Exhibit 10.3

 

LOAN AND SECURITY AGREEMENT

 

Dated as of March 4, 2005

 

Between

 

FIRST STATES INVESTORS 5200, LLC

as Borrower

 

and

 

GERMAN AMERICAN CAPITAL CORPORATION

 

and

 

BEAR STEARNS COMMERCIAL MORTGAGE, INC.

 

Collectively as Lender

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TABLE OF CONTENTS

 

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I.   DEFINITIONS; PRINCIPLES OF CONSTRUCTION    1     Section 1.1   
Definitions.    1     Section 1.2    Principles of Construction.    32 II.  
GENERAL TERMS    32     Section 2.1    Loan; Disbursement to Borrower.    32    
Section 2.2    Interest; Loan Payments; Late Payment Charge.    33     Section
2.3    Prepayments.    35     Section 2.4    Regulatory Change; Taxes.    37    
Section 2.5    Conditions Precedent to Closing.    39     Section 2.6   
Substitution of Properties    43 III.   CASH MANAGEMENT    49     Section 3.1   
Cash Management.    49 IV.   REPRESENTATIONS AND WARRANTIES    56     Section
4.1    Borrower Representations.    56     Section 4.2    Survival of
Representations    66 V.   BORROWER COVENANTS    66     Section 5.1   
Affirmative Covenants.    66     Section 5.2    Negative Covenants.    74 VI.  
INSURANCE; CASUALTY; CONDEMNATION; RESTORATION    76     Section 6.1   
Insurance Coverage Requirements    76     Section 6.2    Condemnation and
Insurance Proceeds.    81 VII.   IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER
ITEMS    85     Section 7.1    Borrower to Pay Impositions and Other Charges   
85     Section 7.2    No Liens    85     Section 7.3    Contest    86 VIII.  
TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS    87     Section 8.1   
Restrictions on Transfers    87     Section 8.2    Sale of Building Equipment   
87     Section 8.3    Immaterial Transfers and Easements, etc    88     Section
8.4    Intentionally Omitted.    88     Section 8.5    Permitted Interest
Transfers.    88     Section 8.6    Deliveries to Lender    89     Section 8.7
   Release of Properties    89     Section 8.8    Leases.    92

 

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IX.   DEFEASANCE.    95     Section 9.1    Defeasance and Release.    95 X.  
MAINTENANCE OF PROPERTY; ALTERATIONS    99     Section 10.1    Maintenance of
Property    99     Section 10.2    Conditions to Alteration    99     Section
10.3    Costs of Alteration    100 XI.   BOOKS AND RECORDS, FINANCIAL
STATEMENTS, REPORTS AND OTHER INFORMATION    101     Section 11.2    Financial
Statements.    101 XII.   ENVIRONMENTAL MATTERS    105     Section 12.1   
Representations    105     Section 12.2    Covenants.    106     Section 12.3   
Environmental Reports    106     Section 12.4    Environmental Indemnification
   107     Section 12.5    Recourse Nature of Certain Indemnifications    107
XIII.   THE GROUND LEASES    107     Section 13.1    Leasehold Representations,
Warranties    107     Section 13.2    Cure by Lender    108     Section 13.3   
Option to Renew or Extend the Ground Leases    109     Section 13.4    Ground
Lease Covenants.    109     Section 13.5    Lender Right to Participate    111  
  Section 13.6    No Liability    111 XIV.   SECURITIZATION AND PARTICIPATION   
112     Section 14.1    Sale of Notes and Securitization    112     Section 14.2
   Loan Components; Uncross of Properties.    113     Section 14.3   
Cooperation    115     Section 14.4    Securitization Costs    115     Section
14.5    Securitization Indemnification.    115     Section 14.6    Retention of
Servicer    117 XV.   ASSIGNMENTS AND PARTICIPATIONS    118     Section 15.1   
Assignment and Acceptance    118     Section 15.2    Effect of Assignment and
Acceptance    118     Section 15.3    Content    119     Section 15.4   
Register    119     Section 15.5    Substitute Notes    119     Section 15.6   
Participations    120     Section 15.7    Disclosure of Information    120    
Section 15.8    Security Interest in Favor of Federal Reserve Bank.    120 XVI.
  RESERVE FUNDS    121     Section 16.1    Required Repairs.    121

 

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    Section 16.2    Environmental Remediation.    122     Section 16.3    Tax,
Insurance and Other Charges Funds.    124     Section 16.4    Replacements and
Replacement Reserve.    126     Section 16.5    Vacant B Space Rollover Reserve.
   130     Section 16.6    Rollover Reserve.    131     Section 16.7    BofA
Reserve.    132     Section 16.8    Debt Service Reserve Fund.    133    
Section 16.9    Reserve Funds, Generally    133     Section 16.10    Letter of
Credit.    134 XVII.   DEFAULTS    135     Section 17.1    Event of Default.   
135     Section 17.2    Remedies.    138     Section 17.3    Remedies
Cumulative; Waivers.    139     Section 17.4    Costs of Collection    140
XVIII.   SPECIAL PROVISIONS    140     Section 18.1    Exculpation.    140 XIX.
  MISCELLANEOUS    140     Section 19.1    Survival    140     Section 19.2   
Lender’s Discretion    140     Section 19.3    Governing Law.    141     Section
19.4    Modification, Waiver in Writing    142     Section 19.5    Delay Not a
Waiver    142     Section 19.6    Notices    142     Section 19.7    TRIAL BY
JURY    144     Section 19.8    Headings    144     Section 19.9    Severability
   144     Section 19.10    Preferences    145     Section 19.11    Waiver of
Notice    145     Section 19.12    Expenses; Indemnity.    145     Section 19.13
   Exhibits and Schedules Incorporated    148     Section 19.14    Offsets,
Counterclaims and Defenses    148     Section 19.15    Liability of Assignees of
Lender    148     Section 19.16    No Joint Venture or Partnership; No Third
Party Beneficiaries.    148     Section 19.17    Publicity    149     Section
19.18    Waiver of Marshalling of Assets    149     Section 19.19    Waiver of
Counterclaim and other Actions    149     Section 19.20    Conflict;
Construction of Documents; Reliance    149     Section 19.21    Prior Agreements
   150     Section 19.22    Counterparts    150     Section 19.23    VCOC    150

 

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SCHEDULES

 

SCHEDULE I    REQUIRED TENANT ESTOPPEL CERTIFICATES SCHEDULE II    PROPERTY,
ALLOCATED LOAN AMOUNTS AND VACANT B SPACE SCHEDULE III    LITIGATION SCHEDULE
SCHEDULE IV    REA SCHEDULE SCHEDULE V    REQUIRED DEFERRED MAINTENANCE SCHEDULE
VI    GROUND LEASES SCHEDULE VII    BORROWER ORGANIZATIONAL STRUCTURE
SCHEDULE VIII    O&M PROGRAMS SCHEDULE IX    REQUIRED ENVIRONMENTAL REMEDIATION
SCHEDULE X    RENT ROLL SCHEDULE XI    EXCEPTIONS TO GROUND LEASE
REPRESENTATIONS AND WARRANTIES SCHEDULE XII    ADDITIONAL LEASE SCHEDULE
SCHEDULE XIII    WAREHOUSE FINANCING DOCUMENTS AND NON-FINANCED PROPERTY
ACQUISITION AND CONVEYANCE DOCUMENTS SCHEDULE XIV    SAMPLE MONTHLY REPORT,
QUARTERLY REPORT AND ANNUAL REPORT

 

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LOAN AND SECURITY AGREEMENT

 

This LOAN AND SECURITY AGREEMENT, dated as of March 4, 2005 (as amended,
restated, replaced, supplemented or otherwise modified from time to time, this
Agreement), between FIRST STATES INVESTORS 5200, LLC, a Delaware limited
liability company (Borrower), having an office at c/o First States Group, L.P.,
1725 The Fairway, Jenkintown, Pennsylvania 19046, GERMAN AMERICAN CAPITAL
CORPORATION, a Maryland corporation (GACC), having an address at 60 Wall Street,
10th Floor, New York, New York 10005 and BEAR STEARNS COMMERCIAL MORTGAGE, INC.,
a New York corporation (BSCMI), having an office at 383 Madison Avenue, New
York, New York 10179 (GACC and BSCMI together with their respective successors
and assigns, collectively, Lender).

 

W I T N E S S E T H:

 

WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from
Lender; and

 

WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in
accordance with the terms of this Agreement and the other Loan Documents (as
hereinafter defined).

 

NOW THEREFORE, in consideration of the making of the Loan by Lender and the
covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:

 

I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

Section 1.1 Definitions.

 

For all purposes of this Agreement, except as otherwise expressly required or
unless the context clearly indicates a contrary intent:

 

Account Collateral shall mean the Lockbox Account, the Cash Management Account
and the Reserve Funds, collectively.

 

Additional Non-Consolidation Opinion shall have the meaning set forth in Section
4.1.29(b).

 

Affected Property shall have the meaning set forth in Section 14.2(b) hereof.

 

Affiliate shall mean, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with, or any general partner or managing member in, such
specified Person. An Affiliate of a Person includes, without limitation, (i) any
record or beneficial owner of more than 10% of any class of ownership interests
of such Person and (ii) any Affiliate of the foregoing. For the purposes of this
definition, “control” when used with respect to any specified Person means the

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power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities or other
beneficial interest, by contract or otherwise; and the terms “controlling” and
“controlled” have the meanings correlative to the foregoing.

 

Agreement shall mean this Agreement, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

 

Allocated Loan Amount shall mean with respect to each Individual Property, the
designated allocated portion of the Loan applicable to such Individual Property
that is set forth on Schedule II attached hereto. Schedule II attached hereto as
of the Closing Date sets forth the Allocated Loan Amounts, assuming the maximum
Principal Amount of the Loan is advanced in connection with the second
disbursement. At any time on or prior to April 4, 2005, the Lender shall have
the unilateral right to adjust the Allocated Loan Amounts based on the Principal
Amount of the Loan as of such date, provided that the sum of the Allocated Loan
Amount of each Individual Property as of such date shall equal the then current
Principal Amount of the Loan. The Lender shall deliver to the Borrower in
writing an updated Schedule II in connection with such adjustment.

 

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

 

Alteration shall have the meaning set forth in Section 10.2.

 

Amortized Release Amount shall mean, for any Individual Property, the original
Allocated Loan Amount for such Individual Property, reduced in accordance with
this definition. For the purpose of calculating the Amortized Release Amount of
an Individual Property, (A) prepayments of the Loan described in Sections
2.3.1(b) and any Defeasance of the Loan pursuant to Section 9.1 shall be deemed
to reduce the Amortized Release Amount of any Individual Property being released
to zero, (B) an amount equal to the excess of (x) the Principal Amount prepaid
or the Principal Amount defeased in connection with such release over (y) the
Allocated Loan Amount of such Individual Property being released shall be deemed
to reduce the Amortized Release Amounts of all other Individual Properties
subject to the Liens of the Security Instrument at the time of such prepayment
or defeasance pro rata and (C) the pro rata portion of scheduled principal
amortization payments on the Loan shall be deemed to reduce the Amortized
Release Amount of each Individual Property subject to the Lien of the Security
Instrument at the time of such amortization payment.

 

Annual Budget shall mean the operating budget for the Property prepared by or
for Borrower setting forth, in reasonable detail, anticipated results of
operations of the Property for the applicable Fiscal Year, including revenues
from all sources, all anticipated Operating Expenses, Management Fees and
Capital Expenditures.

 

Approved Annual Budget shall have the meaning set forth in Section 11.2.5
hereof.

 

Approved Bank shall mean a bank which has either (i) long-term unsecured debt
obligations rated at least “AA-” by S&P and Fitch and “Aa2” by Moody’s or (ii)
long-term unsecured debt obligations rated at least “A” or “A+” by S&P and Fitch
and “A1” by Moody’s and short-term unsecured debt obligations or commercial
paper rated at least “A-1” by S&P, “P1” by Moody’s and “F-1” by Fitch.

 

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Assignment and Acceptance shall mean an assignment and acceptance entered into
by Lender and an assignee, and accepted by Lender in accordance with Article XV
and in the form customarily used by Lender in connection with the participation
or syndication of mortgage loans at the time of such assignment.

 

Assignment of Leases shall mean those certain first priority Assignment of
Leases, Rents and Security Deposits, dated as of the date hereof, from Borrower,
as assignor, to MERS, as nominee of Lender, as assignee, assigning to MERS, as
nominee of Lender all of Borrower’s interest in and to the Leases, Rents and
security deposits as security for the Loan, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

 

Assignment of Management Agreement shall mean that certain Manager’s Consent and
Subordination of Management Agreement, dated as of the date hereof, among
Lender, Borrower and Manager, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time in accordance with this
Agreement.

 

Bankruptcy Code shall mean Title 11, U.S.C.A., as amended from time to time and
any successor statute thereto.

 

BofA Lease shall mean that certain Master Lease Agreement, dated as of October
1, 2004, between Borrower and Bank of America, N.A., as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time in
accordance with this Agreement.

 

BofA Reserve Fund shall have the meaning set forth in Section 16.7.1.

 

Borrower has the meaning set forth in the first paragraph of this Agreement.

 

Borrower’s Account shall mean Borrower’s account number 2000013368494 at
Wachovia Bank (ABA #: 031201467), or such other account as Borrower may
designate in writing to the Lender.

 

Breakage Costs shall mean with respect to any prepayment of the Loan, the sum of
(i) all interest that accrues through the end of the Interest Period related to
the Unscheduled Payment Date next following the date of such prepayment (or, if
such prepayment occurs on an Unscheduled Payment Date, all interest that accrues
through the end of the Interest Period related to such Unscheduled Payment Date)
plus (ii) with respect to any interest rate lock agreement entered into by a
Lender with the Borrower or an Affiliate of the Borrower, the applicable
breakage costs associated with any hedging transaction entered into by the
Lender pursuant to such agreement to the extent that the Principal Amount
following such prepayment is less than the hedged principal amount.

 

Building Equipment shall have the meaning set forth in the Security Instrument.

 

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Business Day shall mean any day other than a Saturday, Sunday or any other day
on which national banks in New York or in the state in which Servicer is located
are not open for business.

 

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

 

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

 

Cash and Cash Equivalents shall mean any one or a combination of the following:
(i) Cash, and (ii) U.S. Government Obligations.

 

Cash Management Account shall have the meaning set forth in Section 3.1.2(a)
hereof.

 

Cash Management Agreement shall mean that certain Account and Control Agreement,
dated as of the date hereof, by and among Borrower, Cash Management Bank,
Manager and Lender, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.

 

Cash Management Bank shall mean PNC Bank, National Association or any other
financial institution approved by the Lender and, if a Securitization has
occurred, the Rating Agencies.

 

Casualty Amount shall mean, with respect to any casualty that affects an
Individual Property, the greater of (i) five percent (5%) of the Allocated Loan
Amount of the affected Individual Property and (ii) $500,000 with respect to
such affected Individual Property and, with respect to any single casualty or
series of related casualties that affects multiple Individual Properties,
$5,000,000 in the aggregate.

 

Closing Date shall mean the date of this Agreement set forth in the first
paragraph hereof.

 

Closing Date DSCR shall mean a DSCR of 1.16 to 1.0.

 

Code shall mean the Internal Revenue Code of 1986, as amended, as it may be
further amended from time to time, and any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.

 

Control shall mean (i) 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/or
(ii) the ownership, direct or indirect, of no less than 51% of the voting
securities of such Person, and the terms Controlled, Controlling and Common
Control shall have correlative meanings.

 

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Cure Event shall mean the curing of a Lockbox Event by the Borrower which cure
may occur solely and strictly in accordance with clauses (1) – (4) below:

 

(1) if the Lockbox Event is the occurrence of an Event of Default (as described
in clause (a) of the definition of Lockbox Event), then the Borrower may cure
the Lockbox Event by curing the Event of Default in a manner which is accepted
by the Lender (except notwithstanding the foregoing, no cure of a Lockbox Event
which is an Event of Default shall be permitted hereunder if the Lender has
accelerated the Maturity Date of the Loan, moved for the appointment of a
receiver or commenced a foreclosure proceeding with respect to the Property);

 

(2) if the Lockbox Event is an insolvency of the Manager (as described in clause
(b) of the definition of Lockbox Event), then the Borrower may cure by
appointing a Qualified Manager pursuant to a management agreement acceptable to
the Lender by not later than sixty (60) days after the occurrence of such
insolvency;

 

(3) if the Lockbox Event is that the credit rating of Bank of America, N.A. by
any of S&P, Fitch or Moody’s falls below “BBB” (or the equivalent), then such
Lockbox Event shall be cured when such credit rating increases to “BBB” (or the
equivalent); and

 

(4) if the Lockbox Event is the ratio of Underwritten Net Cash Flow to debt
service on the Loan falling below the required level (as described in clause (d)
of the definition of Lockbox Event), then the Borrower may

 

(i) cure such Lockbox Event on an immediate basis by posting with the Lender
Cash or a Letter of Credit in an amount that if applied to repay the Loan would,
based on the hypothetical reduced Principal Amount, cause the ratio of (x)
Underwritten Net Cash Flow of the Property subject to the Liens of the Security
Instrument on the date of such cure for the preceding six (6) months annualized
to (y) the product of twelve (12) and either (a) during the period from the
Closing Date through June 14, 2005, the interest payment due and payable on the
next Payment Date or (b) commencing on June 15, 2005 and thereafter, the current
Monthly Debt Service Payment Amount to equal 1.15x as determined by Lender or

 

(ii) cure such Lockbox Event over time by achieving a ratio of (x) Underwritten
Net Cash Flow of the Property on the date of such cure for the applicable
preceding six (6) months annualized to (y) the product of twelve (12) and either
(a) during the period from the Closing Date through June 14, 2005, the interest
payment due and payable on the next Payment Date or (b) commencing on June 15,
2005 and thereafter, the current Monthly Debt Service Payment Amount equal to
1.15x as determined by the Lender.

