy-five percent (75%) of the insurance coverage (100% of the
primary layer), shall be provided by an insurance company with a claim paying
ability rating of “A” or better from S&P, or one other Rating Agency approved by
Agent;

(ii) at least fifteen percent (15%) of the insurance coverage shall be provided
by an insurance company with a claim paying ability rating of “BBB” or better
from S&P or with a rating of “A-” and a financial class of “X” or better by A.M.
Best; and

(iii) at least ten percent (10%) of the insurance coverage shall be provided by
an insurance company with a claim paying ability rating of “A-” or better from
S&P or with a rating of “A-” and a financial class of “X” or better by A.M.
Best.

5.1.3 Captive Insurance Company. Notwithstanding anything to the contrary set
forth in this Section 5.1 the terrorism coverage may be issued by a captive
insurance company wholly-owned and Controlled (directly or indirectly) by
Borrower or their Affiliates (a “Captive Insurer”); provided that:

 

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(a) the Terrorism Risk Insurance Program Reauthorization Act (of 2007) and its
extensions and/or modifications enacted over time (“TRIPRA”) shall be in full
force and effect upon substantially similar terms and conditions as are in
effect on the date hereof;

(b) the Policies issued by such Captive Insurer are in full compliance with the
requirements of Section 5.1 hereof;

(c) except with respect to the deductible permitted, those covered losses which
are not reinsured by the federal government under TRIPRA and payable directly to
the insured shall be reinsured by an insurance company or companies that satisfy
the requirements of Section 5.1.2 (collectively, the “Reinsurance Policies”);

(d) all Reinsurance Policies shall be acceptable to Agent and shall provide for
direct access to such reinsurers by all named insureds, loss payees and
mortgagees with such insurance benefits;

(e) such Captive Insurer shall not be subject to any bankruptcy, insolvency,
reorganization or like proceeding;

(f) such Captive Insurer shall be a special purpose bankruptcy remote entity, as
determined by Agent, which is prohibited from conducting any business other than
the issuance of insurance policies for properties owned by Affiliates of
Borrower;

(g) such Captive Insurer shall qualify for the reinsurance and other benefits
afforded insurance companies under TRIPRA; and

(h) Agent shall receive and approve the following:

(i) the organizational documents of such Captive Insurer;

(ii) any regulatory agreements of such Captive Insurer;

(iii) the application for licensing for such Captive Insurer;

(iv) the form of the Policy to be used by such Captive Insurer to provide the
insurance coverage described herein; and

(v) the Reinsurance Policies.

5.1.4 Compliance by Operating Company. Borrower shall cause Operating Company to
comply with the provisions of this Section 5.1.

Section 5.2 Casualty and Condemnation.

5.2.1 Casualty. If the Property shall sustain a Casualty, Borrower shall and
shall cause Operating Company to give prompt notice of such Casualty to Agent
and shall or

 

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shall cause Operating Company to promptly commence and diligently prosecute to
completion the repair and restoration of the Property as nearly as possible to
the condition the Property was in immediately prior to such Casualty (a
“Restoration”) and otherwise in accordance with Section 5.3. Borrower shall or
shall cause Operating Company to pay all costs of such Restoration whether or
not such costs are covered by insurance. Agent may, upon five (5) Business Days’
notice to Borrower of its intent to do so, but shall not be obligated to, make
proof of loss if not made promptly by Borrower or Operating Company.

5.2.2 Condemnation. Borrower shall and shall cause Operating Company to give
Agent prompt notice of any actual or threatened Condemnation by any Governmental
Authority of all or any part of the Property and shall and shall cause Operating
Company to deliver to Agent a copy of any and all papers served in connection
with such proceedings. Agent may participate in any such proceedings, and
Borrower shall and shall cause Operating Company to from time to time deliver to
Agent all instruments reasonably requested by Agent to permit such
participation. Borrower shall and shall cause Operating Company to, at its
expense, diligently prosecute or cause Operating Company to diligently prosecute
any such proceedings, and shall consult with Agent, its attorneys and experts,
and cooperate with them in the carrying on or defense of any such proceedings.
Notwithstanding any Condemnation, Borrower shall continue to pay the Debt at the
time and in the manner provided for its payment in the Note and this Agreement.
Lenders shall not be limited to the interest paid on the Award by any
Governmental Authority but shall be entitled to receive out of the Award
interest and additional interest (if any) at the rate or rates provided in this
Agreement or in the Note. If the Property or any portion thereof is taken by any
Governmental Authority, Borrower shall and shall cause Operating Company to
promptly commence and diligently prosecute or cause Operating Company to
diligently prosecute the Restoration of the Property and otherwise comply with
the provisions of Section 5.3. If the Property is sold, through foreclosure or
otherwise, prior to the receipt by Agent of the Award, Agent shall have the
right, whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive the Award, or a portion thereof sufficient to
pay the Debt.

Section 5.3 Delivery of Net Proceeds.

5.3.1 Minor Casualty or Condemnation. If a Casualty or Condemnation has occurred
to the Property, Borrower’s and Operating Company’s right, title and interest in
and to all Proceeds are, except as otherwise herein provided, hereby assigned to
Agent and all Net Proceeds shall, except as otherwise herein provided, be paid
to Agent. Borrower shall, in good faith and in a commercially reasonable manner,
file and prosecute or cause Operating Company to file an prosecute the
adjustment, compromise or settlement of any claim for Proceeds and, subject to
Borrower’s right to receive the direct payment of any Net Proceeds as herein
provided, will cause and shall cause Operating Company to cause the same to be
paid directly to Agent to be held and applied in accordance with the provisions
of this Agreement. Except upon the occurrence and during the continuance of a
Monetary Default or an Event of Default or during a Trigger Period, Borrower may
settle any insurance claim with respect to Net Proceeds which do not exceed the
Restoration Threshold. Whether or not a Monetary Default or an Event of Default
or a Trigger Period shall have occurred and be continuing, Agent shall have the
right to approve, such approval not to be unreasonably withheld, any settlement
which would in Agent’s reasonable judgment result in Net Proceeds which exceed
the Restoration Threshold and

 

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Borrower shall and shall cause Operating Company to deliver or cause to be
delivered to Agent all instruments reasonably requested by Agent to permit such
approval. Borrower shall pay all reasonable out-of-pocket costs, fees and
expenses incurred by Agent on behalf of Lenders (including all reasonable
attorneys’ fees and expenses, the reasonable fees of insurance experts and
adjusters and reasonable costs incurred in any litigation or arbitration), and
interest thereon at the Default Rate to the extent not paid within fifteen (15)
Business Days after delivery of a request for reimbursement by Agent,
accompanied by reasonable back-up documentation, in connection with the
settlement of any claim for Proceeds and the seeking and obtaining of any
payment on account thereof in accordance with the foregoing provisions. If any
Proceeds are received by Borrower or Operating Company and may be retained by
Borrower or Operating Company pursuant to this Section 5.3.1, such Proceeds
shall, until the completion of the related Work, be held in trust for Agent,
subject to the rights of parties benefited by Article 3A of the New York Lien
Law (and Borrower shall cause Operating Company to hold same in trust for Agent)
for the ratable benefit of Lenders and shall be segregated from other funds of
Borrower or Operating Company, as applicable, to be used to pay for the cost of
the Restoration in accordance with the terms hereof, and to the extent such
Proceeds exceed the Restoration Threshold, such Proceeds shall be forthwith paid
directly to and held by Agent to be applied or disbursed in accordance with this
Article V. If a Monetary Default or an Event of Default shall have occurred and
be continuing, or if Borrower or Operating Company fails to file any insurance
claim for a period of fifteen (15) Business Days, or to prosecute same with
commercially reasonable diligence following Borrower’s receipt of written notice
to do so from Agent, Borrower hereby irrevocably empowers Agent, in the name of
Borrower as its true and lawful attorney-in-fact, to file and prosecute such
claim (including settlement thereof) with counsel satisfactory to Agent and to
collect and to make receipt for any such payment, all at Borrower’s expense
(including payment of interest at the Default Rate for any amounts advanced by
Agent pursuant to this sentence). Notwithstanding anything to the contrary set
forth in this Agreement, but excluding all situations requiring prepayment of
the Note, to the extent any Proceeds (either singly or when aggregated with all
other then unapplied Proceeds with respect to the Property) do not exceed the
Restoration Threshold, such Proceeds are to be paid directly to Borrower to be
applied to restoration of the Property in accordance with the terms hereof. If a
Casualty or Condemnation has occurred to the Property and the Net Proceeds shall
be less than the Restoration Threshold and the costs of completing the
Restoration shall be less than the Restoration Threshold, and provided no
Monetary Default or Event of Default shall have occurred and remain uncured, the
Net Proceeds, if received by Agent, will be disbursed by Agent to Borrower. As
soon as reasonably practicable after receipt of the Net Proceeds (but in no
event later than sixty (60) days after such Casualty or Condemnation, whichever
the case may be, occurs) Borrower shall commence and satisfactorily complete
with due diligence the Restoration in accordance with the terms of this
Agreement.

5.3.2 Major Casualty or Condemnation. (a) If a Casualty or Condemnation has
occurred to the Property, Borrower shall or shall cause Operating Company to
commence and satisfactorily complete with due diligence the Restoration in
accordance with the terms of this Agreement, provided that, if required pursuant
to the terms of this Agreement, Agent shall have made the Net Proceeds available
to Borrower in accordance with the provisions of this Agreement. If the Net
Proceeds are equal to or greater than the Restoration Threshold or the costs of
completing the Restoration are equal to or greater than the Restoration
Threshold, or the Observation Deck shall, as a result of such Casualty, be
inaccessible or closed for more than thirty (30) days, Agent shall make the Net
Proceeds available for the Restoration, provided that each of the following
conditions are met:

 

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(i) no Monetary Default or Event of Default shall have occurred and be
continuing;

(ii) the Net Proceeds Deficiency, if applicable, shall have been deposited with
Agent within (30) days of the settlement of any claim with respect to a Casualty
or Condemnation;

(iii) (A) in the event the Net Proceeds are insurance proceeds, less than
twenty-five percent (25%) of the total floor area of the Improvements at the
Property has been damaged, destroyed or rendered unusable as a result of such
Casualty or (B) in the event the Net Proceeds are an Award, less than ten
percent (10%) 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 the subject of the Condemnation;

(iv) the Debt Yield for the Property, after giving effect to the Restoration,
shall be equal to or greater than 16%, as determined by Agent in its reasonable
discretion. Agent hereby agrees that, in connection with Agent’s determination
of the Debt Yield after giving effect to the Restoration in connection with a
Casualty or Condemnation, if Agent used a lower NOI to calculate the applicable
Debt Yield than the NOI which was calculated by Borrower, Agent shall review the
same with Borrower and/or its representatives, including Agent’s adjustment (if
any) to Gross Revenues and/or Operating Expenses, as applicable, to provide to
Borrower and/or its representatives the basis for and details surrounding such
determination (provided, however, that the duration of such review and the
provision of such basis for and details surrounding Agent’s determination shall
be reasonably determined by Agent and the final determination of the Debt Yield
shall be unilaterally made by Agent);

(v) Borrower shall and shall cause Operating Company to commence the Restoration
as soon as reasonably practicable (but in no event later than ninety (90) days
after such Casualty or Condemnation, whichever the case may be, occurs);

(vi) Agent shall be reasonably satisfied that (A) the undisbursed amount of the
Net Proceeds shall be sufficient to pay for the costs of completing the
Restoration or Borrower has deposited sufficient funds with Agent to pay for any
such deficiency, (B) any operating deficits and all payments of principal and
interest under the Note will be paid during the period required for Restoration
from (1) the Net Proceeds or (2) other funds of Borrower;

(vii) Agent shall be reasonably satisfied that the Restoration will be completed
on or before the earliest to occur of (A) the date six (6) months prior to the
Maturity Date, (B) the earliest date required for such completion under the
terms of any Major Lease, (C) such time as may be required under applicable
Legal Requirements in order to repair and restore the Property to the condition
it was in immediately prior to such Casualty or to as nearly as possible the
condition it was in immediately prior to such Condemnation, as applicable or
(D) the expiration of the business income insurance required hereunder;

 

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(viii) the Property and the use thereof after the Restoration will be in
compliance with and permitted under all applicable Legal Requirements;

(ix) intentionally omitted; and

(x) such Casualty or Condemnation, as applicable, does not result in a material
loss of access to the Property or the related Improvements, as determined by
Agent in its reasonable discretion, for a period in excess of ten (10) Business
Days.

(b) The Net Proceeds shall be paid directly to Agent and held by Agent in an
interest-bearing account and, until disbursed in accordance with the provisions
of this Section 5.3.2, shall constitute additional security for the Debt. The
Net Proceeds shall be disbursed by Agent to, or as directed by, Borrower from
time to time during the course of the Restoration, promptly after receipt of
evidence reasonably satisfactory to Agent that (i) all requirements set forth in
Section 5.3.2(a) have been satisfied, (ii) all materials installed or being
fabricated if to be paid for in whole or in part prior to the installation
thereof 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 (iii) there exist no notices of pendency, stop
orders, mechanic’s or materialman’s liens, 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 off of the Property and discharged of record or in
the alternative fully insured to the reasonable satisfaction of Agent by the
title company issuing the Title Insurance Policy.

(c) All plans and specifications required in connection with the Restoration
shall be subject to prior reasonable approval by Agent and by an independent
architect selected by Agent and reasonably satisfactory to Borrower (the
“Casualty Consultant”). The plans and specifications shall require that the
Restoration be completed in a first-class workmanlike manner at least equivalent
to the quality and character of the original work in the Improvements (provided,
however, that in the case of a partial Condemnation, the Restoration shall be
done to the extent reasonably practicable after taking into account the
consequences of such partial Condemnation), so that upon completion thereof, the
Property shall be at least equal in value and general utility to the Property
prior to the damage or destruction; it being understood, however, that Borrower
shall not be obligated to restore the Property to the precise condition of the
Property prior to such Casualty provided the Property is restored, to the extent
practicable, to be of at least equal value and of substantially the same
character as prior to the Casualty; provided, further, that if, by reason of
Legal Requirements, the Property cannot be substantially restored to equal value
and character, it can be rebuilt so that the Loan-to-Value Ratio will, upon
completion of such Restoration, be not less than fifty percent (50%). Borrower
shall and shall cause Operating Company to restore all Improvements such that
when they are fully restored and/or repaired, such Improvements and their
contemplated use fully comply with all applicable material Legal Requirements.
The identity of the contractors, subcontractors and materialmen engaged in the
Restoration, as well as the contracts under which they have been engaged, shall
be subject to approval by Agent and the Casualty Consultant. All third-party
costs and expenses incurred by Agent in connection with recovering, holding and
advancing the Net Proceeds for

 

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the Restoration including, without limitation, reasonable attorneys’ fees and
disbursements and the Casualty Consultant’s fees and disbursements, shall be
paid by Borrower or be paid from Net Proceeds, to the extent that there is a
sufficient amount of Net Proceeds to pay such fees and expenses. If, in
connection with this Section 5.3(c), Agent determines that the Loan-to-Value
Ratio exceeds fifty (50%) and the Appraised Value, based on Agent’s
determination thereof is lower than the Appraised Value as reflected on the
Appraisal then delivered to Agent in connection with this Section 5.3(c), Agent
shall review the basis for and details surrounding such determination of the
Appraised Value by Agent with Borrower and/or its representatives (provided,
however, that the duration of such review and the provision of such basis for
and details surrounding Agent’s determination shall be reasonably determined by
Agent and the final determination of the Appraised Value shall be unilaterally
made by Agent).

(d) In no event shall Agent 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 and the costs for work
being fabricated if determined to be reasonably required by the Casualty
Consultant, as certified by the Casualty Consultant, less the Casualty
Retainage. The term “Casualty Retainage” shall mean, as to each contractor,
subcontractor or materialman engaged in the Restoration, an amount equal to ten
percent (10%) of the costs actually incurred for work in place or being
fabricated 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
Section 5.3.2(d), be less than the amount actually held back from contractors,
subcontractors and materialmen engaged in the Restoration. The Casualty
Retainage shall not be released until the Casualty Consultant certifies to Agent
that the Restoration has been substantially completed in accordance with the
provisions of this Section 5.3.2(d) and all applicable Legal Requirements and
that all approvals necessary for the re-occupancy and use of the Property have
been obtained from all appropriate Governmental Authorities, and Agent receives
evidence reasonably satisfactory to Agent 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 Agent 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 Agent that the contractor, subcontractor or materialman has satisfactorily
completed substantially 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 Agent or by the title company
issuing the Title Insurance Policy and Agent receives a title update. If
required by Agent, 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.

(e) Agent shall not be obligated to make disbursements of the Net Proceeds more
frequently than once every calendar month.

(f) If at any time the Net Proceeds or the undisbursed balance thereof shall
not, in the reasonable opinion of Agent in consultation with the Casualty
Consultant, be sufficient to pay in full the balance of the costs which are
estimated by the Casualty Consultant

 

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to be incurred in connection with the completion of the Restoration, Borrower
shall deposit, or cause to be deposited, to the extent that the deficiency is in
excess of $1,000,000, the deficiency (the “Net Proceeds Deficiency”) with Agent
before any further disbursement of the Net Proceeds shall be made. The Net
Proceeds Deficiency deposited with Agent shall be held by Agent and shall be
disbursed for costs actually incurred in connection with the Restoration on the
same conditions applicable to the disbursement of the Net Proceeds, and until so
disbursed pursuant to this Section 5.3.2 shall constitute additional security
for the Debt.

(g) The excess, if any, of the Net Proceeds and the remaining balance, if any,
of the Net Proceeds Deficiency deposited with Agent after the Casualty
Consultant certifies to Agent that the Restoration has been substantially
completed in accordance with the provisions of this Section 5.3.2, and the
receipt by Agent of evidence reasonably satisfactory to Agent that all costs
incurred in connection with the Restoration have been paid in full, shall be
remitted by Agent to Borrower, provided no Monetary Default or Event of Default
shall have occurred and shall be continuing under any of the Loan Documents and
provided, however, that with respect to an Award, no amounts shall be remitted
to Borrower in excess of the Net Proceeds Deficiency deposited with Agent.

(h) All Net Proceeds not required (i) to be made available for the Restoration
as a result of the Borrower failing to satisfy any of the conditions set forth
in Section 5.3.2(a) or otherwise, or (ii) to be returned to Borrower as excess
Net Proceeds pursuant to Section 5.3.2(g), including, without limitation, any
Award which is not used for Restoration as more particularly described in
Section 5.3.2(g), may be retained and applied by Agent toward the payment of the
Debt, without prepayment premium or penalty (but subject to Sections 2.2.7 and
2.4.3), whether or not then due and payable in such order, priority and
proportions as Agent in its sole discretion shall deem proper, or, in the case
of clause (ii) only, at the discretion of Agent, the same may be paid, either in
whole or in part, to Borrower for such purposes as Agent shall designate.

(i) Borrower shall and shall cause Operating Company to complete the Restoration
in an expeditious and diligent fashion and in compliance with all applicable
Legal Requirements.

5.3.3 Application of Net Proceeds. Upon the occurrence of a Monetary Default or
an Event of Default, Agent, at its option, may withdraw all the Net Proceeds or
the undisbursed balance thereof and the remaining balance, if any, of the Net
Proceeds Deficiency deposited with Agent and may apply the such Net Proceeds and
Net Proceeds Deficiency either to the payment of Restoration or to payment of
the Debt (without premium or penalty, but subject to Section 2.2.7) in such
order, proportion and priority as Agent may determine in its sole discretion.
Agent’s right to withdraw and/or direct the withdrawal of the Net Proceeds and
Net Proceeds Deficiency and apply such Net Proceeds and Net Proceeds Deficiency
shall be in addition to all other rights and remedies provided to Agent under
the Loan Documents.

5.3.4 Ground Lease/Sublease. Notwithstanding the provisions of the Ground Lease
and Sublease, Borrower shall and shall cause the Operating Company to comply
with this Section 5.3.

 

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VI. RESERVE FUNDS

Section 6.1 Tax Funds.

6.1.1 Deposits of Tax Funds. Subject to the provisions of Section 6.1.3,
Borrower shall and shall cause Operating Company to deposit with Agent on each
Payment Date an amount equal to one-twelfth of the Taxes that Agent estimates
will be payable during the next ensuing twelve (12) months in order to
accumulate sufficient funds to pay all such Taxes at least ten (10) days prior
to their respective due dates (the “Monthly Tax Reserve Deposit”). Amounts
deposited pursuant to this Section 6.1.1 are referred to herein as the “Tax
Funds.” If at any time Agent reasonably determines that the Tax Funds will not
be sufficient to pay the Taxes, Agent shall notify Borrower of such
determination and the monthly deposits for Taxes shall be increased by the
amount that Agent estimates is sufficient to make up the deficiency at least
ten (10) days prior to the respective due dates for the Taxes; provided that if
Borrower receives notice of any deficiency after the date that is ten (10) days
prior to the date that Taxes are due, Borrower will or, shall cause Operating
Company to, deposit such amount within two (2) Business Day after its receipt of
such notice.

6.1.2 Release of Tax Funds. Agent shall have the right to apply the Tax Funds to
payments of Taxes. In making any payment relating to Taxes, Agent may do so
according to any bill, statement or estimate procured from the appropriate
public office (with respect to Taxes) 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 Funds
shall exceed the amounts due for Taxes, Agent shall, in its sole discretion,
return any excess to Borrower or credit such excess against future payments to
be made to the Tax Funds and advise Borrower of the amount and whether such
amount will be returned or credited as aforesaid. Any Tax Funds remaining on
deposit after the termination of a Trigger Period, provided that no Monetary
Default or Event of Default then exists, shall be returned to Borrower. In
addition, any Tax Funds remaining on deposit after the Debt has been paid in
full shall be returned to Borrower.

6.1.3 Waiver; Trigger Event. Notwithstanding the foregoing, so long as no
Trigger Period is then in effect, Borrower shall not be required to make
deposits of the Monthly Tax Reserve Deposit. At such time, if any, as Agent
reasonably determines that a Trigger Period is then in effect, Agent shall
deliver to Borrower written notice of such determination, and Borrower shall and
shall cause Operating Company to thereafter commence making deposits of the
Monthly Tax Reserve Deposit, to the extent not otherwise transferred from the
Deposit Account pursuant to Section 6.5.6 hereof and the Cash Management
Agreement, so long as such Trigger Period remains in effect. Furthermore, upon
the occurrence of any Trigger Event, Borrower shall and shall cause Operating
Company to deposit into the Tax Funds within ten (10) Business Days after
receipt of notice from Agent an amount reasonably determined by Agent to be
equal to all amounts which would have been on deposit as Tax Funds as of the
commencement of the Trigger Period assuming that Borrower shall have made all
deposits required to be made pursuant to Section 6.1.1 since the Closing Date
had the waiver of deposits provided for above in this Section 6.1.3 not been in
effect, giving due consideration to all amounts that would have been payable by
a disbursement from such Tax Funds since the Closing Date.

 

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Section6.2 Insurance Funds.

6.2.1 Deposits of Insurance Funds. Subject to the provisions of Section 6.2.3,
Borrower shall and shall cause Operating Company to deposit with Agent on each
Payment Date an amount equal to one-twelfth of the Insurance Premiums that Agent
estimates will be payable for the renewal of the coverage afforded by the
Policies upon the expiration thereof in order to accumulate sufficient funds to
pay all such Insurance Premiums at least thirty (30) days prior to the
expiration of the Policies (the “Monthly Insurance Reserve Deposit”). Amounts
deposited pursuant to this Section 6.2.1 are referred to herein as the
“Insurance Funds”. If at any time Agent reasonably determines that the Insurance
Funds will not be sufficient to pay the Insurance Premiums, Agent shall notify
Borrower of such determination and the monthly deposits for Insurance Premiums
shall be increased by the amount that Agent estimates is sufficient to make up
the deficiency at least ten (10) days prior to the respective due dates for
payment of such Insurance Premiums; provided that if Borrower receives notice of
any deficiency after the date that is ten (10) days prior to the date that any
Insurance Premiums are due, Borrower will or, shall cause Operating Company to,
deposit such amount within two (2) Business Day after its receipt of such
notice. Notwithstanding anything contained herein to the contrary, to the extent
that any of the Policies required to be maintained by Borrower are effected
under a blanket policy, Borrower shall not be required to make deposits of the
Monthly Insurance Funds hereunder.

6.2.2 Release of Insurance Funds. Agent shall have the right to apply the
Insurance Funds to payment of Insurance Premiums. In making any payment relating
to Insurance Premiums, Agent may do so according to any bill, statement or
estimate procured from the insurer or its agent, without inquiry into the
accuracy of such bill, statement or estimate. If the amount of the Insurance
Funds shall exceed the amounts due for Insurance Premiums, Lender shall, in its
sole discretion, return any excess to Borrower or credit such excess against
future payments to be made to the Insurance Funds and advise Borrower of the
amount and whether such amount will be returned or credited as aforesaid. Any
Insurance Funds remaining on deposit after the termination of a Trigger Period,
provided that no Monetary Default or Event of Default then exists, shall be
returned to Borrower. In addition, any Insurance Funds remaining on deposit
after the Debt has been paid in full shall be returned to Borrower.

6.2.3 Waiver; Trigger Event. Notwithstanding the foregoing, so long as no
Trigger Period is then in effect, Borrower shall not be required to make
deposits of the Monthly Insurance Reserve Deposit. At such time, if any, as
Agent reasonably determines that a Trigger Period is then in effect, Agent shall
deliver to Borrower written notice of such determination, and Borrower shall and
shall cause Operating Company to thereafter commence making deposits of the
Monthly Insurance Reserve Deposit, to the extent not otherwise transferred from
the Deposit Account pursuant to Section 6.5.6 hereof and the Cash Management
Agreement, so long as such Trigger Period remains in effect. Furthermore, upon
the occurrence of any Trigger Event, Borrower shall and shall cause Operating
Company to deposit into the Insurance Funds within ten (10) Business Days after
receipt of notice from Agent an amount reasonably determined by Agent to be
equal to all amounts which would have been on deposit as Insurance Funds as of
the commencement of the Trigger Period assuming that Borrower shall have made
all deposits required to be made pursuant to Section 6.2.1 since the Closing
Date had the waiver of deposits provided for above in this Section 6.2.3 not
been in effect, giving due consideration to all amounts that would have been
payable by a disbursement from such Insurance Funds since the Closing Date.

 

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Section 6.3 Lease Termination Rollover Funds.

6.3.1 Deposits of Lease Termination Rollover Funds. After Borrower and Operating
Company have received, in the aggregate, in excess of $3,000,000 of Lease
Termination Fees (as hereinafter defined) (the “Fee Threshold”), Borrower shall
or shall cause Operating Company to immediately deposit any such excess Lease
Termination Fees thereafter received with Agent as additional collateral for the
Debt, provided that for so long as no Monetary Default or Event of Default shall
have occurred and is then continuing, Borrower shall be permitted to utilize
such funds for tenant improvements, leasing commissions and Capital Expenditures
that may be incurred with respect to the space relating to any such Lease
Termination Fee deposited with Agent with respect to a given terminated Lease (a
“Termination Space”) as provided herein. In addition, prior to the date that the
Fee Threshold has been met, if Borrower or Operating Company receives a Lease
Termination Fee with respect to an individual Termination Space or Termination
Spaces for an individual Tenant and its Affiliates which is in excess of
$750,000, Borrower shall, or shall cause Operating Company to, immediately
deposit such Lease Termination Fee with Agent as additional collateral for the
Debt and provided that no Monetary Default or Event of Default shall have
occurred and be continuing, Borrower shall be permitted to utilize such funds
for tenant improvements, leasing commissions and Capital Expenditures that may
be incurred with respect to the Termination Space. Any deposit with Agent
pursuant to the preceding sentence shall not be counted in computing whether the
Fee Threshold has been achieved. Amounts deposited pursuant to this
Section 6.3.1 are referred to herein as the “Lease Termination Rollover Funds”.
The term “Lease Termination Fee” shall mean the receipt by Borrower or Operating
Company of a fee, payment or other compensation from any Tenant relating to or
in exchange for the termination or surrender of such Tenant’s Lease. During the
continuance of a Monetary Default or an Event of Default, all Lease Termination
Fees shall be deposited with Agent.

6.3.2 Release of Lease Termination Rollover Funds. (a) Agent shall disburse to
Borrower the Lease Termination Rollover Funds upon satisfaction by Borrower of
each of the following conditions: (i) Borrower shall submit a request for
payment to Agent at least ten (10) days prior to the date on which Borrower
requests such payment be made and specifies the tenant improvement costs,
leasing commissions and/or Capital Expenditures to be paid for or with respect
to the Termination Space, (ii) on the date such request is received by Agent and
on the date such payment is to be made, no Monetary Default or Event of Default
shall exist and remain uncured, (iii) Agent shall have received and, to the
extent required hereby, approved, or is deemed to have approved in accordance
with Section 4.1.11, the new Lease or Leases, as applicable with respect to the
Termination Space (collectively, the “Replacement Lease”) in respect of which
Borrower is obligated to pay or reimburse certain tenant improvement costs,
leasing commissions and Capital Expenditures, (iv) with respect to any Lease
Termination Rollover Funds to be released by Agent for tenant improvements,
leasing commissions or Capital Expenditures pursuant to a Replacement Lease,
Agent shall have received a budget for tenant improvement costs and Capital
Expenditures and a schedule of leasing commissions payments and the requested
disbursement will be used to pay all or a portion of such costs and payments,
(v) with respect to any Lease Termination Rollover Funds to

 

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be released by Agent for tenant improvements, leasing commissions or Capital
Expenditures pursuant to a Replacement Lease, Agent shall have received a
certificate from Borrower (A) stating that all tenant improvements and Capital
Expenditures at the Property to be funded by the requested disbursement have
been substantially completed in a good and workmanlike manner and in accordance
with all applicable federal, state and local laws, rules and regulations, such
certificate to be accompanied by a copy of any license, permit or other approval
by any Governmental Authority required in connection with the Capital
Expenditures to the point of the work then completed, (B) identifying each
Person that supplied materials or labor in connection with the tenant
improvements and Capital Expenditures to be funded by the requested
disbursement, and (C) stating that each such Person has been paid in full or
will be paid in full upon such disbursement, such certificate to be accompanied
by lien waivers or other evidence of payment reasonably satisfactory to Agent,
(vi) with respect to any Lease Termination Rollover Funds to be released by
Agent for tenant improvements, leasing commissions or Capital Expenditures
pursuant to a Replacement Lease, at Agent’s reasonable 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 (vii) with respect to
any Lease Termination Rollover Funds to be released by Agent for tenant
improvements, leasing commissions and Capital Expenditures pursuant to a
Replacement Lease, Agent shall have received such other evidence as Agent shall
reasonably request that the tenant improvements and Capital Expenditures at the
Property to be funded by the requested disbursement have been substantially
completed (as to the level for which funds are requested) and are paid for or
will be paid upon such disbursement to Borrower. Agent shall not be required to
disburse Lease Termination Rollover Funds more frequently than once each
calendar month, unless such requested disbursement is in an amount greater than
the Minimum Disbursement Amount (or a lesser amount if the total amount of Lease
Termination Rollover Funds is less than the Minimum Disbursement Amount, in
which case only one disbursement of the amount remaining in the account shall be
made).