 

Cut-Off Date shall have the meaning set forth in Section 6.2.3.

 

DBS/BSI shall have the meaning set forth in Section 14.5.2(a)(ii).

 

DBS/BSI Group shall have the meaning set forth in Section 14.5.2(a)(ii).

 

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Debt shall mean, with respect to any Person at any time, (a) indebtedness or
liability of such Person for borrowed money whether or not evidenced by bonds,
debentures, notes or other instruments, or for the deferred purchase price of
property or services; (b) obligations of such Person as lessee under leases
which should have been or should be, in accordance with GAAP, recorded as
capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for, or liabilities incurred on the account of, such Person; (e) obligations or
liabilities of such Person arising under letters of credit, credit facilities or
other acceptance facilities; (f) obligations of such Person under any guarantees
or other agreement to become secondarily liable for any obligation of any other
Person, endorsements (other than for collection or deposit in the ordinary
course of business) and other contingent obligations to purchase, to provide
funds for payment, to supply funds to invest in any Person or otherwise to
assure a creditor against loss; (g) obligations of such Person secured by any
Lien on any property of such Person, whether or not the obligations have been
assumed by such Person; or (h) obligations of such Person under any interest
rate or currency exchange agreement.

 

Debt Service shall mean, with respect to any particular period of time,
scheduled interest and principal amortization payments due under the Note.

 

Debt Service Reserve Fund shall have the meaning provided in Section 16.8.1.

 

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

 

Default Rate shall mean a rate per annum equal to the lesser of (a) the Maximum
Legal Rate and (b) four percent (4%) above the Interest Rate.

 

Defeasance shall have the meaning provided in Section 9.1.

 

Defeasance Collateral shall mean Defeasance Eligible Investments pledged to
Lender as collateral pursuant to Section 9.1 (including, without limitation, all
amounts then on deposit in the Defeasance Collateral Account).

 

Defeasance Collateral Account shall have the meaning provided in Section 9.1.

 

Defeasance Collateral Requirement shall mean with respect to

 

(i) the Defeasance of the Liens of the Security Instrument for all of the
Individual Properties that have not been subject to prior Property Releases,
Defeasance Collateral in an amount sufficient to generate cash payments
sufficient to pay all principal indebtedness outstanding as of the date of
Defeasance under the Note as it becomes due and sufficient to pay scheduled
interest payments on the Loan, as the same become due, through the Maturity Date
or

 

(ii) a Defeasance of the Lien of the Security Instrument for an Individual
Property which is a Release Property, Defeasance Collateral in an amount,
calculated based upon the Allocated Loan Amount of such Individual Property,
sufficient to generate cash

 

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payments sufficient to pay the Defeasance Collateral Requirement Percentage of
each of (I) the product of (a) the quotient expressed as a percentage of the
Allocated Loan Amount of such Individual Property divided by the then
outstanding Principal Amount of the Loan multiplied by (b) each Monthly Debt
Service Payment Amount due on each successive scheduled Payment Date thereafter
under this Agreement and (II) the product of (a) the quotient expressed as a
percentage of the Allocated Loan Amount of such Individual Property divided by
the then outstanding Principal Amount of the Loan multiplied by (b) the payment
due on the Maturity Date pursuant to Section 2.2.2(d) of this Agreement, in each
case as each interest and principal payment is required to be made under this
Agreement.

 

Defeasance Collateral Requirement Percentage means the fraction expressed as a
percentage the numerator of which is the Release Price for such Individual
Property and the denominator of which is the Allocated Loan Amount of such
Individual Property.

 

Defeasance Eligible Investments shall mean obligations or securities not subject
to prepayment, call or early redemption which are direct obligations of, or
obligations fully guaranteed as to timely payment by, the United States of
America or any agency or instrumentality of the United States of America, the
obligations of which are backed by the full faith and credit of the United
States of America, the ownership of which will not cause Lender to be an
“investment company” under the Investment Company Act of 1940, as amended, as
evidenced by an Opinion of Counsel reasonably acceptable to Lender, and which
qualify under §1.860G-2(a)(8) of the Treasury regulations. All such obligations
or securities shall mature or be redeemable, or provide for payments of interest
thereon on or prior to the Business Day preceding the date principal and
interest payments are scheduled to be paid under the Note.

 

Defeasance Lockout Period shall mean the period commencing on the date hereof
and expiring on the earlier date to occur of (a) two years after (i) the
“startup day,” within the meaning of Section 860G(a)(9) of the Code, of a REMIC,
that holds the Notes and the Security Instruments or (ii) if the Notes are
severed and such severed portions are included in REMICs that do not have the
same “startup day,” the “startup day” of the REMIC in which the last of such
severed portions is included, or (b) three (3) years after the first day of the
Interest Period during which the Loan begins to accrue interest at the fixed
Interest Rate referred to in clause (3) of the definition of “Interest Rate”,
whichever shall first occur.

 

Defeasance Note shall have the meaning provided in Section 9.1.

 

Defeasance Security Agreement shall have the meaning provided in Section 9.1.

 

Deficiency shall have the meaning set forth in Section 6.2.4(b).

 

Disclosure Documents shall have the meaning set forth in Section 14.5.1.

 

DSCR shall mean a ratio, as reasonably determined by Lender for the applicable
period, in which:

 

(a) the numerator is the Underwritten Net Cash Flow for the Property subject to
the Liens of the Security Instrument, for the most recent twelve (12) month
period

 

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immediately prior to the applicable calculation date for which the Borrower has
delivered financial statements to the Lender pursuant to this Agreement (or in
the event the Borrower has not yet delivered financial statements for a twelve
(12) month period, such shorter period for which Borrower has delivered
financial statements to the Lender pursuant to this Agreement annualized); and

 

(b) the denominator is the product of (a) the DSCR Constant multiplied by (b) an
amount equal to the outstanding Principal Amount plus any undrawn principal
amount minus the aggregate remaining balance of the Defeasance Notes, if any, as
of such calculation date.

 

DSCR Constant shall mean (1) with respect to the calculation of the DSCR on the
Closing Date and at any time thereafter up to June 13, 2005, 7.26% and (2) as of
any date of determination on or after June 13, 2005, a rate equal to (x) the
quotient of the Monthly Debt Service Payment Amount for the Payment Date
following such date of determination divided by the Principal Amount of the Loan
on such Payment Date multiplied by (y) twelve (12).

 

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 the corporate trust
department of a federal or state chartered depository institution or trust
company acting in its fiduciary capacity subject to regulations regarding
fiduciary funds on deposit substantially similar to 12 C.F.R. §9.10(b), having
in either case corporate trust powers and 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
or any other physical indicia of ownership. Following a downgrade, withdrawal,
qualification or suspension of such institution’s rating, each account must
promptly (and in any case within not more than thirty (30) calendar days) be
moved to a qualifying institution or to one or more segregated trust accounts in
the trust department of such institution, if permitted.

 

Eligible Institution shall mean a depository institution or trust company, the
short term unsecured debt obligations or commercial paper of which are rated at
least “A-1+” by S&P, “P-1” by Moody’s and “F-1+” by Fitch in the case of
accounts in which funds are held for thirty (30) days or less (or, in the case
of accounts in which funds are held for more than thirty (30) days, the
long-term unsecured debt obligations of which are rated at least “AA” by Fitch
and S&P and “Aa2” by Moody’s).

 

Embargoed Person shall have the meaning set forth in Section 5.1.22.

 

Environmental Certificate shall have the meaning set forth in Section 12.2.1.

 

Environmental Claim shall mean any claim, action, cause of action, investigation
or written notice by any Person alleging potential liability (including
potential liability for investigatory costs, cleanup costs, natural resource
damages, property damages, personal injuries or penalties) arising out of, based
upon or resulting from (a) the presence,

 

8

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threatened presence, release or threatened release into the environment of any
Hazardous Materials from or at the Property, or (b) the violation, or alleged
violation, of any Environmental Law relating to the Property.

 

Environmental Event shall have the meaning set forth in Section 12.2.1.

 

Environmental Indemnity shall mean the Environmental Indemnity, dated as of the
date hereof, made by First States Group, L.P. in favor of Lender, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time
to time in accordance with this Agreement.

 

Environmental Law shall have the meaning provided in the Environmental
Indemnity.

 

Environmental Reports shall have the meaning set forth in Section 12.1.

 

Environmental Remediation shall have the meaning set forth in Section 16.2.1.

 

Environmental Remediation Reserve Fund shall have the meaning set forth in
Section 16.2.1.

 

ERISA shall mean the United States Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and the
rulings issued thereunder.

 

Event of Default shall have the meaning set forth in Section 17.1(a).

 

Excess Cash Flow shall have the meaning set forth in Section 3.1.2(b)(viii).

 

Exchange Act shall have the meaning set forth in Section 14.5.1.

 

Excluded Special Taxes shall have the meaning set forth in Section 2.4.2 hereof.

 

Exculpated Parties shall have the meaning set forth in Section 18.1.1.

 

Excusable Delay shall mean a delay solely due to acts of god, governmental
restrictions, stays, judgments, orders, decrees, enemy actions, civil commotion,
fire, casualty, strikes, work stoppages, shortages of labor or materials or
other causes beyond the reasonable control of Borrower, but Borrower’s lack of
funds in and of itself shall not be deemed a cause beyond the control of
Borrower.

 

Fee Owners shall mean the lessors under the Ground Leases.

 

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 or the portion of
any such 12-month period falling within the term of the Loan in the event that
such a 12-month period occurs partially before or after, or partially during,
the term of the Loan.

 

Fitch shall mean Fitch Ratings Inc.

 

9

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GAAP shall mean the generally accepted accounting principles 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, to the extent such principles are applicable
to the facts and circumstances on the date of determination.

 

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

 

Ground Lease shall mean the ground lease identified on Schedule VI attached
hereto.

 

Ground Lessor shall mean the respective lessor under each of the Ground Leases.

 

Ground Rent shall mean any and all payments required of Borrower under the
Ground Leases, including base rent, fixed rent, additional rent and any other
payments, sums or charges payable or required to be paid, whether to the Ground
Lessor or to a third party, under the Ground Lease.

 

Guarantor shall mean First States Group, L.P., a Delaware limited partnership.

 

Hazardous Materials shall have the meaning provided in the Environmental
Indemnity.

 

HVAC shall have the meaning set forth in Section 10.2.

 

Impositions shall mean all taxes (including all ad valorem, sales (including
those imposed on lease rentals), use, single business, gross receipts, value
added, intangible transaction, privilege or license or similar taxes),
governmental assessments (including all assessments for public improvements or
benefits, whether or not commenced or completed prior to the date hereof and
whether or not commenced or completed within the term of this Agreement), water,
sewer or other rents and charges, excises, levies, fees (including license,
permit, inspection, authorization and similar fees), and all other governmental
charges, in each case whether general or special, ordinary or extraordinary, or
foreseen or unforeseen, of every character in respect of the Property and/or any
Rents (including all interest and penalties thereon), which at any time prior
to, during or in respect of the term hereof may be assessed or imposed on or in
respect of or be a Lien upon (a) Borrower (including all income, franchise,
single business or other taxes imposed on Borrower for the privilege of doing
business in the jurisdiction in which the Property is located), (b) the
Property, or any other collateral delivered or pledged to Lender in connection
with the Loan, or any part thereof, or any Rents therefrom or any estate, right,
title or interest therein, or (c) any occupancy, operation, use or possession
of, or sales from, or activity conducted on, or in connection with the Property
or the leasing or use of all or any part thereof. Nothing contained in this
Agreement shall be construed to require Borrower to pay any tax, assessment,
levy or charge imposed on (i) any tenant occupying any

 

10

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portion of the Property, (ii) any third party manager of the Property, including
any Manager, or (iii) Lender in the nature of a capital levy, estate,
inheritance, succession, franchise, income or net revenue tax.

 

Improvements shall have the meaning set forth in the Security Instrument.

 

Increased Costs shall have the meaning set forth in Section 2.4.1.

 

Indebtedness shall mean, at any given time, the Principal Amount, together with
all accrued and unpaid interest thereon and all other obligations and
liabilities due or to become due to Lender pursuant hereto, under the Note or in
accordance with the other Loan Documents and all other amounts, sums and
expenses paid by or payable to Lender hereunder or pursuant to the Note or the
other Loan Documents.

 

Indemnified Parties shall have the meaning set forth in Section 19.12(b).

 

Indemnity Guaranty shall mean that certain Guaranty and Indemnity, dated as of
the date hereof, by Guarantor in favor of Lender, as the same may be amended,
supplemented, restated or otherwise modified from time to time.

 

Independent shall mean, when used with respect to any Person, a Person who: (i)
does not have any direct financial interest or any material indirect financial
interest in any Borrower or in any Affiliate of any Borrower, (ii) is not
connected with any Borrower or any Affiliate of any Borrower as an officer,
employee, promoter, underwriter, trustee, partner, member, manager, creditor,
director, supplier, customer or person performing similar functions and (iii) is
not a member of the immediate family of a Person defined in (i) or (ii) above.

 

Independent Accountant shall mean a firm of nationally recognized, certified
public accountants which is Independent and which is selected by Borrower and
reasonably acceptable to Lender.

 

Independent Architect shall mean an architect, engineer or construction
consultant selected by Borrower which is Independent, licensed to practice in
the State and has at least five (5) years of architectural experience and which
is reasonably acceptable to Lender.

 

Independent Director, Independent Manager, or Independent Member shall mean a
natural person who is not and will not be while serving and has never been (i) a
member (other than an Independent Member), manager (other than an Independent
Manager), director (other than an Independent Director), employee, attorney, or
counsel of Borrower or its Affiliates, (ii) a customer, supplier or other Person
who derives more than 1% of its purchases or revenues from its activities with
Borrower or its Affiliates, (iii) a direct or indirect legal or beneficial owner
in such entity or any of its Affiliates, (iv) a member of the immediate family
of any member, manager, employee, attorney, customer, supplier or other Person
referred to above, or (v) a person Controlling or under the common Control of
anyone listed in (i) through (iv) above. A natural person that otherwise
satisfies the foregoing shall not be disqualified from serving as an Independent
Director or Independent Manager or Independent Member if such individual is at
the time of initial appointment, or at any time while serving as such, is an
Independent Director or Independent Manager or Independent Member, as
applicable, of a

 

11

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Single Purpose Entity affiliated with Borrower, if such Single Purpose Entity
does not own a direct or indirect equity interest in Borrower and if such
individual is provided by a nationally recognized company that provides
professional independent directors.

 

Individual Parcel shall have the meaning set forth in the Security Instrument.

 

Individual Property shall have the meaning set forth in the Security Instrument.
As used herein, the term “Individual Property” shall include any Substitute
Property which is added to the Property pursuant to and in accordance with
Section 2.6 of this Agreement and shall exclude any Substituted Property which
is removed from the Property pursuant to and in accordance with Section 2.6 of
this Agreement.

 

Insurance Escrow Fund shall have the meaning set forth in Section 16.3.2 hereof.

 

Insurance Premiums shall mean the premiums due under the insurance policies
provided for in Section 6.1 of this Agreement.

 

Insurance Requirements shall mean, collectively, (i) all material terms of any
insurance policy required pursuant to this Agreement and (ii) all material
regulations and then-current standards applicable to or affecting the Property
or any part thereof or any use or condition thereof, which may, at any time, be
recommended by the Board of Fire Underwriters, if any, having jurisdiction over
the Property, or such other body exercising similar functions; provided, that
any such regulation or standard which, if not followed, is reasonably likely to
result in an invalidation of any such insurance policy required pursuant to this
Agreement shall be deemed a material regulation or standard for all purposes
hereunder.

 

Intangible shall have the meaning set forth in the Security Instrument.

 

Interest Determination Date shall mean, with respect to each Interest Period
during which the Loan accrues interest at the floating Interest Rate, the first
day of the Interest Period for which the applicable Interest Rate is being
determined.

 

Interest Period shall mean, with respect to each Payment Date or Unscheduled
Payment Date or the Maturity Date, the period commencing on and including the
fifteenth (15th) calendar day of the calendar month preceding the month in which
such Payment Date or Unscheduled Payment Date or the Maturity Date occurs and
ending on (and including) the fourteenth (14th) calendar day of the calendar
month in which such Payment Date or Unscheduled Payment Date or the Maturity
Date occurs, in each case without adjustment for any Business Day convention;
provided that the first interest period shall commence on the date hereof and
end on March 14, 2005 and the final interest period relating to the Maturity
Date shall commence on August 15, 2019 and end on September 14, 2019.

 

Interest Rate shall mean (i) for the period commencing on the date hereof and
ending on June 14, 2005, the LIBOR Rate applicable with respect to each Interest
Period plus two (2) basis points (0.02%); and (ii) commencing on and after June
15, 2005, a rate of 5.9634% per annum; provided that, with respect to any
principal advanced in a second disbursement in accordance with Section 2.1.2,
the Interest Rate relating to such amount shall, from the date of

 

12

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such second disbursement through and including the fourteenth (14th) calendar
day of the calendar month in which the next succeeding Payment Date occurs, be
calculated as if the related Interest Period commenced on the date of such
second disbursement.

 

Borrower acknowledges that the Interest Rate includes the standard monthly
servicing fee of the Servicer equal to two (2) basis points (0.02%) per annum of
the aggregate Principal Amount outstanding.

 

LC Expiration Date shall have the meaning set forth in the definition of “Letter
of Credit”.

 

Land shall have the meaning set forth in the Security Instrument.

 

Late Payment Charge shall have the meaning set forth in Section 2.2.3.

 

Lease shall mean any lease (other than the Ground Lease), sublease or
subsublease, letting, license, concession or other agreement (whether written or
oral and whether now or hereafter in effect) pursuant to which any Person is
granted by the Borrower a possessory interest in, or right to use or occupy all
or any portion of any space in the Property, and every modification, amendment
or other agreement relating to such lease, sublease, subsublease, or other
agreement entered into in connection with such lease, sublease, subsublease, or
other agreement and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed and observed by the other
party thereto.

 

Leasehold Estates shall have the meaning set forth in the Security Instrument.

 

Lease Modification shall have the meaning set forth in Section 8.8.1.

 

Legal Requirements shall mean all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, injunctions, rules, regulations and
requirements, and irrespective of the nature of the work to be done, of every
Governmental Authority including, without limitation, Environmental Laws and all
covenants, restrictions and conditions now or hereafter of record which may be
applicable to Borrower or to the Property and the Improvements and the Building
Equipment thereon, or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration, repair or reconstruction of the Property and
the Improvements and the Building Equipment thereon including, without
limitation, building and zoning codes and ordinances and laws relating to
handicapped accessibility.

 

Lender shall have the meaning set forth in the first paragraph of this
Agreement.

 

Lender’s Consultant shall mean EMG Corp. or such other environmental and
engineering consulting firm selected by Lender having experience (i) conducting
environmental and engineering assessments for properties similar to the Property
and (ii) preparing and supervising remediation plans for properties similar to
the Property.

 

Letter of Credit shall mean an irrevocable, unconditional, transferable, clean,
stand-by sight draft letter of credit (either an evergreen letter of credit or
one which does not expire until at least sixty (60) days after the Maturity Date
(the LC Expiration Date)), in favor

 

13

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of Lender and entitling Lender to draw thereon in New York, New York, based
solely on a statement executed by an officer or authorized signatory of Lender
and issued by an Approved Bank. If at any time (a) the institution issuing any
such Letter of Credit shall cease to be an Approved Bank or (b) the Letter of
Credit is due to expire prior to the LC Expiration Date, Lender shall have the
right immediately to draw down the same in full and hold the proceeds thereof in
accordance with the provisions of this Agreement, unless Borrower shall deliver
a replacement Letter of Credit from an Approved Bank within (i) as to (a) above,
twenty (20) days after Lender delivers written notice to Borrower that the
institution issuing the Letter of Credit has ceased to be an Approved Bank or
(ii) as to (b) above, at least twenty (20) days prior to the expiration date of
said Letter of Credit. Any such Letter of Credit shall not provide for any
reimbursement obligation on the part of the Borrower or require the payment of
any fees in connection with a transfer of the Letter of Credit by Lender and
shall expressly provide that partial draws are permitted and it is freely
transferable to any successor or assignee of the holder of the Loan without
cost. The holder of the Loan shall be entitled to draw on a Letter of Credit
immediately and without further notice upon the occurrence and during the
continuance of any Event of Default under the Loan Documents.

 

Letter of Credit Provider means any Approved Bank that issues a Letter of Credit
hereunder.

 

Liabilities shall have the meaning set forth in Section 14.5.2(a)(ii).

 

LIBOR shall mean, with respect to each Interest Period for which interest
accrues at a floating interest rate, the rate determined by Lender to be (i) the
per annum rate for deposits in U.S. dollars for a period equal to the applicable
Interest Period, which appears on the Telerate Access Service Page 3750 (or any
successor thereto) as the London Interbank Offering Rate as of 11:00 a.m.,
London time, on the day that is two (2) London Business Days prior to that
respective Interest Period’s Interest Determination Date (rounded upwards, if
necessary, to the nearest 1/1000 of 1%); (ii) if such rate does not appear on
said Telerate Access Service Page, the arithmetic mean (rounded as aforesaid) of
the offered quotations of rates obtained by Lender from the Reference Banks for
deposits in U.S. dollars for a period equal to the applicable Interest Period to
prime banks in the London interbank market as of approximately 11:00 a.m.,
London time, on the day that is two (2) London Business Days prior to that
Interest Determination Date and in an amount that is representative for a single
transaction in the relevant market at the relevant time; or (iii) if fewer than
two (2) Reference Banks provide Lender with such quotations, the rate per annum
which Lender determines to be the arithmetic mean (rounded as aforesaid) of the
offered quotations of rates which major banks in New York, New York selected by
Lender are quoting at approximately 11:00 a.m., New York City time, on the
Interest Determination Date for loans in U.S. dollars to leading European banks
for a period equal to the applicable Interest Period in amounts of not less than
U.S. $1,000,000.00. Lender’s determination of LIBOR shall be binding and
conclusive on Borrower absent manifest error. LIBOR may or may not be the lowest
rate based upon the market for U.S. Dollar deposits in the London Interbank
Eurodollar Market at which Lender prices loans on the date which LIBOR is
determined by Lender as set forth above.

 

14

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LIBOR Rate shall mean, with respect to each Interest Period through June 14,
2005, an interest rate per annum equal to the greater of (i) LIBOR and (ii) two
hundred basis points (2.00%).

 

License shall have the meaning set forth in Section 4.1.23.

 

Lien shall mean any mortgage, deed of trust, lien, pledge, hypothecation,
collateral assignment, security interest, or any other encumbrance or charge on
or affecting Borrower, the Property, any portion thereof or any interest
therein, including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, the filing of any financing statement, and the
filing of mechanic’s, materialmen’s and other similar liens and encumbrances.

 

Liquidated Damages Amount shall mean the greater of (A) one percent of the
Principal Amount being repaid during the period from the date hereof through the
day prior to the Prepayment Lockout Release Date (other than repayments the
source of which is Proceeds (unless an Event of Default has occurred and is
continuing) or in connection with a Property Release permitted hereunder) and
(B) the Yield Maintenance Premium.

 

Loan shall mean the loan in the maximum amount of $304,000,000.00 made by Lender
to Borrower pursuant to this Agreement.

 

Loan Documents shall mean, collectively, this Agreement, the Note, the Security
Instrument, the Assignment of Leases, the Environmental Indemnity, the
Assignment of Management Agreement, the Recourse Guaranty, the Indemnity
Guaranty, the Cash Management Agreement and all other documents executed and/or
delivered by Borrower in connection with the Loan including any certifications
or representations delivered by or on behalf of Borrower, any Affiliate of
Borrower, the Manager, or any Affiliate of the Manager.

 

Loan to Value Percentage shall mean, in connection with a Property Release, the
product, expressed as a percentage, of (a) 0.70 multiplied by (b) a fraction,
the numerator of which is the sum of the then current Amortized Release Amounts
of all Properties subject to the Liens of the Security Instrument after giving
effect to such Property Release and the denominator of which is the sum of the
Allocated Loan Amounts of all Properties subject to the Liens of the Security
Instrument after giving effect to such Property Release.

 

Loan to Value Test shall mean the test that shall be satisfied in connection
with a Property Release if after giving effect to such Property Release, an
amount equal to the outstanding Principal Amount minus the aggregate principal
amounts of the Defeasance Notes, if any, is not greater than the applicable Loan
to Value Percentage of the fair market value of the Properties subject to the
Liens of the Security Instruments set forth in an appraisal acceptable to
Lender.

 

Lockbox Account shall have the meaning set forth in Section 3.1.1 hereof.

 

Lockbox Bank shall mean PNC Bank, National Association, or any successor or
permitted assigns thereof.

 

15

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Lockbox Event shall mean the event that shall be deemed to have occurred and be
continuing if at any time any of the following events shall have occurred and
shall not have been cured as permitted under the definition of Cure Event:

 

(a) an Event of Default shall have occurred; or

 

(b) if Manager shall make an assignment for the benefit of creditors or if a
receiver, liquidator or trustee shall be appointed for Manager or if Manager
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, Manager, or if any proceeding for the dissolution or liquidation of
Manager shall be instituted; or

 

(c) the credit rating of Bank of America, N.A. by any of S&P, Fitch or Moody’s
falls below “BBB” (or the equivalent); or

 

(d) the ratio of (i) Underwritten Net Cash Flow of the Properties subject to the
Liens of the Security Instruments for the preceding six (6) months annualized to
(ii) the product of twelve (12) and either (1) during the period from the
Closing Date through June 14, 2005, the interest payment due and payable on the
next Payment Date or (2) commencing on June 15, 2005 and thereafter, the current
Monthly Debt Service Payment Amount falls below 1.10x as determined by Lender.

 

London Business Day shall mean any day other than (i) Saturday, (ii) Sunday or
(iii) any other day in which commercial banks in London, England are not open
for business.

 

Management Agreement shall mean the management agreement, dated as of October 1,
2004, pursuant to which the Manager is to provide management and other services
with respect to the Property, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.

 

Management Fee shall mean an amount equal to the property management fee payable
to the Manager pursuant to the terms of the Management Agreement.

 

Manager shall mean First States Management Corp, LLC, a Delaware limited
liability company or any Qualified Manager appointed pursuant to and in
accordance with the terms of this Agreement.

 

Material Adverse Effect shall mean any event or condition that has a material
adverse effect on (i) the Property taken as a whole, (ii) the use, operation, or
value of the Property taken as a whole, (iii) the business, profits, operations
or financial condition of Borrower, or (iv) the ability of Borrower to repay the
principal and interest of the Loan as it becomes due or to satisfy any of
Borrower’s obligations under the Loan Documents.

 

Material Alteration shall mean any Alteration which, when aggregated with all
related Alterations (other than decorative work such as painting, wall papering
and carpeting and the replacement of fixtures, furnishings and equipment to the
extent being of a routine and recurring nature and performed in the ordinary
course of business) constituting a single project,

 

16

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involves an estimated cost exceeding five percent (5%) of the Allocated Loan
Amount for each Individual Property with respect to such Alteration or related
Alterations (including the Alteration in question) then being undertaken at such
Individual Property.

 

Maturity Date shall mean September 8, 2019, or such earlier date on which the
final payment of principal of the Notes becomes due and payable as provided in
this Agreement, whether by declaration of acceleration or otherwise.

 

Maximum Legal Rate shall mean the maximum non-usurious 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.

 

MERS shall mean Mortgage Electronic Registration Systems, Inc., a Delaware
corporation.

 

Monthly Debt Service Payment Amount means the debt service payment amount for
each Payment Date, commencing with the July 2005 Payment Date, which shall be
computed by the Lender on June 13, 2005, based upon a level payment of principal
and interest based upon (i) the outstanding Principal Amount as of such date,
(ii) an interest rate equal to the Interest Rate, and (iii) an amortization
schedule of 348 months; provided, that if any prepayment of the Loan described
in Section 2.3.1(b) is made after June 13, 2005, then the Monthly Debt Service
Payment Amount for each Payment Date following such prepayment shall be
recomputed by the Lender and notified to the Borrower based upon a level payment
of principal and interest (x) based upon an amount equal to the outstanding
Principal Amount as of such date, (y) an interest rate equal to the Interest
Rate, and (z) an amortization schedule of 348 months less the number of months
from June 12, 2005 to the date of such prepayment; provided, however, that if
any such prepayment occurs on a day other than a Payment Date, then for the
purposes of this definition, such prepayment shall be deemed to occur on the
Payment Date next following such prepayment, and the first Monthly Debt Service
Payment Amount to be affected by such prepayment shall be the Monthly Debt
Service Payment Amount due on the second Payment Date following such prepayment.
Such calculations shall be based on a thirty (30) day month and a three hundred
sixty (360) day year accrual period (which calculation methodology shall not
have any effect on the interest payment methodology described in Section
2.2.1(ii)). Such level payment of principal and interest shall be used only for
purpose of recalculating the amortization schedule. Lender’s determination of
such recalculated Monthly Debt Service Payment Amount shall be binding and
conclusive on Borrower absent any manifest errors.

 

Moody’s shall mean Moody’s Investors Service, Inc.

 

New Ground Lease shall mean after the termination or expiration of the Ground
Lease, any new, replacement or substitute Ground Lease issued to or obtained by
Lender with respect to or in place of the terminated Ground Lease, whether
pursuant to any provision of the terminated Ground Lease or otherwise.

 

New Lease shall have the meaning set forth in Section 8.8.1.

 

17

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Non-Consolidation Opinion shall have the meaning provided in Section 2.5.5.

 

Non-Disqualification Opinion shall mean an opinion of outside tax counsel
reasonably acceptable to the Lender or the Rating Agencies to whom such opinion
is addressed that a contemplated action will neither cause any of the REMICs
previously created pursuant to a Securitization to fail to qualify as a “real
estate mortgage investment conduit” within the meaning of Section 860D of the
Code at any time that any “regular interests” in such REMICs are outstanding nor
cause a “prohibited transaction” tax (within the meaning of Section 860F(a)(2)
of the Code) or “prohibited contribution” tax (within the meaning of Section
860G(d) of the Code) to be imposed on any of the REMICs previously created
pursuant to a Securitization.

 

Non-Disturbance Agreement shall have the meaning set forth in Section 8.8.9.

 

Non-Renewal Sweep Event means the event that shall be deemed to have occurred if
as of September 8, 2018, Bank of America, N.A. shall not have renewed the term
of the BofA Lease.

 

Note shall mean those certain Promissory Notes numbered A-1 and A-2 in the
maximum aggregate principal amount of Three Hundred Four Million Dollars
($304,000,000.00), made by Borrower in favor of Lender as of the date hereof, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.

 

O&M Program shall have the meaning set forth in Section 12.2.2.

 

Obligations shall have meaning set forth in the recitals of the Security
Instrument.

 

Officer’s Certificate shall mean a certificate executed by an authorized
signatory of Borrower that is familiar with the financial condition of Borrower
and the operation of the Property.

 

Operating Expenses shall mean, for any period, without duplication, all expenses
actually paid or payable by Borrower during such period and incurred on a
regular monthly or other recurring periodic basis in connection with the
operation, management, maintenance, repair and use of the Property, determined
on an accrual basis, and, except to the extent otherwise provided in this
definition, in accordance with GAAP. Operating Expenses specifically shall
include

 

(i) all expenses incurred in the immediately preceding twelve (12) month period
based on quarterly financial statements delivered to Lender in accordance with
Article XI,

 

(ii) all payments required to be made pursuant to any REAs,

 

(iii) property management fees,

 

18

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(iv) administrative, payroll, security and general expenses for the Property,

 

(v) the cost of utilities, inventories and fixed asset supplies consumed in the
operation of the Property,

 

(vi) a reasonable reserve for uncollectible accounts,

 

(vii) costs and fees of independent professionals (including, without
limitation, legal, accounting, consultants and other professional expenses),
technical consultants, operational experts (including quality assurance
inspectors) or other third parties retained to perform services required or
permitted hereunder,

 

(viii) cost of attendance by employees at training and manpower development
programs,

 

(ix) association dues,

 

(x) computer processing charges,

 

(xi) operational equipment and other lease payments as reasonably approved by
Lender,

 

(xii) taxes and other Impositions, other than income taxes or other Impositions
in the nature of income taxes and insurance premiums and

 

(xiii) all underwritten reserves required by Lender hereunder (without
duplication).

 

Notwithstanding the foregoing, Operating Expenses shall not include (1)
depreciation or amortization, (2) income taxes or other Impositions in the
nature of income taxes, (3) any expenses (including legal, accounting and other
professional fees, expenses and disbursements) incurred in connection with the
making of the Loan or the sale, exchange, transfer, financing or refinancing of
all or any portion of the Property or in connection with the recovery of
Proceeds which are applied to prepay the Note, (4) any expenses which in
accordance with GAAP should be capitalized, (5) Debt Service, and (6) any item
of expense which would otherwise be considered within Operating Expenses
pursuant to the provisions above but is paid directly by any Tenant.