Notwithstanding the foregoing, upon receipt by Agent of evidence that, with
respect to any new Replacement Lease, all tenant improvements and Capital
Expenditures required to be completed by Borrower pursuant to the Replacement
Lease, if any, have been completed and all leasing commissions required to be
paid by Borrower with respect to the Replacement Lease, if any, have been paid,
and provided that substantially all of the Termination Space has been re-let
pursuant to such Replacement Lease and any other Replacement Lease(s) and no
Monetary Default or Event of Default then exists, Agent shall disburse to
Borrower the Lease Termination Funds on deposit with respect to such Termination
Space.

6.3.3 Compliance by Operating Company. Borrower shall cause the Operating
Company to comply with the provisions of this Section 6.3.

Section 6.4 Security Interest in Funds.

6.4.1 Grant of Security Interest. Borrower shall be the owner of the Net
Proceeds Deficiency, if any, deposited with Agent after a Casualty or
Condemnation, the Tax Funds, Insurance Funds, Lease Termination Rollover Funds,
the Remargining Collateral and the Terrorism Insurance Period Collateral
(collectively, the “Funds”). Borrower hereby pledges, assigns and grants a
security interest to Agent for the benefit of Agent and Lenders, as security for
payment of the Debt and the performance of all other terms, conditions and
covenants of the Loan Documents on Borrower’s part to be paid and performed, in
all of Borrower’s right, title and interest in and to the Funds. The Funds shall
be under the sole dominion and control of Agent.

 

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6.4.2 Prohibition Against Further Encumbrance. Borrower shall not (and Borrower
shall cause the Operating Company to not), without the prior consent of Agent,
further pledge, assign or grant any security interest in the Funds or permit any
lien or encumbrance to attach thereto, or any levy to be made thereon, or any
UCC-1 Financing Statements, except those naming Agent as the secured party, to
be filed with respect thereto.

6.4.3 Permitted Investments. Agent or the Cash Management Bank, as applicable,
shall invest any balances of the Funds in such Permitted Investments as Agent
shall determine in its sole discretion is appropriate given the length of time
that such Funds are to be invested, which Permitted Investments shall be under
the sole dominion and control of Agent and subject at all times to the terms
hereof. No investment shall be made unless Agent shall have and continue to have
a perfected first priority lien in such investment securing the Obligations of
Borrower hereunder and under the other Loan Documents and all filings and other
actions necessary to ensure the validity, perfection, and first priority of such
lien shall have been taken. Agent shall have no liability for any loss of such
funds that are invested in investments and no such loss shall affect Borrower’s
obligations to make the deposits required under this Article VI.

6.4.4 Application of Funds. Upon the occurrence of a Monetary Default or an
Event of Default, Agent, at its option, may withdraw the Funds and apply the
Funds to payment of the Debt in such order, proportion and priority as Lender
may determine in its sole discretion. Agent’s right to withdraw and apply the
Funds shall be in addition to all other rights and remedies provided to Agent or
Lenders under the Loan Documents.

Section 6.5 Cash Management.

6.5.1 Establishment of Accounts. Borrower hereby confirms that, simultaneously
with the execution of this Agreement, pursuant to the HSBC Account Control
Agreement, it has established with HSBC Collection Bank, in the name of Borrower
for the benefit of Agent, as secured party, the “HSBC Collection Account”, which
has been established as an non-interest-bearing deposit account. In addition,
Borrower hereby confirms that, simultaneously with the execution of this
Agreement, pursuant to the JP Account Control Agreement, it has established with
JP Collection Bank, in the name of Borrower for the benefit of Agent, as secured
party, the “JP Collection Account”, which has been established as a non-interest
bearing deposit account. The HSBC Collection Account and the JP Collection
Account and the funds deposited therein shall serve as additional security for
the Loan. Pursuant to the HSBC Account Control Agreement, Borrower shall
irrevocably instruct and authorize HSBC Collection Bank to disregard any and all
orders for withdrawal from the HSBC Collection Account made by, or at the
direction of, Borrower, Operating Company or Manager, if applicable, other than
to transfer all amounts on deposit in the HSBC Collection Account on a daily
basis (except upon (a) the occurrence and during the continuance of an Event of
Default and/or (b) the occurrence of a Trigger Event and during the continuance
of a Trigger Period) to the Borrower’s Account. Notwithstanding the foregoing,
to the extent that Observatory Tenant has deposited any Rent

 

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payable under the Observatory Lease (excluding the Net Observatory Deck Revenue)
for more than one (1) month in advance, that portion of such Rent which is
payable with respect to future months shall be held in the HSBC Collection
Account and shall be applied to shortfalls with respect to any Rents payable
under the Observatory Lease (excluding the Net Observatory Deck Revenue) during
future months (the “Advance Pay Rent”). Pursuant to the JP Account Control
Agreement, Borrower shall irrevocably instruct and authorize JP Collection Bank
to disregard any and all orders for withdrawal from the JP Collection Account
made by, or at the direction of, Borrower, Observatory Tenant or Manager, if
applicable, other than to transfer all amounts on deposit in the JP Collection
Account on the last Business Day of each month (except upon (a) the occurrence
and during the continuance of an Event of Default and/or (b) the occurrence of a
Trigger Event and during the continuance of a Trigger Period) to an account
specified by Observatory Tenant. Upon the occurrence of an Event of Default or
Trigger Event and during the continuance of an Event of Default or Trigger
Period, as applicable, each of HSBC Collection Bank and JP Collection Bank shall
transfer all amounts on deposit in the HSBC Collection Account and the JP
Collection Account to or as directed by Agent; provided, however, that upon the
occurrence of a Trigger Event and during the continuance of a Trigger Period,
the amounts on deposit in the HSBC Collection Account and the JP Collection
Account shall be transferred and applied in the manner set forth in
Section 6.5.6 hereof. Pursuant to the HSBC Account Control Agreement, provided
no Event of Default or Trigger Period is continuing, HSBC Collection Bank shall
transfer all collected and available funds on a daily basis, as determined by
HSBC Collection Bank’s then current funds availability schedule, received in the
HSBC Collection Account to the Borrower’s Account. Pursuant to the JP Account
Control Agreement, provided no Event of Default or Trigger Period is continuing,
JP Collection Bank shall transfer all collected and available funds on the last
Business Day of each calendar month, as determined by JP Collection Bank’s then
current funds availability schedule, received in the JP Collection Account to an
account designated by Observatory Tenant. Borrower agrees that, prior to the
payment in full of the Debt, the terms and conditions of the HSBC Account
Control Agreement and JP Account Control Agreement shall not be amended or
modified without the prior written consent of Agent (which consent Agent may
grant or withhold in its reasonable discretion). In recognition of Agent’s and
Lenders’ security interest in the funds deposited into the HSBC Collection
Account and the JP Collection Account, Borrower shall identify the HSBC
Collection Account and the JP Collection Account with the name of Agent, as
secured party. Agent hereby agrees that, in connection with Agent’s
determination that a Trigger Event exists, if Agent used a lower NOI to
calculate the applicable Debt Yield than the NOI which was calculated by
Borrower, Agent shall review the same with Borrower and/or its representatives,
including Agent’s adjustment (if any) to Gross Revenues and/or Operating
Expenses, as applicable, to provide to Borrower and/or its representatives the
basis for and details surrounding such determination (provided, however, that
the duration of such review and the provision of such basis for and details
surrounding Agent’s determination shall be reasonably determined by Agent and
the final determination of the Debt Yield shall be unilaterally made by Agent).
Agent shall establish and hold the following accounts (each, an “Account” and,
collectively, the “Accounts” and, together with the HSBC Collection Account and
the JP Collection Account, the “Collateral Accounts”) with the Cash Management
Bank, which shall each be an Eligible Account to which certain funds shall be
allocated and from which disbursements shall be made pursuant to the terms of
this Agreement and the Cash Management Agreement:

 

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(a) an Account into which the HSBC Collection Bank and JP Collection Bank shall,
if directed by Agent, upon the occurrence and during the continuance of an Event
of Default and upon the occurrence of a Trigger Event and during the continuance
of a Trigger Period, deposit all sums on deposit in the HSBC Collection Account
and the JP Collection Account (the “Deposit Account”);

(b) an Account for the retention of Account Collateral in respect of Debt
Service payments due under the Loan (the “Debt Service Reserve Account”);

(c) an Account for the retention of Account Collateral in respect of Taxes for
the Property (the “Tax Reserve Account”);

(d) an Account for the retention of Account Collateral in respect of insurance
premiums for the Property (the “Insurance Reserve Account”);

(e) an Account for the retention of Account Collateral in respect of Lease
Termination Fees (the “Lease Termination Fee Reserve Account”);

(f) an Account for the retention of Net Proceeds (the “Proceeds Reserve
Account”); and

(g) an Account for the retention of Excess Cash Flow (the “Excess Cash Flow
Account”).

6.5.2 Pledge of Account Collateral. (a) To secure the full and punctual payment
and performance of the Obligations, Borrower hereby collaterally assigns, grants
a security interest in and pledges to Agent, for the benefit of Lenders, a first
priority continuing security interest in and to the following property of
Borrower, whether now owned or existing or hereafter acquired or arising and
regardless of where located (all of the same, collectively, the “Account
Collateral”):

(i) the Collateral Accounts and all cash, checks, drafts, securities
entitlements, certificates, instruments and other property, including, without
limitation, all deposits and/or wire transfers from time to time deposited or
held in, credited to or made to Collateral Accounts;

(ii) any and all amounts invested in Permitted Investments held in the
Collateral Accounts;

(iii) all interest, dividends, cash, instruments, securities, entitlements and
other property from time to time received, receivable or otherwise payable in
respect of, or in exchange for, any or all of the foregoing or purchased with
funds from the Collateral Accounts; and

(iv) to the extent not covered by sub-paragraphs (i), (ii) or (iii) above, all
proceeds (as defined under the UCC) of any or all of the foregoing.

 

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(b) In addition to the rights and remedies herein set forth, Agent shall have
all of the rights and remedies with respect to the Account Collateral available
to a secured party at law or in equity, including, without limitation, the
rights of a secured party under the UCC, as if such rights and remedies were
fully set forth herein.

(c) This Agreement shall constitute a security agreement for purposes of the
Uniform Commercial Code and other applicable law.

6.5.3 Maintenance of HSBC Collection Account and JP Collection Account. Borrower
agrees that each of the HSBC Collection Account and the JP Collection Account is
and shall be maintained (a) as a “deposit account” (as such term is defined in
Section 9-102(a)(29) of the UCC), (b) in such a manner that Agent shall have
control (within the meaning of Section 9-104(a)(2) of the UCC) over the HSBC
Collection Account and the JP Collection Account, and (c) such that neither any
Credit Party nor Manager, if applicable, shall have any right of withdrawal from
the HSBC Collection Account or the JP Collection Account and, except as provided
herein, no Account Collateral shall be released to any Credit Party or Manager,
if applicable, from the HSBC Collection Account or the JP Collection Account.
Without limiting Borrower’s obligations under the immediately preceding
sentence, Borrower and Operating Company shall only establish and maintain the
HSBC Collection Account and Borrower and Observatory Tenant shall only establish
and maintain the JP Collection Account with a financial institution that has
executed an agreement substantially in the form of the HSBC Account Control
Agreement or the JP Account Control Agreement, as applicable, or in such other
form acceptable to Agent in its reasonable discretion.

6.5.4 Maintenance of Collateral Accounts. The Collateral Accounts shall be
Eligible Accounts. The Collateral Accounts shall be subject to such applicable
laws, and such applicable regulations of the Board of Governors of the Federal
Reserve System and of any other banking or governmental authority, as may now or
hereafter be in effect. Income and interest accruing on the Collateral Accounts
or any investments held in such accounts shall be periodically added to the
principal amount of such account and shall be held, disbursed and applied in the
same manner as the other amounts on deposit therein in accordance with the
provisions of this Agreement, the Account Agreement and the Cash Management
Agreement. Borrower shall be the beneficial owner of the Collateral Accounts for
federal income tax purposes and shall report all income on the Collateral
Accounts.

6.5.5 Transfer to Borrower’s Account. So long as no Event of Default has
occurred and is continuing under this Agreement and no Trigger Period is
continuing, Borrower hereby irrevocably authorizes Agent to transfer (and,
pursuant to the HSBC Account Control Agreement, shall irrevocably authorize HSBC
Collection Bank to execute any corresponding instructions of Agent), and Agent
hereby authorizes HSBC Collection Bank to transfer, from the HSBC Collection
Account by 11:00 a.m. (New York time) on each Business Day commencing on the
date hereof, all funds in the HSBC Collection Account (except for Advance Pay
Rent which is not then being applied as provided in Section 6.5.1) to the
Borrower’s Account; provided, however, that Agent shall have the right to
suspend remittances to the Borrower’s Account during the continuance of (i) an
Event of Default or (ii) a Trigger Period, upon notice to the HSBC Collection
Bank and the JP Collection Bank and Borrower (it being acknowledged that during
the continuance of a Trigger Period such funds will be transferred to the
Deposit

 

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Account and, so long as no Event of Default then exists, allocated in accordance
with Section 6.5.6); and provided, further, that upon the termination of the
Trigger Period, provided that no Event of Default shall have occurred and be
continuing, or at any time after an Event of Default is no longer in effect,
Agent shall promptly instruct the HSBC Collection Bank to resume transfers of
all funds in the HSBC Collection Account (except for Advance Pay Rent which is
not then being applied as provided in Section 6.5.1) to Borrower’s Account in
accordance with this Section 6.5.5 (including any monies then on deposit in any
subaccounts under Section 6.5.6). So long as no Event of Default has occurred
and is continuing under this Agreement and no Trigger Period is continuing,
Borrower hereby irrevocably authorizes Agent to transfer (and, pursuant to the
JP Account Control Agreement, shall irrevocably authorize JP Collection Bank to
execute any corresponding instructions of Agent), and Agent hereby authorizes JP
Collection Bank to transfer, from the JP Collection Account by 11:00 a.m. (New
York time) on the last Business Day of each month, all funds in the JP
Collection Account to any account designated by Observatory Tenant; provided,
however, that Agent shall have the right to suspend remittances to Observatory
Tenant’s account during the continuance of (i) an Event of Default or (ii) a
Trigger Period, upon notice to the JP Collection Bank and Borrower (it being
acknowledged that during the continuance of a Trigger Period such funds will be
transferred to the Deposit Account and, so long as no Event of Default then
exists, allocated in accordance with Section 6.5.6); and provided, further, that
upon the termination of the Trigger Period, provided that no Event of Default
shall have occurred and be continuing, or at any time after an Event of Default
is no longer in effect, Agent shall promptly instruct the JP Collection Bank to
resume transfers of all funds in the JP Collection Account to Borrower’s Account
in accordance with this Section 6.5.5.

6.5.6 Payments to Accounts. (a) During a Trigger Period, provided no Event of
Default has occurred and is continuing, Agent shall, on each Payment Date,
transfer, or shall cause the transfer of, amounts from the Deposit Account, to
the extent available therein in the following amounts and order of priority:

(i) First, to the Tax Reserve Account, the amounts then required to be deposited
pursuant to Section 6.1.1;

(ii) Second, to the Insurance Reserve Account, the amounts then required to be
deposited pursuant to Section 6.2.1;

(iii) Third, to the Debt Service Reserve Account for payment to Agent, for the
ratable benefit of Lenders, of the amount of all delinquent interest and
principal on the Loan, the next scheduled monthly payment of interest and
principal on the Loan and all other amounts then due and payable under the Loan
Documents;

(iv) Fourth, to HSBC Account Control Bank and JP Account Control Bank, funds
sufficient to pay the fees and expenses of HSBC Account Control Bank and JP
Account Control Bank, respectively and to the Cash Management Bank funds
sufficient to pay the fees and expenses of Cash Management Bank as required
pursuant to the HSBC Account Control Agreement, JP Account Control Agreement and
the Cash Management Agreement, respectively;

 

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(v) Fifth, to Borrower’s Account or to the account of Operating Company if
Borrower so directs, an amount equal to the Operating Expenses, including
Capital Expenditures, tenant improvement costs and leasing commissions, for the
month in which such Payment Date occurs as set forth on the Approved Annual
Budget, provided that the amount disbursed to Borrower’s Account, or to the
account of Operating Company if Borrower so directs, pursuant to this clause (v)
shall be used by Borrower or Operating Company solely to pay the Operating
Expenses, including Capital Expenditures, tenant improvement costs and leasing
commissions, for such month set forth on the Approved Annual Budget (Borrower
agreeing that, in the event that such Approved Operating Expenses exceed the
actual operating expenses for such month, such excess amounts shall be remitted
by Borrower (or Operating Company if it had received the disbursement pursuant
to this clause (v)) to the Deposit Account prior to the next succeeding Payment
Date);

(vi) Sixth, to Borrower’s Account, an amount equal those Extraordinary Expenses
which have been approved by Agent pursuant to Section 4.1.7(d); and

(vii) Seventh, the amounts remaining after payment of the items set forth in
clauses (i) through (vi) above, as applicable, (the “Excess Cash Flow”), to the
Excess Cash Flow Account to be held as additional Collateral for the Debt until
the Trigger Period shall have terminated.

(b) On the first Business Day subsequent to the expiration of any Trigger
Period, as applicable, Borrower hereby authorizes Agent to, and, provided no
Event of Default shall have occurred and be continuing under this Agreement,
Agent hereby agrees to, transfer, and shall cause the transfer of, all funds
then on deposit in each of the Deposit Account, Tax Reserve Account, the
Insurance Reserve Account, the Debt Service Reserve Account, and the Excess Cash
Flow Account to the Borrower’s Account or to the account of Operating Company if
Borrower so directs.

(c) During a Trigger Period, if on any Payment Date the amount in the Deposit
Account shall be insufficient to make all of the transfers described in
clauses (i) through (iv) of Section 6.5.6, then Borrower shall deposit, or cause
Operating Company to deposit, into the Deposit Account on such Payment Date the
amount of such deficiency. If Borrower shall fail to make such deposit, or to
cause Operating Company to make such deposit, the same shall constitute an Event
of Default and, in addition to all other rights and remedies provided for under
the Loan Documents, Agent may disburse and apply the amounts in the Collateral
Accounts in accordance with Section 6.5.8. During a Trigger Period, if
sufficient funds are on deposit in the Deposit Account to make all required
payments hereunder then no Event of Default shall occur hereunder due to the
failure to actually make all such required payments.

6.5.7 Borrower’s Account Representations, Warranties and Covenants. (a) Borrower
represents, warrants and covenants that (i) no later than the fifteenth
(15th) day after the date hereof, Borrower shall have and shall have caused
Operating Company to direct all Tenants under the Leases to mail all checks and
wire all funds with respect to any payments due

 

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under such Leases directly to the HSBC Collection Account pursuant to a letter
substantially in the form of Exhibit H, and (ii) Borrower shall and shall cause
Operating Company to deliver a letter substantially in the form attached hereto
as Exhibit H to Tenants under all Leases entered into after the date hereof.
Observatory Tenant shall on a monthly basis (prior to the last Business Day of
each calendar month) directly deposit all Net Observatory Deck Revenue into the
JP Collection Account and Rent, as set forth in the Observatory Lease, into the
HSBC Collection Account.

(b) Borrower further represents, warrants and covenants that (i) if Borrower,
Operating Company or Manager, if applicable, shall receive any Rents, Borrower
shall and shall cause Operating Company and Manager, if applicable, to deposit
such Rents into the HSBC Collection Account within two (2) Business Days after
receipt thereof and, until so deposited, any such amounts held by Borrower,
Operating Company or Manager, if applicable, shall be deemed to be Account
Collateral and shall be held in trust by it for the benefit of Agent, for the
ratable benefit of the Lenders, and shall not be commingled with any other funds
or property of Borrower, Operating Company or Manager, if applicable, (ii) there
are no accounts other than the Collateral Accounts and the Borrower’s Account
maintained by Borrower (except as set forth on Schedule XVIII and otherwise to
hold funds released from the HSBC Collection Account, JP Collection Account or
Deposit Account) or any other Person on behalf of Borrower with respect to the
Property or the collection of Rents, (iii) so long as any portion of the Loan
shall be outstanding, neither Borrower, Operating Company nor any other Person
on behalf of Borrower or Operating Company shall open any other operating
accounts with respect to the Property or the collection of Rents, except for the
Collateral Accounts and Borrower’s Account (except to hold funds released from
the HSBC Collection Account, JP Collection Account or Deposit Account), and
(iv) in the event that any Rents are paid into an account other than the HSBC
Collection Account, Borrower shall promptly, upon becoming aware of the same,
cause such Rents to be paid into the HSBC Collection Account.

6.5.8 Account Collateral and Remedies. (a) Upon the occurrence and during the
continuance of an Event of Default, without additional notice from Agent to
Borrower, all funds in the HSBC Collection Account and JP Collection Account and
all funds in the Collateral Accounts may be applied by Agent in such order and
priority as Agent shall determine in its sole and absolute discretion,
including, but not limited to liquidating and transferring any amounts then
invested in Permitted Investments to the Collateral Accounts to which they
relate or reinvesting such amounts in other Permitted Investments as Agent may
determine in its sole discretion as necessary to perfect or protect any security
interest granted or purported to be granted hereby or to enable Agent to
exercise and enforce Agent’s and Lenders’ rights and remedies hereunder with
respect to any Account Collateral or to preserve the value of the Account
Collateral.

(b) Upon the occurrence and during the continuance of an Event of Default,
Borrower hereby irrevocably constitutes and appoints Agent as Borrower’s true
and lawful attorney-in-fact, with full power of substitution, to execute,
acknowledge and deliver any instruments and to exercise and enforce every right,
power, remedy, option and privilege of Borrower with respect to the Account
Collateral, and do in the name, place and stead of Borrower, all such acts,
things and deeds for and on behalf of and in the name of Borrower, which
Borrower could do or which Agent may deem necessary or desirable to more fully
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Agent the rights and remedies provided for herein and to accomplish the purposes
of this Agreement. The foregoing powers of attorney are irrevocable and coupled
with an interest. Upon the occurrence and during the continuance of an Event of
Default, Agent may perform or cause performance of any such agreement, and any
reasonable out-of-pocket expenses of Agent incurred in connection therewith
shall be paid by Borrower.

(c) Borrower hereby expressly waives, to the fullest extent permitted by law,
presentment, demand, protest or any notice of any kind in connection with the
Account Collateral. Borrower acknowledges and agrees that ten (10) days’ prior
written notice of the time and place of any public sale of the Account
Collateral or any other intended disposition thereof shall be reasonable and
sufficient notice to Borrower within the meaning of the UCC.

6.5.9 Transfers and Other Liens. Borrower agrees that it will not (a) sell or
otherwise dispose of any of the Account Collateral or (b) create or permit to
exist any Lien upon or with respect to all or any of the Account Collateral,
except for the Lien granted to Agent under this Agreement and the other Loan
Documents and Permitted Encumbrances.

6.5.10 Reasonable Care. Beyond the exercise of reasonable care in the custody
thereof, Agent shall have no duty as to any Account Collateral in its possession
or control as agent therefor or bailee thereof or any income thereon or the
preservation of rights against any Person or otherwise with respect thereto.
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Account Collateral in its possession if the Account
Collateral is accorded treatment substantially equal to that which Agent accords
its own property, it being understood that Agent shall not be liable or
responsible for any loss or damage to any of the Account Collateral, or for any
diminution in value thereof, by reason of the act or omission of Agent, its
Affiliates, agents, employees or bailees, except to the extent that such loss or
damage results from Agent’s, Lenders’ or such Affiliates’, agents’, employees’
or bailees’ gross negligence or willful misconduct. In no event shall Agent or
Lenders be liable either directly or indirectly for losses or delays resulting
from any event which may be the basis of an Excusable Delay, computer
malfunctions, interruption of communication facilities, labor difficulties or
other causes beyond Agent’s or Lenders’ reasonable control or for indirect,
special or consequential damages except to the extent of Lender’s gross
negligence or willful misconduct. Notwithstanding the foregoing, Borrower
acknowledges and agrees that (a) Agent does not have custody of the Account
Collateral held in the HSBC Collection Account and JP Collection Account,
(b) HSBC Collection Bank has custody of the Account Collateral held in the HSBC
Collection Account and JP Collection Bank has custody of the Account Collateral
held in the JP Collection Account, (c) the initial HSBC Collection Bank and JP
Collection Bank were chosen by Borrower and (d) neither Agent nor Lenders have
an obligation or duty to supervise HSBC Collection Bank or JP Collection Bank or
to see to the safe custody of the Account Collateral held in the HSBC Collection
Account or JP Collection Account.

6.5.11 Agent’s and Lenders’ Liability. (a) Agent and Lenders, as applicable,
shall be responsible for the performance only of such duties with respect to the
Account Collateral as are specifically set forth in this Section 6.5.11 or
elsewhere in the Loan Documents, and no other duty shall be implied from any
provision hereof. Neither Agent nor Lenders shall be under any obligation or
duty to perform any act with respect to the Account Collateral which would cause
them to incur any expense or liability or to institute or defend any suit in
respect hereof, or to

 

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advance any of its own monies. Borrower shall indemnify and hold Agent and
Lenders and their respective employees and officers harmless from and against
any loss, cost or damage (including, without limitation, reasonable attorneys’
fees and disbursements) incurred by Agent and/or Lenders in connection with the
transactions contemplated hereby with respect to the Account Collateral except
as such may be caused by the gross negligence or willful misconduct of Agent or
Lenders, and their respective employees, officers or agents or the breach of the
standard set forth in Section 6.5.11(b).

(b) Each of Agent and Lenders, as applicable, shall be protected in acting upon
any notice, resolution, request, consent, order, certificate, report, opinion,
bond or other paper, document or signature believed by it in good faith to be
genuine, and, in so acting, it may be assumed that any person purporting to give
any of the foregoing in connection with the provisions hereof has been duly
authorized to do so. Agent and Lenders may consult with counsel, and the opinion
of such counsel shall be full and complete authorization and protection in
respect of any action taken or suffered by it hereunder and in good faith in
accordance therewith.

6.5.12 Continuing Security Interest. This Agreement shall create a continuing
security interest in the Account Collateral and shall remain in full force and
effect until payment in full of the Debt. Upon payment in full of the Debt, this
security interest shall automatically terminate without further notice from any
party and Borrower shall be entitled to the return, upon its request, of such of
the Account Collateral as shall not have been sold or otherwise applied pursuant
to the terms hereof and Agent shall execute such instruments and documents as
may be reasonably requested by Borrower to evidence such termination and the
release of the Account Collateral.

6.5.13 Debt Yield Collateral Event; Debt Yield Collateral Period. Within
five (5) Business Days after notice from Agent that a Debt Yield Collateral
Event has occurred, Borrower shall either (a) prepay the Loan, (b) post Cash
with Agent, or (c) deliver a Letter of Credit to Agent (items (b) and (c), the
“Remargining Collateral”), or (d) any combination of the foregoing, in an amount
necessary to reduce the principal balance of the Loan (or, in the case of
Remargining Collateral, assuming the Remargining Collateral were applied to
reduce the principal amount of the Loan) such that a Debt Yield of eleven
percent (11%) will be satisfied. If Borrower delivered Remargining Collateral to
Agent, then upon the written request of the Borrower upon the expiration of the
Debt Yield Collateral Period and, provided no Monetary Default or Event of
Default shall have occurred and be continuing under this Agreement, Agent shall
release such portion of the Remargining Collateral which has not been previously
applied by Agent in accordance herewith, to Borrower, together with such letter
as the issuing bank may reasonably require, if the Remargining Collateral
consisted in whole or in part of a Letter of Credit, to allow the termination of
such Letter of Credit. Notwithstanding the foregoing, upon the occurrence and
during the continuance of an Event of Default, without additional notice from
Agent to Borrower, any Remargining Collateral then posted with Agent, for the
benefit of the Lenders, may be applied by Agent to the Debt in such order and
priority as Agent shall determine in its sole and absolute discretion. Agent
hereby agrees that, in connection with Agent’s determination that a Debt Yield
Collateral Event exists, if Agent used a lower NOI to calculate the applicable
Debt Yield than the NOI which was calculated by Borrower, Agent shall review the
same with Borrower and/or its representatives, including Agent’s adjustment (if
any)

 

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to Gross Revenues and/or Operating Expenses, as applicable, to provide to
Borrower and/or its representatives the basis for and details surrounding such
determination (provided, however, that the duration of such review and the
provision of such basis for and details surrounding Agent’s determination shall
be reasonably determined by Agent and the final determination of the Debt Yield
shall be unilaterally made by Agent).

Section 6.6 Letters of Credit.

6.6.1 Delivery of Letters of Credit. (a) Borrower may deliver a Letter of Credit
to Agent as all or a portion of the Remargining Collateral, as necessary.

(b) Borrower shall pay to Agent all of Agent’s reasonable out-of-pocket costs
and expenses in connection Agent’s review and approval of a Letter of Credit.
Borrower shall not be entitled to draw from any such Letter of Credit. Upon
thirty (30) days’ notice to Agent, Borrower may replace a Letter of Credit with
a Cash deposit if a Letter of Credit has been outstanding for more than six (6)
months. Prior to the return of a Letter of Credit, Borrower shall deposit an
amount equal to required Remargining Collateral in accordance with this
Agreement if such Letter of Credit had not been delivered.

6.6.2 Security for Debt. Each Letter of Credit delivered under this Agreement
shall be additional security for the payment of the Debt. Upon the occurrence of
an Event of Default, Agent shall have the right, at its option, to draw on any
Letter of Credit and to apply all or any part thereof to the payment of the
items for which such Letter of Credit was established or to apply each such
Letter of Credit to payment of the Debt in such order, proportion or priority as
Agent may determine.