 

Operating Income shall mean, for any period, all income of Borrower during such
period from the use, ownership or operation of the Property as follows:

 

(a) all amounts payable to Borrower by any Person as Rent and other amounts
under Leases, license agreements, occupancy agreements, concession agreements or
other agreements relating to the Property;

 

(b) business interruption insurance proceeds allocable to the applicable
reporting period; and

 

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(c) all other amounts which in accordance with GAAP are included in Borrower’s
annual financial statements as operating income attributable to the Property.

 

Notwithstanding the foregoing, Operating Income shall not include (a) any
Proceeds (other than business interruption insurance proceeds and only to the
extent allocable to the applicable reporting period), (b) any proceeds resulting
from the Transfer of all or any portion of the Property, (c) any Rent
attributable to a Lease where the related Tenant pays such Rent on a
“month-to-month” basis (provided that up to 5% of overall income derived from
such Rent shall not be excluded to the extent (x) during the period of time from
the Closing Date through the second anniversary of the date the Loan commences
accruing interest at a fixed interest rate, the Guarantor performs its
obligations under the Indemnity Guaranty and (y) thereafter, the Guarantor
provides credit enhancement for same acceptable to the Lender) or is the debtor
in a bankruptcy proceeding or prior to the date (1) in which the Tenant
thereunder has taken occupancy and is paying full contractual rent with no
offsets or rent credits or similar items or (2) in which the actual payment of
rent is required to commence thereunder, (d) any item of income otherwise
included in Operating Income but paid directly by any Tenant to a Person other
than Borrower as an offset or deduction against Rent payable by such Tenant,
provided such item of income is for payment of an item of expense (such as
payments for utilities paid directly to a utility company) and such expense is
otherwise excluded from the definition of Operating Expenses pursuant to clause
“(6)” of the definition thereof, and (e) security deposits received from Tenants
until forfeited or applied. Operating Income shall be calculated on the accrual
basis of accounting and, except to the extent otherwise provided in this
definition, in accordance with GAAP.

 

Opinion of Counsel shall mean an opinion of counsel of a law firm selected by
Borrower and reasonably acceptable to Lender.

 

Other Charges shall mean ground rents, maintenance charges, 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 by any
Governmental Authority.

 

Other Charges Escrow Fund shall have the meaning set forth in Section 16.3.3.

 

Other Taxes shall have the meaning set forth in Section 2.4.3.

 

Participant shall have the meaning set forth in Section 2.4.2.

 

Patriot Laws shall mean, collectively, (a) 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), (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.

 

Payment Date shall be the twelfth (12th) day of each calendar month, or if such
day is not a Business Day, the immediately preceding Business Day.

 

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Permitted Debt shall mean collectively,

 

(a) the Note and the other obligations, indebtedness and liabilities
specifically provided for in any Loan Document and secured by this Agreement,
the Security Instrument and the other Loan Documents,

 

(b) trade payables incurred in the ordinary course of Borrower’s business, not
secured by Liens on the Property (other than liens being properly contested in
accordance with the provisions of this Agreement or the Security Instrument),
not to exceed three percent (3%) of the Principal Amount at any one time
outstanding, payable by or on behalf of Borrower for or in respect of the
operation of the Property in the ordinary course of operating Borrower’s
business, provided that (but subject to the remaining terms of this definition)
each such amount shall be paid within sixty (60) days following the date on
which each such amount becomes past due and

 

(c) amounts due under (i) REAs and similar operating agreements, (ii) the
Management Agreement, and (iii) Leases (including reimbursements for tenant
improvement work).

 

Nothing contained herein shall be deemed to require Borrower to pay any amount,
so long as Borrower is in good faith, and by proper legal proceedings,
diligently contesting the validity, amount or application thereof, 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 (i) no Event of Default
shall exist and be continuing hereunder, (ii) adequate reserves with respect
thereto are maintained on the books of Borrower in accordance with GAAP (as
determined by the Independent Accountant), (iii) such contest operates to
suspend collection or enforcement, as the case may be, of the contested amount
and such contest is maintained and prosecuted continuously and with diligence
and (iv) no Individual Property nor any part thereof or interest therein will be
in danger of being sold, forfeited, terminated, cancelled or lost.
Notwithstanding anything set forth herein, in no event shall Borrower be
permitted under this provision to enter into a note (other than the Note and the
other Loan Documents) or other instrument for borrowed money.

 

Permitted Encumbrances shall mean collectively, (a) the Liens and security
interests created or permitted by the Loan Documents, (b) all Liens,
encumbrances and other matters disclosed in the Title Policy and (c) Liens, if
any, for Impositions imposed by any Governmental Authority not yet due or
delinquent.

 

Permitted Investments shall have the meaning set forth in the Cash Management
Agreement.

 

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

 

Personal Property shall have the meaning set forth in the Security Instrument.

 

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Physical Conditions Report shall mean the structural engineering report with
respect to the Property (i) prepared by an Independent Architect, (ii) addressed
to Lender, (iii) prepared based on a scope of work determined by Lender in
Lender’s reasonable discretion, and (iv) in form and content acceptable to
Lender in Lender’s reasonable discretion, together with any amendments or
supplements thereto.

 

Plan shall have the meaning set forth in Section 4.1.10(a).

 

Prepayment Date shall have the meaning set forth in Section 2.3.1(e).

 

Prepayment Lockout Release Date shall mean August 8, 2019.

 

Prepayment Notice shall have the meaning set forth in Section 2.3.1(d).

 

Prepayment Period shall mean the period commencing on the date hereof and ending
on September 4, 2006.

 

Prepayment Rate shall mean the bond equivalent yield (in the secondary market)
on the United States Treasury Security that as of the Prepayment Rate
Determination Date has a remaining term to maturity closest to but not
exceeding, the remaining term to the Maturity Date, as most recently published
in the “Treasury Bonds, Notes and Bills” section in The Wall Street Journal as
of such Prepayment Rate Determination Date. If more than one issue of United
States Treasury Securities has the remaining term to the Maturity Date, the
“Prepayment Rate” shall be the yield on such United States Treasury Security
most recently issued as of the Prepayment Rate Determination Date. The rate so
published shall control absent manifest error. If the publication of the
Prepayment Rate in The Wall Street Journal is discontinued, Lender shall
determine the Prepayment Rate on the basis of “Statistical Release H.15 (519),
Selected Interest Rates,” or any successor publication, published by the Board
of Governors of the Federal Reserve System, or on the basis of such other
publication or statistical guide as Lender may reasonably select.

 

Prepayment Rate Determination Date shall mean the date which is five (5)
Business Days prior to the date that a prepayment shall be made in accordance
with the terms and provisions of Section 2.3.1 hereof.

 

Principal Amount shall mean the principal amount of the Loan outstanding as
adjusted by each decrease in such principal amount of the Loan outstanding or
each increase for advances made by Lender to protect the Property, whether as a
result of prepayment or otherwise, from time to time.

 

Proceeds shall have the meaning set forth in Section 6.2.2.

 

Property shall have the meaning set forth in the Security Instrument. As used
herein, the term Property shall refer to all Individual Properties collectively.
The name and address of each Individual Property as of the Closing Date is
identified on Schedule II hereto.

 

Property Release shall have the meaning set forth in Section 8.7.

 

Provided Information shall have the meaning set forth in Section 14.1(a).

 

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Qualified Manager shall mean (i) a reputable and experienced management
organization which together with its Affiliates manages multiple properties
having an aggregate minimum of 10,000,000 net rentable square feet of office
space, provided that (1) (a) prior to a Securitization, Borrower shall have
obtained the prior written consent of Lender for such Person, which consent
shall not be unreasonably withheld or delayed and (b) after a Securitization,
Borrower shall have obtained the prior written consent of Lender for such
Person, which consent shall not be unreasonably withheld or delayed, and a
Rating Agency Confirmation, (2) Borrower shall have delivered an Additional
Non-Consolidation Opinion, if such Qualified Manager is an Affiliate of the
Borrower and (3) notwithstanding the foregoing, if 100% of the ownership
interests in such Qualified Manager are owned directly or indirectly by First
States Group, L.P., then the requirement of 10,000,000 net rentable square feet
of office space under management and the such prior written consent of Lender
shall not apply or (ii) any other manager as Lender shall approve in its sole
and absolute discretion.

 

Rating Agencies shall mean (a) prior to a Securitization, each of S&P, Moody’s
and Fitch and (b) after any Securitization has occurred, each such Rating Agency
which has rated the Securities in each such Securitization.

 

Rating Agency Confirmation shall mean, collectively, a written affirmation from
each of the Rating Agencies that has given a credit rating to the Securities
issued in a Securitization, that such credit rating given by such Rating Agency
immediately prior to the occurrence of the event with respect to which such
Rating Agency Confirmation is sought will not be qualified, downgraded or
withdrawn as a result of the occurrence of such event, which affirmation may be
granted or withheld in such Rating Agency’s sole and absolute discretion. In the
event that, at any given time, no such Securities shall have been issued and are
then outstanding, then the term Rating Agency Confirmation shall be deemed
instead to require the written approval of Lender based on its good faith
determination of whether the Rating Agencies would issue a Rating Agency
Confirmation if any such Securities were outstanding.

 

REAs shall mean, collectively, as the same may be amended, restated,
supplemented or otherwise modified from time to time, those certain agreements
more specifically described on Schedule IV.

 

Real Property shall mean, collectively, the “Land”, the “Improvements” and the
“Appurtenances” that is defined in the Security Instrument.

 

Recourse Guaranty shall mean that certain Guaranty of Recourse Obligations of
Borrower, dated as of the date hereof, by Guarantor in favor of Lender, as the
same may be amended, supplemented, restated or otherwise modified from time to
time.

 

Reference Banks shall mean four (4) major banks in the London interbank market
selected by Lender.

 

Register shall have the meaning set forth in Section 15.4.

 

Regulatory Change shall mean any change after the date of this Agreement in
federal, state or foreign laws or regulations or the adoption or the making,
after such date, of any interpretations, directives or requests applying to
Lender, or any Person Controlling Lender or to

 

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a class of banks or companies Controlling banks of or under any federal, state
or foreign laws or regulations (whether or not having the force of law) by any
court or Governmental Authority or monetary authority charged with the
interpretation or administration thereof.

 

Release Date shall have the meaning set forth in Section 8.7.

 

Release DSCR shall mean the product of (a) 1.15x multiplied by (b) a fraction,
the numerator of which is the sum of the Allocated Loan Amounts of all
Properties subject to the Liens of the Security Instrument (including the
Individual Property to be released), and the denominator of which is the sum of
the then current Amortized Release Amounts of all Properties subject to the Lien
of the Security Instruments (including the Individual Property to be released).

 

Release DSCR Test shall mean the test that shall be satisfied in connection with
a Property Release if after giving effect to such Property Release, the DSCR for
the Properties then remaining subject to the Liens of the Security Instrument
shall be equal to or greater than the Release DSCR.

 

Release Instruments shall have the meaning set forth in Section 8.7.

 

Release Price shall mean, with respect to a Property Release of an Individual
Property, the greater of (a) 115% of the related Allocated Loan Amount and (b)
the amount that causes the Loan to Value Test and the Release DSCR Test to be
satisfied after giving effect to such Property Release; provided, that
notwithstanding the foregoing, the Release Price with respect to the Individual
Property referred to on Schedule II as “Easton” shall be zero.

 

Release Property shall have the meaning set forth in Section 8.7.

 

Relevant Portions shall have the meaning provided in Section 14.5.2.

 

Remaining Property shall have the meaning provided in Section 8.7.

 

REMIC shall mean a “real estate mortgage investment conduit” within the meaning
of Section 860D of the Code.

 

Rents shall mean all rents, rent equivalents, moneys payable as damages or in
lieu of rent or rent equivalents, royalties (including, without limitation, all
oil and gas or other mineral royalties and bonuses), income, receivables,
receipts, revenues, deposits (including, without limitation, security, utility
and other deposits), accounts, cash, issues, profits, charges for services
rendered, and other consideration of whatever form or nature received by or paid
to or for the account of or benefit of Borrower from any and all sources arising
from or attributable to the Property and Proceeds, if any, from business
interruption or other loss of income insurance.

 

Replacement Reserve Fund shall have the meaning set forth in Section 16.4.1
hereof.

 

Replacement Reserve Monthly Deposit shall have the meaning set forth in Section
16.4.1 hereof.

 

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Replacements shall have the meaning set forth in Section 16.4.1 hereof.

 

Required Repair Fund shall have the meaning set forth in Section 16.1.1 hereof.

 

Required Repairs shall have the meaning set forth in Section 16.1.1 hereof.

 

Reserve Funds shall mean, collectively, the Tax Escrow Fund, the Insurance
Escrow Fund, the Other Charges Escrow Fund, the Replacement Reserve Fund, the
Required Repair Fund, the Environmental Remediation Reserve Fund, the Vacant B
Space Rollover Reserve Fund, the Rollover Reserve Fund, the BofA Reserve Fund
and the Debt Service Reserve Fund and any other escrow fund established by the
Loan Documents.

 

Resizing Event shall have the meaning provided in Section 14.2.

 

Rollover Reserve Fund shall have the meaning set forth in Section 16.6.1 hereof.

 

Rollover Reserve Fund Cap shall have the meaning set forth in Section 16.6.1
hereof.

 

S&P shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.

 

Securities shall have the meaning set forth in Section 14.1.

 

Securities Act shall have the meaning set forth in Section 14.5.1.

 

Securitization shall have the meaning set forth in Section 14.1.

 

Security Instrument shall mean (x) those certain first priority Combined Fee and
Leasehold Multistate Mortgage, Deed to Secure Debt, Deed of Trust, Security
Agreement, Financing Statement, Fixture Filing and Assignment of Leases, Rents
and Security Deposits, dated the date hereof, executed and delivered by Borrower
(i) with respect to the Mortgage Properties (as defined therein) to MERS, as
nominee of Lender and (ii) with respect to the Deed of Trust Properties (as
defined therein) to the trustees specified therein for the benefit of MERS, as
nominee of Lender, and encumbering the applicable Property, and (y) with respect
to any Individual Property located in a State whose Legal Requirements do not
permit the recordation of the document referred to in the immediately preceding
clause (x), a comparable document, dated the date hereof, executed and delivered
by Borrower to MERS, as nominee of Lender or to the trustees specified therein
for the benefit of MERS, as nominee of Lender and encumbering such Individual
Property as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

 

Servicer shall mean such Person designated in writing with an address for such
Person by Lender, in its sole discretion, to act as Lender’s agent hereunder
with such powers as are specifically delegated to the Servicer by Lender,
whether pursuant to the terms of this Agreement, the Cash Management Agreement
or otherwise, together with such other powers as are reasonably incidental
thereto.

 

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Single Purpose Entity shall mean a Person, other than an individual, which

 

(i) is formed or organized solely for the purpose of owning, holding,
developing, using, operating and financing an ownership interest in the
Property,

 

(ii) does not engage in any business unrelated to the Property and the
ownership, development, use, operation and financing thereof,

 

(iii) has not and will not have any assets other than those related to its
interest in the Property or the operation, management and financing thereof or
any indebtedness other than the Permitted Debt,

 

(iv) maintains its own separate books and records and its own accounts, in each
case which are separate and apart from the books and records and accounts of any
other Person,

 

(v) holds itself out as being a Person, separate and apart from any other
Person,

 

(vi) does not and will not commingle its funds or assets with those of any other
Person,

 

(vii) holds its assets and conducts its own business in its own name;

 

(viii) maintains financial statements separate from those of any other Person,

 

(ix) pays its own debts and liabilities out of its own funds,

 

(x) observes all partnership, corporate or limited liability company
formalities, as applicable, and preserves its existence,

 

(xi) pays the salaries of its own employees, if any, and maintains a sufficient
number of employees, if any, in light of its contemplated business operations,

 

(xii) does not guarantee or otherwise obligate itself with respect to the debts
of any other Person or hold out its credit as being available to satisfy the
obligations of any other Person,

 

(xiii) does not acquire obligations or securities of its partners, members or
shareholders,

 

(xiv) allocates fairly and reasonably shared expenses, including, without
limitation, any overhead for office space shared with any of its Affiliates,

 

(xv) uses separate stationary, invoices, and checks bearing its own name,

 

(xvi) maintains an arms-length relationship with its Affiliates,

 

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(xvii) does not and will not pledge its assets for the benefit of any other
Person (other than Lender) or make any loans or advances to any other Person,

 

(xviii) does and will continue to use commercially reasonable efforts to correct
any known misunderstanding regarding its separate identity,

 

(xix) maintains adequate capital in light of its contemplated business
operations,

 

(xx) has and will continue to have a partnership or operating agreement,
certificate of incorporation, articles of organization or other organizational
document which has been approved by Lender, and

 

(xxi) has not and will not engage in, seek, or consent to the dissolution,
winding up, liquidation, consolidation or merger and except as otherwise
permitted in this Agreement, has not and will not engage in, seek or consent to
any asset sale, transfer or partnership, membership or shareholder interests, or
amendments of its partnership or operating agreement, certificate of
incorporation, articles of organization or other organizational document.

 

In addition, if such Person is a partnership: (1) all general partners of such
Person shall be Single Purpose Entities; and (2) if such Person has more than
one general partner, then the organizational documents shall provide that such
Person shall continue (and not dissolve) for so long as a solvent general
partner exists. In addition, if such Person is a corporation, then, at all
times: (a) such Person shall have at least two (2) Independent Directors and (b)
the board of directors of such Person may not take any action requiring the
unanimous affirmative vote of 100% of the members of the board of directors
unless all of the directors, including the Independent Directors, shall have
participated in such vote. In addition, if such Person is a limited liability
company, (a) such Person shall have at least two (2) Independent Managers or
Independent Members, (b) if such Person is managed by a board of managers, the
board of managers of such Person may not take any action requiring the unanimous
affirmative vote of 100% of the members of the board of managers unless all of
the managers, including the Independent Managers, shall have participated in
such vote, (c) if such Person is not managed by a board of managers, the members
of such Person may not take any action requiring the affirmative vote of 100% of
the members of such Person unless all of the members, including the Independent
Members, shall have participated in such vote, (d) each managing member shall be
a Single Purpose Entity and (e) its articles of organization, certificate of
formation and/or operating agreement, as applicable, shall provide that until
all of the Indebtedness and Obligations are paid in full such entity will not
dissolve. In addition, the organizational documents of such Person shall provide
that such Person

 

(1) without the unanimous consent of all of the partners, directors, members or
managers, as applicable (including “independent partners,” Independent
Directors, Independent Members or Independent Managers, as applicable), shall
not with respect to itself or to any other Person in which it has a direct or
indirect legal or beneficial interest (a) seek or consent to the appointment of
a receiver, liquidator, assignee, trustee, sequestrator, custodian or other
similar official for the benefit of the creditors of such Person or all or any
portion of such Person’s properties, or (b) take any action that might cause
such Person to become insolvent, petition or otherwise institute insolvency
proceedings or otherwise seek any relief under any laws relating to the relief
from debts or the protection of debtors generally,

 

27

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(2) shall maintain its books, records, resolutions and agreements as official
records,

 

(3) shall conduct business in its own name, make all oral and written
communications in its own name, and hold itself out to the public as being a
legal entity separate and distinct from its Affiliates and all other Persons,

 

(4) shall not identify any Affiliate as a division, department or other
constituent part of such Person,

 

(5) shall use its own separate stationery, invoices, checks, purchase orders and
other business forms and not those of any other Person,

 

(6) shall not conduct business on behalf of any Affiliate thereof nor make any
of its assets available to pay creditors of any other Person, nor assume any
liabilities of any other Person,

 

(7) shall not hold itself out to be responsible for any decisions or actions
respecting the business or affairs of any other Person,

 

(8) shall not permit itself to be dependent, operationally or otherwise, on any
of its Affiliates or other entity to operate its business, except for the
services rendered by the Manager to Borrower under and on the terms set forth in
the Assignment of Management Agreement and the Management Agreement,

 

(9) shall maintain financial statements, books of account, records and bank
accounts separate from those of any other Person, except that if Borrower is
consolidated for financial reporting purposes with any of its Affiliates, such
consolidation shall be effected in accordance with generally accepted accounting
principles and Borrower shall present all of its consolidated financial
statements with appropriate notations thereon or in the notes thereto reflecting
Borrower’s separateness from its Affiliates, its separate financial condition
and the fact that Borrower’s assets and credit are not available to satisfy the
debts and other obligations of any of its Affiliates,

 

(10) all business transactions between such Person and any of its Affiliates
shall be entered into upon terms and conditions that are intrinsically fair,
commercially reasonable and substantially similar to, and are no less favorable
to such Person than, those that would be available on an arm’s length basis with
third parties, and all dividends and other capital distributions made by such
Person will be properly reflected on its books of account and business records
and are made only in accordance with applicable law, the provisions of its
organizational document and the Loan Documents,

 

(11) will not enter into any agreement other than the Loan Documents to which it
is a party and any agreements, instruments, certificates and other documents
relating thereto and to its Business,

 

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(12) shall not own any assets other than (i) the Property, (ii) the rents and
other distributions from and proceeds of the Property and (iii) assets necessary
to operate and manage the Property, to borrow upon the security of the Property
and to engage in activities related or incidental thereto, and

 

(13) shall not incur any indebtedness other than indebtedness that is permitted
under the Loan Documents;

 

provided, that a Person shall not be prevented from qualifying as a Single
Purpose Entity as a result of its election to be or otherwise being treated as a
disregarded entity for tax purposes.

 

Special Taxes shall mean any and all present or future taxes, levies, imposts,
deductions, charges or withholdings imposed by any Governmental Authority, or
any liabilities with respect thereto, applicable to payments of principal,
interest or other amounts on the Loan or pursuant to the Loan Documents, but
excluding, in the case of Lender, (i) such taxes (including income taxes,
franchise taxes and branch profit taxes) as are imposed on or measured by or for
which alternate base is imposed on or measured by Lender’s net income by the
United States of America or any Governmental Authority of the jurisdiction under
the laws under which Lender is organized or maintains a lending office, (ii)
U.S. backup withholding taxes and (iii) estate, inheritance or succession taxes.

 

Standard Form of Lease shall have the meaning set forth in Section 8.8.2(a).

 

State shall mean, with respect to each Individual Parcel, the State or
Commonwealth in which such Individual Parcel or any part thereof is located.

 

Substitute Property, Substitute Properties and Substituted Property shall have
the respective meaning set forth in Section 2.6.

 

Substitute Release Amount shall have the meaning set forth in Section 2.6(l).

 

Successor Borrower shall have the meaning set forth in Section 9.1.

 

Surveys shall mean a survey of each parcel included in the Property prepared by
a surveyor licensed in the State and satisfactory to Lender and the company or
companies issuing the Title Policy, and containing a certification of such
surveyor satisfactory to Lender.

 

Taking 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.

 

Tax Escrow Fund shall have the meaning set forth in Section 16.3.1 hereof.

 

Telerate Access Service Page 3750 shall mean the display designated as “Page
3750” on the Dow Jones Market Service (or any successor thereto) or such other
service as may be nominated by the British Bankers’ Association as the
information vendor for the purpose of displaying British Bankers’ Association
Interest Settlement Rates for U.S. Dollar deposits.

 

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Tenant shall mean any Person that is a party to a Lease leasing, subleasing or
otherwise occupying any portion of the Property, other than the Manager and its
employees, agents and assigns.

 

Threshold Amount shall mean an amount equal to one percent (1.0%) of the
Principal Amount.

 

Title Company shall mean Chicago Title Insurance Company.

 

Title Policy shall mean an ALTA mortgagee title insurance policy (or, if an
Individual Parcel is in a State which does not permit the issuance of such ALTA
policy, such form as shall be permitted in such State) issued by the Title
Company with respect to the Property and insuring the Liens of the Security
Instrument and in form and substance satisfactory to Lender.

 

Total Loss shall mean

 

(i) a casualty, damage or destruction of the Property which, in the reasonable
judgment of Lender, (A) involves an actual or constructive loss of more than
twenty percent (20%) of the lesser of (x) the fair market value of the Property
or (y) the Principal Amount, or (B) results in the cancellation of leases
comprising more than twenty percent (20%) of the rentable area of the Property,
and in either case with respect to which Borrower is not required under the
Leases to apply Proceeds to the restoration of the Property or

 

(ii) a permanent Taking which, in the reasonable judgment of Lender, (A)
involves an actual or constructive loss of more than fifteen percent (15%) of
the lesser of (x) the fair market value of the Property or (y) the Principal
Amount, or (B) renders untenantable either more than fifteen percent (15%) of
the rentable area of the Property, or

 

(iii) a casualty, damage, destruction or Taking that affects so much of the
Property such that it would be impracticable, in Lender’s reasonable discretion,
even after restoration, to operate the Property as an economically viable whole.

 

Transfer shall mean to, directly or indirectly, sell, assign, convey, mortgage,
transfer, merge, consolidate, reorganize, pledge, hypothecate, encumber, grant a
security interest in, exchange or otherwise dispose of any beneficial interest
or grant any option or warrant with respect to, or where used as a noun, a
direct or indirect sale, assignment, conveyance, transfer, merger,
consolidation, reorganization, pledge or other disposition of any beneficial
interest by any means whatsoever whether voluntary, involuntary, by operation of
law or otherwise.

 

UCC or Uniform Commercial Code shall mean the Uniform Commercial Code as in
effect in the State of New York.

 

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Uncrossed Allocated Loan Amount shall have the meaning set forth in Section
14.2(b) hereof.

 

Uncrossed Note shall have the meaning set forth in Section 14.2(b) hereof.

 

Undefeased Note shall have the meaning set forth in Section 9.1.

 

Underwriter Group shall have the meaning set forth in Section 14.5.2(a)(ii).

 

Underwritten Net Cash Flow shall mean, as of any date of calculation with
respect to the Property, the amount obtained by subtracting Operating Expenses
from Operating Income, each as determined by Lender and after Lender makes
adjustments, if necessary and without duplication, for the following:

 

(1) expenses for management fees equal to the greater of actual management fees
or three percent (3%) of Operating Income, and

 

(2) periodic deposits to the Replacement Reserve Fund and the Rollover Reserve
Fund required to be made pursuant to Section 16.4 and Section 16.6 of this
Agreement, respectively.

 

Unscheduled Payment Date shall be the eighth (8th) day of each calendar month,
or if such day is not a Business Day, the immediately preceding Business Day.

 

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.

 

Vacant B Space means the applicable vacant space within the Properties
identified on Schedule II attached hereto.

 

Vacant B Space Rollover Reserve Fund shall have the meaning provided in Section
16.5.1.

 

Yield Maintenance Premium shall mean an amount equal to the greater of (a) one
percent (1%) of the outstanding balance of the Loan to be prepaid or satisfied
and (b) the

 

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excess, if any, of (i) the sum of the present values of all then-scheduled
payments of principal and interest under the Note, assuming that all remaining
outstanding principal and interest on the Loan is paid on the Maturity Date
(with each such payment and assumed payment discounted to its present value at
the date of prepayment at the rate which, when compounded monthly, is equivalent
to the Prepayment Rate when compounded semi-annually), over (ii) the principal
amount being prepaid. For purposes of the calculation of the Yield Maintenance
Premium due and payable in connection with a prepayment of the Loan at any time
the Loan shall be accruing interest at a floating interest rate, such prepayment
shall be deemed made on the first day on which the Loan accrues interest at a
fixed interest rate (i.e., June 15, 2005); provided, however, that the
Prepayment Rate used in such calculation shall be determined as of the date of
prepayment.

 

Work shall have the meaning provided in Section 6.2.4(a).

 

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. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. When used herein, the
term “financial statements” shall include the notes and schedules thereto.
Unless otherwise specified herein or therein, all terms defined in this
Agreement shall have the definitions given them in this Agreement when used in
any other Loan Document or in any certificate or other document made or
delivered pursuant thereto. All uses of the word “including” shall mean
including, without limitation unless the context shall indicate otherwise.
Unless otherwise specified, the words hereof, herein and hereunder and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. Unless otherwise
specified, all meanings attributed to defined terms herein shall be equally
applicable to both the singular and plural forms of the terms so defined.

 

II. GENERAL TERMS

 

Section 2.1 Loan; Disbursement to Borrower.

 

2.1.1 The Loan. Subject to and upon the terms and conditions set forth herein,
Lender hereby agrees to make and Borrower hereby agrees to accept the Loan on
the Closing Date.

 

2.1.2 Up to Two Disbursements to Borrower. Borrower may request and receive up
to two (2) disbursements hereunder in respect of the Loan. The first
disbursement shall be made on the Closing Date in an amount equal to
$230,000,000. The Borrower may request in writing that the Lender make a second
disbursement of the Loan during the period commencing on the Business Day
following the Closing Date to and including March 31, 2005. Such written request
for a second disbursement shall specify the amount of the disbursement, which
shall be an amount up to $74,000,000, and contain an Officer’s Certificate that
the representations and warranties set forth in this Agreement will be true and
correct on the date of the second disbursement, subject to any exceptions
thereto set forth in an attachment to such Officer’s Certificate. Provided (1)
no Default or Event of Default has occurred and is continuing

 

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and (2) Lender shall have received satisfactory evidence that all
re-measurements of the leased premises under the BofA Lease have been completed
along with a schedule of the final re-measured square footages of such leased
premises, the Lender shall make the second disbursement of the Loan to the
Borrower on the second (2nd) Business Day following the Business Day on which
the Lender receives the Borrower’s written disbursement request. The Borrower
acknowledges and agrees that the Lender shall not have any obligation to make
any additional disbursement with respect to the Loan after April 4, 2005. Any
amount borrowed and repaid hereunder in respect of the Loan may not be
reborrowed. Borrower acknowledges and agrees that the full proceeds of the Loan
have been disbursed by Lender to Borrower on the date of the second disbursement
of the Loan.

 

2.1.3 The Note, Security Instrument and Loan Documents. The Loan shall be
evidenced by the Note and secured by the Security Instrument, the Assignment of
Leases, this Agreement and the other Loan Documents.

 

2.1.4 Use of Proceeds. Borrower shall use the proceeds of the Loan to (a) repay
and discharge any existing loans relating to the Properties, (b) make deposits
into the Reserve Funds on the Closing Date in the amounts provided herein, (c)
pay costs and expenses incurred in connection with the closing of the Loan, as
approved by Lender, and (d) retain the balance, if any.

 

Section 2.2 Interest; Loan Payments; Late Payment Charge.

 

2.2.1 Interest Rate; Interest Calculation.

 

(i) With respect to each Interest Period, interest shall accrue on the Principal
Amount at the applicable Interest Rate. Except as expressly set forth in this
Agreement to the contrary, interest shall accrue on all amounts advanced by
Lender pursuant to the Loan Documents (other than the Principal Amount, which
shall accrue interest in accordance with the immediately preceding sentence) at
the Default Rate.

 

(ii) Interest, for any given Interest Period, shall be computed on the Principal
Amount on the basis of a fraction, the denominator of which shall be 360 and the
numerator of which shall be the actual number of days in the relevant Interest
Period.

 

(iii) Upon the occurrence and during the continuance of an Event of Default and
from and after the Maturity Date (if the entire Principal Amount is not repaid
on the Maturity Date) interest on the outstanding Principal Amount of the Loan
and, to the extent permitted by law, overdue interest and other amounts due in
respect of the Loan shall accrue at the Default Rate calculated from the date
such payment was due without regard to any grace or cure periods contained
herein. Interest at the Default Rate shall be computed from the occurrence of
the Event of Default until the actual receipt and collection of the Indebtedness
(or that portion thereof that is then due). To the extent permitted by
applicable law, interest at the Default Rate shall be added to the Indebtedness
and shall be secured by the Security Instrument. This paragraph shall not be
construed as an agreement or privilege to extend the date of the payment of the
Indebtedness, nor as a waiver of any other right or remedy accruing to Lender by
reason of the occurrence of any Event of Default, and Lender retains its rights
under the Note to accelerate and to continue to demand payment of the
Indebtedness upon the happening of any Event of Default.

 

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2.2.2 Loan Payments.

 

(a) Borrower shall pay to Lender on the Closing Date, an amount equal to
interest only on the Principal Amount of the Loan from the Closing Date up to
and including March 14, 2005. With respect to any principal advanced in a second
disbursement in accordance with Section 2.1.2, Borrower shall pay to Lender on
the date of such second disbursement, an amount equal to interest only on the
principal amount so disbursed from the date of such second disbursement up to
and including the fourteenth (14th) calendar day of the calendar month in which
the next succeeding Payment Date occurs. On each Payment Date, commencing on
April 12, 2005, through the June 2005 Payment Date, Borrower shall pay to Lender
monthly installments of interest at the applicable Interest Rate for the
applicable Interest Period. No regularly scheduled payments of principal shall
be due with respect to the Loan prior to the July 2005 Payment Date. On each
Payment Date, commencing with the July 2005 Payment Date, and on the Maturity
Date, Borrower shall make a payment to Lender of principal and interest in an
amount equal to the Monthly Debt Service Payment Amount, which payments shall be
applied first to unpaid interest and the balance to principal.

 

(b) For purposes of making payments hereunder, but not for purposes of
calculating Interest Periods, if the day on which such payment is due is not a
Business Day, then amounts due on such date shall be due on the immediately
preceding Business Day and with respect to payments of principal due on the
Maturity Date, interest shall be payable at the Interest Rate or the Default
Rate, as the case may be, through and including the last day of the related
Interest Period. Except as provided in Section 2.4 with respect to taxes, all
amounts due under this Agreement and the other Loan Documents shall be payable
without setoff, counterclaim, defense or any other deduction whatsoever.

 

(c) All amounts advanced by Lender pursuant to the applicable provisions of the
Loan Documents, other than the Principal Amount, together with any interest at
the Default Rate or other charges as provided therein, shall be due and payable
hereunder as provided in the Loan Documents. In the event any such advance or
charge is not so repaid by Borrower, Lender may, at its option, first apply any
payments received under the Note to repay such advances, together with any
interest thereon, or other charges as provided in the Loan Documents, and the
balance, if any, shall be applied in payment of any installment of interest or
principal then due and payable.

 

(d) Borrower shall pay to Lender on the Maturity Date the outstanding Principal
Amount of the Loan, all unpaid interest and all other amounts due hereunder and
under the Notes, the Security Instruments and the other Loan Documents.