6.6.3 Additional Rights of Agent. In addition to any other right Agent may have
to draw upon a Letter of Credit pursuant to the terms and conditions of this
Agreement, Agent shall have the additional rights to draw in full any Letter of
Credit: (a) with respect to any evergreen Letter of Credit, if Agent has
received a notice from the issuing bank that the 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; (b) with respect to any Letter of Credit with a stated expiration date,
if Agent 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 or 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; (c) 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
(d) if Agent has received notice that the bank issuing the Letter of Credit
shall cease to be an Eligible Institution and within ten (10) Business Days
after Agent notifies Borrower in writing of such circumstance, Borrower shall
fail to deliver to Agent a substitute Letter of Credit issued by an Eligible
Institution. Notwithstanding anything to the contrary contained in the above,
Agent is not obligated to draw any Letter of Credit upon the happening of an
event specified in (a), (b), (c) or (d) 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 Agent has not drawn the Letter of Credit.

 

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VII. PROPERTY MANAGEMENT

Section 7.1 The Management Agreement.

At any time that a Management Agreement is in place, Borrower shall, or shall
cause Operating Company, to cause Manager to manage the Property in accordance
with the Management Agreement. At any time that a Management Agreement is in
place, Borrower shall or shall cause Manager to (a) diligently perform and
observe all of the terms, covenants and conditions of the Management Agreement
on the part of Borrower or Operating Company, as applicable, to be performed and
observed, (b) promptly notify Agent of any notice to Borrower or Operating
Company of any default by Borrower or Operating Company, as applicable, in the
performance or observance of any of the terms, covenants or conditions of the
Management Agreement on the part of Borrower or Operating Company to be
performed and observed and (c) promptly notify Agent of any default by Manager
in the performance or observance of any of the terms, covenants or conditions of
the Management Agreement on the part of Manager to be performed and observed. At
any time that a Management Agreement is in place, if Borrower or Operating
Company shall default in the performance or observance of any material term,
covenant or condition of the Management Agreement on the part of Borrower or
Operating Company, as applicable, to be performed or observed, then, without
limiting Agent’s other rights or remedies under this Agreement or the other Loan
Documents, and without waiving or releasing Borrower from any of its obligations
hereunder or waiving or releasing Borrower or Operating Company, as applicable
from its obligations under the Management Agreement, Agent shall have the right,
but shall be under no obligation, to pay any sums and to perform any act as may
be appropriate to cause all the material terms, covenants and conditions of the
Management Agreement on the part of Borrower or Operating Company, as
applicable, to be performed or observed.

Section 7.2 Prohibition Against Termination or Modification.

At any time that a Management Agreement is in place, neither Borrower nor
Operating Company, as applicable, shall surrender, terminate, cancel, modify,
renew or extend the Management Agreement or enter into any other agreement
relating to the management or operation of the Property with Manager or any
other Person, or consent to the assignment by the Manager of its interest under
the Management Agreement, in each case without the express consent of Agent,
which consent shall not be unreasonably withheld; provided, however, with
respect to a new manager such consent may be conditioned upon such new manager
and Borrower executing an assignment of management agreement and subordination
of management fees in the form then used by Agent.

Section 7.3 Replacement of Manager.

(a) Borrower hereby represents and warrants that the property is currently
self-managed by Operating Company. If, at any time, the Property is no longer
self-managed or a Malkin Controlled Person does not manage the Property, a
Qualified Manager shall be engaged to manage the Property pursuant to a
Management Agreement and Borrower and such Qualified Manager shall enter into an
Assignment of Management Agreement with respect thereto.

 

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(b) Agent shall have the right to require Borrower to replace the Manager, if
applicable, or, put a Manager in place at the Property and any such replacement
Manager or Manager shall be chosen by Borrower and approved by Agent, or at
Agent’s option, selected by Agent in its sole discretion, upon the occurrence of
any one or more of the following events: (i) at any time during the existence of
an Event of Default and the acceleration of the Loan, (ii) at any time after the
Maturity Date and/or (iii) if there is an existing Manager or, in connection
with Operating Company’s current management of the Property, such Manager or the
Operating Company, as applicable, has engaged in (A) gross negligence, (B) fraud
or (C) willful misconduct.

VIII. TRANSFERS

Section 8.1 Agent’s and Lenders’ Reliance.

Borrower acknowledges that Agent and Lenders have examined and relied on the
experience of Borrower and its general partners, members, principals and (if
Borrower is a trust) beneficial owners in owning and operating properties such
as the Property in agreeing to enter into this Agreement and make the Loan, and
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 and
the performance of the Borrower’s Obligations under the Loan Documents. Borrower
acknowledges that Agent and Lenders have a valid interest in maintaining the
value of the Property so as to ensure that, should Borrower default in the
repayment of the Debt or the performance of the Borrower’s Obligations under the
Loan Documents, Agent and Lenders can recover the Debt by a sale of the
Property.

Section 8.2 No Transfers.

Except for Permitted Transfers, the Credit Parties shall not Transfer the
Property, all or any portion of their leasehold interest therein, as applicable,
or any part thereof or permit or suffer the Property or any part thereof to be
Transferred or permit any other Transfer to occur, unless Agent shall consent
thereto in writing, in Agent’s sole and absolute discretion.

Section 8.3 Permitted Transfers.

(a) The restrictions on Transfers set forth in Section 8.2 shall not apply to
the following Transfers (“Permitted Transfers”) provided no Monetary Default or
Event of Default shall have occurred and is then continuing:

(i) a Transfer or transfers (but not a pledge or collateral assignment) in the
aggregate of up to forty-nine percent (49%) of the direct or indirect ownership
interests in any Credit Party provided that a Malkin Controlled Person maintains
Control of Borrower;

(ii) Transfers (but not a pledge or collateral assignment) by any Malkin
Controlled Person for estate planning purposes provided that the Transferor or
another Malkin Controlled Person maintains Control of Borrower;

 

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(iii) Operating Company entering into subleases (but not a master sublease) in
accordance with Section 4.1.10 hereof;

(iv) any Transfers by participants of their indirect participation interests in
ESBA; provided that a Malkin Controlled Person maintains Control of Borrower;

(v) A Transfer (or series of transfers) (but not a pledge, collateral
assignment, lien, charge, encumbrance, hypothecation, security interest or other
security device) of the interests of Borrower and Operating Company in the
Property to a wholly-owned limited liability company (“Op Sub”) which is a
subsidiary of an operating partnership (“Op”) in which a corporation intending
to qualify for taxation as a real estate investment trust under Sections 856
through 860 of the Internal Revenue Code of 1986, as amended, or any successor
statute under which corporations may be organized under the general laws of the
State of Maryland as now or hereafter in force (a “REIT”) acts as general
partner, provided that (A) such Transfer takes place immediately prior to or
contemporaneously with an initial public offering of common stock in the REIT
(the “IPO”), (B) immediately following the IPO, Anthony E. Malkin shall be the
chief executive officer of the REIT, (C) the Property and at least fifty percent
(50%) of the assets listed on Schedule XIX (based on square footage as
determined by Borrower and including the Property) shall be contributed to the
REIT, (D) the REIT and the Op, at all times, shall not be leveraged in excess of
60% based upon the assets held by the REIT and Op, directly and through wholly
owned subsidiaries (based on the gross book values of the assets in the REIT and
Op), and taking into account all secured and unsecured debt of the REIT and its
direct and indirect wholly-owned subsidiaries (including any unfunded portion
thereof to the extent that the applicable borrower is then entitled to advances
under the applicable facility) and, with respect to this Loan, including the
Accordion (both the advanced and unadvanced portions thereof) if the Accordion
is then in place, (E) at all times, the majority of the directors of the REIT
shall be independent directors, and (F) the majority of the members of the board
of directors of the REIT shall have substantial and significant experience and
expertise in the ownership and operation of commercial real estate and
commercial real estate companies or shall have served as an officer or director
of a public company, and the chairman of the board of directors of the REIT
shall have substantial and significant experience and expertise in commercial
real estate. In addition, in connection with a Transfer pursuant to this
Section 8.3(a)(v), Borrower shall satisfy the following conditions:

(1) to the extent that current senior employees of either the Operating Company
or of Malkin Holdings LLC are not employed as the principal management team of
the Property, a Qualified Manager shall be appointed to manage the Property and
such Manager shall deliver an Assignment of Management Agreement;

(2) the Person who owns the Property shall be a single purpose, bankruptcy
remote entity meeting the applicable Rating Agency requirements for a single
purpose bankruptcy remote entity;

 

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(3) Agent, for the ratable benefit of the Lenders, shall have a mortgage lien on
the consolidated estates of Borrower and Operating Company existing on the
Property prior to the date of Transfer, and an assignment of leases and rents
with respect to all Leases, each substantially in the forms of the Mortgage and
the Assignment of Leases constituting Loan Documents, and the Ground Lease,
Operating Lease and Observatory Lease shall be terminated;

(4) Borrower shall deliver to Agent an endorsement to the existing Title
Insurance Policy insuring that the Agent, for the benefit of the Lenders, has a
first priority Lien on the various estates as provided in Section 8.3(a)(v)(3)
above, subject only to Permitted Encumbrances, which endorsement shall be
satisfactory to Agent in its reasonable discretion;

(5) Borrower shall deliver to Agent the organizational documents of such REIT;

(6) Borrower shall deliver to Agent such legal opinions reasonably required by
Agent with respect to the REIT, the Op and the Op Sub and the continuing Lien of
the Mortgage substantially on the terms of the opinion delivered in connection
with the closing of the Loan on the date hereof; and

(7) Borrower shall pay all costs and expenses of Agent in connection therewith,
including, without limitation, reasonable attorney’s fees; and

(vi) After any Transfer contemplated in Section 8.3(a)(v) above, the Transfer of
any shares of any series or class of common stock of the REIT or limited
partnership units of the Op and/or the redemption of limited partnership units
of the Op into common stock of the REIT; provided, however, that, if the same
shall result in a change in Control of Borrower, after giving effect to such
Transfer, (A) a majority of the members of the board of directors of the REIT
shall either (x) have been members of the board of directors prior to such
change of Control or (y) have either (1) at least the same or greater level of
experience and expertise in the ownership and operation of commercial real
estate and commercial real estate companies as the majority of the board of
directors prior to such Transfer or (2) previously served as an officer or
director of a public company, and the chairman of the board of directors of the
REIT shall have substantial and significant experience and expertise in
commercial real estate, and (B) conditions (1) and (2) of Section 8.3(a)(v)
shall continue to be complied with;

(vii) Easements affecting the Property that are granted with the approval of
Agent (not to be unreasonably withheld) in accordance with the terms of this
Agreement and the Mortgage; and

(viii) Any Liens that are Permitted Encumbrances.

 

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(b) In connection with the Transfer to a public company in accordance with
Section 8.3(a)(v) above, Agent and the Lenders will accept the REIT, which is
the direct or indirect owner of Borrower, as a replacement guarantor/indemnitor
with respect to the Guaranty and the Environmental Indemnity (the “Replacement
Carve-out Obligor”). Upon assumption by the REIT of all obligations of
guarantor/ indemnitor, commencing from the Closing Date, under the Guaranty and
the Environmental Indemnity, Agent and the Lenders shall release Guarantor from
the Guaranty and the Environmental Indemnity.

(c) The parties hereto hereby agree to cooperate in order for the Credit Parties
to complete a Transfer to a public company in accordance with Section 8.3(a)(v)
above and to amend, modify and/or supplement the Loan Documents, as applicable,
to reflect such Transfer to a public company; provided, that, any such
amendments, modifications and/or supplements shall not increase the obligations
of Agent and the Lenders hereunder and under the other Loan Documents or
materially decrease the rights of Agent and Lenders hereunder and under the
other Loan Documents, as determined by Agent in its reasonable discretion, and
further provided that Borrower shall pay all costs and expenses of Agent,
including reasonable attorney’s fees, in connection with any such amendments,
modifications and/or supplements to the Loan Document. After any such transfer
in accordance with Section 8.3(a)(v) above, it shall be an Event of Default
hereunder if the REIT loses its REIT status or if, at any time, it is not in
compliance with Section 8.3(a)(v)(D), (E) or (F).

(d) In connection with a Transfer to a public company in accordance with
Section 8.3(a)(v), the parties acknowledge that certain sections and provisions
of this Loan Agreement and other Loan Documents including covenants,
representations and warranties and conditions to Advances, may no longer be
applicable with regard to the REIT, Op or Op Sub, as the case may be. The
parties intend to continue the arrangements described in this Loan Agreement and
the other Loan Documents following the Transfer described in Section 8.3(a)(v),
with such amendments to the Loan Documents which are necessitated by the revised
structure of the Borrower and as are required by Agent, in its reasonable
discretion. The parties understand and agree that certain sections and
provisions of the Loan Documents may not be relevant after such public company
Transfer, and therefore will not be complied with, enforced or enforceable, and
representations and warranties will be deemed modified to reflect the impact of
such Transfer only, but the successor borrower shall be required to comply with
all other provisions of the Loan Documents and if such successor borrower fails
to so comply, Agent and Lenders shall be entitled to all of their respective
rights and remedies hereunder. In addition, certain additional covenants,
representations and warranties may be required by Agent in its reasonable
discretion to be added and incorporated into this Loan Agreement and the other
Loan Documents to reflect the impact of such Transfer. The Borrower shall,
subject to legal limitations, advise the Agent, from time to time, regarding
plans concerning the Transfer described herein, including timing and structure,
to the extent known to the Borrowers and the other Credit Parties from time to
time.

(e) Notwithstanding anything to the contrary herein, the provisions of this
Article VIII shall not restrict or limit in any way the rights of LMH to
Transfer interests in Operating Company and indirect interests in Observatory
Tenant or the rights of direct or indirect owners of interests in LMH to
Transfer interests in LMH or in Persons owning such direct or indirect
interests, subject only to the provisions of the operative documents of
Operating Company and Observatory Tenant.

 

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(f) If, at any time, LMH no longer holds any interest, direct or indirect, in
Operating Company, and as long as any direct or indirect successor owner of the
interests of LMH is not a foundation or other tax exempt Person subject to
unrelated business income tax or other similar tax which is imposed as a result
of a mortgage being placed on real estate interests in which it has an
investment, Operating Company shall grant to Agent, for the ratable benefit of
the Lenders, a first mortgage lien in Operating Company’s leasehold interest in
the Sublease and an assignment of leases and rents with respect to Operating
Company’s Leases.

(g) Notwithstanding the above, all Transfers, other than (i) indirect Transfers
by participants of indirect interests in ESBA, and (ii) the subsequent transfers
of shares in the public company, and (iii) transfers pursuant to clause (d)
above, as applicable, are subject to the Lenders confirming that the same will
not cause transferee to exceed exposure limits with the Lenders and that
transferee is not an entity with whom any Lender is prohibited (either by law or
internal directives) from conducting business.

IX. DEFAULTS

Section 9.1 Events of Default.

(a) Each of the following events shall constitute an event of default hereunder
(an “Event of Default”):

(i) if (A) the Debt is not paid in full on the Maturity Date, (B) any regularly
scheduled monthly payment of interest and/or principal due under the Note is not
paid in full within five (5) calendar days of the applicable Payment Date, or
(C) except as to any amount included in (A) and (B) of this sub-paragraph (i),
any other amount payable pursuant to the Loan Documents is not paid in full when
due and payable in accordance with the provisions of the applicable Loan
Document and such failure continues for ten (10) days after Agent delivers
written notice thereof to Borrower;

(ii) if Borrower or Operating Company shall fail to pay any of the Taxes or
Other Charges when due unless Agent is collecting Taxes and Other Charges
pursuant to Article VI hereof, and only if (A) no Event of Default exists and
(B) Agent is holding a sufficient amount in the Tax Reserve Account to pay such
Taxes and Other Charges;

(iii) if the Policies are not kept in full force and effect;

(iv) if Borrower breaches or permits or suffers a breach by Operating Company or
otherwise of Article 6 of the Mortgage or Article VIII hereof or there is a
Transfer in violation of Section 8.2;

(v) if any Credit Party is in breach of Section 6.5.7 or if any Credit Party is
in breach of any of the covenants set forth in Section 4.1.7 for a period in
excess of five (5) days;

 

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(vi) if any representation or warranty made by any Credit Party or any Guarantor
in this Agreement or in any other Loan Document, or in any report, certificate,
financial statement or other instrument, agreement or document furnished to
Agent and/or Lenders shall have been false or shall have omitted a material fact
so as to make the same not misleading in any material respect as of the date the
representation or warranty was made (or deemed remade);

(vii) if any Credit Party, Guarantor or ESB Captive shall make an assignment for
the benefit of creditors;

(viii) if a receiver, liquidator or trustee shall be appointed for any Credit
Party, Guarantor or ESB Captive or if any Credit Party, Guarantor, or ESB
Captive 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, any Credit Party, Guarantor or ESB Captive, or if any
proceeding for the dissolution or liquidation of any Credit Party, Guarantor or
ESB Captive shall be instituted; provided, however, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by any
Credit Party, Guarantor or ESB Captive, upon the same not being discharged,
stayed or dismissed within thirty (30) days;

(ix) if any Credit Party attempts to assign its rights under this Agreement or
any of the other Loan Documents or any interest herein or therein in
contravention of the Loan Documents and if any Credit Party attempts to assign
its interest in the Ground Lease, Sublease and Observatory Lease, as applicable;

(x) if any Lease is modified, amended, supplemented, restated, extended,
surrendered or terminated without the prior written consent of Agent, to the
extent that such consent is required pursuant to the provisions of
Section 4.1.10;

(xi) if any material easements, restrictions, covenants or operating agreements
benefiting the Property shall no longer be in full force and effect and the same
has a Material Adverse Effect;

(xii) if any Credit Party breaches any covenant contained in Section 4.2 (other
than Section 4.2.10).

(xiii) if (A) any Person shall engage in any “prohibited transaction” (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(B) any failure to satisfy the minimum funding requirements of Section 412 or
430 of the Code or Section 302 of ERISA, whether or not waived, shall occur with
respect to any Single Employer Plan or a Single Employer Plan shall obtain “at
risk” status or any Lien in favor of the PBGC or a Single Employer Plan shall
arise on the assets of any Credit Party or any Commonly Controlled Entity, (C) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable

 

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opinion of the Agent, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (D) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (E) the Credit Parties or any Commonly Controlled
Entity incur, or in the reasonable opinion of the Agent are reasonably likely to
incur, any liability in connection with the occurrence of a complete or partial
withdrawal from, or the Insolvency, Reorganization or termination of, a
Multiemployer Plan; and in each case in clauses (A) through (E) above, such
event or condition, together with all other such events or conditions, if any,
could reasonably be expected to have a Material Adverse Effect;

(xiv) intentionally omitted;

(xv) if any Credit Party fails to comply with the covenants as to Prescribed
Laws set forth in Section 4.1.1, 4.1.20, 4.1.27, or 4.1.28;

(xvi) intentionally omitted;

(xvii) if Guarantor continues to breach any of the covenants contained in
Section 4.1 of the Guaranty for ten (10) days following notice of such breach;

(xviii) if any Credit Party shall be in Default under any of the other terms,
covenants or conditions of this Agreement or any other Loan Document not
otherwise specified in subsections (i) to (xvii) above or in subsections (xix)
to (xxiv) below and such Default continues for ten (10) days, in the case of any
such Default which can be cured by the payment of a sum of money, or for
ten (10) days after notice from Agent in the case of any other such Default;
provided, however, that if such non-monetary Default is susceptible of cure but
cannot reasonably be cured within such ten (10) day period and provided,
further, that Borrower shall have commenced to cure such Default within such
ten (10) day period and thereafter diligently and expeditiously proceeds to cure
the same, such ten (10) day period shall be extended for such time as is
reasonably necessary for Borrower in the exercise of due diligence to cure such
Default, such additional period not to exceed ninety (90) days;

(xix) or if any other event shall occur or condition shall exist if the effect
of such event or condition under any Loan Document is to accelerate the maturity
of any portion of the Debt or to permit Agent to accelerate the maturity of all
or any portion of the Debt;

(xx) intentionally omitted;

(xxi) intentionally omitted;

(xxii) if one or more judgments or decrees shall be entered against any Credit
Party or Guarantor involving in the aggregate a liability in excess of
$1,000,000 and shall not have been vacated or bonded or otherwise removed as a
Lien against the Property or any Credit Party’s interest therein within
thirty (30) days;

(xxiii) if Borrower fails to comply with the provisions of Section 6.5.13;

 

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(xxiv) subject to the effect of a Force Majeure Event, (A) the neglect, failure
or refusal of any Credit Party to keep in full force and effect any material
permit, license, consent or approval required for the operation of the
Improvements that is not fully reinstated within thirty (30) days after Agent
gives Borrower notice of the lapse of effectiveness of such material permit,
license, consent or approval or (B) the curtailment in availability to the
Property of utilities or other public services necessary for the full occupancy
and utilization of the Improvements that is not restored to full availability
within thirty (30) days after Agent gives Borrower notice of such curtailment of
availability.

(b) Upon the occurrence of an Event of Default (other than an Event of Default
described in clauses (vii), (viii) or (ix) above) and at any time thereafter
Agent may, in addition to any other rights or remedies available to it pursuant
to this Agreement and the other Loan Documents or at law or in equity, take such
action, without notice or demand, that Agent deems advisable to protect and
enforce its rights against Borrower and in and to the Property, including,
without limitation, declaring the Debt to be immediately due and payable, and
Agent may enforce or avail itself of any or all rights or remedies provided in
the Loan Documents against Borrower and the Property, including without
limitation, all rights or remedies available at law or in equity; and upon any
Event of Default described in clauses (vii), (viii) or (ix) above, the Debt and
all other Obligations of Borrower hereunder and under the other Loan Documents
shall immediately and automatically become due and payable, without notice or
demand, and Borrower hereby expressly waives any such notice or demand, anything
contained herein or in any other Loan Document to the contrary notwithstanding.

Section 9.2 Rights and Remedies of Agent and Lenders.

(a) Upon the occurrence of an Event of Default, all or any one or more of the
rights, powers, privileges and other remedies available to Agent against
Borrower under this Agreement or any of the other Loan Documents executed and
delivered by, or applicable to, Borrower or at law or in equity may be exercised
by Agent at any time and from time to time, whether or not all or any of the
Debt shall be declared due and payable, and whether or not Agent shall have
commenced any foreclosure proceeding or other action for the enforcement of its
rights and remedies under any of the Loan Documents with respect to the
Property. Any such actions taken by Agent shall be cumulative and concurrent and
may be pursued independently, singly, successively, together or otherwise, at
such time and in such order as Agent may determine in its sole discretion, to
the fullest extent permitted by law, without impairing or otherwise affecting
the other rights and remedies of Agent permitted by law, equity or contract or
as set forth herein or in the other Loan Documents. Without limiting the
generality of the foregoing, Borrower agrees that if an Event of Default is
continuing (i) Agent 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 Agent shall remain in full force and effect until Agent
has exhausted all of its remedies against the Property and the Mortgage has been
foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt or
the Debt has been paid in full.

 

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(b) Agent shall have the right from time to time following the occurrence of an
Event of Default to partially foreclose the Mortgage in any manner and for any
amounts secured by the Mortgage then due and payable as determined by Agent in
its sole discretion including, without limitation, the following circumstances:
(i) in the event Borrower defaults beyond any applicable grace period in the
payment of one or more scheduled payments of principal and interest, Agent may
foreclose the Mortgage to recover such delinquent payments, or (ii) in the event
Agent elects to accelerate less than the entire outstanding principal balance of
the Loan, Agent may foreclose the Mortgage to recover so much of the principal
balance of the Loan as Agent may accelerate and such other sums secured by the
Mortgage as Agent may elect. Notwithstanding one or more partial foreclosures,
the Property shall remain subject to the Mortgage to secure payment of sums
secured by the Mortgage and not previously recovered.

(c) Agent 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 (the “Severed Loan Documents”) in such denominations as Agent shall
determine in its sole discretion for purposes of evidencing and enforcing its
rights and remedies provided hereunder. Borrower shall execute and deliver to
Agent from time to time, promptly after the request of Agent, a severance
agreement and such other documents as Agent shall request in order to effect the
severance described in the preceding sentence, all in form and substance
reasonably satisfactory to Agent, provided that the same shall contain
provisions substantially the same as are set forth in Section 10.22. Borrower
hereby absolutely and irrevocably appoints Agent 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 the aforesaid severance, Borrower
ratifying all that its said attorney shall do by virtue thereof; provided,
however, Agent shall not make or execute any such documents under such power
until three (3) Business Days after notice has been given to Borrower by Agent
of Agent’s intent to exercise its rights under such power. Borrower shall not be
obligated to pay any costs or expenses incurred in connection with the
preparation, execution, recording or filing of the Severed Loan Documents, and
the Severed Loan Documents shall not contain any representations, warranties or
covenants not contained in the Loan Documents and any such representations and
warranties contained in the Severed Loan Documents will be given by Borrower
only as of the Closing Date or the date of the last Advance made hereunder,
whichever is later.

(d) During the continuance of an Event of Default, Agent may:

(i) execute all applications and certificates on behalf of Borrower which may be
required by any Governmental Authority or Legal Requirement or contract
documents or agreements;

(ii) complete the marketing and leasing of leasable space in the Improvements,
and modify or amend existing leases and occupancy agreements, all as Agent shall
deem to be necessary or desirable;

(iii) take such other action hereunder, or refrain from acting hereunder, as
Agent may, in its sole and absolute discretion, from time to time determine, and
without any limitation whatsoever, to carry out the intent of this Section 9.2.

 

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(e) Upon the occurrence of an Event of Default, Agent may appoint or seek
appointment of a receiver with respect to both Borrower and Operating Company,
without notice and without regard to the solvency of Borrower or the adequacy of
the security, for the purpose of preserving the Property, preventing waste, and
to protect all rights accruing to Agent and/or Lenders by virtue of this
Agreement and the other Loan Documents, and expressly to do any further acts as
Agent may determine to be necessary to complete the development and construction
of the Improvements. All expenses incurred in connection with the appointment of
such receiver, or in protecting, preserving, or improving the Property, shall be
charged against Borrower and shall be secured by the Mortgage and enforced as a
Lien against the Property.

(f) Upon the occurrence of an Event of Default, Agent may accelerate maturity of
the Note and any other indebtedness of Borrower to Lenders, and demand payment
of the principal sum due thereunder, with interest, costs and reasonable
attorneys’ fees and expenses (including those for appellate proceedings), and
enforce collection of such payment by foreclosure of the Mortgage or the
enforcement of any other collateral, or other appropriate action.

Section 9.3 Power of Attorney.

For the purposes of carrying out the provisions and exercising the rights,
powers and privileges granted by or referred to in this Agreement, Borrower
hereby irrevocably constitutes and appoints Agent its true and lawful
attorney-in-fact, with full power of substitution, to execute, acknowledge and
deliver any instruments and do and perform any acts which are referred to in
this Agreement, in the name and on behalf of Borrower. The power vested in such
attorney-in-fact is, and shall be deemed to be, coupled with an interest and
irrevocable; provided, however, that so long as no Event of Default then exists,
Agent shall not make or execute any such documents under such power until
three (3) Business Days after notice has been given to Borrower by Agent of
Agent’s intent to exercise its rights under such power.

Section 9.4 Remedies Cumulative.

Upon the occurrence of any Event of Default, the rights, powers and privileges
provided in this Article IX and all other remedies available to Agent and
Lenders under this Agreement or under any of the other Loan Documents or at law
or in equity may be exercised by Agent and Lenders at any time and from time to
time and shall not constitute a waiver of Agent’s or any of Lenders’ other
rights or remedies thereunder, whether or not the Loan shall be due and payable,
and whether or not Agent shall have instituted any foreclosure proceedings or
other action for the enforcement of its rights under the Loan Documents.

Section 9.5 Annulment of Defaults.

An Event of Default shall not be deemed to be in existence for any purpose of
this Agreement or any Loan Document if Agent shall have waived such Event of
Default in writing or stated that the same has been cured to its reasonable
satisfaction, but no such waiver shall extend to or affect any subsequent Event
of Default or impair any of the rights of Lenders upon the occurrence thereof.

 

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Section 9.6 Waivers.

Borrower hereby waives to the extent not prohibited by applicable law (a) all
presentments, demands for payment or performance, notices of nonperformance
(except to the extent required by the provisions hereof or of any other Loan
Documents), protests and notices of dishonor, (b) any requirement of diligence
or promptness on Agent’s or Lenders’ part in the enforcement of its rights (but
not fulfillment of its obligations) under the provisions of this Agreement or
any other Loan Document, and (c) any and all notices of every kind and
description which may be required to be given by any statute or rule of law, to
the fullest extent permitted by applicable law.

Section 9.7 Course of Dealing, Etc.

No course of dealing and no delay or omission by Agent, Lenders or Borrower in
exercising any right or remedy hereunder shall operate as a waiver thereof or of
any other right or remedy and no single or partial exercise thereof shall
preclude any other or further exercise thereof or the exercise of any other
right or remedy. A waiver on any one occasion shall not be construed as a bar to
or waiver of any right or remedy on any future occasion. No waiver or consent
shall be binding upon Lenders unless it is in writing and signed by Agent.
Agent’s exercise of Agent’s right to remedy any default by Borrower to Lenders
or any other person, firm or corporation shall not constitute a waiver of the
default remedied, a waiver of any other prior or subsequent default by Borrower
or a waiver of the right to be reimbursed for any and all of its expenses in so
remedying such default. All rights and remedies of Lenders hereunder are
cumulative.

Section 9.8 Remedies Cumulative.

The rights, powers and remedies of Agent under this Agreement shall be
cumulative and not exclusive of any other right, power or remedy which Agent may
have against Borrower pursuant to this Agreement or the other Loan Documents, or
existing at law or in equity or otherwise. Agent’s rights, powers and remedies
may be pursued singly, concurrently or otherwise, at such time and in such order
as Agent may determine in Agent’s sole discretion. No delay or omission to
exercise any remedy, right or power accruing upon an Event of Default shall
impair any such remedy, right or power or shall 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 with respect to Borrower shall not be construed to be a waiver of any
subsequent Default or Event of Default by Borrower or to impair any remedy,
right or power consequent thereon.

X. MISCELLANEOUS

Section 10.1 Successors and Assigns.

The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns permitted
hereby, except that, subject to Section 8.3(a)(iv), no Borrower or Guarantor may
assign or otherwise transfer any of its rights or obligations under the Loan
Documents without the prior written consent of Agent, in Agent’s sole discretion
(and any attempted assignment or transfer by Borrower or Guarantor without such
consent shall be null and void). Nothing in the Loan Documents, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
(to the extent provided in Section 10.26 hereof) and, to the extent expressly
contemplated hereby, the Affiliates of any Lender) any legal or equitable right,
remedy or claim under or by reason of any of the Loan Documents.