 

(e) To the extent that Borrower makes a payment or Lender receives any payment
or proceeds for Borrower’s benefit, which are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, debtor in possession, receiver, custodian or any other party under any
bankruptcy law, common law or equitable cause, then, to such extent, the
obligations of Borrower hereunder intended to be satisfied shall be revived and
continue as if such payment or proceeds had not been received by Lender.

 

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2.2.3 Late Payment Charge. If any principal, interest or any other sums due
under the Loan Documents (other than the outstanding Principal Amount due and
payable on the Maturity Date) is not paid by Borrower on or prior to the
applicable Payment Date, Borrower shall pay to Lender upon demand an amount
equal to the lesser of four percent (4%) of such unpaid sum or the Maximum Legal
Rate (the Late Payment Charge) in order to defray the expense incurred by Lender
in handling and processing such delinquent payment and to compensate Lender for
the loss of the use of such delinquent payment. Any such amount shall be secured
by this Agreement, the Security Instrument and the other Loan Documents to the
extent permitted by applicable law.

 

2.2.4 Usury Savings. This Agreement, the Note and the other Loan Documents are
subject to the express condition that at no time shall Borrower be obligated or
required to pay interest on the principal balance of the Loan at a rate which
could subject Lender to either civil or criminal liability as a result of being
in excess of the Maximum Legal Rate. If, by the terms of this Agreement, the
Note or the other Loan Documents, Borrower is at any time required or obligated
to pay interest on the principal balance due under the Note at a rate in excess
of the Maximum Legal Rate, then the 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 under this Agreement, the Note and the other Loan Documents. All sums paid
or agreed to be paid to Lender for the use, forbearance, or detention of the
sums due under the Loan, shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of
the Loan until payment in full so that the rate or amount of interest on account
of the Loan does not exceed the Maximum Legal Rate of interest from time to time
in effect and applicable to the Loan for so long as the Loan is outstanding.

 

2.2.5 Method and Place of Payment. Except as otherwise specifically provided
herein, all payments and prepayments under this Agreement and the Notes shall be
made to Lender not later than 1:00 P.M., New York City time, on the date when
due and shall be made in lawful money of the United States of America in
immediately available funds at Lender’s office or as otherwise directed by
Lender, and any funds received by Lender after such time shall, for all purposes
hereof, be deemed to have been paid on the next succeeding Business Day.

 

Section 2.3 Prepayments.

 

2.3.1 Voluntary Prepayments.

 

(a) Except as otherwise provided in Section 2.3.2 and in this Section 2.3.1,
Borrower shall not have the right to prepay the Loan in whole or in part prior
to the Maturity Date.

 

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(b) During the Prepayment Period, Borrower shall have the right to prepay a
portion of the Principal Amount in connection with a Property Release of one or
more Individual Properties consummated in accordance with and subject to the
conditions of Section 8.7 of this Agreement, provided that the portion of the
Principal Amount that may be voluntarily prepaid during the Prepayment Period
shall not exceed $19,220,000 in the aggregate.

 

(c) The outstanding Principal Amount may not be voluntarily prepaid in whole or
in part, in excess of the $19,220,000 portion of the Principal Amount that may
be prepaid in connection with Property Releases of Individual Properties during
the Prepayment Period. At any time on or after the Prepayment Lockout Release
Date, Borrower shall have the right to prepay the Principal Amount, in whole but
not in part.

 

(d) In connection with any voluntary prepayment of the Principal Amount,
Borrower shall provide prior irrevocable written notice (the Prepayment Notice)
to Lender specifying the proposed date on which the prepayment is to be made,
which date must be no earlier than ten (10) Business Days after the date of such
Prepayment Notice. Promptly following the receipt of the Prepayment Notice, the
Lender shall notify the Borrower in writing of the Release Price. Upon the
delivery of such notice, such amounts shall be due and payable on the specified
Prepayment Date and failure to pay such amounts shall be an Event of Default
hereunder.

 

(e) On the date on which a prepayment, voluntary or mandatory, is made as
required under this Agreement (the Prepayment Date), Borrower shall pay to
Lender an amount equal to the sum of (x) the entire outstanding Principal Amount
or portion thereof required to be prepaid plus (y) the Breakage Costs, plus (z)
an amount equal to the Yield Maintenance Premium on such prepayment; provided,
that notwithstanding the foregoing, other than following an Event of Default, no
Yield Maintenance Premium shall be due in connection with any prepayment made
pursuant to Section 2.3.2(a).

 

(f) On the Prepayment Date, Borrower shall pay to Lender all other sums then due
under the Note, this Agreement, the Security Instrument, and the other Loan
Documents. Borrower shall pay all costs and expenses of Lender incurred in
connection with the prepayment (including without limitation, any costs and
expenses associated with a release of the Lien of the related Security
Instrument as set forth in Section 2.3.3 of this Agreement as well as reasonable
attorneys’ fees and expenses).

 

2.3.2 Mandatory Prepayments.

 

(a) On the next occurring Unscheduled Payment Date following the date on which
Lender actually receives any Proceeds, if Lender is not obligated to make such
Proceeds available to Borrower for the restoration of any Individual Property or
otherwise remit such Proceeds to Borrower pursuant to Section 6.2 hereof,
Borrower shall prepay or authorize Lender to apply such Proceeds as a prepayment
of all or a portion of the outstanding Principal Amount of the Loan together
with all interest required hereunder to be paid thereon and any other sums due
hereunder in an amount equal to one hundred percent (100%) of such Proceeds;
provided, however, if an Event of Default has occurred and is continuing, Lender
may apply such Proceeds to the Indebtedness (until paid in full) in any order or
priority in its sole discretion. Other than following an Event of Default, no
Yield Maintenance Premium shall be due in connection with any prepayment made
pursuant to this Section 2.3.2(a).

 

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(b) If, following an Event of Default, Borrower tenders payment of all or any
part of the Indebtedness, or if all or any portion of the Indebtedness is
recovered by Lender after such Event of Default (including, without limitation,
by application of the Reserve Funds), (a) such payment may be made only, or will
be applied by Lender, on the next occurring Unscheduled Payment Date together
with all interest required hereunder to be paid thereon, (b) such payment shall
be deemed a voluntary prepayment by Borrower, and (c) Borrower shall pay, in
addition to the Indebtedness, an amount equal to the Liquidated Damages Amount
in the event the payment occurs prior to the Prepayment Lockout Release Date.

 

2.3.3 Release of Property. Lender shall, upon the written request and at the
expense of Borrower, upon (i) payment in full of the Principal Amount and
interest on the Loan and all other amounts due and payable under the Loan
Documents in accordance with the terms and provisions of the Note and this
Agreement, or (ii) satisfaction of the conditions to a Property Release provided
in Section 8.7, release the Lien of the Security Instrument on the Individual
Property or Properties, as the case may be, or assign it, in whole or in part,
to a new lender. In such event, Borrower shall submit to Lender, not less than
three (3) Business Days prior to the date of such release or assignment, a
release of lien or assignment of lien, as applicable, for such property for
execution by Lender. Such release or assignment, as applicable, shall be in a
form appropriate in each jurisdiction in which the Property is located and
satisfactory to Lender in its reasonable discretion. In addition, Borrower shall
provide all other documentation Lender reasonably requires to be delivered by
Borrower in connection with such release or assignment, as applicable.

 

Section 2.4 Regulatory Change; Taxes.

 

2.4.1 Increased Costs. If, as a result of any Regulatory Change or compliance of
Lender therewith, Lender or the company Controlling Lender shall be subject to
any reserve, special deposit or similar requirements relating to any extensions
of credit or other assets of, or any deposits with or other liabilities, of
Lender or any company Controlling Lender is imposed, modified or deemed
applicable; and Lender determines that, by reason thereof, the cost to Lender or
any company Controlling Lender of making, maintaining or extending the Loan to
Borrower is increased, or any amount receivable by Lender or any company
Controlling Lender hereunder in respect of any portion of the Loan to Borrower
is reduced, in each case by an amount deemed by Lender in good faith to be
material (such increases in cost and reductions in amounts receivable being
herein called Increased Costs), then Lender shall provide notice thereof to
Borrower and Borrower agrees that it will pay to Lender upon Lender’s written
request such additional amount or amounts as will compensate Lender or any
company Controlling Lender for such Increased Costs to the extent Lender
reasonably determines that such Increased Costs are allocable to the Loan. If
Lender requests compensation under this Section 2.4.1, Borrower may, by notice
to Lender, require that Lender furnish to Borrower a statement setting forth in
reasonable detail the basis for requesting such compensation and the method for
determining the amount thereof.

 

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2.4.2 Taxes. Borrower shall make all payments hereunder free and clear of and
without deduction for Special Taxes other than Excluded Special Taxes. If
Borrower shall be required by law to deduct any Special Taxes from or in respect
of any sum payable hereunder or under any other Loan Document to Lender, (a) the
sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.4.2) Lender receives an amount equal to the sum Lender
would have received had no deductions been made in respect of any Special Taxes
other than Excluded Special Taxes, (b) Borrower shall make all deductions
required by law in respect of Special Taxes, and (c) Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law. For purposes of this Section 2.4.2 and Section 2.4.4, “Excluded
Special Taxes” shall mean: (i) Special Taxes imposed as a result of a failure of
Lender or a Person to whom Lender or a Participant has sold a participation
interest pursuant to Section 15.6 (such Person, for purposes of this Section
2.4.2, a Participant) or any Person in the chain of payment between Lender or
such Participant and Borrower to comply with documentation or certification
requirements that would allow for an exemption from such Special Taxes or for
such Special Taxes to be imposed at a reduced rate (it being understood that
Excluded Special Taxes described in this clause (i) shall include only any
excess Special Taxes payable as a result of a failure by Lender or such
Participant or any Person in the chain of payment between Lender or such
Participant and the Borrower to comply with such documentation or certification
requirements over the Special Taxes that would be payable had no such failure
occurred), (ii) Special Taxes that would not be imposed but for Lender having a
connection with the jurisdiction imposing such Special Taxes other than solely
through holding an interest in the Loan or the receipt of any payments thereon,
(iii) Special Taxes imposed by the United States on interest payments made by
Borrower to a Lender that fails to provide (A) a properly completed Form W-9,
(B) a properly completed Form W-8BEN (certifying that Lender is a foreign person
and establishing that Lender is eligible for the “portfolio interest exemption”
under Section 871(h) or 881(c) of the Code or, in the case where Lender is a
bank, that such Lender is eligible for benefits under an income tax treaty with
the United States that reduces the rate of withholding on interest payments made
by Borrower to such Lender to zero), (C), a properly completed Form W-8ECI
applicable to all interest payments to be received by such Lender from Borrower,
or (D) a properly completed Form W-8IMY together with all required attachments,
provided for purposes of this clause (iii) that any Special Tax imposed by the
United States as a result of any information not included on or with such Form
W-8IMY in accordance with applicable requirements or a failure to attach a
properly completed Form W-9, W-8BEN (establishing the provider’s eligibility for
either the “portfolio interest exception” under Section 871(h) or 881(c) of the
Code or, in the case where such provider is a bank, that such provider is
eligible for benefits under an income tax treaty with the United States that
reduces the rate of withholding on interest payments made by Borrower to such
Lender attributable to such provider to zero) or W-8ECI (applicable to all
payments to be received by the Lender from Borrower attributable to such
provider) shall be an Excluded Special Tax and (iv) Special Taxes that are
imposed on a Lender or a Participant as a result of a change in the tax laws of
the jurisdiction imposing such Special Taxes that becomes effective after the
Closing Date and before the date on which Lender or a Participant acquires the
interest in the Loan in respect of which such Special Taxes are imposed (it
being understood that Excluded Special Taxes described in this clause (iv) shall
include only any excess Special Taxes payable as a result of such a change in
tax laws over the Special Taxes that would be payable had no such change in tax
laws occurred).

 

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2.4.3 Other Taxes. In addition, Borrower agrees to pay any present or future
stamp or documentary taxes or other excise or property taxes, charges, or
similar levies which arise from any payment made hereunder, or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the other Loan Documents, or the Loan (hereinafter referred to as
Other Taxes).

 

2.4.4 Indemnity. Borrower shall indemnify Lender for the full amount of Special
Taxes (other than Excluded Special Taxes) and Other Taxes (including any Special
Taxes (other than Excluded Special Taxes) or Other Taxes imposed by any
Governmental Authority on amounts payable under this Section 2.4.4) paid by
Lender and any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within
thirty (30) days after the date Lender makes written demand therefor.

 

2.4.5 Change of Office. To the extent that changing the jurisdiction of Lender’s
applicable office would have the effect of minimizing Special Taxes, Other Taxes
or Increased Costs, Lender shall use reasonable efforts to make such a change,
provided that same would not otherwise be disadvantageous to Lender.

 

2.4.6 Survival. Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained in this
Section 2.4 shall survive the payment in full of principal and interest
hereunder, and the termination of this Agreement.

 

Section 2.5 Conditions Precedent to Closing.

 

The obligation of Lender to make the Loan hereunder is subject to the
fulfillment by, or on behalf of, Borrower or waiver by Lender of the following
conditions precedent and any other conditions precedent set forth elsewhere in
this Agreement or the other Loan Documents no later than the Closing Date;
provided, however, that unless a condition precedent shall expressly survive the
Closing Date pursuant to a separate agreement, by funding the Loan, Lender shall
be deemed to have waived any such conditions not theretofore fulfilled or
satisfied:

 

2.5.1 Representations and Warranties; Compliance with Conditions. The
representations and warranties of Borrower contained in this Agreement and the
other Loan Documents shall be true and correct in all material respects on and
as of the Closing Date with the same effect as if made on and as of such date;
and Borrower shall be in compliance in all material respects with all terms and
conditions set forth in this Agreement and in each other Loan Document on its
part to be observed or performed.

 

2.5.2 Delivery of Loan Documents; Title Policy; Reports.

 

(a) Loan Documents. Lender shall have received an original copy of this
Agreement, the Note and all of the other Loan Documents, in each case, duly
executed (and to the extent required, acknowledged) and delivered on behalf of
Borrower and any other parties thereto.

 

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(b) Security Instrument, Assignment of Leases. Lender shall have received
evidence that original counterparts of the Security Instrument and Assignment of
Leases, in proper form for recordation, have been delivered to the Title Company
for recording, so as effectively to create, in the reasonable judgment of
Lender, upon such recording valid and enforceable first priority Liens upon the
Property, in favor of Lender or Lender’s nominee (or such other trustee as may
be required or desired under local law), subject only to the Permitted
Encumbrances and such other Liens as are permitted pursuant to the Loan
Documents.

 

(c) UCC Financing Statements. Lender shall have received evidence that the UCC
financing statements relating to the Security Instrument and this Agreement have
been delivered to the Title Company for filing in the applicable jurisdictions.

 

(d) Title Insurance. Lender shall have received a Title Policy issued by the
Title Company and dated as of the Closing Date, with reinsurance and direct
access agreements reasonably acceptable to Lender. Such Title Policy shall (i)
provide coverage in the amount of the Loan, (ii) insure Lender or Lender’s
nominee that the Security Instrument creates valid, first priority Liens on the
Property, free and clear of all exceptions from coverage other than Permitted
Encumbrances and standard exceptions and exclusions from coverage (as modified
by the terms of any endorsements), (iii) contain endorsements and affirmative
coverages acceptable to Lender, and (iv) name Lender or Lender’s nominee as the
insured. The Title Policy shall be assignable. Lender also shall have received
evidence that all premiums in respect of such Title Policy have been paid.

 

(e) Surveys. Lender shall have received current Surveys for the Property,
containing the survey certification in a form acceptable to Lender. Such Surveys
shall reflect the same legal description for the applicable parcel of the
Property that is contained in the Title Policy referred to in clause (d) above
and shall include, among other things, a metes and bounds description of the
real property comprising part of the Property reasonably satisfactory to Lender.
The surveyor’s seal shall be affixed to the Surveys and the surveyor shall
provide a certification for such Surveys in form and substance acceptable to
Lender.

 

(f) Insurance. Lender shall have received valid certificates of insurance for
the policies of insurance required hereunder, satisfactory to Lender in its sole
discretion, and evidence of the payment of all Insurance Premiums currently due
and payable for the existing policy period.

 

(g) Environmental Reports. Lender shall have received an Environmental Report in
respect of the Property satisfactory to Lender.

 

(h) Zoning. Lender shall have received reports reasonably acceptable to Lender
confirming the zoning compliance of each Individual Property.

 

(i) Certificate of Occupancy. Lender shall have received reports reasonably
acceptable to Lender confirming the existence of a valid certificate of
occupancy, if available, for each Individual Property.

 

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2.5.3 Related Documents. Each additional document not specifically referenced
herein, but relating to the transactions contemplated herein, shall have been
duly authorized, executed and delivered by all parties thereto and Lender shall
have received and approved certified copies thereof.