 

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Section 10.2 Agent’s and Lenders’ Discretion.

Whenever, pursuant to this Agreement, Agent and/or a Lender exercises any right
given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Agent and/or any Lender, the decision of Agent and/or such
Lender to approve or disapprove or to decide whether arrangements or terms are
satisfactory or not satisfactory shall (except as is otherwise specifically
herein provided) be in the sole discretion of Agent and/or such Lender, as
applicable, and shall be final and conclusive.

Section 10.3 Governing Law, Jurisdiction and Agent for Service.

(a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BY
LENDERS AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF
THE LOAN 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, WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS AND THE
OBLIGATIONS ARISING HEREUNDER AND THEREUNDER 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 (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS) 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 LIEN
AND SECURITY INTEREST CREATED PURSUANT THE MORTGAGE AND THE OTHER LOAN DOCUMENTS
(OTHER THAN WITH RESPECT TO LIENS AND SECURITY INTERESTS IN PROPERTY WHOSE
PERFECTION AND PRIORITY IS COVERED BY ARTICLE 9 OF THE UCC (INCLUDING, WITHOUT
LIMITATION, THE ACCOUNTS) WHICH SHALL BE GOVERNED BY THE LAW OF THE JURISDICTION
APPLICABLE THERETO IN ACCORDANCE WITH SECTIONS 9-301 THROUGH 9-307 OF THE UCC AS
IN EFFECT IN THE STATE OF NEW YORK) SHALL BE GOVERNED BY AND CONSTRUED ACCORDING
TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD
THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE
STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF
ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER.
TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS AGREEMENT,

 

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THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE AND THE
OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW EXCEPT AS SPECIFICALLY SET FORTH ABOVE.

(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST AGENT, ANY LENDER OR BORROWER
ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN ANY FEDERAL
OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO
SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND EACH PARTY HERETO
WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR
FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH PARTY
HERETO HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY
SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:

MALKIN HOLDINGS LLC

ONE GRAND CENTRAL PLACE

60 EAST 42ND STREET

NEW YORK, NY 10165

ATTENTION: LEGAL

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
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO AGENT 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 SUBSTITUTE AGENT AND OFFICE
SHALL BE DESIGNATED AS THE PERSON AND 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 10.4 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

 

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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.

Section 10.5 Delay Not a Waiver.

Neither any failure nor any delay on the part of Agent and/or Lenders in
insisting upon strict performance of any term, condition, covenant or agreement,
or exercising any right, power, remedy or privilege hereunder, or under 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 this Agreement or any other Loan Document, neither Agent nor
Lenders shall be deemed to have waived any right either to require prompt
payment when due of all other amounts due under this Agreement or the other Loan
Documents, or to declare a default for failure to effect prompt payment of any
such other amount.

Section 10.6 Notices.

All notices, demands, requests, consents, approvals or other communications (any
of the foregoing, a “Notice”) required, permitted, or desired to be given
hereunder or under any other Loan Document (other than the Guaranties, which
shall be governed by the respective provisions thereof concerning notices) shall
be in writing sent by telefax (with answer back acknowledged) or by registered
or certified mail, postage prepaid, return receipt requested, or delivered by
hand or reputable overnight courier addressed to the party to be so notified at
its address hereinafter set forth, or to such other address as such party may
hereafter specify in accordance with the provisions of this Section 10.6. Any
Notice to Borrower shall be effective if rendered in accordance with this
Section to Borrower solely. Agent shall use commercially reasonable efforts to
provide copies of notices rendered to Borrower to the additional parties
specified below, but the failure to effect any such Notice to such additional
party shall not affect the validity and full force and effect of such Notice
upon Borrower. Any Notice shall be deemed to have been received: (a) three (3)
days after the date such Notice is mailed, (b) on the date of sending by telefax
if sent during business hours on a Business Day (otherwise on the next Business
Day), (c) on the date of delivery by hand if delivered during business hours on
a Business Day (otherwise on the next Business Day), and (d) on the next
Business Day if sent by an overnight commercial courier, in each case addressed
to the parties as follows:

 

If to Agent:

  HSBC Bank USA, National Association, as Agent   545 Washington Boulevard, 10th
Floor   Jersey City, New Jersey 07310   Attention: Commercial Mortgage Servicing
Department   Facsimile No. (212) 525-1152

 

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with a copy to:

 

Cadwalader, Wickersham & Taft LLP

One World Financial Center

New York, New York 10281

Attention: Steven M. Herman, Esq.

Facsimile No.: (212) 504-6666

If to Lenders:

 

at their respective Applicable Lending Office set forth

opposite their signatures hereto.

If to Borrower:

 

Empire State Building Associates L.L.C.

60 East 42nd Street

New York, New York 10165

Attention: Legal

Facsimile No.: (212) 986-8795

With a copy to:

 

Herrick, Feinstein LLP

2 Park Avenue

New York, New York 10016

Attention: Howard E. Peskoe

Facsimile No.: (212) 545-3455

Section 10.7 Trial by Jury.

BORROWER, AGENT AND EACH LENDER EACH 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, AGENT AND EACH 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. BORROWER, AGENT AND EACH LENDER ARE EACH HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER.

Section 10.8 Headings.

The Article and/or Section headings and the Table of Contents in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.

Section 10.9 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.

 

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Section 10.10 Preferences.

Each 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 Obligations
of Borrower hereunder. To the extent Borrower makes a payment or payments to
Agent or any Lender, which payment or proceeds or any part thereof are
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 Obligations hereunder 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 been received by Agent
or such Lender.

Section 10.11 Waiver of Notice.

Borrower shall not be entitled to any notices of any nature whatsoever from
Agent or Lenders except with respect to matters for which this Agreement or the
other Loan Documents specifically and expressly provide for the giving of notice
by Agent and/or Lenders 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 Agent and/or any Lender with respect to any matter for which this
Agreement or the other Loan Documents do not specifically and expressly provide
for the giving of notice by Agent and/or such Lender to Borrower.

Section 10.12 Remedies of Borrower.

In the event that a claim or adjudication is made that Agent or any Lender or
its agents have acted unreasonably or unreasonably delayed acting in any case
where, by law or under this Agreement or the other Loan Documents, Agent or such
Lender or such agent, as the case may be, has an obligation to act reasonably or
promptly, neither Agent nor such Lender nor its agents shall be liable for any
monetary damages, and Borrower’s sole remedy shall be limited to commencing an
action seeking injunctive relief or declaratory judgment. Any action or
proceeding to determine whether Agent or a Lender has acted reasonably shall be
determined by an action seeking declaratory judgment. Any expedited procedure
legally available with such a declaratory judgment action or action for
injunctive relief may be utilized to the extent possible. If it is determined
that Agent or any Lender acted in bad faith or in willful disregard of its
obligation to act reasonably, then Borrower may also seek and recover its costs
to seek a declaratory judgment or injunctive relief and its costs relating to
such determination of bad faith or willful disregard, such costs to include
reasonable attorneys’ fees.

Section 10.13 Expenses; Indemnity.

(a) Borrower shall pay or, if Borrower fails to pay, shall reimburse Agent and
the Lenders upon receipt of notice and demand from Agent or the applicable
Lender, on an after-tax basis, for all reasonable costs and expenses (including
reasonable attorneys’ fees and disbursements but excluding any internal cost for
administration) incurred by Agent and Lenders

 

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in connection with (i) any Credit Party’s and/or Guarantor’s ongoing performance
of and compliance with any Credit Party’s and/or Guarantor’s agreements and
covenants contained in the Loan Documents on their respective parts to be
performed or complied with after the date of this Agreement, including, without
limitation, confirming compliance with environmental and insurance requirements;
(ii) Agent’s ongoing performance of and compliance with all agreements and
covenants contained in this Agreement and the other Loan Documents on its part
to be performed or complied with after the date of this Agreement; (iii) the
negotiation, preparation, execution, delivery and administration of any
consents, amendments, waivers or other modifications to this Agreement and the
other Loan Documents and any other documents or matters requested by Borrower
and/or Guarantor; (iv) the filing and recording fees and expenses, title
insurance and reasonable fees and expenses of counsel for providing to Agent all
required legal opinions, and other similar expenses incurred, in creating and
perfecting the Liens in favor of Agent pursuant to this Agreement and the other
Loan Documents; (v) enforcing or preserving any rights, whether at trial or not,
including appeals therefrom, in response to third party claims or the
prosecuting or defending of any action or proceeding, mediation, arbitration or
other litigation or administrative proceeding, in each case against, under or
affecting any Credit Party, Guarantor, this Agreement, the other Loan Documents,
the Property, or any other security given for the Loan and any and all actions
that may be taken by Agent or any Lender in connection with the enforcement of
the provisions of the Loan Documents, whether or not suit is filed in connection
with the same, or in connection with any Credit Party, Guarantor or any
Affiliate thereof, any other guarantor or indemnitor, and/or any partner, joint
venturer, member or shareholder thereof becoming party to a voluntary or
involuntary federal or state bankruptcy, insolvency or similar proceeding; and
(vi) enforcing any Obligations of or collecting any payments due from any Credit
Party and/or Guarantor under this Agreement, the other Loan Documents or with
respect to the Property or in connection with any refinancing or restructuring
of the credit arrangements provided under this Agreement in the nature of a
“work-out” or of any insolvency or bankruptcy proceedings; provided, however,
that Borrower shall not be liable for the payment of any such costs and expenses
to Agent to the extent the same arise by reason of the gross negligence, illegal
acts, fraud, bad faith or willful misconduct of Agent.

(b) Borrower shall indemnify, defend and hold harmless Agent and each Lender,
each Participant in the Loan, and their respective officers, directors,
partners, employees and agents (each, an “Indemnified Party”) on an after-tax
basis from and against, and shall reimburse the affected Indemnified Party for,
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (including, without limitation, the reasonable fees and
expenses of counsel for Agent in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
Agent shall be designated a party thereto and any loss or expense on account of
amounts borrowed, contracted for or utilized to pay any amount payable under any
Loan Document or the Loan or any part thereof) (collectively, “Losses”), that
may be imposed on, incurred by, or asserted against such Indemnified Party in
any manner relating to or arising out of (i) any breach by Borrower of its
Obligations under, or any material misrepresentation by Borrower contained in,
this Agreement or the other Loan Documents, (ii) the use of the proceeds of the
Loan or (iii) any other matter arising from this Agreement or the Loan
(collectively, the “Indemnified Liabilities”); provided, however, that Borrower
shall not have any obligation to such Indemnified Party hereunder to the extent
that such Indemnified Liabilities arise from the gross negligence, illegal acts,
fraud, bad faith or willful misconduct of such Indemnified Party. To the extent
that the undertaking to indemnify, defend and hold harmless set forth in the
preceding sentence may be unenforceable because it violates any law or public
policy, Borrower shall pay the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by such Indemnified Party.

 

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(c) In case any such claim, action or proceeding (a “Claim”) is brought against
an Indemnified Party in respect of which indemnification may be sought by such
Indemnified Party pursuant hereto, Agent shall give prompt written notice
thereof to Borrower, which notice shall include all documents and information in
the possession of or under the control of Agent and such Indemnified Party
relating to such Claim and shall specifically state that indemnification for
such Claim is being sought under this Section 10.13; provided, however, that the
failure of Agent to so notify Borrower shall not limit or affect such
Indemnified Party’s rights to be indemnified pursuant to this Section 10.13
except to the extent Borrower is materially prejudiced by such failure or delay.
Upon receipt of such notice of Claim (together with such documents and
information from Agent and such Indemnified Party), Borrower shall, at its sole
cost and expense, in good faith defend any such Claim with counsel reasonably
satisfactory to Agent and such Indemnified Party (it being understood that
counsel selected by Borrower’s insurance carrier shall be deemed to be
acceptable to Agent and such Indemnified Party, provided such insurer is an
acceptable insurer under the Loan Documents or otherwise was accepted by Agent
as an insurer), which counsel may, without limiting the rights of Agent and such
Indemnified Party pursuant to the next succeeding sentence of this
Section 10.13, also represent Borrower in such investigation, action or
proceeding. In the alternative, such Indemnified Party may elect to conduct its
own defense through counsel of its own choosing and at the reasonable expense of
Borrower, if (i) such Indemnified Party reasonably determines that the conduct
of its defense by Borrower could be materially prejudicial to its interests,
(ii) Borrower refuses to defend, or (iii) Borrower shall have failed, in such
Indemnified Party’s reasonable judgment, to defend the Claim in good faith
(unless such Claim is being defended by Borrower’s insurance carrier, provided
such insurer is an acceptable insurer under the Loan Documents or otherwise was
accepted by Agent as an insurer). Borrower may settle any Claim against such
Indemnified Party without such Indemnified Party’s consent, provided (i) such
settlement is without any liability, cost or expense whatsoever to such
Indemnified Party, (ii) the settlement does not include or require any admission
of liability or culpability by such Indemnified Party under any federal, state
or local statute or regulation, whether criminal or civil in nature and
(iii) Borrower obtains an effective written release of liability for such
Indemnified Party from the party to the Claim with whom such settlement is being
made, which release must be reasonably acceptable to such Indemnified Party, and
a dismissal with prejudice with respect to all claims made by the party against
such Indemnified Party in connection with such Claim. Agent and such Indemnified
Party shall reasonably cooperate with Borrower, at Borrower’s sole cost and
expense, in connection with the defense or settlement of any Claim in accordance
with the terms hereof. If Borrower refuses to defend any Claim or fails to
defend such Claim in good faith (other than a Claim that is being defended by
Borrower’s carrier, provided such insurer is an acceptable insurer under the
Loan Documents or otherwise was accepted by Agent as an insurer) and such
Indemnified Party elects to defend such Claim by counsel of its own choosing
Borrower shall be responsible for any good faith settlement of such Claim
entered into by such Indemnified Party. If such Indemnified Party reasonably
determines that the conduct of its defense by Borrower could be materially
prejudicial to its interests and elects to defend such Claim by counsel of its
own choosing, Borrower shall be responsible for any reasonable

 

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settlement of such Claim entered into by such Indemnified Party. Except as
provided in the preceding two (2) sentences, no Indemnified Party may pay or
settle any Claim and seek reimbursement therefor under this Section 10.13.
Nothing contained herein shall be construed as requiring Agent or any
Indemnified Party to expend funds or incur costs to defend any Claim in
connection with the matters for which Agent or any Indemnified Party is entitled
to indemnification pursuant to this Section 10.13. The Obligations of Borrower
hereunder shall specifically include the obligation to expend its own funds, to
incur costs in its own name and to perform all actions as may be necessary to
protect Agent or any other Indemnified Party from the necessity of expending its
own funds, incurring cost or performing any actions in connection with the
matters for which Agent or such other Indemnified Party is entitled to
indemnification hereunder.

Section 10.14 Schedules and Exhibits Incorporated.

The Schedules and Exhibits annexed hereto are hereby incorporated herein as a
part of this Agreement with the same effect as if set forth in the body hereof.

Section 10.15 Offsets, Counterclaims and Defenses.

Any assignee of Agent’s or any Lender’s interest in and to this Agreement and
the other Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to such documents which Borrower
may otherwise have against any assignor of such documents, and no such unrelated
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 unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by Borrower.

Section 10.16 No Joint Venture or Partnership; No Third Party Beneficiaries.

(a) Borrower, Agent and Lenders intend that the relationships created hereunder
and under the other Loan Documents be solely that of borrower and lender.
Nothing herein or therein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between Borrower and Agent or
Lenders nor to grant Agent or Lenders any interest in the Property other than
that of mortgagee, beneficiary or lender.

(b) This Agreement and the other Loan Documents are solely for the benefit of
Agent and Lenders and nothing contained in this Agreement or the other Loan
Documents shall be deemed to confer upon anyone other than Agent and Lenders any
right to insist upon or to enforce the performance or observance of any of the
Obligations contained herein or therein. In addition, no Lender is the agent or
representative of Borrower and this Agreement shall not make any Lender liable
to any Trade Contractor or any other Person for goods delivered to or services
performed by them upon the Property, or for debts or claims accruing to such
parties against Borrower and there is no contractual relationship, either
express or implied, between any Lender and any Trade Contractor or any other
Person supplying any work, labor or materials for the Improvements.

 

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Section 10.17 Publicity.

(a) All news releases, publicity or advertising by Borrower or its Affiliates
through any media intended to reach the general public that refers to the Loan
Documents or the financing evidenced by the Loan Documents shall be subject to
the prior reasonable approval of Agent.

(b) Subject to Borrower’s consent which shall not be unreasonably withheld,
conditioned or delayed, Agent and the Lenders shall have the right to issue news
releases, and publicize and/or advertise the fact that the Lenders have provided
financing with respect to the Property and in connection therewith. The parties
hereto hereby acknowledge and agree that Borrower has granted to Agent and the
Lenders on the date hereof a license to use one or more photographs or pictures
of the Property for the limited purposes set forth in such license. Agent and/or
any Lender, as applicable, shall be required to obtain a license from Borrower
in connection with any use by Agent or any Lender of any photograph and pictures
of the Property, which use is not included in the existing license. Borrower’s
approval of any such license shall not be unreasonably withheld, conditioned or
delayed.

Section 10.18 Approvals and Consents.

Wherever the consent or approval of Agent is required under this Agreement or
any other Loan Document, such consent or approval may be granted or withheld in
the sole discretion of Agent unless the specific provision states that the
consent or approval shall be reasonable or shall not be unreasonably withheld,
in which case, such consent or approval shall be granted or withheld in the
Agent’s discretion exercising its reasonable business judgment and shall not be
unreasonably withheld, conditioned or delayed.

Section 10.19 Waiver of Offsets/Defenses/Counterclaims.

Borrower hereby waives the right to assert a counterclaim, other than a
compulsory counterclaim, in any action or proceeding brought against it by Agent
or Lenders or their agents or otherwise to offset any obligations to make the
payments required by the Loan Documents. No failure by Agent or Lenders to
perform any of its obligations hereunder shall be a valid defense to, or result
in any offset against, any payments which Borrower is obligated to make under
any of the Loan Documents. Nothing herein shall constitute a waiver by Borrower
of any such claim or counterclaim.

Section 10.20 Conflict; Construction of Documents; Reliance.

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 they were represented by competent counsel in
connection with the negotiation, drafting and execution of the Loan Documents
and that such Loan Documents shall not be subject to the principle of construing
their meaning against the party that drafted same. Borrower acknowledges that,
with respect to the Loan, Borrower shall rely solely on its own judgment and
advisors in entering into the Loan without relying in any manner on any
statements, representations or recommendations of Agent or any Lender or any
parent, subsidiary or affiliate of Agent or such Lender. Neither Agent nor any
Lender shall be subject to any

 

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limitation whatsoever in the exercise of any rights or remedies available to it
under any of the Loan Documents or any other agreements or instruments which
govern the Loan by virtue of the ownership by it or any parent, subsidiary or
affiliate of Agent or such Lender of any equity interest any of them may acquire
in Borrower, and Borrower hereby irrevocably waives the right to raise any
defense or take any action on the basis of the foregoing with respect to Agent’s
and/or Lenders’ exercise of any such rights or remedies. Borrower acknowledges
that Agent and each Lender engages in the business of real estate financings and
other real estate transactions and investments that may be viewed as adverse to
or competitive with the business of Borrower or its Affiliates.

Section 10.21 Brokers and Financial Advisors.

(a) Borrower hereby represents and warrants that it has dealt with no financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Agreement other than
Estreich & Company, Inc. (the “Broker”). Borrower shall pay all brokerage
commissions and fees payable to Broker with respect to the transactions
contemplated by this Agreement and shall indemnify, defend and hold each
Indemnified Party and its officers and directors harmless from and against any
Losses in any way relating to or arising from a breach of the foregoing
representation and warranty.

(b) Agent hereby represents and warrants that it has dealt with no financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Agreement other than
Broker. Agent shall indemnify, defend and hold each Indemnified Party and its
officers and directors harmless from and against any Losses in any way relating
to or arising from a breach of the foregoing representation and warranty.

(c) Each Lender hereby represents and warrants that it has dealt with no
financial advisors, brokers, underwriters, placement agents, agents or finders
in connection with the transactions contemplated by this Agreement other than
Broker. Each Lender shall indemnify, defend and hold each Indemnified Party and
its officers and directors harmless from and against any Losses in any way
relating to or arising from a breach of the foregoing representation and
warranty.

(d) The provisions of this Section 10.21 shall survive the expiration and
termination of this Agreement and the payment of the Debt.

Section 10.22 Exculpation.

Subject to the qualifications below and except as set forth in the Guaranty and
Environmental Indemnity, neither Agent nor Lenders shall enforce the liability
and obligation of the Borrower or any holder of a direct or indirect interest in
ESBA or any supervisor of either party comprising Borrower or Controlling either
party comprising Borrower to perform and observe the Obligations contained in
the Note, this Agreement, the Mortgage or the other Loan Documents by any action
or proceeding wherein a money judgment shall be sought against a Credit Party,
except that Agent may bring a foreclosure action, terminate the Ground Lease,
Operating Lease and Observatory Lease, bring an action for specific performance
or any other

 

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appropriate action or proceeding to enable Agent to enforce and realize upon its
interest under the Note, this Agreement, the Mortgage and the other Loan
Documents, or in the Property, the Rents or any other collateral given to Agent
and/or Lenders pursuant to the Loan Documents; provided, however, that, except
as specifically provided herein, any judgment in any such action or proceeding
shall be enforceable against Borrower only to the extent of Borrower’s interest
in the Property, in the Rents, in the Cash Collateral and in any other
collateral given to Agent and/or Lenders, and Lenders, by accepting the Note,
this Agreement, the Mortgage and the other Loan Documents, shall not sue for,
seek or demand any deficiency judgment against Borrower in any such action or
proceeding under or by reason of or under or in connection with the Note, this
Agreement, the Mortgage or the other Loan Documents; provided, further, that,
subject to the terms and provisions of the Sublease as the same is amended,
modified or supplemented after the date hereof with the consent of Agent,
nothing herein shall constitute an acknowledgement by any party hereto that
Operating Company or Observatory Tenant is liable for all or any portion of the
Loans or other Obligations of Borrower. The provisions of this Section shall
not, however, (a) constitute a waiver, release or impairment of any obligation
evidenced or secured by any of the Loan Documents; (b) impair the right of Agent
or Lenders to name any Credit Party as a party defendant in any action or suit
for foreclosure and sale under the Mortgage and termination of the Operating
Lease and Observatory Lease; (c) affect the validity or enforceability of any
guaranty or indemnification agreement made in connection with the Loan or any of
the rights and remedies of Agent or Lenders thereunder; (d) impair the right of
Agent or Lenders to obtain the appointment of a receiver; (e) impair the
enforcement of the Assignment of Leases; (f) constitute a prohibition against
Agent or Lenders to seek a deficiency judgment against Borrower in order to
fully realize on any security given by Borrower in connection with the Loan or
to commence any other appropriate action or proceeding in order for Agent or
Lenders to exercise its remedies against such security; or (g) constitute a
waiver of the right of Agent or Lenders to enforce the liability and obligation
of Borrower or Guarantor, by money judgment or otherwise, to the extent of any
loss, damage, cost, expense, liability, claim or other obligation incurred by
Agent and/or any Lender (including reasonable attorneys’ fees and costs
reasonably incurred) arising out of or in connection with the following:

(i) any material intentional misrepresentation by any Credit Party in connection
with the Loan;

(ii) the fraudulent acts or willful misconduct of any Credit Party, Guarantor or
Manager, if applicable (so long as Manager is an Affiliate of any Credit Party
or Guarantor);

(iii) during a Trigger Period or during the continuance of an Event of Default,
any misappropriation of the Rents by Manager, if applicable (so long as Manager
is an Affiliate of any Credit Party or Guarantor or any Affiliate thereof), any
Credit Party, Guarantor or any Affiliate thereof;

(iv) the failure of the Observatory Tenant, during the continuance of an Event
of Default or during a Trigger Period, to pay all Rent under the Observatory
Lease into the HSBC Collection Account in accordance with the Loan Documents and
Net Observatory Deck Revenue under the Observatory Lease directly into the JP
Collection Account in accordance with the Loan Documents;

 

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(v) the misappropriation of (A) any insurance proceeds paid by reason of any
loss, damage or destruction to the Property, or (B) any Awards or other amounts
received in connection with the Condemnation of all or a portion of the Property
by Manager, if applicable (so long as Manager is an Affiliate of any Credit
Party or Guarantor or any Affiliate thereof), any Credit Party or Guarantor or
any Affiliate thereof;

(vi) any failure by Manager, if applicable (so long as Manager is an Affiliate
of any Credit Party or Guarantor), any Credit Party or Guarantor or any
Affiliate thereof to use current Rents to pay then current material operating
expenses with respect to the Property in the ordinary course of business (except
with respect to Taxes, Other Charges and Trade Payables being contested in
accordance with Section 4.1.2);

(vii) intentional physical waste of the Property (but excluding any matter that
arises by reason of lack of cash flow with respect to the Property, except to
the extent that such lack of cash flow arises from the misappropriation of
revenue with respect to the Property as described in clauses (iii), (iv),
(v) and (vi) above);

(viii) any removal or disposal of any portion of the Property after an Event of
Default in any manner prohibited by the Loan Documents;

(ix) any Credit Party’s failure to obtain Agent’s prior consent to any Transfer,
as applicable, as required by the Mortgage or Article VIII hereof (except with
respect to a mechanic’s, tax, judgment or similar Lien arising from insufficient
Property cash flow except to the extent that such lack of cash flow arises from
the misappropriation of revenue with respect to the Property as described in
clauses (iii), (iv), (v) and (vi) above);

(x) a voluntary Lien remains an encumbrance on all or any portion of the
Property, the Operating Lease or the Observatory Lease in violation of the Loan
Documents;

(xi) subject to the provisions of Section 8.3(a)(v), the failure by any Credit
Party to comply with the material single purpose entity requirements of this
Agreement including those set forth in Section 4.2.19 hereof if such failure
leads to a consolidation of the assets of any Credit Party with the assets of
another Person (other than the other Credit Parties);

(xii) the incurrence of Indebtedness in violation of the Loan Documents;

(xiii) the breach of any indemnification provision in the Environmental
Indemnity Agreement concerning environmental laws, Hazardous Substances and
asbestos;

(xiv) any security deposits, advance deposits or any other deposits collected
with respect to the Property which are not delivered to Agent upon a foreclosure
of the Property or transfer in lieu thereof, except to the extent any such
security deposits were applied in accordance 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 transfer in lieu thereof; and

 

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(xv) any modifications, amendments, restatements and/or supplements made to the
Ground Lease, Sublease or the Observatory Lease without the consent of Agent and
any termination of the Observatory Lease without the consent of Agent.

Notwithstanding anything to the contrary in this Agreement, the Note or any of
the Loan Documents, (A) neither Agent nor Lenders shall be deemed to have waived
any right which Agent and/or Lenders may have under Section 506(a), 506(b),
1111(b) or any other provisions of the 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 Lenders in accordance with the Loan Documents,
and (B) the Debt shall be fully recourse to Borrower, but not to any holder of a
direct or indirect interest in ESBA or any party supervising either party
comprising Borrower (other than as provided in the Guaranty and Environmental
Indemnity) or Controlling either party comprising Borrower, in the event that:
(1) any Credit Party files a voluntary petition under the Bankruptcy Code or any
other Federal or state bankruptcy or insolvency law; (2) an Affiliate, officer,
trustee, director, or representative which Controls, directly or indirectly, any
Credit Party or Guarantor files or any Credit Party or Guarantor joins in the
filing of an involuntary petition against any Credit Party under the Bankruptcy
Code or any other Federal or state bankruptcy or insolvency law, or solicits or
causes to be solicited petitioning creditors for any involuntary petition
against any Credit Party or from any Person; (3) there is the filing of an
involuntary petition against any Credit Party under the Bankruptcy Code or any
other Federal or state bankruptcy or insolvency law, in which any Credit Party
or Guarantor colludes with, or otherwise assists such Person, or solicits or
causes to be solicited petitioning creditors for any involuntary petition
against any Credit Party from any Person; (4) any Credit Party files an answer
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 solicits or causes to be solicited petitioning creditors for any involuntary
petition from any Person; (5) any Affiliate, officer, trustee, director, or
representative which Controls any Credit Party or Guarantor joins in an
application for the appointment of a custodian, receiver, trustee, or examiner
for any Credit Party or any portion of the Property; (6) any Credit Party makes
a general assignment for the benefit of creditors, or admits, in writing or in
any legal proceeding, its insolvency or inability to pay its debts as they
become due unless such admission is true; or (7) in connection with any
enforcement action or exercise or assertion of any right or remedy upon the
continuance of an Event of Default and acceleration of the Loan by or on behalf
of the Agent and Lenders under or in connection with the Guaranty, Mortgage,
Subordinations, Negative Pledges or any other Loan Document, any Credit Party,
or Manager, if applicable (if the Manager is an Affiliate of any Credit Party or
Guarantor) (I) seeks a defense, judicial intervention or injunctive or other
equitable relief of any kind, or (II) asserts, or causes a third party to
assert, in a pleading filed in connection with a judicial proceeding any defense
against Agent and/or the Lenders, or (III) any right in connection with any
security for the Loan, in each of (I), (II) or (III) that the Subordinations or
the Negative Pledges or the subordination provisions of the Sublease or
Observatory Lease are void, voidable or unenforceable.

Section 10.23 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 among or between such parties, whether
oral or written, including, without limitation, the Summary of Terms and
Conditions dated June 10, 2011 (as amended) among Borrower, Agent, DekaBank and
Norddeutsche Landesbank Girozentrale, New York Branch, are superseded by the
terms of this Agreement and the other Loan Documents.

 

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Section 10.24 Joint and Several Liability.

If Borrower is comprised of more than one Person, all representations,
warranties, covenants (both affirmative and negative) and all other Obligations
hereunder shall be the joint and several obligation of each entity making up
Borrower and a Default or Event of Default by any such Person shall be deemed a
Default or Event of Default by all such entities and Borrower. The
representations, covenants and warranties contained herein or in any other Loan
Document shall be read to apply to the individual entities comprising Borrower
when the context so requires but a breach of any such representation, covenant
or warranty or a breach of any obligation under the Loan Documents shall be
deemed a breach by all such entities and Borrower, entitling Agent and/or
Lenders, as applicable, to exercise all of their rights and remedies under all
the Loan Documents and under applicable law. Notwithstanding anything to the
contrary herein contained, except as provided in any Guaranty or in the
Environmental Indemnity, no principal, director, officer or employee or direct
or indirect partner or member or other holder of an interest in Borrower, nor
any principal, director, officer or employee of any such partner or member, nor
any supervisor of Borrower or other entity comprising Borrower nor any employee,
agent, principal, director, officer or direct or indirect partner or member or
other holder of an interest in such supervisor shall have any personal liability
under the Loan Documents.