 

2.5.4 Delivery of Organizational Documents. On or before the Closing Date,
Borrower shall deliver, or cause to be delivered, to Lender copies certified by
an Officer’s Certificate, of all organizational documentation related to
Borrower and Guarantor as have been requested by Lender and/or the formation,
structure, existence, good standing and/or qualification to do business of
Borrower and Guarantor, as Lender may request in its sole discretion, including,
without limitation, good standing certificates, qualifications to do business in
the appropriate jurisdictions, resolutions authorizing the entering into of the
Loan and incumbency certificates as may be requested by Lender.

 

2.5.5 Opinions of Borrower’s Counsel.

 

(a) Lender shall have received a Non-Consolidation Opinion in a form approved by
the Lender (the Non-Consolidation Opinion).

 

(b) Lender shall have received one or more Opinions of Counsel in a form
approved by the Lender.

 

2.5.6 Budgets. Borrower shall have delivered the Annual Budget for the current
Fiscal Year which Annual Budget shall be approved by Lender prior to the Closing
Date.

 

2.5.7 Completion of Proceedings. All corporate and other proceedings taken or to
be taken in connection with the transactions contemplated by this Agreement and
other Loan Documents and all documents incidental thereto shall be satisfactory
in form and substance to Lender, and Lender shall have received certified copies
of such documents as Lender may reasonably request.

 

2.5.8 Payments. All payments, deposits or escrows, if any, required to be made
or established by Borrower under this Agreement, the Note and the other Loan
Documents on or before the Closing Date shall have been paid.

 

2.5.9 Loan to Value Test; Loan to Cost. Lender shall have determined that (x)
the Property has an appraised dark value reasonably acceptable to Lender in
light of Lender’s loan underwriting assumptions and (y) the initial Principal
Amount of the Loan is not more than 70% of each of the acquisition cost of the
Property and the fair market value of the Property set forth in an appraisal
acceptable to Lender (assuming the BofA Lease is in place).

 

2.5.10 Cash Management Agreement. Lender shall have received the original of the
Cash Management Agreement executed by each of Cash Management Bank, Manager and
Borrower.

 

2.5.11 Assignment of Management Agreement. Lender shall have received the
original of the Assignment of Management Agreement executed by each of Borrower
and Manager.

 

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2.5.12 Tenant Estoppels. Lender shall have received an executed tenant estoppel
letter, in a form reasonably acceptable to the Lender from (i) Bank of America,
N.A., and (ii) each of the other Tenants identified on Schedule I attached
hereto, which result in the Borrower having delivered to the Lender acceptable
tenant estoppel letters from tenants that in aggregate represent 85% of the
income from the Property.

 

2.5.13 Ground Lease Estoppels. Lender shall have received an executed estoppel
letter from each Fee Owner in a form reasonably acceptable to the Lender.

 

2.5.14 Reciprocal Easement Agreement Estoppels. Lender shall have received an
executed reciprocal easement agreement estoppel letter from all parties under
the REAs, in a form reasonably acceptable to Lender.

 

2.5.15 Closing Date DSCR. Lender shall have determined that the DSCR is equal to
or greater than the Closing Date DSCR.

 

2.5.16 Independent Manager Certificate. Lender shall have received an executed
Independent Manager certificate in a form reasonably acceptable to Lender.

 

2.5.17 Transaction Costs. Borrower shall have paid or reimbursed Lender for all
title insurance premiums, recording and filing fees, costs of Environmental
Reports, Physical Conditions Reports, appraisals and other reports, the
reasonable fees and costs of Lender’s counsel and all other third party
out-of-pocket expenses incurred in connection with the origination of the Loan.

 

2.5.18 Material Adverse Effect. No event or condition shall have occurred since
the date of Borrower’s, Guarantor’s or Bank of America, N.A.’s most recent
financial statements previously delivered to Lender which has or could
reasonably be expected to have a Material Adverse Effect. The Operating Income
and Operating Expenses of the Property, the occupancy thereof, the Leases, and
all other features of the transaction shall be as represented to Lender without
material adverse change. Neither Borrower nor any of its constituent Persons
shall be the subject of any bankruptcy, reorganization, or insolvency
proceeding.

 

2.5.19 Leases and Rent Roll. Lender shall have received certified copies of all
Leases and Ground Leases requested by Lender. Lender shall have received a
current certified rent roll of the Property.

 

2.5.20 Underwritten Net Cash Flow. Lender shall have determined that the
Underwritten Net Cash Flow of the Property is not less than $26,000,000.

 

2.5.21 Tax Lot. Lender shall have received evidence that each Individual
Property constitutes one(1) or more separate tax lots, which evidence shall be
reasonably satisfactory in form and substance to Lender.

 

2.5.22 Physical Conditions Report. Lender shall have received a Physical
Conditions Report with respect to each Individual Property, which report shall
be satisfactory in form and substance to Lender.

 

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2.5.23 Management Agreement. Lender shall have received a certified copy of the
Management Agreement which shall be satisfactory in form and substance to
Lender.

 

2.5.24 Appraisal. Lender shall have received an appraisal of the Property, which
shall be satisfactory in form and substance to Lender.

 

2.5.25 Financial Statements. Lender shall have received certified copies of
financial statements with respect to the Property for the period commencing
October 1, 2004 to the extent available.

 

2.5.26 Further Documents. Lender or its counsel shall have received such other
and further approvals, opinions, documents and information as Lender or its
counsel may have reasonably requested including the Loan Documents in form and
substance satisfactory to Lender and its counsel.

 

Section 2.6 Substitution of Properties. Subject to the terms and conditions set
forth in this Section 2.6, Borrower may obtain a release of the Lien of the
Security Instrument (and the related Loan Documents) encumbering an Individual
Property (a Substituted Property) by substituting therefor another property of
like kind and quality acquired by Borrower (individually, a Substitute Property
and collectively, the Substitute Properties), provided that the following
conditions precedent are satisfied:

 

(a) The Maturity Date shall have not occurred.

 

(b) Lender shall have received at least thirty (30) days prior written notice
requesting the substitution and identifying the Substitute Property and
Substituted Property.

 

(c) Lender shall have received a copy of a deed conveying all of Borrower’s
right, title and interest in and to the Substituted Property to an entity other
than Borrower pursuant to an arms length transaction and a letter from Borrower
countersigned by a title insurance company acknowledging receipt of such deed
and agreeing to record such deed in the real estate records for the county in
which the Substituted Property is located.

 

(d) Lender shall have received a fee in the amount of $10,000 with respect to
each Substituted Property.

 

(e) Lender shall have received an appraisal of the Substitute Property and
Substituted Property, dated no more than one hundred eighty (180) days prior to
the substitution date, by an appraiser acceptable to the Rating Agencies if the
Loan is part of a Securitization, or the Lender if the Loan is not part of a
Securitization, which demonstrates that the appraised value of the Substitute
Property shall be equal to or greater than the appraised value of the
Substituted Property.

 

(f) All or substantially all of the Substitute Property shall be subject to a
Lease to a tenant which has a senior unsecured long term credit rating (or whose
obligations under the Lease are guaranteed by a guarantor which has a senior
unsecured long term credit rating) at least equal to, for each Rating Agency,
the lower of (i) the credit rating of Bank of America, N.A. at the time of the
substitution by such Rating Agency and (ii) “A+” in the case of

 

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S&P, “AA-” in the case of Fitch and “Aa2” in the case of Moody’s, which Lease
shall (A) provide that every monetary and non-monetary obligation associated
with managing, owning, developing and operating such Substitute Property is an
obligation of the tenant thereunder (i.e., a “triple net” Lease), (B) have a
term substantially similar or longer than that of the Lease then encumbering the
applicable Substituted Property, (C) provide offset and termination rights in
favor of the tenant thereunder substantially similar (or more favorable to
Borrower, as landlord thereunder) to those in favor of Bank of America, N.A.
provided for by the BofA Lease then encumbering the applicable Substituted
Property, and (D) provide for annual cash flow equal to or in excess of the
Underwritten Net Cash Flow on an annual basis of the Substituted Property. In
the event the tenant’s obligations under the Lease are guaranteed by such
guarantor, the Lender shall have approved the form of guarantee. Lender shall
have received copies of all Leases affecting the Substitute Property certified
by Borrower as being true and correct.

 

(g) After giving effect to the substitution, the DSCR for the Loan for all of
the Properties (excluding the Substituted Property and including the Substitute
Property) is not less than the greater of (1) the DSCR for the Loan for all of
the Properties as of the Closing Date and (2) the DSCR for the Loan for all of
the Properties as of the date immediately preceding the substitution.

 

(h) After giving effect to the substitution, the aggregate Allocated Loan Amount
of the Substituted Properties shall not exceed (A) during any twelve (12)
consecutive month period, 5.00% of the initial Principal Amount of the Loan or
(B) during the term of the Loan, 30.00% of the initial Principal Amount of the
Loan; provided, that for purposes of the aforementioned calculation in clause
(A) of the maximum 5.00% of the initial Principal Amount of the Loan, as
calculated by reference to the Allocated Loan Amount of the Substituted
Properties, that may be substituted during any twelve consecutive month period,
such calculation shall exclude any substitution of any Individual Property for
which a reserve amount has been allocated on Schedule IX hereto or the
Individual Property referred to on Schedule II attached hereto as “Las Vegas
Operations Center”, which substitution occurs in connection with, as a result of
and simultaneous with the exercise of the right to repurchase such Individual
Property granted to Bank of America, N.A. in the documentation pursuant to which
Borrower acquired the Property.

 

(i) The quotient of Underwritten Net Cash Flow (for the most recent twelve (12)
month period immediately preceding the substitution for which the Borrower has
delivered financial statements to the Lender pursuant to this Agreement (or in
the event the Borrower has not yet delivered financial statements for a twelve
(12) month period, such shorter period for which Borrower has delivered
financial statements to the Lender pursuant to this Agreement annualized))
divided by an amount equal to Allocated Loan Amount multiplied by the DSCR
Constant shall be calculated separately with respect to each of the Substituted
Property and the Substitute Property (replacing for this purpose all references
to Property in the definitions of Underwritten Net Cash Flow, Operating Income
and Operating Expenses with Substituted Property and Substitute Property, as
applicable) and the result of such calculation for the Substitute Property shall
be equal to or greater than the result of such calculation for the Substituted
Property.

 

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(j) Borrower shall have obtained a Rating Agency Confirmation in writing. If any
subordinate or mezzanine financing has been obtained with respect to the
Property (including, without limitation, under Article XIV hereof), the Borrower
shall have obtained the consent of the lender under such subordinate or
mezzanine financing in writing to such substitution.

 

(k) No Event of Default shall have occurred and be continuing and Borrower shall
be in compliance in all material respects with all terms and conditions set
forth in this Agreement and in each Loan Document on Borrower’s part to be
observed or performed. Lender shall have received a certificate from Borrower
confirming the foregoing, stating that the representations and warranties of
Borrower contained in this Agreement and the other Loan Documents are true and
correct in all material respects on and as of the date of the substitution with
respect to Borrower, the Properties and the Substitute Property.

 

(l) Borrower (A) shall have executed, acknowledged and delivered to Lender (I) a
Security Instrument and shall have approved UCC-1 Financing Statements with
respect to the Substitute Property, and shall have executed, acknowledged and
delivered to Lender a letter from Borrower countersigned by a title insurance
company acknowledging receipt of such Security Instrument and UCC-1 Financing
Statements and agreeing to record or file, as applicable, such Security
Instrument and one of the UCC-1 Financing Statements in the real estate records
for the county in which the Substitute Property is located and to file one of
the UCC-1 Financing Statements in the office of the Secretary of State (or other
central filing office) of the state in which the Substitute Property is located,
so as to effectively create upon such recording and filing valid and enforceable
Liens upon the Substitute Property, of the requisite priority, in favor of
Lender (or such other trustee as may be desired under local law), subject only
to the Permitted Encumbrances and such other Liens as are permitted pursuant to
the Loan Documents, (B) shall have executed, acknowledged and delivered to
Lender an Environmental Indemnity with respect to the Substitute Property and
(C) shall have caused the Guarantor to acknowledge and confirm its respective
obligations under the Loan Documents. The Security Instrument, UCC-1 Financing
Statements and Environmental Indemnity shall be the same in form and substance
as the counterparts of such documents executed and delivered with respect to the
related Substituted Property subject to modifications reflecting only the
Substitute Property as the Individual Property that is the subject of such
documents and such modifications reflecting the laws of the state in which the
Substitute Property is located as shall be recommended for similar transactions
by the counsel admitted to practice in such state and delivering the opinion as
to the enforceability of such documents required pursuant to clause (r) below.
The Security Instrument encumbering the Substitute Property shall secure all
amounts evidenced by the Notes, provided that in the event that the jurisdiction
in which the Substitute Property is located imposes a mortgage recording,
intangibles or similar tax and does not permit the allocation of indebtedness
for the purpose of determining the amount of such tax payable, the principal
amount secured by such Security Instrument shall be equal to one hundred
twenty-five percent (125%) of the fair market value of the Substitute Property.
The amount of the Loan allocated to the Substitute Property (such amount being
hereinafter referred to as the Substitute Release Amount) shall equal the
Allocated Loan Amount of the related Substituted Property.

 

(m) Lender shall have received (A) to the extent available any “tie-in” or
similar endorsement to each title insurance policy insuring the Lien of an
existing Security

 

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Instrument as of the date of the substitution with respect to the title
insurance policy insuring the Lien of the Security Instrument with respect to
the Substitute Property and (B) a title insurance policy (or a marked, signed
and redated commitment to issue such title insurance policy) insuring the Lien
of the Security Instrument encumbering the Substitute Property, issued by the
title company that issued the title insurance policies insuring the Lien of the
existing Security Instrument and dated as of the date of the substitution, with
reinsurance and direct access agreements that replace such agreements issued in
connection with the title insurance policy insuring the Lien of the Security
Instrument encumbering the Substituted Property. The title insurance policy
issued with respect to the Substitute Property shall (1) provide coverage in the
amount of the Substitute Release Amount if the “tie-in” or similar endorsement
described above is available or, if such endorsement is not available, in an
amount equal to one hundred twenty-five percent (125%) of the Substitute Release
Amount, (2) insure Lender that the relevant Security Instrument creates a valid
first lien on the Substitute Property encumbered thereby, free and clear of all
exceptions from coverage other than Permitted Encumbrances and standard
exceptions and exclusions from coverage (as modified by the terms of any
endorsements), (3) contain such endorsements and affirmative coverages as are
then available and are contained in the title insurance policies insuring the
Liens of the existing Security Instruments, and (4) name Lender as the insured.
Lender also shall have received copies of paid receipts or other evidence
showing that all premiums in respect of such endorsements and title insurance
policies have been paid.

 

(n) Lender shall have received a current Survey for each Substitute Property,
certified to the Title Company and Lender and their successors and assigns, in
the same form and having the same content as the certification of the Survey of
the Substituted Property prepared by a professional land surveyor licensed in
the state in which the Substitute Property is located and, if the Loan is the
subject of a Securitization, acceptable to the Rating Agencies in accordance
with the 1992 Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys. Such survey shall reflect the same legal description contained in the
Title Policy relating to such Substitute Property and shall include, among other
things, a metes and bounds description of the real property comprising part of
such Substitute Property (unless such real property has been satisfactorily
designated by lot number on a recorded plat). The surveyor’s seal shall be
affixed to each Survey and each Survey shall certify that the surveyed property
is not located in a “one-hundred-year flood hazard area.”

 

(o) Lender shall have received valid certificates of insurance indicating that
the requirements for the policies of insurance required for an Individual
Property hereunder have been satisfied with respect to the Substitute Property
and evidence of the payment of all premiums payable for the existing policy
period.

 

(p) Lender shall have received a Phase I environmental report acceptable to
Lender and, if recommended under the Phase I environmental report, a Phase II
environmental report acceptable to Lender, which conclude that the Substitute
Property does not contain any Hazardous Materials and is not subject to any risk
of contamination from any off-site Hazardous Materials. If any such report
discloses the presence of any Hazardous Materials or the risk of contamination
from any off-site Hazardous Materials, such report shall include an estimate of
the cost of any related remediation and Borrower shall deposit with Lender an
amount equal to one hundred twenty-five percent (125%) of such estimated cost,
which deposit shall constitute

 

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additional security for the Loan and shall be released to Borrower upon the
delivery to Lender of (A) an update to such report indicating that there is no
longer any Hazardous Materials on the Substitute Property or any danger of
contamination from any off-site Hazardous Materials that has not been fully
remediated and (B) paid receipts indicating that the costs of all such
remediation work have been paid.

 

(q) Borrower shall deliver or cause to be delivered to Lender (A) updates
certified by Borrower of all organizational documentation related to Borrower
and/or the formation, structure, existence, good standing and/or qualification
to do business delivered to Lender on the Closing Date; (B) good standing
certificates, certificates of qualification to do business in the jurisdiction
in which the Substitute Property is located (if required in such jurisdiction);
and (C) resolutions of Borrower authorizing the substitution and any actions
taken in connection with such substitution.