Section 10.25 Assignments/Information Sharing.

(a) Subject to Section 8.3(a)(iv), Borrower may not assign this Agreement or any
of its rights or obligations hereunder without the prior approval of Agent.

(b) Each Lender may assign, pledge or otherwise transfer to one or more Persons
(a Person to which any such assignment, transfer or sale is made in accordance
with this Article X being an “Assignee”) all or a portion of its rights and
obligations under this Agreement and the Loan (each, an “Assignment”) without
the consent of Agent, any other Lender, the Credit Parties or their respective
Affiliates, Guarantor and/or any other Person, provided, however, that:

(i) any such Assignment to a Person who is not a Lender, an Affiliate of a
Lender or an Eligible Assignee, shall require the requisite Lender consent;

(ii) so long as no Event of Default then exists, any such Assignment to a Person
who is not a Lender, an Affiliate of a Lender or an Eligible Assignee, shall
require Borrower consent which shall not be unreasonably withheld, conditioned
or delayed;

(iii) after giving effect to such transaction, such Lender’s aggregate
unassigned Ratable Share of the Loan shall be in a principal amount of at least
$25,000,000.00 (A) unless such transaction encompasses all of such Lender’s
rights in and to the Loan in which case such Lender shall have assigned all of
its rights in and to the Loan and (B) except with respect to any assignment to
another Lender or an Affiliate of another Lender; and

 

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(iv) the parties to each such assignment shall execute and deliver to Agent, for
its acceptance and recording in the Agent’s Register, Agent’s form of assignment
and acceptance agreement attached hereto as Exhibit D, with appropriate
completions (each, an “Assignment and Acceptance”), together with a processing
and registration fee of $2,500, which fee shall cover Agent’s cost in connection
with the assignments under this Agreement.

In addition to and without limiting the provisions of subsection (b) above,
solely with respect to HSBC and DekaBank, (A) if pursuant to a mandate (1) from
a Governmental Authority having jurisdiction over any such Lender or (2) from
the board of such Lender, such Lender is required by such Governmental Authority
or board to sell all or a portion of its Ratable Share of the Loan, or
(B) during the continuance of an Event of Default, any such Lender elects to
sell all or a portion of its Ratable Share of the Loan, then in the case of
either clause (A) or (B), each such Lender shall have the right to transfer or
assign all or a portion of its Ratable Share of the Loan, so long as each such
transfer or assignment is in a minimum principal amount of $25,000,000 and no
such transfer or assignment shall cause such Lender to hold less than
$25,000,000; provided, that if any such Lender, following one or more transfers
and assignments of its Ratable Share, holds $25,000,000 of the Loan, then such
Lender shall have the further right to assign or transfer all or a portion of
its Ratable Share of the Loan, so long as the next succeeding transfer or
assignment by such Lender is in a principal amount of at least $10,000,000, and
the next succeeding transfer or assignment is of all of such Lender’s remaining
Ratable Share of the Loan. In addition, if, at any time, any such Lender holds
less than $50,000,000 but more than $25,000,000, such that any additional
transfer or assignment in the amount of $25,000,000 would reduce such Lender’s
Ratable Share of the Loan to less than $25,000,000, such Lender shall have the
right to make such additional transfer or assignment in the amount of
$25,000,000; provided, that any transfer or assignment thereafter shall be in a
principal amount of not less than $10,000,000. Any assignment pursuant to this
paragraph shall be subject to and made otherwise in accordance with the
provisions of Section 10.25(a) and (b) above. Notwithstanding the foregoing (but
subject to clauses (b)(i)—(iv) above), HSBC, and DekaBank shall have the right,
and the foregoing does not restrict, (x) a transaction which encompasses all of
such Lender’s rights in and to the Loan in which case such Lender shall have
assigned all of its rights in and to the Loan or (y) an assignment to another
Lender or an Affiliate of another Lender.

Borrower will not in any event be required to incur, suffer or accept (except to
a de minimis extent) any expense or liability in connection with a Lender
Assignment. Upon such Assignment, from and after the effective date thereof, the
assignee thereunder shall be a party hereto and have the rights and obligations
of Lender hereunder. The assigning Lender shall promptly notify Borrower of the
consummation of any such assignment. For purposes of this Section 10.25, the
term “Affiliate”, as the same relates to DekaBank, shall include any real estate
debt fund represented and/or managed by Deka Immobilien Investment GmbH
(including, without limitation, the DRK (Deka Realkredit Klassik) Fund).

 

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(c) If an Event of Default has occurred and is continuing, Borrower’s consent to
any assignment to any party whatsoever shall not be required and all parties
hereto agree to promptly execute and file an amendment to this Agreement
reflecting any such assignment. Furthermore, if within five (5) Business Days
after receiving a request pursuant to subparagraph (b) above for its consent to
any assignment by any Lender, Borrower shall not have either consented or
withheld its consent (specifying the reasons therefor), then such consent shall
be deemed to have been given.

(d) Borrower agrees to execute, or cause Guarantor and/or Operating Company to
execute, within ten (10) days after request therefor is made by Agent, any
documents and/or estoppel certificates reasonably requested by Agent in
connection with such assignment or participation, without charge; provided that
such documents and/or estoppel certificates do not expand the liability or
Obligations of Borrower, Guarantor or Operating Company or reduce Assignee’s or
Participant’s obligations.

(e) Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in such Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) subject to Sections 10.25(b)(i) and
(ii) above, the Lender assignor thereunder shall, to the extent of the interest
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement other than any
obligations to Borrower theretofore accruing (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of
Sections 2.2.4, 2.2.7, 2.2.8, 10.12, 10.13 and 10.32 hereof and, in the case of
Section 10.13, shall continue to be subject to the terms thereof.

(f) Agent acting solely for this purpose as an agent of the Borrower, shall
maintain a register (the “Agent’s Register”) showing the name and addresses of
the Lenders and each Lender’s Ratable Share of the Loan from time to time. The
entries in the Agent’s Register shall be conclusive, in the absence of manifest
error, and Borrower, Agent and the Lenders may (and, in the case of any portion
of the Loan or other obligation hereunder not evidenced by a Note, shall) treat
each Person whose name is recorded in the Register as the owner of such portion
of the Loan or other obligation hereunder as the owner thereof for all purposes
of this Agreement and the other Loan Documents, notwithstanding any notice to
the contrary. Any assignment of any portion of the Loan or other obligation
hereunder not evidenced by a Note shall be effective only upon appropriate
entries with respect thereto being made in the Register. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.

(g) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an Assignee (and, in the case of an Assignee that is not then a
Lender or an affiliate thereof, by Borrower and Agent) together with payment to
Agent of a registration and processing fee of $2,500, Agent shall (i) promptly
accept such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Agent’s
Register and give notice of such acceptance and recordation to the Lenders and
the Borrower.

 

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(h) Borrower authorizes each Lender to disclose to any Assignee or Participant
of such Lender (each, a “Transferee”), any prospective Transferee, any Affiliate
of such Lender, any derivative counterparty or any Rating Agency any and all
financial or other information in such Lender’s possession concerning Borrower
and its Affiliates which has been delivered to such Lender by or on behalf of
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of Borrower in connection with such Lender’s credit evaluation
of Borrower and its Affiliates prior to becoming a party to this Agreement.
Notwithstanding the foregoing, any Lender who intends to disclose such
information shall notify the recipient, in writing, prior to or simultaneously
with such disclosure, that all such information is and shall remain confidential
and that such recipient is required to keep such information confidential, and
to use reasonable efforts to cause its agents, employees and consultants to keep
any such information confidential unless already known to the general public or
as required by Legal Requirements.

(i) Any Lender may at any time, without the consent of Agent, any other Lender,
any Credit Party or any of their Affiliates, Guarantor, and/or any other Person,
pledge or assign a security interest in all or any portion of its rights under
this Agreement to secure obligations of such Lender, including, without
limitation, any pledge or assignment to secure obligations to a Federal Reserve
Bank in accordance with applicable law, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(j) Borrower agrees that (i) Borrower shall execute and deliver to Agent any
amendment and/or other document that may be necessary to effectuate such an
assignment and (ii) after the effective date under such Assignment and
Acceptance, upon the request to Agent by any Lender, Borrower shall execute and
deliver to such Lender one or more substitute notes of Borrower evidencing such
Lender’s Ratable Share of the Loan in substantially the same form as the Note
with appropriate insertions as to payee and principal amount; each such
substitute note shall be dated as of the Closing Date; provided, however, there
shall be no increase in Borrower’s Obligations.

(k) Notwithstanding anything herein to the contrary, the Lenders may, without
the consent of Agent, any other Lender, any Credit Party or any of their
Affiliates, Guarantor, and/or any other Person, consent, assign, pledge or
otherwise transfer its interest in the Loan to any Person which is a trustee,
administrator or receiver (or their respective nominees, collateral agents or
collateral trustees) of a mortgage pool securing covered mortgaged bonds issued
by an eligible German bank (Pfandbriefbanken), the bondholders (as a collective
whole) thereof, or by any other Person otherwise permitted to issue covered
mortgage bonds (Hypothekenpfandbriefe) under German Pfandbrief legislation, as
such legislation may be amended and in effect from time to time, or any
successor or substitute legislation, and any such Person shall have the right to
be a “Lender” in lieu of the Lender which assigned, pledged or otherwise
transferred its interest to such Person. Borrower will not in any event be
required to incur, suffer or accept (except to a de minimis extent) any expense
or liability in connection with an assignment, pledge or other transfer of an
interest in the Loan by Lender pursuant to this Section 10.25(k) or
Section 10.25(j).

 

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(l) Borrower hereby agrees that the terms and provisions of the following
confidentiality agreements shall not survive the execution and delivery of this
Agreement:

(i) that certain confidentiality agreement among ESBA, Operating Company and
DekaBank, dated June 6, 2011; and

(ii) that certain confidentiality agreement among ESBA , Operating Company and
HSBC, dated May 4, 2011.

(m) Borrower agrees that during the term of the Loan, it shall under no
circumstances claim, and hereby waives, any right of offset, counterclaim or
defense against Agent or Lender with respect to the Obligations or the
Indebtedness arising from, due to, related to or caused by any obligations,
liability or other matter or circumstance which is not the Indebtedness and is
otherwise unrelated to the Loan. Any assignee of Lender’s interest in and to
this Agreement, the Note and the other Loan Documents shall take the same free
and clear of all offsets, counterclaims or defenses which are unrelated to such
documents which Borrower may otherwise have against any assignor of such
documents, and no such unrelated 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 unrelated
offset, counterclaim or defense in any such action or proceeding is hereby
expressly waived by Borrower.

Section 10.26 Participations. Without in any way limiting any rights of Lender
or Borrower under this Agreement or the other Loan Documents, Lender may,
without the consent of Agent, any other Lender, any Credit Party or any of their
Affiliates, Guarantor, and/or any other Person but subject to the last sentence
of Section 10.25(h), sell participations to one or more Persons (a
“Participant”) in or to all or a portion of its rights and obligations under
this Agreement and the Loan; provided, however, that (a) Lender shall remain
solely responsible to Borrower for the performance of such obligations,
(b) Lender shall remain the holder of the Note for all purposes of the Note, and
(c) Borrower shall continue to deal solely and directly with Agent in connection
with Lender’s rights and obligations under and in respect of this Agreement and
the other Loan Documents. Borrower will not in any event be required to incur,
suffer or accept (except to a de minimis extent) any expense or liability in
connection with any Lender selling participations in all or any portion of its
rights and obligations under this Agreement and the Loan to any Person pursuant
to this Section 10.26.

(i) A Participant shall not be entitled to receive any greater payment under
Section 2.2.4 or 2.2.8 hereof than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with Borrower’s
prior written consent. For avoidance of doubt, a Participant shall be entitled
to receive an amount under Section 2.2.8 only to the extent that it complies
with the requirements of such section including those relating to the provision
of appropriate forms, certificates, and other documents described in that
section.

 

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(ii) Each Lender that sells a participation in the Loan shall, acting solely for
this purpose as an agent of the Borrower, maintain a register on which it enters
the name and address of each such participant and the principal amount of each
such participant’s interest in the Loan or other obligations under the Loan
Documents; provided, that no Lender shall have any obligation to disclose all or
any portion of such participant register to any Person except to the extent that
such disclosure is necessary to establish that such obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in any such participant register shall be conclusive absent manifest
error, and the applicable Lender shall treat each Person whose name is recorded
in such participant register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary.

Section 10.27 Agent Minimum Hold. Notwithstanding the provisions of
Section 10.25 and Section 10.26, so long as no Event of Default exists and HSBC
is the Agent, HSBC and HSBC’s Affiliates shall, in the aggregate, at all times,
be required to maintain a minimum and direct interest in the Loan (as a Lender
and not as a participant) equal to Agent’s Minimum Hold. In addition, each
successor Agent, appointed in accordance with Section 11.6 below, and its
Affiliates, in the aggregate, shall, at all times, maintain the Agent Minimum
Hold unless, at the time of such Agent’s appointment, none of the Lenders
(including their respective Affiliates but excluding the Agent who has resigned
or has been removed and its Affiliates) is holding the Agent Minimum Hold, in
which case the applicable successor Agent and its Affiliates, in the aggregate,
shall be required to have and maintain the greatest Ratable Share of the Loan
then held by any Lender; provided, however, that such successor Agent shall not
be obligated to resign as Agent if such successor Agent fails to maintain the
greatest Ratable Share solely because another Lender has acquired a greater
Ratable Share of the Loan.

Section 10.28 Cooperation. In addition, Borrower hereby agrees to cooperate, at
no cost, expense or liability to Borrower, Guarantor, any other Credit Party or
any of their respective Affiliates, with HSBC and DekaBank and any other Lender
to syndicate, assign or participate the Loan by (a) timely providing information
regarding the Borrower, Operating Company, Observatory Tenant and Property to
Agent or the Lenders, as may be reasonably requested from time to time by Agent
or the Lenders, (b) assisting in the preparation of marketing materials to be
used in connection with the syndication of the Loan, (c) executing and
delivering one or more substitute notes of Borrower evidencing each Lender’s
Ratable Share of the Loan substantially in the same form as the Note (and
against surrender of the Note or lost note affidavit with indemnity from the
applicable Lender in form and substance reasonably acceptable to Borrower) with
appropriate insertions as to payee and principal amount, and (d) executing and
delivering any documents (including, without limitation, any amendments,
modifications or supplements to this Agreement or any other Loan Document),
updated opinion letters, other agreements and/or estoppel certificates with
respect to the Loan which are reasonably requested by Agent or Lender in
connection with any such syndication, assignment or participation and in form
and substance reasonably satisfactory to Agent or such Lender, as the case may
be; provided that such documents and/or estoppel certificates shall not increase
Borrower’s economic obligations under the Loan Documents or increase in any
respect Borrower’s other obligations under the Loan Documents or reduce in any
material respect Borrower’s rights under the Loan Documents.

 

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Section 10.29 Component Notes. Each of Agent and the Lenders, without in any way
limiting Agent’s, Lenders’ or Borrower’s other rights hereunder, in its
respective sole and absolute discretion, shall have the right at any time to
require Borrower to execute and deliver “component” notes. Any such component
notes may have varying principal amounts and economic terms; provided, however,
that (a) such notes may not effectuate a senior/junior loan structure (except
for senior/junior loan structures created and at all times held by either HSBC,
or DekaBank with their respective Affiliates) or mortgage/mezzanine loan
structure, (b) the aggregate principal amount of such “component” notes shall
equal the outstanding principal balance of the Loan immediately prior to the
creation of such “component” notes, (c) the weighted average interest rate of
all such “component” notes shall on the date created and at all times thereafter
equal the interest rate which was applicable to the Loan immediately prior to
the creation of such “component” notes (i.e., under this clause (c) and the
immediately following clause (d), the “component” notes may not effectuate a
loan structure that could result in “rate creep”), (d) the debt service payments
on all such “component” notes shall on the date created and at all times
thereafter equal the debt service payment which was due under the Loan
immediately prior to the creation of such component notes, (e) the other terms
and provisions of each of the “component” notes shall be identical in substance
and substantially similar in form to the Loan Documents, (f) the maturity date
of any such component note shall be the same as the scheduled Maturity Date of
the Note immediately prior to the issuance of such component notes and (g) any
prepayments in connection with a casualty or condemnation shall be applied pro
rata in accordance with their respective principal balances to the payment of
the outstanding balance of the component notes such that Borrower’s economic
position shall remain the same as if there had been no component notes.
Borrower, at Lenders’ cost and expense, shall (i) cooperate with all reasonable
requests of Agent in order to establish the “component” notes, and (ii) execute
and deliver such documents as shall reasonably be required by Agent in
connection therewith, all in form and substance reasonably satisfactory to
Agent, including, without limitation, the severance of security documents if
requested. It shall be an Event of Default under this Agreement, the Note, the
Mortgage and the other Loan Documents if Borrower fails to comply with any of
the terms, covenants or conditions of this Section 10.29 after expiration of
ten (10) Business Days after notice thereof, which notice shall contain a legend
in capitalized bold letters at the top of the cover page stating: “THIS IS A
REQUEST FOR BORROWER TO EXECUTE AND DELIVER “COMPONENT” NOTES. BORROWER’S
FAILURE TO SO EXECUTE AND DELIVER SAME WITHIN TEN (10) BUSINESS DAYS SHALL
CONSTITUTE AN EVENT OF DEFAULT UNDER THE LOAN AND SECURITY AGREEMENT EXECUTED BY
BORROWER AND CERTAIN OTHER PARTIES”, together with a comparison “blackline” of
the documents to be executed against the applicable document executed by
Borrower on the Closing Date.

Section 10.30 Adjustments; Set-Off.

(a) If any Lender (a “Benefited Lender”) shall at any time receive any payment
of all or part of its Ratable Share of the Loan, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred to in
Section 9.1(a)(viii), or otherwise including pursuant to subsection (b) below),
in a greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of such other Lender’s Ratable Share of the
Loan, or interest thereon, such Benefited Lender shall purchase for cash from
the other Lenders a participating

 

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interest in such portion of each such other Lender’s Loan, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such Benefited Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. Borrower agrees that each Lender so purchasing a
portion of another Lender’s Ratable Share of the Loan may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion.

(b) In addition to any rights and remedies of the Lenders provided by law, each
Lender shall have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the 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 such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify
Borrower and Agent after any such set-off and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.

Section 10.31 Counterparts.

This Agreement may be executed in any number of counterparts, each of which
shall be an original and all of which shall constitute together but one and the
same agreement.

Section 10.32 WAIVER OF SPECIAL DAMAGES.

TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER SHALL NOT ASSERT, AND HEREBY
WAIVES, ANY CLAIM AGAINST AGENT AND/OR LENDERS ON ANY THEORY OF LIABILITY FOR
SPECIAL INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR
ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF THIS
AGREEMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE TRANSACTIONS,
THE LOAN OR THE USE OF PROCEEDS THEREOF.

Section 10.33 USA Patriot Act Notification.

Agent and Lenders hereby notify Borrower that pursuant to the requirements of
the USA Patriot Act, Agent and Lenders are required to obtain, verify and record
information that identifies Borrower, which information includes the name and
address of Borrower and other information that will allow Agent and Lenders to
identify Borrower in accordance with the USA Patriot Act.

 

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Section 10.34 Assignment Upon Payment.

In connection with arrangements for repayment or prepayment of the Loan in full
by Borrower in accordance with the terms of this Agreement and the other Loan
Documents, Lenders shall, on a one-time basis, assign the Note and Agent shall
assign the Mortgage, each without recourse, covenant or warranty of any nature,
express or implied by document in recordable form, (except that Agent and each
Lender shall represent (x) that such assignment(s) has been duly authorized and
that Agent and each Lender have not assigned or encumbered the Note, the
Mortgages or the other Loan Documents and (y) the principal amount outstanding
on the Note as of the date of assignment), and if any Lender is not delivering
the original Note, in which case such Lender shall execute and deliver a “lost
note affidavit” in its customary form with respect to the copy of its Note) to
such new mortgagee designated by Borrower (other than Borrower or a nominee of
Borrower); provided that Borrower (a) has caused to be paid the reasonable
out-of-pocket expenses of Agent and Lenders incurred in connection therewith and
Agent’s and Lenders’ reasonable attorneys’ fees for the preparation, delivery
and performance of such an assignment, (b) has caused the delivery of an
executed Statement of Oath under Section 275 of the New York Real Property Law;
and (c) has provided such other information and documents which a prudent
mortgagee would reasonably require to effectuate such assignment. Borrower shall
be responsible for all mortgage recording taxes, recording fees and other
charges payable in connection with any such assignment.

Section 10.35 No Liability.

Unless expressly agreed to the contrary, a transferor Lender makes no
representation or warranty and assumes no responsibility to assignee for the
legality, validity, adequacy, accuracy, completeness or performance of (a) the
financial condition of any Credit Party or their Affiliates, Guarantor, or any
other Lender or (b) the legality, validity, effectiveness, enforceability,
adequacy, accuracy, completeness or performance of (i) any Loan Document or any
other document, (ii) any statement or information (whether written or oral) made
in or supplied in connection with any Loan Document, or (iii) any observance or
performance by any Credit Party or any of their Affiliates, Guarantor, or any
other Lender of its respective obligations under any Loan Document or any other
document. Each assignee shall confirm to the transferor Lender, Agent and the
other Lenders that it (A) has made, and will continue to make, its own
independent determination of all risks arising under or in connection with the
Loan Documents (including the financial condition and affairs of Borrower and
its related entities and the nature and extent of any recourse against any party
or its assets) in connection with its participation in the Loan, this Agreement
and the other Loan Documents, and (B) has not relied exclusively on any
information supplied to it by the transferor Lender in connection with any Loan
Document. Nothing in any Loan Document requires any transferor Lender to
(1) accept a re-transfer from assignee of any of the rights and obligations
assigned or transferred under this Agreement or (2) support any losses incurred
by the assignee by reason of the non-performance by any Credit Party or their
Affiliates or Guarantor of its obligations under any Loan Document or otherwise.

 

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XI. AGENT

Section 11.1 Performance by Agent.

If an Event of Default shall have occurred and be continuing, Agent shall have
the right, but not the duty, without limitation, upon any of Agent’s rights
pursuant hereto, to perform the Obligations of Borrower which are the subject of
the Event of Default, in which event Agent shall endeavor to give notice to
Borrower of Agent’s performance, and Borrower agrees to pay to Agent, within
five (5) days of demand therefor, all actual and reasonable costs and expenses
incurred by Agent in connection therewith, including without limitation
reasonable attorneys’ fees, together with interest from the date of expenditure
at the Default Rate, if an Event of Default shall have given rise to such
expenditure.

Section 11.2 Actions.

If Agent shall have reasonable cause to believe that any action or proceeding
related to the Property could, if adversely determined, have a Material Adverse
Effect, Agent shall have the right to commence, appear in and defend such action
or proceeding, and in connection therewith Agent may pay necessary expenses,
employ counsel, and pay reasonable attorneys’ fees. Borrower agrees to pay to
Agent, within five (5) days after demand therefor by Agent (together with
reasonable back-up), all actual and reasonable costs and expenses incurred by
Agent in connection therewith, including without limitation reasonable
attorneys’ fees, together with interest from the date of expenditure at the
Default Rate, if an Event of Default shall have given rise to such action or
proceeding. Borrower’s Obligations to repay such expenses shall be secured by
the Loan Documents. Agent shall endeavor to provide to Borrower prior notice of
any such action by Agent pursuant to this Section 11.2.

Section 11.3 Nonliability of Agent and Lenders.

Borrower acknowledges and agrees that:

(a) by accepting or approving anything required to be observed, performed,
fulfilled or given to Agent or Lenders pursuant to the Loan Documents, including
any certificate, statement of profit and loss or other financial statement,
survey, appraisal, lease or insurance policy, neither Agent nor Lenders shall be
deemed to have warranted or represented the sufficiency, legality,
effectiveness, enforceability, adequacy, accuracy, completeness, performance or
legal effect of the same, or of any term, provision or condition thereof and
such acceptance or approval thereof shall not constitute a warranty or
representation to anyone with respect thereto by Agent; and

(b) neither Agent nor any Lender shall be directly or indirectly liable or
responsible for any loss, claim, cause of action, liability, indebtedness,
damage or injury of any kind or character to any person or property arising from
any construction on, or occupancy or use of, any of the Property, including
without limitation any loss, claim, cause of action, liability, indebtedness,
damage or injury caused by, or arising from: (i) any defect in any building,
structure, grading, fill, landscaping or other improvements. thereon or in any
on-site or off-site improvement or other facility therein or thereon; (ii) any
act or omission of Borrower, the parties comprising Borrower or any of
Borrower’s agents, employees, independent contractors,

 

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licensees or invitees; (iii) any accident in or on the Land and Improvements or
any fire, flood or other casualty or hazard thereon; (iv) the failure of
Borrower, any of Borrower’s licensees, employees, invitees, agents, independent
contractors or other representatives to maintain the Property in a safe
condition; and (v) any nuisance made or suffered on any part of the Property.

Section 11.4 Authorization and Action.

(a) Each Lender hereby appoints and authorizes Agent to take such action as
agent on its behalf, to enter into and execute the Loan Documents and to
exercise such powers under the Loan Documents and the Co-Lender Agreement as are
delegated to Agent by the terms hereof and thereof, together with such powers as
are reasonably incidental thereto.

(b) By their execution of this Agreement, all of the Lenders hereby authorize
and direct Agent to act on their behalf in all respects in connection with the
Loan Documents and the making of the Loan, subject to the provisions of the Loan
Documents and the Co-Lender Agreement, and agree with Borrower that Borrower
shall only be required to and shall only deal with Agent and each of the Lenders
shall be bound by any acts of Agent.

(c) If Agent shall resign as Agent (which Agent may so resign upon thirty (30)
days’ written notice to Borrower and each Lender), or if the Lenders shall
remove Agent in accordance with the provisions of the Co-Lender Agreement, then
the Lenders shall, in accordance with the Co-Lender Agreement, designate another
Lender to perform the obligations and exercise the rights of Agent hereunder,
subject to Section 11.6 hereof. The successor Agent shall assume such
obligations in writing and from and after Borrower’s receipt of a copy of notice
of such replacement and receipt of a copy of such assumption the successor Agent
shall be the sole Agent hereunder and the term “Agent” shall thereafter refer to
such successor.

Section 11.5 Agent as a Lender.

With respect to Agent’s ownership interest in the Loan and the Loan Documents as
a Lender, Agent in its capacity as a Lender shall have the rights and powers of
a Lender under this Agreement and the other Loan Documents as set forth herein
and therein and may exercise the same as though it were not Agent. Agent in its
capacity as a Lender and its affiliates may accept deposits from, lend money to,
act as trustee under indentures of accept investment banking engagements from
and generally engage in any kind of business with, Borrower, any of its
affiliates and/or subsidiaries and any Person who may do business with or own
securities of Borrower, any of its affiliates and/or subsidiaries, all as if
such Lender were not the Agent and without any duty to account therefor to the
other Lenders.

Section 11.6 Successor Agent.

11.6.1 Resignation. Agent may resign from the performance of all its functions
and duties hereunder at any time, by giving at least sixty (60) days’ prior
written notice to the Lenders and Borrower, such resignation to be effective on
the date set forth in such notice. HSBC agrees, for the benefit of Borrower,
that, provided no Event of Default exists, HSBC, as the initial Agent, shall
resign as Agent from the performance of all its functions and duties hereunder
as Agent (but not as Lender) at any time that HSBC’s (including HSBC’s
Affiliates, as applicable) Ratable Share of the Loan is less than the Agent
Minimum Hold, such resignation to

 

153

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be effective concurrently with its failure to maintain the Agent Minimum Hold.
In addition, each Lender hereby agrees, for the benefit of Borrower that,
provided no Event of Default exists, that each successor Agent shall resign as
Agent from the performance of all its functions and duties hereunder as Agent
(but not as a Lender) at any time that such successor Agent’s (including such
Agent’s Affiliates, as applicable) Ratable Share of the Loan is (a) less than
the Agent Minimum Hold or (b) to the extent that the applicable Lender did not
meet the Agent Minimum Hold when such Lender was appointed as successor Agent,
then less than the Ratable Share of any other Lender (except to the extent that
such successor Agent fails to maintain the greatest Ratable Share of the Loan
solely because another Lender acquired a greater Ratable Share of the Loan than
such successor Agent).

11.6.2 Appointment of Successor. Upon the resignation or removal of Agent, or
any successor Agent, the Lenders shall appoint a successor Agent, which
successor Agent shall be consented to by Borrower, which consent shall not be
unreasonably withheld, conditioned or delayed (provided that no consent of
Borrower shall be required if the successor Agent is also a Lender, is an
Eligible Assignee or if an Event of Default then exists). If no successor Agent
appointed by the Lenders shall have accepted such appointment within sixty (60)
days after delivery of notice of resignation or removal, then the departing
Agent may, after consultation with the Lenders and Borrower, appoint a successor
Agent with the consent of Borrower, which shall not be unreasonably withheld,
conditioned or delayed (provided that no consent of Borrower shall be required
if (a) the successor Agent is (i) a Lender or (ii) an Eligible Assignee, or
(b) an Event of Default then exists). Borrower shall grant or deny its consent
within ten (10) Business Days after request therefor (and if denying consent,
shall specify in reasonable detail the basis of its denial) and Borrower shall
be deemed to have consented if Borrower shall fail to reply within such period.
Upon the acceptance of any appointment as an Agent hereunder by a successor
Agent and upon the recordation of a written designation and acceptance, Agent’s
resignation shall become effective and such successor Agent shall thereupon
succeed to and become vested with all of the rights, powers, privileges and
duties of Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents other than its
liability, if any, for duties and obligations accrued prior to its retirement.
After any retiring Agent’s resignation hereunder as an administrative agent, the
provisions of this Article XI shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
an administrative agent hereunder and under the other Loan Documents. The new
Agent shall promptly deliver to Borrower a copy of the resignation and
acceptance. If no successor Agent has accepted appointment as Agent by the
effective date of a retiring Agent’s resignation or removal, the retiring
Agent’s resignation or removal shall nevertheless be effective and the Lender or
Lenders, as applicable, with the greatest Ratable Share (whether or not the
Ratable Share of each such Lender is equal to or greater than the Agent Minimum
Hold) shall perform all of the duties of Agent hereunder until such time, if
any, as the Lender appoints a successor Agent as provided for above; provided,
however, that if two (2) or more Lenders then hold the greatest Ratable Share of
the Loan, such successor Agent shall be one of such Lenders as chosen by a vote
of the requisite Lenders.

[NO FURTHER TEXT ON THIS PAGE]

 

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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.

SIGNATURES FOLLOW ON NEXT PAGE

--------------------------------------------------------------------------------

 

BORROWER:

EMPIRE STATE LAND ASSOCIATES L.L.C.

a New York limited liability company

By:  

/s/ Peter L. Malkin

 

Peter L. Malkin, Member

By:  

/s/ Anthony E. Malkin

  Anthony E. Malkin, Member By:   /s/ Thomas N. Keltner, Jr.   Thomas N.
Keltner, Member

EMPIRE STATE BUILDING ASSOCIATES L.L.C.,

a New York limited liability company

By:  

/s/ Peter L. Malkin    

 

Peter L. Malkin, Member

By:  

/s/ Anthony E. Malkin

  Anthony E. Malkin, Member By:   /s/ Thomas N. Keltner, Jr.   Thomas N.
Keltner, Member

[signatures continue on next page]

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AGENT: HSBC BANK USA, NATIONAL ASSOCIATION, as Agent

 

By:  

/s/ Barbara Isaacman    

 

Name: Barbara Isaacman

 

Title: Vice President

[signatures continue on next page]

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LENDER: HSBC BANK USA, NATIONAL ASSOCIATION By:  

/s/ Barbara Isaacman

 

Name: Barbara Isaacman

 

Title: Vice President

Applicable Lending Office:

452 Fifth Avenue, 24th Floor

New York, New York 10018

Attention: Commercial Mortgage Servicing Department

[signatures continue on next page]

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LENDER: DEKABANK DEUTSCHE GIROZENTRALE, By:  

/s/ Michael McAuliffe

 

Name: Michael McAuliffe

 

Title: Managing Director

By:  

/s/ Bjorn Kronsbein

 

Name: Bjorn Kronsbein

 

Title: Senior Associate

Applicable Lending Office:

Mainzer Landstrasse 16

60325 Frankfurt am Main, Germany

Attention: Bjoern Kronsbein

--------------------------------------------------------------------------------

Index to Schedules and Exhibits to Loan Agreement

SCHEDULES

 

Schedule I

    —      

List of Affiliate Contracts

Schedule II

    —      

Funding Statement

Schedule III

    —      

The Land

Schedule IV

    —      

Lenders’ Ratable Share

Schedule V

    —      

Short Term Repairs

Schedule VI

    —      

Intentionally Omitted

Schedule VII

    —      

Rent Roll

Schedule VIII

    —      

Estoppels and Subordination, Nondisturbance and Attornment Agreements

Schedule IX

    —      

Borrower’s Chief Executive Office Address, Jurisdiction of Organization and
Federal Employer’s Identification Number

Schedule X

    —      

Borrower’s Organizational Chart

Schedule XI

    —      

Approved Alterations

Schedule XII

    —      

Estoppel Certificates

Schedule XIII

    —      

Standard Form of Lease

Schedule XIV

    —      

Collective Bargaining Agreements and Union Contracts

Schedule XV

    —      

Intentionally Omitted

Schedule XVI

    —      

Ground Lease

Schedule XVII

    —      

Sublease

Schedule XVIII

    —      

Accounts

Schedule XIX

    —      

REIT Assets

EXHIBITS

EXHIBIT A

    —      

Form of Agreement Regarding Instructions Given by Telephone or Facsimile

EXHIBIT B

    —      

Form of Sublease Amendment

EXHIBIT C

    —      

Form of Section 2.2.8 Certificate

EXHIBIT D

    —      

Form of Assignment and Acceptance

EXHIBIT E

    —      

Form of Draw Request and Borrower’s Certificate

EXHIBIT F

    —      

Form of Subordination, Non-Disturbance and Attornment Agreement

EXHIBIT G

    —      

Form of Assignment of Interest Rate Cap Agreement

EXHIBIT H

    —      

Form of Tenant Direction Letter

EXHIBIT I

    —      

Form of Requisition Authorization Statement

EXHIBIT J

    —      

Form of Subordination Agreement

 

-i-

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SCHEDULE I

LIST OF AFFILIATE CONTRACTS

 

1.

Ground Lease

 

2.

Sublease

 

3.

Observatory Lease

 

4.

Supervisory Agreements with Malkin Holdings LLC

 

5.

Insurance Agreements with ESB Captive Insurance Company L.L.C.

 

1

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SCHEDULE II

FUNDING STATEMENT

AGENT FOR LENDERS: HSBC Bank USA, National Association (“HSBC”), as Agent

BORROWER: Empire State Building Associates L.L.C. and Empire State Land
Associates L.L.C.

CLOSING DATE:

LOAN TYPE/TRANSACTION:

LOAN AMOUNT: PROJECT DESCRIPTION:

LENDER’S COUNSEL: Cadwalader, Wickersham & Taft LLP, Attention: Steven M. Herman

 

September 30, September 30,                 Loan Proceeds  

A.     Total amount of loan proceeds to be funded by Lenders on Date of Closing:

          $ —               

 

 

 

B.     Amounts to be retained by Agent for Agent’s/Lenders’ fees and expenses:

         

1.      HSBC’s Commitment Fee:

     $ —          

less deposit previously paid

     $ —               

 

 

            $ —               

 

 

      

2.      Administration Fee:

     $ —               

 

 

      

3.      Consultant Expenses:

         

Appraisal (firm)

     $ —          

Environmental (firm)

     $ —          

Insurance Review (firm)

     $ —          

Agent’s Counsel (firm)

     $ —          

Other

     $ —               

 

 

            $ —               

 

 

      

4.      Cost of other Items to be retained:

     $ —                $ —               

 

 

            $ —               

 

 

      

Total amount to be retained by Agent/Lenders:

     $ —          

C.     Amounts to be wired by Agent/Lenders:

                        

 

 

      

Amount to be wired to Title Company Wire per instructions attached

     $ —               

 

 

      

Total amount to be wired by Agent/Lenders:

     $ —          

 

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The Borrower approves of the foregoing Funding Statement and authorizes
Agent/Lenders to make the disbursements set forth herein. Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them in
that certain Loan Agreement, dated as of             , 20            between
Agent, Lenders and Borrower.

ACCEPTED AND AGREED:

(BORROWER)

By:

Name:

Title:

 

2

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SCHEDULE III

THE LAND

ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, County of New York, City and State of New York, bounded
and described as follows:

BEGINNING at the corner formed by the intersection of the southerly side of West
34th Street with the westerly side of Fifth Avenue;

THENCE Southerly along the westerly side of Fifth Avenue, 197 feet 6 inches to
the northerly side of West 33rd Street;

THENCE Westerly along the northerly side of West 33rd Street, 500 feet;

THENCE Northerly and parallel with the westerly side of Fifth Avenue, 98 feet 9
inches to the middle line of the block;

THENCE Easterly and parallel with the northerly side of West 33rd Street, 75
feet;

THENCE again Northerly and parallel with the westerly side of Fifth Avenue and
part of the distance through a party wall, 98 feet 9 inches to the southerly
side of West 34th Street;

THENCE Easterly along the southerly side of West 34th Street, 425 feet to the
corner aforesaid, the point or place of BEGINNING.

 

1

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SCHEDULE IV

LENDERS’ RATABLE SHARE

 

September 30, September 30,

Lender’s Name

     Ratable Loan
Amount        Percentage/Ratable
Share  

HSBC BANK USA, National Association

     $ 135,000,000.00           57 21/47 % 

DEKABANK DEUTSCHE GIROZENTRALE

     $ 100,000,000.00           42 26/47 % 

 

1

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SCHEDULE V

SHORT TERM REPAIRS

[ATTACHED]

Schedule Omitted

 

1

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SCHEDULE VI

INTENTIONALLY OMITTED

 

1

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SCHEDULE VII

RENT ROLL

[ATTACHED]

Schedule Omitted

 

1

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SCHEDULE VIII

ESTOPPELS AND SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENTS

Estoppels

 

1.

Human Rights Watch, Inc.

 

2.

Napoli Bern, LLP

 

3.

Accessory Network Group, LLC

 

4.

World Monument Fund, Inc.

 

5.

Essex Manufacturing, Inc.

 

6.

ParenteBeard LLC

 

7.

Taylor Global, Inc.

 

8.

Boy Scouts of America Greater New York Council

 

9.

YWCA of the USA

 

10.

Royce Too LLC

 

11.

LF USA Inc.

 

12.

Goldin Associates, LLC

 

13.

New Cingular Wireless PCS, LLC

 

14.

Tandy Brands Accessories

 

15.

Virgo Empire State Business Centers LLC

 

16.

Federal Deposit Insurance Corporation

 

17.

JPMorgan Chase Bank, N.A.

 

18.

FedEx Office and Print Services, Inc.

 

19.

Starbucks Corporation

 

20.

Special Citizens Futures Unlimited, Inc.

 

1

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21.

Feld Entertainment, Inc.

 

22.

Walgreen Eastern Co., Inc.

 

23.

Noven Pharmaceuticals, Inc.

 

24.

Chipotle Mexican Grill of Colorado, LLC

 

25.

Skanska USA Building, Inc.

 

26.

Aspect Education, Inc.

 

27.

LinkedIn Corporation

 

28.

Coty, Inc.

 

29.

NACME, Inc.

 

30.

Garan, Incorporated

 

31.

Host Services of New York, Inc.

Subordination, Nondisturbance and Attornment Agreements

 

1.

New Cingular Wireless PCS, LLC

 

2.

Virgo Empire State Business Centers LLC

 

3.

Human Rights Watch, Inc.

 

4.

Essex Manufacturing., Inc.

 

5.

JPMorgan Chase Bank, N.A.

 

6.

Starbucks Corporation

 

7.

FedEx Office and Print Services, Inc.

 

8.

Federal Deposit Insurance Corporation

 

9.

Skanska USA Building, Inc.

 

10.

NACME, Inc.

 

11.

LF USA Inc.

 

12.

Garan, Incorporated

 

2

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SCHEDULE IX

BORROWER’S CHIEF EXECUTIVE OFFICE ADDRESS,

JURISDICTION OF ORGANIZATION AND

FEDERAL EMPLOYER’S IDENTIFICATION NUMBER

Borrower’s Chief Executive Office Address:

Empire State Land Associates L.L.C.: c/o Malkin Holdings LLC, One Grand Central
Place, 60 East 42nd Street, New York, NY 10165

Empire State Building Association L.L.C.: c/o Malkin Holdings LLC, One Grand
Central Place, 60 East 42nd Street, New York, NY 10165

Jurisdiction of Organization:

Empire State Land Associates L.L.C.: New York

Empire State Building Associates L.L.C.: New York

Federal Employer’s Identification Number:

Empire State Land Associates L.L.C.: 04-3641193

Empire State Building Associates L.L.C.: 13-6084254

 

1

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SCHEDULE X

BORROWER’S ORGANIZATIONAL CHART

[ATTACHED]

Schedule Omitted

 

1

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SCHEDULE XI

APPROVED ALTERATIONS

[ATTACHED]

Schedule Omitted

 

1

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SCHEDULE XII

ESTOPPEL CERTIFICATES

 

1.

CBS Broadcasting, Inc.

 

2.

The City of New York, acting by and through The Board of Education of the City
School District of the City of New York

 

3.

Fox Television Stations, Inc.

 

4.

CBS Radio, Inc.

 

5.

Emmis Radio Corp.

 

6.

WNJU-TV Broadcasting Corp,

 

7.

National Broadcasting Company, Inc.

 

8.

Univision Television Group, Inc.

 

9.

Clear Channel Broadcasting, Inc.

 

10.

American Broadcasting Companies, Inc.

 

1

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SCHEDULE XIII

STANDARD FORM OF LEASE

[ATTACHED]

Schedule Omitted

 

1

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SCHEDULE XIV

COLLECTIVE BARGAINING AGREEMENTS AND UNION CONTRACTS

 

1.

SEIU, Local 32BJ

 

2.

International Union of Operating Engineers, Local 30 (expired 12/30/10)

 

3.

DC9 IPAT Carpenters & Locksmiths

 

4.

DC9 IPAT Painters

 

1

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SCHEDULE XV

INTENTIONALLY OMITTED

 

1

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SCHEDULE XVI

GROUND LEASE

Indenture of Lease dated 12/21/1951 by and between THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA, as landlord and ALGLAN REALTY CORPORATION, ROSTEV REALTY
CORPORATION and BENTOB REALTY CORPORATION, as tenants, recorded 12/21/1951 in
Liber 4759 Cp. 534, which lease is affected by the following instruments:

a. Assignment of Lease from ALGLAN REALTY CORPORATION, ROSTEV REALTY CORPORATION
and BENTOB REALTY CORPORATION to IMPERIUM CORPORATION, dated 12/21/1951 recorded
12/21/1951 in Liber 4759 Cp. 609;

b. Assumption of Lease dated 12/21/1951, made by IMPERIUM CORPORATION to THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA, which was recorded in the Recorder’s
Office on 12/21/1951 in Liber 4759 Cp. 605;

c. Assignment of Ground Lease from EMPIRE STATE BUILDING CORPORATION (f/k/a
IMPERIUM CORPORATION) to EMPIRE STATE BUILDING ASSOCIATES, dated 12/27/1961,
recorded 12/27/1961 in Liber 5173 Cp. 41;

d. Modification of Lease between THE PRUDENTIAL INSURANCE COMPANY OF AMERICA and
EMPIRE STATE BUILDING ASSOCIATES, dated 12/27/1961, recorded 12/27/1961 in Liber
5173 Cp. 49;

e. Assignment and Assumption of Lease from EMPIRE STATE BUILDING ASSOCIATES to
CELERITAS REALTY CORP., dated 10/26/1964, recorded 10/28/1964 in Liber 5300 Cp.
334;

f. Re-Assignment and Re-Assumption of Lease from CELERITAS REALTY CORP. to
EMPIRE STATE BUILDING ASSOCIATES, dated 10/26/1964, recorded 11/6/1964 in Liber
5302 Cp. 125;

g. Second Modification of Lease between THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA and EMPIRE STATE BUILDING ASSOCIATES, dated 2/15/1965, recorded
2/15/1965 in Liber 5314 Cp. 479;

h. Assignment of Disbursement Right made by LAWRENCE A. WIEN, HARRY S. HELMSLEY,
WICO TRADING CORPORATION and MARTIN WEINER REALTY CORPORATION, Joint Venturers
associated under the name of EMPIRE STATE BUILDING COMPANY and EMPIRE STATE
BUILDING ASSOCIATES to MORGAN GUARANTY TRUST COMPANY OF NEW YORK dated
2/15/1965, recorded 2/15/1965 in Liber 5315 Cp. 23;

i. Agreement and Declaration by and between THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA and EMPIRE STATE BUILDING ASSOCIATES, dated 12/6/1965, recorded
12/10/1965 in Liber 5353 Cp. 260;

 

1

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j. Lessor’s Assignment of lease made by THE PRUDENTIAL INSURANCE COMPANY to E.G.
HOLDING CO. INC. dated 11/27/1991 and recorded 11/27/1991 in Reel 1828 Page
1978;

k. Assignment and Assumption of Lease made by NS 1999 AMERICAN COMPANY, as
nominee for The NS 1991 AMERICAN TRUST to TRUMP EMPIRE STATE PARTNERS dated
6/28/1994 and recorded 7/1/1994 in Reel 2111 Page 2039;

1. Certificate of Conversion of EMPIRE STATE BUILDING ASSOCIATES to EMPIRE STATE
BUILDING ASSOCIATES L.L.C. dated 9/30/2001 and filed on 10/1/2001 in the Office
of the Department of State of the State of New York;

m. The landlord’s interest in said Lease was assigned by TRUMP EMPIRE STATE
PARTNERS to EMPIRE STATE LAND ASSOCIATES L.L.C. by an unrecorded Assignment
dated as of 4/17/2002.

 

2

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SCHEDULE XVII

SUBLEASE

That Certain Agreement of Lease dated 12/27/61 and recorded 12/27/1961 in Liber
5173 Cp. 155 made by EMPIRE STATE BUILDING ASSOCIATES, as sub-landlord, to
LAWRENCE A. WIEN, HARRY B. HELMSLEY, MARTIN WEINER REALTY CORPORATION and
PAREMPCO INC., Joint Venturers, associated under the name of EMPIRE STATE
BUILDING COMPANY, as sub-tenant, which lease is affected by the following
instruments:

(1) Assignment of sublease from PAREMPCO, INC. to LAWRENCE A. WIEN and HARRY B.
HELMSLEY, dated as of 2/1/1963, recorded on 7/10/1963 in Liber 5239 Cp. 122;

(2) Assumption of Sublease from LAWRENCE A. WIEN to WICO TRADING CORPORATION
dated as of 6/30/1964 and recorded on 7/22/1964 in Liber 5287 Cp. 238;

(3) First Modification of Sublease between EMPIRE STATE BUILDING ASSOCIATES, as
sub-landlord and LAWRENCE A. WIEN, HARRY B. HELMSLEY, WICO TRADING CORPORATION
and MARTIN WEINER REALTY CORPORATION, Joint Venturers, associated under the name
of EMPIRE STATE BUILDING COMPANY, as sub-tenants (with consent from THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA) dated 2/15/1965, recorded 2/15/1965 in
Liber 5315 Cp. 1;

(4) Assignment of Disbursement, Right made by LAWRENCE A. WIEN, HARRY B.
?ELMSLEY, WICO TRADING CORPORATION and MARTIN WEINER REALTY CORPORATION, Joint
Venturers, associated under the name of EMPIRE STATE BUILDING ASSOCIATES to
MORGAN GUARANTY TRUST COMPANY OF NEW YORK dated 2/15/1965 and recorded 2/15/1965
in Liber 5315 Cp. 23;

(5) Assignment of Interest in Sublease from LAWRENCE A. WIEN to WILLIAM C.
WARREN, as Trustee under a certain Trust Agreement dated 12/12/1967 for the
benefit of COLUMBIA UNIVERSITY, dated as of 12/31/1967 and recorded on 4/1/1971
in Reel 200 Page 1123;

(6) Assignment of Interest in Sublease from MARTIN WIENER REALTY CORPORATION to
MARTIN WIENER, dated as of 12/31/1968 and recorded on 4/1/1971 in Reel 200 Page
1126;

(7) Assignment of Interest in Sublease from WILLIAM C. WARREN, as Trustee under
a certain Trust Agreement dated 12/12/1967 for the benefit of COLUMBIA
UNIVERSITY to LAWRENCE A. WIEN, dated as of 1/1/1970, recorded 4/1/1971 in Reel
200 Page 1130;

(8) Assignment of Interest in Sublease from SAMFORD G. BLUESTEIN, JOAN KONNER,
BENJAMIN NADEL and LAWRENCE A. WIEN, as Executors of the Last Will and Testament
of MARTIN WIENER, deceased to MARTIN WIENER ASSOCIATES, dated 6/25/1970,
recorded on 4/1/1971 in Reel 200 Page 1133;

 

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(9) Assignment of Sublease from WICO TRADING CORPORATION to HARRY B. HELMSLEY,
dated as of 8/2/1969, recorded 4/1/1971 in Reel 200 Page 1496;

(10) Assignment and Assumption of the Sublease from LAWRENCE A. WIEN, HARRY B.
HELMSLEY and MARTIN WIENER ASSOCIATES, Joint Venturers associated under the name
of EMPIRE STATE BUILDING COMPANY to EMPIRE STATE BUILDING COMPANY, dated as of
4/2/1971, recorded on 4/8/1971 in Reel 201 Page 556;

(11) Certificate of Conversion of EMPIRE STATE BUILDING COMPANY to EMPIRE STATE
BUILDING COMPANY LLC dated 12/17/2001 and filed 12/17/2001 in the Office the
Department of State of the State of New York;

(12) Second Modification of Sublease, dated February 25, 2009, between EMPIRE
STATE BUILDING ASSOCIATES L.L.C. and EMPIRE STATE BUILDING COMPANY L.L.C., which
was not recorded; and

(13) Third Modification of Sublease, dated of even date herewith, between EMPIRE
STATE BUILDING ASSOCIATES L.L.C. and EMPIRE STATE BUILDING COMPANY L.L.C. and to
be recorded.

 

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SCHEDULE XVIII

ACCOUNTS

 

September 30, September 30,         Deposit
holder           

OBS

         

Chase operating account (there may be sub accounts)

       Chase           9XXXXXXXX   

“cashier” subaccount (cash receipts)

       Chase           9XXXXXXXX   

“other” subaccount (credit card receipts)

       Chase           9XXXXXXXX   

OBS payroll account number

       Chase           9XXXXXXXX   

Debit card

       Chase           2XXXXXXXX   

ESBC

         

Chase operating account (there may be sub accounts)

       Chase           2XXXXXXXX   

Chase supervisory checking account

       Chase           007XXXXXXX   

Fidelity MMF excess cash account 

       Fidelity           3XXXX   

Chase / Prime MMF excess cash account (Depository) 

      
  Chase
MMF   
          EXXXXX   

ESBC payroll account

       Chase           2XXXXXXXX   

“concession” account

       Chase           9XXXXXXXX   

ESBA

         

Chase supervisory account 

       Chase           007XXXXXXX   

Cap One checking account (for debt service payments) 

       Capital One           9XXXXXXXXX   

Cap One MMF account (debt service reserve) 

       Capital One           9XXXXXXXXX   

Signature Bank checking account (for debt service payments) 

       Signature           1XXXXXXXXX   

Fidelity MMF excess cash account 

       Fidelity           3XXXX   

Fidelity MMF improvement reserve account

       Fidelity           XXXXW   

Former OBS lessee

         

Operating

       Chase           7XXXXXXXX   

Other

       Chase           7XXXXXXXX   

Cashier

       Chase           7XXXXXXXX   

Concession

       Chase           7XXXXXXXX   

Debit card

       Chase           7XXXXXXXX   

accounts above in regular text will be maintained

accounts in italics will be closed after financing is complete

accounts in bold to be closed at a later date

 

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SCHEDULE XIX

REIT ASSETS

 

September 30,

Building

     Total RSF  

Metro Center

       283,821   

First Stamford Place

       786,199   

MerrittView

       256,974   

500 Mamaroneck

       282,813   

Ten Bank

       225,571   

Westport Retail

       21,359   

10 Union Square East

       55,824   

East/West Retail

       40,223   

The Gotham

       56,250   

One Grand Central Place

       1,291,553   

Empire State Building

       2,749,931   

501 7th Avenue

       487,159   

1333 Broadway

       361,729   

1350 Broadway

       400,121   

1359 Broadway

       476,403   

250 West 57th Street

       535,903   

 

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EXHIBIT A

AGREEMENT REGARDING INSTRUCTIONS

GIVEN BY TELEPHONE OR FACSIMILE

Date: As of July [    ], 2011

HSBC Bank USA, National Association, as Agent

452 Fifth Avenue

New York, NY 10018

Attention: Barbara Isaacman

Gentlemen:

From time to time, the undersigned may elect to give instructions, requests or
applications (all being “Instructions”) to you by telephone or facsimile. Such
Instructions may be with respect to any aspect of our present or future
relationship with your Bank and may include:

1. Funds transferred from one of our accounts to another of our accounts, or to
an account of another person or entity, with your Bank or another institution;

2. Foreign exchange transactions;

3. Letters of credit;

4. Loans, and/or

5. Rollover/funding confirmation letters.

Such Instructions may involve sums of any amount.

To induce you from time to time to accept a telephone or facsimile Instruction
from us, we agree to the following:

1. You may accept as authorized, and act upon, any Instruction which you
reasonably believe to be authorized by us.

2. You may rely on a facsimile Instruction in the form received by you and shall
not be responsible for any transmission error if the Instruction as received by
you appears reasonably complete under all the circumstances (including our prior
practice).

3. When we give you an Instruction by telephone, your records of such
Instruction shall, absent manifest error, be conclusively presumed to be
accurate.

4. We shall indemnify you and hold you harmless from any expense, cost, loss or
damages of any kind, including any reasonable attorneys fees (each of the
foregoing be a “Loss”), that arises from your acceptance of a telephone or
facsimile Instruction apparently on our behalf complying with the standard set
forth in paragraphs 1 and 2 above, except to the extent such expense, cost, loss
or damages actually results from your gross negligence or willful misconduct. We
shall upon your request setting forth such

 

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Loss (which may include your good faith estimate of any internal Loss) promptly
pay the amount of the Loss to you, and, if not promptly paid, interest payable
on demand shall accrue at the Default Rate on the amount of such Loss until it
is paid in full.

We acknowledge that use of telephone and facsimile Instructions involves greater
risks of miscommunication and a lesser ability on your part to verify that the
Instructions are actually authorized by us. We acknowledge that the use of such
methods of Instruction by us creates a greater risk that instructions which we
have not in fact authorized may appear to have been authorized by us. We will
use telephone and facsimile Instructions only if, and when, the attendant risks
are acceptable to us under all the circumstances (including the amount
involved).

We further acknowledge that the risks of miscommunication and unauthorized
Instructions can be reduced in part by our mailing or delivering to you written
confirmations (designated as “Confirmations”) of telephone or facsimile
Instructions and by our using codewords in giving telephone or facsimile
Instructions. We will use written confirmations and/or codewords whenever we
deem circumstances require them to be used. We realize that, even if we provide
written confirmation of telephone or facsimile Instructions, you will act upon
our Instructions and such action may be irrevocable.

If we elect to use codewords for our telephone Instructions, we will notify your
officer responsible for our relationship of the codeword in a writing clearly
addressed to him only, that is mailed or delivered and is not sent by facsimile.
We understand that this codeword must be known only to our officers and
employees who are authorized to use it, and we will take appropriate steps to
insure that no other officers or employees have access to it or inadvertently
learn it. In the event the codeword becomes known to any unauthorized person or
if we have reason to believe it may have become known to an unauthorized person,
we will immediately stop using the codeword and will notify you that the
codeword will no longer be used.

We understand that, unless stated expressly to the contrary, the resolutions of
our Board of Directors or other documents we have given you regarding the
authorization of our officers or employees to act on our behalf authorize the
giving of Instructions by telephone or facsimile. We will deliver new
resolutions or new versions of other such documents to you whenever we want to
limit the authority of any officer or employee or otherwise change such
authorizations.

Notwithstanding any other provision of this Agreement, you shall not be
responsible or liable for any loss or damage caused by any action or omission on
your part in connection with telephone or facsimile Instructions complying with
the standards set forth in paragraphs 1 and 2 above, unless it shall have been
caused by your gross negligence or willful misconduct and unless such loss or
damages was the direct, immediate, and necessary result of such act or omission.

This Agreement sets forth our entire agreement with respect to its subject
matter. We are not relying upon any oral representation of yours in agreeing
hereto. This Agreement shall be construed in accordance with and governed by the
laws of the State of New York pursuant to Section 5-1401 of the General
Obligations Law without regard to its principles of conflicts of laws. It may
not be terminated or revoked by us except by giving a written notice to you
(2) two business days before such termination or revocation becomes effective,
and may in no event be terminated or revoked with respect to telephone or
facsimile instructions given before such termination or revocation becomes
effective.

 

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Recourse to the undersigned with respect to any claims arising under or in
connection with this agreement shall be limited to the extent provided in
Section 10.22 of the Loan Agreement, dated as of the date hereof, by and among
the undersigned, you, as agent and lender and DekaBank Deutsche Girozentrale, a
German banking corporation (as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time, the “Loan Agreement”) and
the terms, covenants and conditions of Section 10.22 of the Loan Agreement are
hereby incorporated by reference as if fully set forth in this agreement.

[NO FURTHER TEXT ON THIS PAGE]

 

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EMPIRE STATE LAND ASSOCIATES

L.L.C., a New York limited liability company

        By: Empire State Building Associates

        L.L.C., its Sole Member

 

  By:         Peter L. Malkin, Member

 

  By:         Anthony E. Malkin, Member

 

  By:         Thomas N. Keltner, Jr., Member

 

EMPIRE STATE BUILDING ASSOCIATES

L.L.C., a New York limited liability company

 

  By:         Peter L. Malkin, Member

 

  By:         Anthony E. Malkin, Member

 

  By:         Thomas N. Keltner, Jr., Member

 

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EXHIBIT B

FORM OF SUBLEASE AMENDMENT

[ATTACHED]

Schedule obmitted

 

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EXHIBIT C

FORM OF SECTION 2.2.8 CERTIFICATE

Reference is hereby made to that certain Loan Agreement, dated as of July __,
2011 (as amended, restated, replaced, supplemented or otherwise modified from
time to time, the “Agreement”), by and among HSBC BANK USA, NATIONAL
ASSOCIATION, as Agent, HSBC BANK USA, NATIONAL ASSOCIATION and DEKABANK DEUTSCHE
GIROZENTRALE, as Lead Arrangers, and EMPIRE STATE BUILDING ASSOCIATES L.L.C. and
EMPIRE STATE LAND ASSOCIATES L.L.C., collectively, as Borrowers.

[Name of lender, assignee, transferee, participant] (the “Lender”) is providing
this Section 2.2.8 Certificate pursuant to the provisions of Section 2.2.8 of
the Agreement. Capitalized terms used herein that are not defined herein shall
have the meanings ascribed to them in the Agreement. The Lender hereby
represents and warrants that:

 

1.

The Lender is not a “bank” for purposes of section 881(c)(3)(A) of the Internal
Revenue Code of 1986, as amended (the “Code”), or the Agreement is not, with
respect to the Lender, a loan agreement entered into in the ordinary course of
its trade or business, within the meaning of such section.

 

2.

The Lender is not a “10-percent shareholder” of a Borrower within the meaning of
section 871(h)(3)(b) of the Code and the Treasury Regulations thereunder.

 

3.

The Lender is not a controlled foreign corporation that is related to a Borrower
within the meaning of section 881(c)(3)(C) of the Code.

 

4.

The Lender shall promptly notify and update the Borrower and Agent if any of the
representations or warranties made herein are no longer true and correct as a
result of an action by the Lender (other than if such inaccuracy is due to a
change in any requirement of law, or in the interpretation or application
thereof, occurring after the date on which this Section 2.2.8 Certificate
originally was required to be provided).

[Name of Lender]

By:                                     

      Name:

      Title:

 

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EXHIBIT D

FORM OF ASSIGNMENT AND ASSUMPTION

Reference is made to that certain: (i) Loan Agreement, dated as of July [__],
2011 (as same may be amended, restated, replaced, supplemented or otherwise
modified from time to time, the “Loan Agreement”), which is by and among Empire
State Land Associates L.L.C., a New York limited liability company (“ESLA”),
Empire State Building Associates L.L.C., a New York limited liability company
(“ESBA”; together with ESLA, collectively, the “Borrower”), HSBC Bank USA,
National Association, a bank organized under the laws of the United States of
America, as agent (together with its successors and assigns, “Agent”) for the
lenders party to the Loan Agreement from time to time (collectively with Agent
as lender and their respective successors and assigns, “Lender”), and that
certain (i) Promissory Note A-[    ], dated as of [    ], 201        , (as same
may be amended, restated, replaced, supplemented, extended, severed, split,
consolidated or otherwise modified from time to time, the “Note”) by Borrower in
favor of Lender. Capitalized terms not defined herein shall have the meanings
ascribed to them in the Loan Agreement.

The “Assignor” and the “Assignee” identified below agree as follows:

1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, an interest in and to the
Assignor’s rights and obligations under the Loan Agreement, the Note and the
Mortgage (but if Assignor is Agent, such assignment shall not include any of
Agent’s rights or obligations as agent) as of [            ] , 201        ]
equal to the percentage interest specified on Schedule 1 attached hereto and
made a part hereof of all rights and obligations under the Loan Agreement,
Mortgage and Note with respect to such interest. After giving effect to such
sale and assignment, the amount of the Loan and the Note owing to the Assignee
will be as set forth on Schedule 1. Such sale and assignment is without recourse
to Assignor and, except as expressly provided in this Assignment and Acceptance,
without representation or warranty by the Assignor.

2. The Assignor hereby: (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of, or the perfection or priority of any Lien or security interest
created or purported to be created under or in connection with, the Loan
Documents or any other instrument or document furnished pursuant thereto, and
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of Borrower or Guarantor or the performance
or observance by Borrower or Guarantor of any of its obligations under any Loan
Document or any other instrument or document furnished pursuant thereto; and
(iv) attaches the Note or Notes held by the Assignor and requests that Agent
cause Borrower to exchange such Note or Notes for a new Note or Notes payable to
the order of the Assignee in an amount equal to the principal amount of the Loan
assumed by the Assignee pursuant hereto, which Note or Notes shall be
(x) payable to the order of the Assignee in an amount equal to the principal
amount of the Loan assumed by the Assignee pursuant hereto and (y) payable to
the order of the Assignor in an amount equal to the principal amount of the Loan
retained by the Assignor under the Loan Agreement, as specified on Schedule 1
hereto.

 

1

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3. The Assignee hereby: (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this
Assignment and Acceptance and to consummate the transactions contemplated hereby
and to become a Lender under the Loan Agreement; (ii) if it is a foreign Lender,
attached to this Assignment and Acceptance is any documentation required to be
delivered by it pursuant to the terms of the Loan Agreement, duly completed and
executed by the Assignee; and (iii) it is an “Eligible Lender” as such term is
defined in the Loan Agreement; (b) confirms that it has received a copy of the
Loan Agreement, Mortgage and Note, together with such financial statements and
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance;
(c) agrees that it will, independently and without reliance upon Lender or the
Assignor, based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Mortgage or the Note; (d) appoints and authorizes Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Loan Documents as are given to Agent by the terms thereof, together
with such powers and discretion as are reasonably incidental thereto; (e) agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of the Loan Agreement, Mortgage and Note are required to be
performed by it as an assignee of an interest therein; and (f) agrees to
indemnify, defend and hold harmless Agent and Assignor, and their respective
officers, directors, shareholders, members, partners, employees and agents from
and against, and shall reimburse the foregoing affected indemnified parties for,
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever, including,, without limitation, the reasonable fees and
expenses of counsel, that may be imposed on, incurred by, or asserted against
any of the foregoing affected indemnified parties in any manner relating to or
arising out of any breach by Assignee of its representations or covenants
hereunder, or any material misrepresentation by Assignee contained in this
Assignment and Acceptance Agreement.

4. Following the execution of this Assignment and Acceptance, it will be
delivered to Agent for acceptance and recording by Agent. The effective date for
this Assignment and Acceptance (the “Effective Date”) shall be the date of
acceptance hereof by the Agent.

5. Upon such acceptance and recording by Agent, as of the Effective Date,
(i) the Assignee shall be a party to the Loan Agreement, and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of
an assignee thereof and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Loan Agreement arising after the Effective Date other
than, if Assignor is also Agent, its agency obligations thereunder and under the
other Loan Documents.

6. Upon such acceptance and recording by Agent, from and after the Effective
Date, Agent shall make all payments under the Loan Agreement and Note or Notes
in respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest and other amounts with respect thereto) to the
Assignee whether such amounts have accrued prior to or after the Effective Date.
The Assignor and the Assignee shall make all appropriate adjustments in payments
under the Loan Agreement, Mortgage and Note, or notes for periods prior to the
Effective Date directly between themselves.

 

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7. This Assignment shall be governed by, and shall be construed and enforced in
accordance with, the laws of the State of New York pursuant to Section 5-1401 of
the New York General Obligations Law applicable to contracts made and the be
performed wholly in the State of New York (without regard to principles of
conflicts of law) other than Section 5-1401 of the New York General Obligations
Law. Each party to this Assignment hereby expressly waives any right to trial by
jury in any action or proceeding arising out of or in connection with this
Assignment or any other agreement executed or delivered in connection herewith.
All judicial proceedings brought against any party hereto with respect to this
Assignment may be brought in any state or federal court of competent
jurisdiction in the State of New York, County of New York, and by execution and
delivery of this Assignment, each party hereto accepts, for itself and in
connection with its properties, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any
final judgment rendered thereby in connection with this Assignment and
Acceptance from which no appeal has been taken or is available. Each party
hereto irrevocably waives any objection, including any objection of the laying
of venue or based on the grounds of forum non conveniens, that it may now or
hereafter have to the bringing of any such action or proceeding in any such
jurisdiction.

8. This Assignment and Acceptance may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

9. This Assignment and Acceptance shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment
and Acceptance to be executed by their officers thereunto duly authorized as of
the date specified thereon.

 

ASSIGNOR: [NAME OF ASSIGNOR], as Assignor         By:       Name:   Title:
        Dated:             , 201

 

        ASSIGNEE:         [NAME OF ASSIGNEE], as Assignee         By:      
Name:   Title:         Dated:             , 201

Accepted this                     day of                     , 201    

AGENT:

 

HSBC BANK USA, National Association By:       Name:   Title:

* *

 

4

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SCHEDULE 1

to

ASSIGNMENT AND ACCEPTANCE

 

September 30, September 30, September 30, September 30,

Amount of Loan Held by Assignor

     Amount
of Loan
Assigned      Amount
of Loan
Retained
by
Assignor      Ratable
Share of
Assignor
after
Assignment      Ratable
Share of
Assignee
after
Assignment $                  $                  $                          %
                 %

 

5

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EXHIBIT E

FORM OF DRAW REQUEST AND BORROWER’S CERTIFICATE

BORROWER’S REQUISITION LETTER

Requisition No.

 

AGENT FOR LENDERS: HSBC Bank USA, National Association

  

BORROWER: EMPIRE STATE LAND

ASSOCIATES L.L.C. and EMPIRE STATE

BUILDING ASSOCIATES L.L.C.

DATE:

  

PREMISES: 350 5th Avenue, New York, New York

Pursuant to the Loan Agreement for the subject Loan, Borrower hereby authorizes
and requests an Advance in the amount of: $            

Borrower requests that the funds be wired on             [DATE] in accordance
with the following wire instructions:

 

Amount:

Bank:

ABA #:

Account Name:

Account #:

Attention:

       

In connection with and in order to induce Agent to advance the amount requested
above, Borrower hereby represents, warrants and stipulates as follows:

1. No Monetary Default or Event of Default exists;

2. The representations and warranties made by Borrower in the Loan Documents are
true and correct in all material respects on the date hereof;

3. The Improvements have not been injured or damaged by fire, explosion,
accident, flood or other Casualty.

 

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Very truly yours,

EMPIRE STATE LAND ASSOCIATES

L.L.C., a New York limited liability company

        By: Empire State Building Associates

        L.L.C., its Sole Member

 

  By:         Peter L. Malkin, Member

 

  By:         Anthony E. Malkin, Member

 

  By:         Thomas N. Keltner, Jr., Member

 

EMPIRE STATE BUILDING ASSOCIATES

L.L.C., a New York limited liability company

 

  By:         Peter L. Malkin, Member

 

  By:         Anthony E. Malkin, Member

 

  By:         Thomas N. Keltner, Jr., Member

 

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FORM OF BORROWER’S CERTIFICATE

Pursuant to subsection 2.1.7 of the Loan Agreement (the “Loan Agreement”) dated
July 26, 2011 between HSBC Bank USA, National Association, as agent for itself
and other co-lenders (collectively, “Lender”), Lender, Empire State Land
Associates L.L.C. (“ESLA”), and Empire State Building Associates L.L.C. (“ESBA”;
together with ESLA, collectively, the “Borrower”), the undersigned hereby
certifies as follows:

1. Each of                                         is an authorized signatory
for each party comprising the Borrower, and the signature set forth on the
signature line opposite such individual’s name below is such individual’s true
and genuine signature:

 

  

Name:

 

 

 

  

Signature:

 

 

 

2. There are no liquidation or dissolution proceedings pending or to the
knowledge of the undersigned threatened against the Borrower, nor has any other
event occurred affecting or threatening the existence of the Borrower; and

3. ESLA and ESBA are both limited liability companies duly organized and validly
existing under the laws of the State of New York and are duly qualified to do
business in the State of New York.

All terms used in this Certificate that are defined in the Loan Agreement shall
have the meanings given to them therein.

[NO FURTHER TEXT ON THIS PAGE]

 

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Date:                 

EMPIRE STATE LAND ASSOCIATES L.L.C., a New York limited liability company

 

By: Empire State Building Associates L.L.C., its Sole Member

                By:      

Peter L. Malkin, Member

                By:       Anthony E. Malkin, Member                 By:      
Thomas N. Keltner, Jr., Member

 

EMPIRE STATE BUILDING ASSOCIATES L.L.C., a New York limited liability company
        By:       Peter L. Malkin, Member         By:       Anthony E. Malkin,
Member         By:       Thomas N. Keltner, Jr., Member

 

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EXHIBIT F

FORM OF SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

[ATTACHED]

 

1

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HSBC BANK USA, NATIONAL ASSOCIATION, as agent

(Agent)

- and -

 

 

(Tenant)

 

 

SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

 

 

 

 

Dated:             , 201            

 

Location:   Empire State Building

350 Fifth Avenue

New York, New York

 

Section:

Block:

Lot:

County:  New York

 

PREPARED BY AND UPON RECORDATION RETURN TO:

 

Cadwalader, Wickersham & Taft LLP

One World Financial Center

New York, New York 10281

Attention: Steven M. Herman, Esq.

  

 

 

 

 

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SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”)
is made as of the             day of             201            by and between
HSBC BANK USA, NATIONAL ASSOCIATION, a bank organized under the laws of the
United States of America (“HSBC”), having an address at 452 Fifth Avenue, New
York, New York 10018, as administrative agent (“Agent”) for itself in its
individual capacity as a lender and the other co-Lenders that may exist from
time to time (together with HSBC in its individual capacity as a lender,
collectively, “Lenders”) and             , having an address at
                                                                     (“Tenant”).

RECITALS:

A. Empire State Land Associates L.L.C., as successor-in-interest to The
Prudential Insurance Company of America (“Ground Lessor”) and Empire State
Building Associates L.L.C., as successor-in-interest to Alglan Realty
Corporation, Rostev Realty Corporation, and Bentob Realty Corporation (“Ground
Lessee”), entered into that certain Lease, dated December 21, 1951 and recorded
on December             , 1951 in the Office of the Register of the City of New
York (the “City Register’s Office”) at book 4759, page 534 (the “Original Ground
Lease”), which Original Ground Lease was amended by that certain Modification of
Indenture of Lease, dated December 27, 1961, between Ground Lessor and Ground
Lessee, and recorded on             , 1961 in the City Register’s Office at book
5173, page 49, and further amended by that certain Second Modification of
Indenture of Lease, dated February 15, 1965, between Ground Lessor and Ground
Lessee, recorded on             , 1965 in the City Register’s Office at book
            , page             (the Original Ground Lease, as amended, the
“Ground Lease”).

B. Ground Lessee and Empire State Building Company L.L.C., as
successor-in-interest to Lawrence A. Wien, Harry B. Helmsley, Martin Weiner
Realty Corporation and Parampco Inc., as joint venturers associated under the
name Empire State Building Company (the “Landlord”) entered into that certain
Sublease, dated December 27, 1961 and recorded on             , 1961 in the City
Register’s Office at book 5173, page 155 (the “Original Sublease”), which
Original Sublease was amended by First Modification of Sublease, dated
February 15, 1965, between Ground Lessee and Landlord and recorded on
            , 1965 in the City Register’s Office at book 5315, page 1 and as
further amended by Second Modification of Sublease, dated February 25, 2009,
between Ground Lessee and Landlord and recorded on             , 2009 in the
City Register’s Office at book             , page             (the Original
Sublease as amended, the “Sublease”).

C. Lenders have made a loan and will in the future advance additional amounts
thereunder (collectively, the “Loan”) to Ground Lessor and Ground Lessee, which
Loan is given pursuant to the terms and conditions of that certain Loan
Agreement (the “Loan Agreement”), dated July             , 2011, between Agent,
Lenders and Ground Lessor and Ground

 

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Lessee, collectively, as borrower (“Borrower”). The Loan is secured by a certain
Consolidated, Amended and Restated Mortgage, Assignment of Leases and Rents and
Security Agreement dated July             , 2011, between Agent and Borrower
(the “Mortgage”), which encumbers the fee estate of Ground Lessor and the
leasehold estate of Ground Lessee under the Ground Lease and Sublease in certain
premises commonly known as the Empire State Building, 350 Fifth Avenue, New
York, New York and more particularly described in Exhibit A attached hereto (the
“Property”);

D. Tenant occupies a portion of the Property under and pursuant to the
provisions of a certain lease described on Exhibit B attached hereto (the
“Lease”); and

E. Tenant has agreed to subordinate the Lease to the Mortgage and to the lien
thereof and Agent has agreed to grant non-disturbance to Tenant under the Lease
on the terms and conditions hereinafter set forth.

AGREEMENT:

For good and valuable consideration, Tenant and Agent agree as follows:

Section 1.01 Subordination. Tenant agrees that the Lease and all of the terms,
covenants and provisions thereof and all rights, remedies and options of Tenant
thereunder are and shall at all times continue to be subject and subordinate in
all respects to the Mortgage and to the lien thereof and all terms, covenants
and conditions set forth in the Mortgage and the Loan Agreement including
without limitation all future advances, renewals, increases, modifications,
spreaders, consolidations, replacements and extensions thereof and to all sums
secured thereby with the same force and effect as if the Mortgage and Loan
Agreement had been executed, delivered and (in the case of the Mortgage)
recorded prior to the execution and delivery of the Lease.

Section 1.02 Non-Disturbance. Agent agrees that if any action or proceeding is
commenced by Agent for the foreclosure of the Mortgage or the sale of the
Property, Tenant shall not be named as a party therein unless such joinder shall
be required by law, provided, however, such joinder shall not result in the
termination of the Lease or disturb the Tenant’s possession or use of the
premises demised thereunder, and the sale of the Property in any such action or
proceeding and the exercise by Agent of any of its other rights under the Loan
Agreement, the Mortgage and the other and the other documents executed in
connection thereunder (“Loan Documents”) shall be made subject to all rights of
Tenant under the Lease except as set forth in Section 1.03 below, provided,
further, that at the time of the commencement of any such action or proceeding
or at the time of any such sale or exercise of any such other rights the
following conditions (the “Conditions”) exist: (a) the term of the Lease shall
have commenced pursuant to the provisions thereof, (b) Tenant shall be in
possession of the premises demised under the Lease, (c) the Lease shall be in
full force and effect and (d) Tenant shall not be in default under any of the
terms, covenants or conditions of the Lease or of this Agreement on Tenant’s
part to be observed or performed beyond the expiration of any applicable notice
or grace periods.

 

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Section 1.03 Attornment. Agent and Tenant agree that upon the conveyance of the
Property by reason of the foreclosure of the Mortgage or the acceptance of a
deed or assignment in lieu of foreclosure or otherwise, the Lease shall not be
terminated or affected thereby if the Conditions above have been met or, if the
conditions above have not been met at the time of such transfer, at the option
of the transferee of the Property (the “Transferee”) but shall continue in full
force and effect as a direct lease between the Transferee and Tenant upon all of
the terms, covenants and conditions set forth in the Lease and in that event,
Tenant agrees to attorn to the Transferee and the Transferee shall accept such
attornment, provided, however, that the provisions of the Loan Agreement and
Mortgage shall govern with respect to the disposition of any casualty insurance
proceeds or condemnation awards and the Transferee shall not be (a) obligated to
complete any construction work required to be done by Landlord pursuant to the
provisions of the Lease or to reimburse Tenant for any construction work done by
Tenant, (b) liable (i) for Landlord’s failure to perform any of its obligations
under the Lease which have accrued prior to the date on which the Transferee
shall become the owner of the Property, or (ii) for any act or omission of
Landlord, whether prior to or after such foreclosure or sale, (c) required to
make any repairs to the Property or to the premises demised under the Lease
required as a result of fire, or other casualty or by reason of condemnation
unless the Transferee shall be obligated under the Lease to make such repairs
and shall have received sufficient casualty insurance proceeds or condemnation
awards to finance the completion of such repairs, (d) required to make any
capital improvements to the Property or to the premises demised under the Lease
which Landlord may have agreed to make, but had not completed, or to perform or
provide any services not related to possession or quiet enjoyment of the
premises demised under the Lease, (e) subject to any offsets, defenses,
abatements or counterclaims which shall have accrued to Tenant against Landlord
prior to the date upon which the Transferee shall become the owner of the
Property, (f) liable for the return of rental security deposits, if any, paid by
Tenant to Landlord in accordance with the Lease unless such sums are actually
received by the Transferee, (g) bound by any payment of rents, additional rents
or other sums which Tenant may have paid more than one (1) month in advance to
any prior Landlord unless (i) such sums are actually received by the Transferee
or such sums are an estimated payment against annual pass-through charges, or
(ii) such prepayment shall have been expressly approved of by the Transferee,
(h) bound to make any payment to Tenant which was required under the Lease, or
otherwise, to be made prior to the time the Transferee succeeded to Landlord’s
interest, (i) bound by any agreement amending, modifying or terminating the
Lease made without the Agent’s prior written consent prior to the time the
Transferee succeeded to Landlord’s interest or (j) bound by any assignment of
the Lease or sublease of the Property, or any portion thereof, made prior to the
time the Transferee succeeded to Landlord’s interest other than if pursuant to
the provisions of the Lease.

Section 1.04 Notice to Tenant. After notice is given to Tenant by Agent that the
Landlord is in default under the Loan Agreement, the Mortgage and the other Loan
Documents and that the rentals under the Lease should be paid to Agent pursuant
to the terms of the assignment of leases and rents executed and delivered by
Landlord to Agent in connection therewith, Tenant shall thereafter pay to Agent
or as directed by the Agent, all rentals and all other monies due or to become
due to Landlord under the Lease and Landlord hereby expressly authorizes Tenant
to make such payments to Agent, or as Agent may direct, and hereby releases and
discharges Tenant from any liability to Landlord on account of any such
payments.

 

5

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Section 1.05 Agent’s Consent. Tenant shall not, without obtaining the prior
written consent of Agent (a) enter into any agreement amending, modifying or
terminating the Lease, (b) prepay any of the rents, additional rents or other
sums due under the Lease for more than one (1) month in advance of the due dates
thereof, (c) voluntarily surrender the premises demised under the Lease or
terminate the Lease without cause or shorten the term thereof, or (d) assign the
Lease or sublet the premises demised under the Lease or any part thereof other
than pursuant to the provisions of the Lease; and any such amendment,
modification, termination, prepayment, voluntary surrender, assignment or
subletting, without Agent’s prior consent, shall not be binding upon Agent.

Section 1.06 Agent to Receive Notices. Tenant shall provide Agent with copies of
all written notices sent to Landlord pursuant to the Lease alleging any default
by Landlord under the Lease which would entitle Tenant to cancel the Lease or to
an abatement of the rents, additional rents or other sums payable thereunder
simultaneously with the transmission of such notices to the Landlord, and agrees
that, notwithstanding any provisions of the Lease to the contrary, no notice of
cancellation thereof or of such an abatement shall be effective unless Agent
shall have received notice of default giving rise to such cancellation or
abatement and shall have failed within sixty (60) days after receipt of such
notice to cure such default, or if such default cannot be cured within
sixty (60) days, shall have failed within sixty (60) days after receipt of such
notice to commence and thereafter diligently pursue any action necessary to cure
such default.

Section 1.07 Notices. All notices or other written communications hereunder
shall be deemed to have been properly given (a) upon delivery, if delivered in
person or by facsimile transmission with receipt acknowledged by the recipient
thereof and confirmed by telephone by sender, (b) one (1) Business Day
(hereinafter defined) after having been deposited for overnight delivery with
any reputable overnight courier service, or (c) three (3) Business Days after
having been deposited in any post office or mail depository regularly maintained
by the U.S. Postal Service and sent by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:

 

If to Tenant:               

     

 

 

Attention:                            

Facsimile No.                     

 

 

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With a copy to:               

     

 

 

Attention:                            

Facsimile No.                     

  If to Agent:               

HSBC Bank USA, National Association, as Agent

545 Washington Boulevard, 10th Floor

Jersey City, New Jersey 07310

Attention: Commercial Mortgage Servicing Department

Facsimile No. (212) 525-1152

With a copy to:               

Cadwalader, Wickersham & Taft LLP

One World Financial Center

New York, New York 10281

Attention: Steven M. Herman, Esq.

Facsimile No. (212) 504-6666

or addressed as such party may from time to time designate by written notice to
the other parties. For purposes of this Section, the term “Business Day” shall
mean a day on which commercial banks are not authorized or required by law to
close in New York, New York.

Either party by notice to the other may designate additional or different
addresses for subsequent notices or communications.

Section 1.08 Joint and Several Liability. If Tenant consists of more than one
person, the obligations and liabilities of each such person hereunder shall be
joint and several. This Agreement shall be binding upon and inure to the benefit
of Agent and Tenant and their respective successors and assigns.

Section 1.09 Definitions. The term “Agent” and “Lenders” as used herein shall
include the successors and assigns of Agent and Lenders and shall also include
any person, party or entity which shall become the owner of the Property by
reason of a foreclosure of the Mortgage or the acceptance of a deed or
assignment in lieu of foreclosure or otherwise. The term “Landlord” as used
herein shall mean and include the present landlord under the Lease and such
landlord’s predecessors and successors in interest under the Lease, but shall
not mean or include Agent. The term “Property” as used herein shall mean the
Property, the improvements now or hereafter located thereon and the estates
therein encumbered by the Mortgage.

Section 1.10 No Oral Modifications. This Agreement may not be modified in any
manner or terminated except by an instrument in writing executed by the parties
hereto.

Section 1.11 Governing Law. This Agreement shall be deemed to be a contract
entered into pursuant to the laws of the State where the Property is located and
shall in all respects be governed, construed, applied and enforced in accordance
with the laws of the State where the Property is located.

 

7

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Section 1.12 Inapplicable Provisions. If any term, covenant or condition of this
Agreement is held to be invalid, illegal or unenforceable in any respect, this
Agreement shall be construed without such provision.

Section 1.13 Duplicate Originals; Counterparts. This Agreement may be executed
in any number of duplicate originals and each duplicate original shall be deemed
to be an original. This Agreement may be executed in several counterparts, each
of which counterparts shall be deemed an original instrument and all of which
together shall constitute a single Agreement. The failure of any party hereto to
execute this Agreement, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.

Section 1.14 Number and Gender. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and vice
versa.

Section 1.15 Further Acts. Tenant will, and without expense to Agent or Lenders,
do, execute, acknowledge and deliver all and every such further acts and
assurances as Agent shall, from time to time, require, for the better assuring
and confirming unto Agent the property and rights hereby intended now or
hereafter so to be, or for carrying out the intention or facilitating the
performance of the terms of this Agreement or for filing, registering or
recording this Agreement, or for complying with all applicable laws.

Section 1.16 Limitations on Agent’s and Lenders’ Liability. Tenant acknowledges
that Lenders are obligated only to Landlord to make the Loan upon the terms and
subject to the conditions set forth in the Loan Agreement, the Mortgage and the
other Loan Documents. In no event shall Agent, Lenders or any purchaser of the
Property at foreclosure sale or any grantee of the Property named in a
deed-in-lieu of foreclosure, nor any heir, legal representative, successor, or
assignee of Agent or Lenders or any such purchaser or grantee (collectively the
Agent, Lenders, such purchaser, grantee, heir, legal representative, successor
or assignee, the “Subsequent Landlord”) have any personal liability for the
obligations of Landlord under the Lease and should the Subsequent Landlord
succeed to the interests of the Landlord under the Lease, Tenant shall look only
to the estate and property of any such Subsequent Landlord in the Property for
the satisfaction of Tenant’s remedies for the collection of a judgment (or other
judicial process) requiring the payment of money in the event of any default by
any Subsequent Landlord as landlord under the Lease, and no other property or
assets of any Subsequent Landlord shall be subject to levy, execution or other
enforcement procedure for the satisfaction of Tenant’s remedies under or with
respect to the Lease; provided, however, that the Tenant may exercise any other
right or remedy provided thereby or by law in the event of any failure by
Subsequent Landlord to perform any such material obligation.

[SIGNATURE PAGE TO FOLLOW]

 

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IN WITNESS WHEREOF, Agent and Tenant have duly executed this Agreement as of the
date first above written.

 

AGENT:

 

HSBC BANK USA, NATIONAL ASSOCIATION, as agent

By:      

Name:

Title:

TENANT:

 

By:      

Name:

Title:

The undersigned accepts and agrees to

the provisions of Section 4 hereof:

LANDLORD:

EMPIRE STATE BUILDING COMPANY L.L.C.

 

By:      

Name:

Title:

 

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ACKNOWLEDGMENTS

 

STATE OF NEW YORK    

 

)

    

)

  

ss.:

COUNTY OF NEW YORK  

)

  

On the             day of             , 201    , before me, the undersigned, a
Notary Public in and for said State, personally appeared             ,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individuals, or the persons upon behalf of
which the individual acted, executed the instrument.

 

 

Notary Public

 

STATE OF NEW YORK    

 

)

    

)

  

ss.:

COUNTY OF NEW YORK  

)

  

On the             day of             , 201    , before me, the undersigned, a
Notary Public in and for said State, personally appeared                     ,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individuals, or the persons upon behalf of
which the individual acted, executed the instrument.

 

 

Notary Public

 

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STATE OF NEW YORK    

 

)

    

)

  

ss.:

COUNTY OF NEW YORK  

)

  

On the             day of             , 201_, before me, the undersigned, a
Notary Public in and for said State, personally appeared                     ,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individuals, or the persons upon behalf of
which the individual acted, executed the instrument.

 

Notary Public

 

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EXHIBIT A

LEGAL DESCRIPTION

ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, County of New York, City and State of New York, bounded
and described as follows:

BEGINNING at the corner formed by the intersection of the southerly side of West
34th Street with the westerly side of Fifth Avenue;

THENCE Southerly along the westerly side of Fifth Avenue, 197 feet 6 inches to
the northerly side of West 33rd Street;

THENCE Westerly along the northerly side of West 33rd Street, 500 feet;

THENCE Northerly and parallel with the westerly side of Fifth Avenue, 98 feet 9
inches to the middle line of the block;

THENCE Easterly and parallel with the northerly side of West 33rd Street, 75
feet;

THENCE again Northerly and parallel with the westerly side of Fifth Avenue and
part of the distance through a party wall, 98 feet 9 inches to the southerly
side of West 34th Street;

THENCE Easterly along the southerly side of West 34th Street, 425 feet to the
corner aforesaid, the point or place of BEGINNING.

 

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EXHIBIT B

LEASE DESCRIPTION

 

Lease:                                                                  
                                                  

 

Amendments (if any):                                        
                                             

 

Leased Premises:                                       
                                                       

  

 

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EXHIBIT G

FORM OF ASSIGNMENT OF INTEREST RATE CAP AGREEMENT

THIS ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT, dated as of
July             , 2011 (this “Assignment”) is made by EMPIRE STATE LAND
ASSOCIATES L.L.C., a New York limited liability company, having an office at c/o
Malkin Holdings LLC, One Grand Central Place, 60 East 42nd Street, New York, NY
10165, Attention: Legal (“ESLA”), and EMPIRE STATE BUILDING ASSOCIATES L.L.C., a
New York limited liability company, having an office at c/o Malkin Holdings LLC,
One Grand Central Place, 60 East 42nd Street, New York, NY 10165, Attention:
Legal (“ESBA” and together with ESLA, collectively, “Assignor”) in favor of HSBC
Bank USA, National Association, as agent, having an address at 452 Fifth Avenue,
New York, New York 10018 (“Agent”). Initially capitalized terms used but not
otherwise defined herein shall have the meanings assigned such terms in that
certain Loan Agreement dated as of the date hereof (as amended, modified or
supplemented and in effect from time to time, the “Loan Agreement), by and among
Assignor, Agent and the lenders signatory thereto (collectively, “Lenders”).

1. Assignment. Assignor hereby collaterally assigns and transfers to Agent for
the benefit of the Lenders and their respective successors and assigns
(collectively, “Assignee”), as collateral, all of Assignor’s interest, whether
now owned or hereafter acquired, now existing or hereafter arising, wherever
located, in, to and under each of those certain interest rate protection
agreements identified on Schedule I annexed hereto with the counterparty
identified on said Schedule I (“Counterparty”), as supplemented by the related
confirmation, as amended from time to time (“Interest Rate Protection
Agreement”), and Assignor hereby grants to Assignee a security interest in and
to the Interest Rate Protection Agreement and all proceeds (as defined in
Section 9-315(1) of the Uniform Commercial Code adopted in the State of New York
(the “UCC”)) thereof, to have and to hold the same, unto Assignee. This
Assignment constitutes additional security for the obligations (collectively,
the “Obligations”) of Assignor arising pursuant to the Loan Agreement and the
other Loan Documents. Notwithstanding anything to the contrary herein contained,
Agent shall have no obligation to make any payments under the Interest Rate
Protection Agreement.

2. Counterparty Agreement. The Counterparty to the Interest Rate Protection
Agreement, by its execution of this Assignment, hereby consents to the above
collateral assignment and the other terms hereof (including, without limitation,
the second sentence of Paragraph 4 hereof), and Assignor and Counterparty agree
that, so long as any Obligations remain unsatisfied, the Counterparty will make
any payments to become payable under or pursuant to the Interest Rate Protection
Agreement directly to Assignee until such time as this Assignment is terminated
or otherwise canceled, at which time the Counterparty will be instructed to make
payments to or on behalf of Assignor. All amounts paid to Assignee pursuant to
the terms hereof arising out of the assignment of the Interest Rate Protection
Agreement shall be deposited into an account designated by the Agent and
distributed in accordance with the provisions of the Loan Agreement.
Counterparty shall be entitled to rely on the instructions of Assignee without
any duty to investigate the authenticity or validity of such instructions.

 

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3. Remedies. Upon the occurrence of an Event of Default and for so long as such
Event of Default is continuing, Assignee shall be entitled to exercise all
remedies in respect of the collateral hereby assigned provided in the UCC.

4. Covenants. Assignor hereby covenants and agrees that Assignor shall not,
without first obtaining Assignee’s written consent, convey, assign, sell,
mortgage, encumber, pledge, hypothecate, grant a security interest in, grant an
option or options with respect to, or otherwise dispose of (directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise, and
whether or not for consideration) any Interest Rate Protection Agreement except
to the extent expressly permitted under the Loan Agreement. Assignor and
Counterparty hereby covenant and agree that until such time as this Assignment
is terminated pursuant to paragraph 6 hereof, Assignor and Counterparty shall
not, without first obtaining Assignee’s written consent, amend or modify in any
material respect or, cancel or terminate the Interest Rate Protection Agreement
or such portion thereof as remains subject to this Assignment.

5. Payment. If Assignee receives any payments under the Interest Rate Protection
Agreement (other than a payment by reason of a Termination Event under (and as
defined in) the Interest Rate Protection Agreement) and no Event of Default
exists under the Loan Agreement, Assignee shall apply the same on a Payment Date
against accrued and unpaid interest on the Loan. If Assignee receives any
payments under the Agreement during the existence of an Event of Default under
the Loan Agreement or by reason of a Termination Event under the Agreement,
Assignee shall have the right to hold same or to apply same to any portion of
the Debt (as defined in the Loan Agreement) in any order it desires or, if the
Agreement has been partially or wholly terminated, to apply same to the cost of
acquiring another interest rate protection agreement in form and substance, and
from a counterparty, satisfactory to Assignee in all respects.

6. Termination. This Assignment shall terminate upon the payment and performance
in full of the Obligations, and upon such termination Assignee shall release
this Assignment and Assignee will give prompt termination instructions to
Counterparty.

7. Governing Law. This Assignment shall be governed by and construed in
accordance with the laws of the State of New York pursuant to Section 5-1401 of
the General Obligations Law without regard to its principles of conflicts of
laws.

8. Successors and Assigns. This Assignment shall be binding upon and shall inure
to the benefit of Assignor, its successors and permitted assigns and Assignee.
Agent may transfer its rights under this Assignment to any Successor Agent under
the Loan Agreement. Without limiting the effect of specific references in any
provision of this Assignment, the term “Assignor” shall be deemed to refer to
each and every Person comprising Assignor from time to time, jointly and
severally, and to include the heirs, executors, administrators, legal
representatives, successors and assigns of each such Person.

9. Amendments. This Assignment may be amended or modified only by a written
instrument signed by the parties hereto.

 

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10. Counterparts. This Assignment may be executed in any number of counterparts,
each of which shall be an original but all of which taken together shall
constitute one instrument.

11. Loan Document. This Assignment is a Loan Document executed pursuant to the
Loan Agreement and shall (unless otherwise expressly indicated herein) be
construed, administered and applied in accordance with the terms and provisions
thereof.

12. Interpretation. Wherever possible each provision of this Assignment shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Assignment shall be prohibited by or invalid under
such 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 Assignment.

13. Exculpation. Recourse to the Assignor with respect to any claims arising
under or in connection with this Assignment shall be limited to the extent
provided in Section 10.22 of the Loan Agreement and the terms, covenants and
conditions of Section 10.22 of the Loan Agreement are hereby incorporated by
reference as if fully set forth in this Assignment.

[END OF TEXT ON THIS PAGE]

 

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IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as of
the day and year first above written.

 

ASSIGNOR: EMPIRE STATE LAND ASSOCIATES L.L.C., a New York limited liability
company   By: Empire State Building Associates L.L.C., its Sole Member     By:  
        Peter L. Malkin, Member     By:           Anthony E. Malkin, Member    
By:           Thomas N. Keltner, Jr., Member

 

EMPIRE STATE BUILDING ASSOCIATES L.L.C., a New York limited liability company  
  By:           Peter L. Malkin, Member     By:           Anthony E. Malkin,
Member     By:           Thomas N. Keltner, Jr., Member

[signatures continue on next page]

 

4

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ASSIGNEE: HSBC BANK USA, NATIONAL ASSOCIATION,   a bank organized under the laws
of the United States of America as Agent By:       Name:   Title:

[signatures continue on next page]

 

5

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The provisions of this Assignment are hereby acknowledged: By:     Name: Title:

 

6

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EXHIBIT H

FORM OF TENANT DIRECTION LETTER

TENANT NOTIFICATION LETTER (MAJOR LEASES)

Empire State Building Company L.L.C.

c/o Malkin Holdings LLC

One Grand Central Place

60 East 42nd Street

New York, New York 10165

July     , 2011

CERTIFIED MAIL

RETURN RECEIPT REQUESTED

[Tenants under Leases]

[                                                                 ]

[                                                                 ]

 

  Re:

Empire State Building, New York, New York

Dear Tenant:

With reference to your lease of space in the above-referenced premises (as same
may have been, or from time to time may be amended, restated, modified, extended
or assigned, the “Lease”), please be advised that Empire State Land Associates
L.L.C. and Empire State Building Associates L.L.C. (collectively, “Borrower”),
affiliates of Empire State Building Company L.L.C. (“Landlord”), have obtained a
secured loan on the above-referenced premises with HSBC Bank USA, National
Association, as Administrative Agent (together with its successors and assigns
in such capacity, “Agent”). In connection with such loan, from and after the
date hereof and until notified otherwise by written instruction from Agent, all
payments pursuant to the Lease should be made payable to:

“EMPIRE STATE BUILDING COMPANY L.L.C. f/b/o HSBC Bank USA, National Association,
as administrative agent, as secured party, Collection Account” and, if payment
is by check, should be sent to:

Empire State Building Company L.L.C. f/b/o HSBC Bank USA, National Association,
as administrative agent, as secured party, Collection Account

[                                                                  ]

[                                                                  ]

[                                                                  ]

and, if payment is made by wire or ACH transfer, it should be sent to:

Bank: [                                                                 ]

Account Name: Empire State Building Company L.L.C. f/b/o HSBC Bank USA, National
Association, as administrative agent, as secured party, Collection Account

Account No.:                   [                      
                                           ]

Wire / ACH ABA No.:   [                                      
                          ]

Reference Tenant Name and Tenant ID#

 

1

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In addition, all notices given pursuant to your lease should be directed as
follows:

Empire State Building Company, L.L.C.

c/o Malkin Holdings LLC

One Grand Central Place

60 East 42nd Street

New York, NY 10165

Attention: Legal

If you have any questions regarding this letter, please contact your Landlord
c/o [350 Fifth].

Please be aware that Agent is the holder of a mortgage dated as of July [     ],
2011, from Borrower to Agent (“Mortgage”) pursuant to a certain Loan Agreement,
dated as of July [     ], 2011 (the “Loan Agreement”).

Subject to certain circumstances and under certain conditions more particularly
detailed in certain portions of the Loan Agreement, pursuant to Section 291-f of
the Real Property Law of the State of New York, Borrower agreed with Agent not
to permit Landlord (referred to as Operating Company in the Loan Agreement and
the other Loan Documents), without the consent of Agent, (i) amend, modify or
waive the provisions of any Lease or terminate, reduce rents under or shorten
the term of any Lease, except pursuant to and in accordance with the provisions
of the Note, the Loan Agreement, the Mortgage and the other Loan Documents, or
(ii) collect any Rents (exclusive of security deposits) more than thirty
(30) days in advance of the time when the same shall become due. A copy of the
text of those parts of the Mortgage and the Loan Agreement containing such
agreement of the Borrower is annexed hereto as Exhibit A. By the service of this
notice upon you, Borrower’s agreement with respect to the Lease has become
binding upon you pursuant to the aforesaid Section 291-f.

 

LANDLORD: EMPIRE STATE BUILDING COMPANY L.L.C., a New York limited liability
company   By:        

 

cc:

Agent

 

2

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EXHIBIT A

SECTION 16.2(F) OF THE MORTGAGE AND

SECTION 4.1.10 OF THE LOAN AGREEMENT

Section 16.2(f) Section 291-f of New York Real Property Law. Agent shall have
all of the rights set forth in Section 291-f of the Real Property Law of New
York. For purposes of Section 291-f of the New York Real Property Law, all
existing tenants and every tenant or subtenant who after the recording of this
Security Instrument, enters into a Lease upon the premises of any of the
Property or who acquires by instrument of assignment or by operation of law a
leasehold estate upon the Property is hereby notified that neither Mortgagor nor
ESBC shall, without obtaining Agent’s prior consent in each instance, cancel,
abridge or otherwise modify any Leases or accept prepayments for more than
thirty (30) days of installments of rent to become due with respect to any Lease
thereof having an unexpired term on the date of this Security Instrument of
five (5) years or more, except as expressly permitted under the Loan Agreement,
and that any such cancellation, abridgement, modification or prepayment made by
any such tenant or subtenant without either being expressly permitted under this
Security Instrument or receiving Agent’s prior consent or as permitted under the
Loan Agreement shall be voidable by Agent at its option.

Section 4.1.10 Leases. (a) All Leases and all renewals of Leases executed after
the date hereof shall (i) contain market rate terms and conditions, (ii) provide
that such Lease is subordinate to the Mortgage and that, upon the foreclosure of
the Mortgage, sale by power of sale thereunder or deed-in-lieu of foreclosure,
the Tenants, at Agent’s discretion, will attorn to the transferee of the
Property, (iii) be prepared on the standard form of lease attached hereto as
Schedule XIII with such modifications as are consistent with the market and that
result from arms-length negotiations that Borrower conducts in good faith and
(iv) not include any option in favor of Tenant to acquire all or any portion of
the Property.

(b) Borrower may or may cause Operating Company to enter into new Leases which
are not Major Leases without Agent’s consent provided that no Event of Default
then exists, the Lease complies with the requirements set forth in
subsection Error! Reference source not found. above, and the Tenant thereunder
is not an Affiliate of Borrower or Operating Company. In addition, Borrower may
enter into renewals, amendments, extensions, restatements, expansions and
modifications of Leases which are not Major Leases without the consent of Agent
provided that no Event of Default then exists, any such renewal, amendment,
extension, restatement, expansion or modification complies with the requirements
set forth in subsection (a) above, and the Tenant thereunder is not an Affiliate
of Borrower or Operating Company. Borrower may terminate any Lease which is not
a Major Lease without the consent of Agent.

(c) All Major Leases and all renewals, amendments, extensions, restatements,
expansions, modifications and terminations thereof (a “Major Lease
Modification”) executed after the date hereof shall, prior to execution, be
subject to Agent’s approval which shall not be unreasonably withheld, delayed or
conditioned. Borrower shall not permit or consent to the assignment of any Major
Lease without Agent’s prior consent, which shall not be unreasonably

 

3

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withheld, delayed or conditioned, unless and except to the extent the right to
assign without Borrower’s consent is already reserved to the tenant thereunder
in any Major Lease in existence on the date of this Agreement or is included in
any Major Lease hereafter entered into in compliance with the terms of this
Section 4.1.10(c). Each request for approval and consent of a Major Lease or
Major Lease Modification shall contain a legend in capitalized bold letters on
the top of the cover page stating: “THIS IS A REQUEST FOR CONSENT TO A [MAJOR
LEASE] [MAJOR LEASE MODIFICATION]. AGENT’S RESPONSE IS REQUESTED WITHIN FIVE (5)
BUSINESS DAYS. AGENT’S FAILURE TO RESPOND WITHIN SUCH TIME PERIOD SHALL RESULT
IN AGENT’S CONSENT BEING DEEMED TO HAVE BEEN GRANTED.” Each such request shall
include the following documentation with such request: (i) the Major Lease or
Major Lease Modification, as applicable, and (ii) all other materials reasonably
necessary in order for Agent to evaluate such Major Lease or Major Lease
Modification. In the event that Agent fails to grant or withhold its approval
and consent to such Major Lease or Major Lease Modification within such five (5)
Business Day period (and, in the case of a withholding of consent, stating the
grounds therefor in reasonable detail), then Agent’s approval and consent shall
be deemed to have been granted. In addition, Borrower may, at Borrower’s option,
prior to delivering to Agent any such Major Lease or Major Lease Modification
for Agent’s approval, first deliver to Agent for Agent’s approval a tenant
application and budget setting forth the major economic and other business terms
(the “TAB”) of such proposed Major Lease or Major Lease Modification, provided,
however, that a TAB shall only be deemed delivered from the date additional
information reasonably required for evaluation of the TAB is delivered to Agent;
provided, further, that a TAB shall be deemed delivered as of the date received
if Agent does not request additional information with respect thereto within
three (3) Business Days following its initial receipt thereof. Each such request
for approval and consent of a TAB for a Major Lease or Major Lease Modification
shall contain a legend in capitalized bold letters on the top of the cover page
stating: “THIS IS A REQUEST FOR CONSENT TO THE TAB FOR A [MAJOR LEASE] [MAJOR
LEASE MODIFICATION]. AGENT’S RESPONSE IS REQUESTED WITHIN FIVE (5) BUSINESS
DAYS. AGENT’S FAILURE TO RESPOND WITHIN SUCH TIME PERIOD SHALL RESULT IN AGENT’S
CONSENT BEING DEEMED TO HAVE BEEN GRANTED.” In the event that Agent fails to
grant or withhold its approval and consent to such TAB within such five (5)
Business Day period (and, in the case of a withholding of consent, stating the
grounds therefor in reasonable detail), then Agent’s approval and consent shall
be deemed to have been granted. Subject to the approval time periods set forth
above with respect to Major Leases and Major Lease Modifications, so long as any
Major Lease or Major Lease Modification does not contain material business terms
which differ more than five percent (5%) on a net effective basis from the
material business terms set forth in the TAB approved or deemed approved by
Agent and otherwise does not contain any lease terms which deviate materially
from the terms of the standard form of Lease used for the Property and approved
by Agent, Agent’s consent to such Major Lease or Major Lease Modification shall
not be required but shall be deemed given for purposes of Sections 4.1.11 and
6.3.2 hereof. All Major Lease, Major Lease Modifications and TABs being sent to
Agent for approval in accordance with this Section 4.1.10(c) shall be sent in
accordance with the notice provisions set forth in Section 10.6 and shall, in
addition, be sent to Ms. Barbara E. Isaacman at the following address: HSBC Bank
USA, National Association, 452 Fifth Avenue, 4th Floor New York, New York 10018.

 

4

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(d) Notwithstanding the foregoing, Borrower shall have the right to terminate
any Major Lease and no consent of Agent shall be required in respect of such
termination, provided that (i) Borrower simultaneously replaces such terminated
Lease with a Lease or Leases (for all or substantially all of the space which
was covered by the Lease being terminated) that either (A) has been approved or
deemed approved by Agent if required in accordance with Section 4.1.10(b) or
(B) otherwise meets the requirements of this Section 4.1.10, or (ii) the
applicable Tenant is in default thereunder beyond any applicable notice and
grace periods.

(e) Borrower shall and shall cause Operating Company to (i) promptly perform and
observe all of the material terms, covenants and conditions required to be
performed and observed by Borrower or Operating Company under the Leases, and
(ii) not collect any of the Rents more than one (1) month in advance (except
that Borrower may collect (A) such security deposits and last month’s Rents as
are permitted by Legal Requirements and are commercially reasonable in the
prevailing market, (B) pre-paid estimates of recoveries of operating expenses
and taxes, and other charges in accordance with the terms of each Lease).

(f) Upon request, Borrower shall furnish Agent with executed copies of all
Leases, certified as true and complete by Borrower.

(g) Intentionally omitted.

(h) Agent shall enter into a subordination, non-disturbance and attornment
agreement, in form and substance substantially similar to the form attached
hereto as Exhibit F (a “Non-Disturbance Agreement”), and otherwise acceptable to
Agent in its reasonable discretion, with any Tenant under a Major Lease (other
than the Operating Company under the Sublease and the Observatory Tenant under
the Observatory Lease) with any Tenant under a Lease for more than 25,000 square
feet of space or for retail or broadcast use and with respect to other Leases as
may be reasonably requested by the Borrower. All reasonable third-party costs
and expenses incurred by Agent in connection with the negotiation, preparation,
execution, delivery and recordation of any Non-Disturbance Agreement, including,
without limitation, reasonable attorneys’ fees and disbursements, shall be paid
by Borrower or another Credit Party.

(i) Borrower shall cause the Operating Company to comply with the terms and
provisions of this Section 4.1.10.

 

5

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TENANT NOTIFICATION LETTER

Empire State Building Company L.L.C.

c/o Malkin Holdings LLC

One Grand Central Place

60 East 42nd Street

New York, New York 10165

July     , 2011

CERTIFIED MAIL

RETURN RECEIPT REQUESTED

[Tenants under Leases]

[                                                     ]

[                                                     ]

 

  Re:

Empire State Building, New York, New York

Dear Tenant:

With reference to your lease of space in the above-referenced premises (as same
may have been, or from time to time may be amended, restated, modified, extended
or assigned, the “Lease”), please be advised that Empire State Land Associates
L.L.C. and Empire State Building Associates L.L.C. (collectively, “Borrower”),
affiliates of Empire State Building Company L.L.C. (“Landlord”), have obtained a
secured loan on the above-referenced premises with HSBC Bank USA, National
Association, as Administrative Agent (together with its successors and assigns
in such capacity, “Agent”). In connection with such loan, from and after the
date hereof and until notified otherwise by written instruction from Agent, all
payments pursuant to the Lease should be made payable to:

“Empire State Building Company L.L.C. f/b/o HSBC Bank USA, National Association,
as administrative agent, as secured party, Collection Account” and, if payment
is by check, should be sent to:

Empire State Building Company L.L.C. f/b/o HSBC Bank USA, National Association,
as administrative agent, as secured party, Collection Account

[                                                     ]

[                                                     ]

[                                                     ]

and, if payment is made by wire or ACH transfer, it should be sent to:

Bank: [                                                     ]

Account Name: Empire State Building Company L.L.C. f/b/o HSBC Bank USA, National
Association, as administrative agent, as secured party, Collection Account

Account No.:                 [                        
                            ]

Wire / ACH ABA No.: [                                                     ]

Reference Tenant Name and Tenant ID#

 

6

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In addition, all notices given pursuant to your lease should be directed as
follows:

Empire State Building Company, L.L.C.

c/o Malkin Holdings LLC

One Grand Central Place

60 East 42nd Street

New York, NY 10165

Attention: Legal

If you have any questions regarding this letter, please contact your Landlord
c/o [350 Fifth].

Please be aware that Agent is the holder of a mortgage dated as of July [    ],
2011, from Borrower to Agent (“Mortgage”) pursuant to a certain Loan Agreement,
dated as of July [    ], 2011 (the “Loan Agreement”).

 

LANDLORD:       EMPIRE STATE BUILDING COMPANY L.L.C., a New York limited
liability company       By:      

 

cc:

Agent

 

7

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EXHIBIT I

FORM OF REQUISITION AUTHORIZATION STATEMENT

Date: As of July [        ], 2011

 

  Re:

Loan Agreement (the “Agreement”), dated as of July [    ], 2011 between HSBC
Bank USA, National Association, (“Agent”), the Lenders signatory thereto
(“Lenders”), Empire State Land Associates L.L.C. (“ESLA”) and Empire State
Building Associates L.L.C. (together with ESLA, collectively, “Borrower”).

The undersigned Borrower hereby unconditionally authorizes any one of the
persons whose names and signatures appear below to execute and submit Draw
Requests for additional Advances of the Loan to Agent for the benefit of the
Lenders under the Agreement with the identical force and effect in all respects
as if executed and submitted by Borrower. No revocation or modification of the
foregoing authorization shall be effective until written notice thereof from
Borrower shall have been actually received by Barbara Isaacman, Senior Real
Estate Relationship Manager, of HSBC Bank USA, National Association, at 452
Fifth Avenue, New York, New York 10018.

 

[                                                         ]:       
[                                                         ]:       
[                                                         ]:       
[                                                         ]:       

 

1

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BORROWER: EMPIRE STATE LAND ASSOCIATES L.L.C., a New York limited liability
company   By: Empire State Building Associates L.L.C., its Sole Member     By:  
        Peter L. Malkin, Member     By:           Anthony E. Malkin, Member    
By:           Thomas N. Keltner, Jr., Member EMPIRE STATE BUILDING ASSOCIATES
L.L.C., a New York limited liability company     By:           Peter L. Malkin,
Member     By:           Anthony E. Malkin, Member     By:           Thomas N.
Keltner, Jr., Member

 

2

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This is to certify that this Requisition Authorization Statement was executed in
my presence on the date hereof (a) by the parties whose signatures appear above
in the capacities indicated on behalf of the above-named Borrower and (b) by the
other parties whose signatures appear above.

 

   Notary Public My Commission Expires:   

 

3

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EXHIBIT J

FORM OF SUBORDINATION AGREEMENT

AFFILIATE DEBT SUBORDINATION

THIS AFFILIATE DEBT SUBORDINATION (this “Subordination”) is made as of the
            day of             , 20    , by and between             , a
            , having             an             office             at
            (the “Affiliate Lender”) and HSBC BANK USA, NATIONAL ASSOCIATION
(“HSBC”), a New York banking corporation, having an office at 452 Fifth Avenue,
New York, New York 10018, as agent (“Agent”) for itself and other co-lenders as
may exist from time to time (collectively with HSBC, “Senior Lender”). All
initially capitalized terms not defined herein shall have the respective
meanings set forth in the Loan Agreement (as defined below).

W I T N E S S E T H:

WHEREAS, Senior Lender is about to make a loan to Empire State Land Associates
L.L.C. and Empire State Building Associates L.L.C., each a New York limited
liability company (collectively, “Borrower”), in the amount of TWO HUNDRED
THIRTY FIVE MILLION AND NO/100 DOLLARS ($235,000,000.00), or so much thereof as
may be advanced from time to time (the “Senior Loan”) pursuant to that certain
loan agreement dated as of July [        ], 2011 between Borrower, Agent and
Senior Lender (as the same may be amended, modified, supplemented and/or
restated from time to time, the “Loan Agreement”), which Senior Loan will be
secured by, among other things, that certain consolidated, amended and restated
fee and leasehold mortgage, assignment of leases and rents and security
agreement dated as of July [        ], 2011 between Borrower and Agent, for the
ratable benefit of Senior Lender (together with any extensions, modifications,
substitutions and consolidations thereof, and any mortgages, deeds of trust and
deeds to secure debt executed by Borrower after the date hereof as security for
the Senior Loan, collectively, the “Mortgage”), which Mortgage encumbers, among
other things, those certain premises more particularly described on EXHIBIT A
attached hereto, together with all improvements located thereon (collectively,
the “Mortgaged Property”);

WHEREAS, Affiliate Lender has made as of the date hereof, and may in the future
make, certain loans (any such loans existing as of the date hereof, together
with any such loans entered into after the date hereof, collectively, the
“Affiliate Loan”) to Borrower;

WHEREAS, Affiliate Lender is an affiliate of Borrower and will derive a
substantial benefit from the making of the Senior Loan by Senior Lender to
Borrower; and

WHEREAS, pursuant to Section 4.2.19(f) of the Loan Agreement, the Affiliate Loan
is required to be subordinate to the Senior Loan.

 

1

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NOW, THEREFORE, in consideration of the mutual premises contained herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by the parties hereto, the Affiliate Lender and Agent on
behalf of Senior Lender hereby agree as follows:

 

  (1)

The Affiliate Loan and all payment obligations of Borrower with respect thereto,
is hereby, and shall continue to be, subject and subordinate to Borrower’s
obligations under the Senior Loan. All of the terms, covenants and conditions of
the loan documents evidencing the Affiliate Loan (collectively, the “Affiliate
Loan Documents”), if any, are hereby, and shall continue to be, subordinate to
all of the terms, covenants and conditions of the Senior Loan and to all of
Borrower’s payment obligations thereunder.

 

  (2)

The Affiliate Lender hereby represents and warrants that (a) it is now the owner
and holder of the Affiliate Loan; (b) the Affiliate Loan is now in full force
and effect; (c) the Borrower is not in default in the observance and/or
performance of any of the obligations thereunder required to be observed and
performed by the Borrower; (d) no event has occurred, which, with the passing of
time or the giving of notice or both would constitute a default thereunder;
(e) all payments due thereon to and including the date hereof, have been paid in
full; and (f) the current outstanding principal balance of the Affiliate Loan is
$            .

 

  (3)

The Affiliate Lender hereby agrees that so long as any sum shall remain
outstanding on the Affiliate Loan:

 

  (a)

The Affiliate Lender shall simultaneously send to Agent due notice of all
defaults under the Affiliate Loan Documents as well as copies of all notices
required to be delivered to the Borrower under the Affiliate Loan Documents.
Notice under the Affiliate Loan shall not be deemed effective until such notice
has been received by Agent.

 

  (b)

The Affiliate Lender shall not, without the prior written consent of Agent, take
any Enforcement Action (hereinafter defined). For the purposes of this
Subordination, the term “Enforcement Action” shall mean with respect to the
Affiliate Loan Documents, the acceleration of all or any part of the
indebtedness secured by the Affiliate Loan Documents, any foreclosure
proceedings, the exercise of any power of sale, the acceptance by the Affiliate
Lender of a deed or assignment in lieu of foreclosure, the obtaining of a
receiver, the seeking of default interest or any late charge, the taking of
possession or control of any of Borrower’s property, the suing on the Affiliate
Loan Documents, the exercising of any banker’s lien or rights of set-off or
recoupment, the commencement of any bankruptcy, reorganization or insolvency
proceedings against the Borrower under any federal or state law, or the taking
of any other enforcement action against the Borrower. Notwithstanding the
foregoing, the Affiliate Loan shall be unsecured.

 

  (c)

Upon the occurrence and during the continuance of any monetary Default or any
Event of Default under the Loan Agreement, no payment shall be made to or
accepted by the Affiliate Lender in respect of the Affiliate Loan.

 

2

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  (d)

The Affiliate Lender shall not pledge, assign, hypothecate, transfer, convey or
sell the Affiliate Loan or any interest in the Affiliate Loan or modify, waive
or amend any of the terms or provisions of the Affiliate Loan Documents, without
the prior written consent of Agent.

 

  (e)

After request by Agent, the Affiliate Lender shall, within ten (10) days,
furnish Agent with a statement, duly acknowledged and certified, setting forth
the outstanding principal amount of the Affiliate Loan, all accrued but unpaid
interest and any other sums due and owing thereunder, the rate of interest, the
monthly payments and that there exists no defaults under the Affiliate Loan
Documents.

 

  (4)

Agent and the Affiliate Lender shall cooperate fully with each other in order to
promptly and fully carry out the terms and provisions of this Subordination.
Each party hereto shall from time to time execute and deliver such other
agreements, documents or instruments and take such other actions as may be
reasonably necessary or desirable to effectuate the terms of this Subordination.

 

  (5)

No failure or delay on the part of any party hereto in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power or remedy
hereunder.

 

  (6)

Each party hereto acknowledges that to the extent that no adequate remedy at law
exists for breach of its obligations under this Subordination, in the event
either party fails to comply with its obligations hereunder, the other party
shall have the right to obtain specific performance of the obligations of such
defaulting party, injunctive relief or such other equitable relief as may be
available.

 

  (7)

Any notice to be given under this Subordination shall be in writing and shall be
deemed to be given when received by the party to whom it is addressed. Notices
shall be in writing and sent by registered mail, hand delivery or by special
courier (in each case, return receipt requested). Notices to the other party
hereto shall be sent to the address first set forth herein or such other address
or addressees as shall be designated by such party in a written notice to the
other parties.

 

  (8)

No person, including, without limitation, Borrower, other than the parties
hereto and their successors and permitted assigns shall have any rights under
this Subordination.

 

  (9)

This Subordination may be executed in two or more counterparts each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.

 

  (10)

No amendment, supplement, modification, waiver or termination of this
Subordination shall be effective against a party against whom the enforcement of
such amendment, supplement, modification, waiver or termination would be
asserted, unless such amendment, supplement, modification, waiver or termination
was made in a writing signed by such party.

 

3

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  (11)

In case any one or more of the provisions contained in this Subordination, or
any application thereof, shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein, and any other application thereof, shall not in any way be
affected or impaired thereby.

 

  (12)

This Subordination shall be construed in accordance with and governed by the
laws of the State of New York.

 

  (13)

This Subordination shall bind and inure to the benefit of Agent, Senior Lender
and the Affiliate Lender and their respective successors, permitted transferees
and assigns.

 

4

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IN WITNESS WHEREOF, the parties have duly executed this Subordination as of the
day and year first above written.

 

AFFILIATE LENDER: [                                                         ]
By:       Name:   Title: AGENT: HSBC BANK USA, NATIONAL ASSOCIATION, as Agent
for Senior Lender By:       Name:   Title:

 

5

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EXHIBIT A

LEGAL DESCRIPTION

ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, County of New York, City and State of New York, bounded
and described as follows:

BEGINNING at the corner formed by the intersection of the southerly side of West
34th Street with the westerly side of Fifth Avenue;

THENCE Southerly along the westerly side of Fifth Avenue, 197 feet 6 inches to
the northerly side of West 33rd Street;

THENCE Westerly along the northerly side of West 33rd Street, 500 feet;

THENCE Northerly and parallel with the westerly side of Fifth Avenue, 98 feet 9
inches to the middle line of the block;

THENCE Easterly and parallel with the northerly side of West 33rd Street, 75
feet;

THENCE again Northerly and parallel with the westerly side of Fifth Avenue and
part of the distance through a party wall, 98 feet 9 inches to the southerly
side of West 34th Street;

THENCE Easterly along the southerly side of West 34th Street, 425 feet to the
corner aforesaid, the point or place of BEGINNING.

 

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