 

(r) Lender shall have received the following opinions of Borrower’s counsel: (A)
an Opinion or Opinions of Counsel admitted to practice under the laws of the
State in which the Substitute Property is located in substantially the same form
and substance as the Opinion of Counsel originally delivered with respect to the
Substituted Property on the Closing Date, stating, without limitation, that the
Loan Documents delivered with respect to the Substitute Property pursuant to
clause (l) above are valid and enforceable in accordance with their terms,
subject to the laws applicable to creditors’ rights and equitable principles,
that Borrower is qualified to do business and in good standing under the laws of
the jurisdiction where the Substitute Property is located or that Borrower is
not required by applicable law to qualify to do business in such jurisdiction;
(B) an Opinion of Counsel acceptable to the Rating Agencies if the Loan is part
of a Securitization, or the Lender if the Loan is not part of a Securitization,
stating that the Loan Documents delivered with respect to the Substitute
Property pursuant to clause (l) above were duly authorized, executed and
delivered by Borrower and that the execution and delivery of such Loan Documents
and the performance by Borrower of its obligations thereunder will not cause a
breach of, or a default under, any agreement, document or instrument to which
Borrower is a party or to which it or its properties are bound; and (C) if the
Loan is the subject of a Securitization, an Opinion of Counsel reasonably
acceptable to the Rating Agencies that the substitution does not constitute a
“significant modification” of the Loan under Section 1001 of the Code or
otherwise cause a tax to be imposed on a “prohibited transaction” by any REMIC.

 

(s) Borrower shall have paid, or escrowed with Lender, (i) all accrued but
unpaid Insurance Premiums relating to the Substitute Property, (ii) all
currently due and payable Impositions (including any in arrears) relating to the
Substitute Property and (iii) all currently due and payable other Charges
relating to the Substitute Property.

 

(t) Borrower shall have paid or reimbursed Lender for all reasonable costs and
expenses incurred by Lender (including, without limitation, reasonable attorneys
fees and disbursements) in connection with the substitution and Borrower shall
have paid all recording charges, filing fees, taxes or other expenses
(including, without limitation, mortgage and intangibles taxes and documentary
stamp taxes) payable in connection with the substitution. Borrower shall have
paid all costs and expenses of the Rating Agencies incurred in connection with
the substitution, if the Loan is the subject of a Securitization.

 

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(u) Lender shall have received annual operating statements and occupancy
statements for the Substitute Property for the most current completed Fiscal
Year and a current operating statement for the Substituted Property, each
certified to Lender as being true and correct and a certificate from Borrower
certifying that, to the best of Borrower’s knowledge, there has been no material
adverse change in the financial condition of the Substitute Property since the
date of such operating statements.

 

(v) Borrower shall have delivered to Lender estoppel certificates from existing
tenants representing not less than 85% of the income of the Substitute Property.
All such estoppel certificates shall be substantially in the form approved by
Lender in connection with the origination of the Loan and shall indicate that
(1) the subject Lease is a valid and binding obligation of the Tenant
thereunder, (2) to the best of Tenant’s knowledge, there are no defaults under
such Lease on the part of the landlord or Tenant thereunder, (3) the Tenant
thereunder has no knowledge of any defense or offset to the payment of rent
under such Lease, (4) no rent under such Lease has been paid more than one (1)
month in advance, (5) the Tenant thereunder has no option under such Lease to
purchase all or any portion of the Substitute Property, and (6) all Tenant
improvement work required under such Lease has been substantially completed and
the Tenant under such Lease is in actual occupancy of its Leased premises. If an
estoppel certificate indicates that all Tenant improvement work required under
the subject Lease has not yet been completed, Borrower shall, if required by the
Rating Agencies if the Loan is the subject of a Securitization, deliver to
Lender financial statements indicating that Borrower has adequate funds to pay
all costs related to such tenant improvement work as required under such Lease.

 

(w) If the Substituted Property is subject to the BofA Lease, Borrower shall
have caused the Substituted Property to be released from the BofA Lease and made
subject to a separate lease.

 

(x) Lender shall have received subordination agreements in the form approved by
Lender in connection with the origination of the Loan with respect to tenants
designated by Lender at the Substitute Property.

 

(y) Lender shall have received (A) an endorsement to the Title Policy insuring
the Lien of the Security Instrument encumbering the Substitute Property insuring
that the Substitute Property constitutes a separate tax lot or, if such an
endorsement is not available in the State in which the Substitute Property is
located, a letter from the Title Company issuing such Title Policy stating that
the Substitute Property constitutes a separate tax lot or (B) a letter from the
appropriate taxing authority stating that the Substitute Property constitutes a
separate tax lot.

 

(z) Lender shall have received a Physical Conditions Report with respect to the
Substitute Property stating that the Substitute Property and its use comply in
all material respects with all applicable Legal Requirements (including, without
limitation, zoning, subdivision and building laws) and that the Substitute
Property is in good condition and repair and free of damage or waste. If
compliance with any Legal Requirements are not addressed by the Physical
Conditions Report, such compliance shall be confirmed by delivery to Lender of a
certificate of an architect licensed in the state in which the Substitute
Property is located, a letter from the municipality in which such Property is
located, a certificate of a surveyor that is

 

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licensed in the state in which the Substitute Property is located (with respect
to zoning and subdivision laws), an ALTA 3.1 zoning endorsement to the title
insurance policy delivered pursuant to clause (m) above (with respect to zoning
laws) or a subdivision endorsement to the title insurance policy delivered
pursuant to clause (m) above (with respect to subdivision laws). If the Physical
Conditions Report recommends that any repairs be made with respect to the
Substitute Property, such Physical Conditions Report shall include an estimate
of the cost of such recommended repairs and Borrower shall deposit with Lender
an amount equal to one hundred twenty-five percent (125%) of such estimated
cost, which deposit shall constitute additional security for the Loan and shall
be released to Borrower upon the delivery to Lender of (A) an update to such
Physical Conditions Report or a letter from the engineer that prepared such
Physical Conditions Report indicating that the recommended repairs were
completed in good and workmanlike manner and (B) paid receipts indicating that
the costs of all such repairs have been paid.

 

(aa) Lender shall have received a certified copy of an amendment to the
Management Agreement reflecting the deletion of the Substituted Property and the
addition of the Substitute Property as a property managed pursuant thereto and
Manager shall have executed and delivered to Lender an amendment to the
Assignment of Management Agreement reflecting such amendment to the Management
Agreement.

 

(bb) Lender shall have received such other and further approvals, opinions,
documents and information in connection with the substitution as requested by
the Rating Agencies if the Loan is part of a Securitization, or the Lender if
the Loan is not part of a Securitization.

 

(cc) Lender shall have received copies of all material contracts and agreements
relating to the leasing and operation of the Substitute Property (other than the
Management Agreement) together with a certification of Borrower attached to each
such contract or agreement certifying that the attached copy is a true and
correct copy of such contract or agreement and all amendments thereto.

 

(dd) Upon the satisfaction of the foregoing conditions precedent, Lender will
execute and deliver to Borrower such instruments as shall be necessary to
release the applicable Substituted Property from the Lien of the applicable
Security Instrument and the other Loan Documents, whereby such Liens shall be
released from the Substituted Property and the Substitute Property shall be
deemed to be an Individual Property for purposes of this Agreement and the
Allocated Loan Amount and Amortized Release Amount with respect to such
Substitute Property shall be deemed to be the Allocated Loan Amount and
Amortized Release Amount, respectively, with respect to the Substituted Property
for all purposes hereunder.

 

III. CASH MANAGEMENT

 

Section 3.1 Cash Management.

 

3.1.1 Lockbox Account. (a) During the term of the Loan, Borrower shall establish
and maintain an account (the Lockbox Account) with Lockbox Bank in trust for the
benefit of Lender, which Lockbox Account shall be under the sole dominion and
control of

 

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Lender. The Lockbox Account shall be entitled “First States Investors 5200, LLC
as Borrower and German American Capital Corporation and Bear Stearns Commercial
Mortgage, Inc., collectively as Lender, pursuant to Loan and Security Agreement
dated as of March 4, 2005 – Lockbox Account”. Borrower hereby grants to Lender a
first-priority security interest in the Lockbox Account and all deposits at any
time contained therein and the proceeds thereof and will take all actions
necessary to maintain in favor of Lender a perfected first priority security
interest in the Lockbox Account. Lender and any Servicer shall have the sole
right to make withdrawals from the Lockbox Account and all costs and expenses
for establishing and maintaining the Lockbox Account shall be paid by Borrower.
All monies now or hereafter deposited into the Lockbox Account shall be deemed
additional security for the Indebtedness.

 

(b) Borrower shall, or shall cause Manager to, deliver irrevocable written
instructions to all Tenants under Leases to deliver all Rents payable thereunder
directly to the Lockbox Account. Borrower shall, and shall cause Manager to,
deposit all amounts received by Borrower or Manager constituting Rents into the
Lockbox Account within one (1) Business Day after receipt thereof. Borrower
shall cause the Guarantor to deposit into the Cash Management Account the
applicable amounts with respect to the applicable identified space at the
Property which the Guarantor has agreed to deposit in the Cash Management
Account pursuant to and in accordance with the Indemnity Guaranty.

 

(c) Borrower shall obtain from Lockbox Bank its agreement to transfer to the
Cash Management Account in immediately available funds by federal wire transfer
all amounts on deposit in the Lockbox Account once every Business Day throughout
the term of the Loan.

 

(d) Upon the occurrence and during the continuance of an Event of Default,
Lender may, in addition to any and all other rights and remedies available to
Lender, apply any sums then present in the Lockbox Account to the payment of the
Indebtedness in any order in its sole discretion.

 

(e) The Lockbox Account shall be an Eligible Account and shall not be commingled
with other monies held by Borrower or Lockbox Bank.

 

(f) Borrower shall not further pledge, assign or grant any security interest in
the Lockbox Account or the monies deposited therein 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 Lender as the secured party, to be
filed with respect thereto.

 

(g) Borrower shall indemnify Lender and hold Lender harmless from and against
any and all actions, suits, claims, demands, liabilities, losses, damages,
obligations and costs and expenses (including litigation costs and reasonable
attorneys fees and expenses) arising from or in any way connected with the
Lockbox Account and/or the Lockbox Agreement (unless arising from the gross
negligence or willful misconduct of Lender) or the performance of the
obligations for which the Lockbox Account was established.

 

3.1.2 Cash Management Account. (a) During the term of the Loan, Borrower shall
establish and maintain a segregated Eligible Account (the Cash Management
Account) to be held by Cash Management Bank in trust and for the benefit of
Lender, which

 

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Cash Management Account shall be under the sole dominion and control of Lender.
The Cash Management Account shall be entitled “First States Investors 5200, LLC
as Borrower and German American Capital Corporation and Bear Stearns Commercial
Mortgage, Inc., collectively as Lender, pursuant to Loan and Security Agreement
dated as of March 4, 2005—Cash Management Account.” Borrower hereby grants to
Lender a first priority security interest in the Cash Management Account and all
deposits at any time contained therein and the proceeds thereof and will take
all actions necessary to maintain in favor of Lender a perfected first priority
security interest in the Cash Management Account. Borrower will not in any way
alter or modify the Cash Management Account and will notify Lender of the
account number thereof. Lender and any Servicer shall have the sole right to
make withdrawals from the Cash Management Account and all costs and expenses for
establishing and maintaining the Cash Management Account shall be paid by
Borrower.

 

(b) Provided no Event of Default shall have occurred and be continuing, on each
Payment Date (or, if such Payment Date is not a Business Day, on the immediately
preceding Business Day) all funds on deposit in the Cash Management Account
shall be applied by Lender to the payment of the following items in the order
indicated:

 

(i) first, payments to the Tax Escrow Fund, the Insurance Escrow Fund and the
Other Charges Escrow Fund on a pro rata basis in accordance with the terms and
conditions of Section 16.3 hereof;

 

(ii) second, either (x) with respect to each Payment Date, commencing in April,
2005 and ending in June, 2005, payment of accrued interest on the outstanding
Principal Amount of the Loan at the Interest Rate, or (y) with respect to each
Payment Date thereafter, commencing in July 2005, payment of the Monthly Debt
Service Payment Amount, applied first to the payment of interest computed at the
Interest Rate with the remainder applied to the reduction of the outstanding
Principal Amount;

 

(iii) third, payments to the Rollover Reserve Fund in accordance with the terms
and conditions hereof;

 

(iv) fourth, payments to the Replacement Reserve Fund in accordance with the
terms and conditions hereof;

 

(v) fifth, payments to the Debt Service Reserve Fund in accordance with the
terms and conditions hereof;

 

(vi) sixth, payment to the Lender of any other amounts then due and payable
under the Loan Documents;

 

(vii) seventh, payments to the lender (or its servicer) under any mezzanine or
other subordinate loan obtained with respect to the Properties which are then
due and payable under the related loan documents; and

 

(viii) lastly, payment of any excess amounts (Excess Cash Flow) to Borrower’s
Account, unless a Lockbox Event or a Non-Renewal Sweep Event shall have occurred
and be continuing in which case Excess Cash Flow shall be retained in the Cash
Management Account and applied as described in Section 3.1.2(d) below.

 

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(c) The insufficiency of funds on deposit in the Cash Management Account shall
not relieve Borrower from the obligation to make any payments, as and when due
pursuant to this Agreement and the other Loan Documents, and such obligations
shall be separate and independent, and not conditioned on any event or
circumstance whatsoever.

 

(d) All funds on deposit in the Cash Management Account following the occurrence
of a Lockbox Event (other than an Event of Default) or a Non-Renewal Sweep Event
shall be held in the Cash Management Account as additional collateral for the
Loan and released to Borrower by the Lender only to the extent necessary to
reimburse Borrower for operating expenses at the Property approved by Lender.
All funds on deposit in the Cash Management Account following the occurrence of
a Lockbox Event which is an Event of Default and until such time as a Cure Event
with respect to such Event of Default shall have occurred may be applied by
Lender in such order and priority as Lender shall determine in its sole
discretion, including, without limitation, to the payment of the Indebtedness.
Notwithstanding anything herein to the contrary, the Borrower shall be permitted
up to three (3) Cure Events in the aggregate during the term of the Loan, and
once a Cure Event occurs, all funds on deposit in the Cash Management Account
shall be released to the Borrower by the Lender as Excess Cash Flow on the
immediately succeeding Payment Date after all other payments required to be made
on such Payment Date pursuant to Section 3.1.2(b) shall have been made.

 

(e) Borrower hereby agrees that Lender may modify the Cash Management Agreement
for the purpose of establishing additional sub-accounts in connection with any
payments otherwise required under this Agreement and the other Loan Documents
and Lender shall provide notice thereof to Borrower.

 

3.1.3 Payments Received Under the Cash Management Agreement. Notwithstanding
anything to the contrary contained in this Agreement or the other Loan
Documents, and provided no Event of Default has occurred and is continuing,
Borrower’s obligations with respect to the payment of interest, the Monthly Debt
Service Payment Amount and amounts required to be deposited into the Reserve
Funds, if any, shall be deemed satisfied to the extent sufficient amounts are
deposited in the Cash Management Account to satisfy such obligations pursuant to
the Cash Management Agreement on the dates each such payment is required,
regardless of whether any of such amounts are so applied by Lender.

 

3.1.4 Maintenance of Account Collateral.

 

(a) Borrower agrees that the Lockbox Account is and shall be maintained (i) as a
“deposit account” (as such term is defined in Section 9-102(a)(29) of the UCC),
(ii) in such a manner that Lender shall have control (within the meaning of
Section 9-104(a)(2) of the UCC) over the Lockbox Account and (iii) such that
neither the Borrower nor Manager shall have any right of withdrawal from the
Lockbox Account and no amounts shall be released to the Borrower or Manager from
the Lockbox Account. Without limiting the Borrower’s obligations under the
immediately preceding sentence, Borrower shall only establish and maintain the
Lockbox Account with a financial institution that has executed an agreement
substantially in the form of the Cash Management Agreement or in such other form
acceptable to Lender in its sole discretion.

 

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(b) Borrower agrees that each of the Cash Management Account and the Reserve
Funds is and shall be maintained:

 

(i) as a “securities account” (as such term is defined in Section 8-501(a) of
the UCC),

 

(ii) in such a manner that Lender shall have control (within the meaning of
Section 8-106(d)(2) of the UCC) over the Cash Management Account and any Reserve
Funds,

 

(iii) such that neither Borrower nor Manager shall have any right of withdrawal
from the Cash Management Account or the Reserve Funds and, except as provided
herein, no amounts shall be released to Borrower from the Cash Management
Account or the Reserve Funds,

 

(iv) in such a manner that the Cash Management Bank shall agree to treat all
property credited to the Cash Management Account or the Reserve Funds as
“financial assets” and

 

(v) such that all securities or other property underlying any financial assets
credited to the Cash Management Account and the Reserve Funds shall be
registered in the name of Cash Management Bank, indorsed to Cash Management Bank
or in blank or credited to another securities account maintained in the name of
Cash Management Bank and in no case will any financial asset credited to any of
the Account Collateral be registered in the name of Borrower, payable to the
order of Borrower or specially indorsed to Borrower except to the extent the
foregoing have been specially indorsed to Cash Management Bank or in blank.

 

Without limiting Borrower’s obligations under the immediately preceding
sentence, Borrower shall only establish and maintain the Cash Management Account
with a financial institution that has executed an agreement substantially in the
form of the Cash Management Agreement or in such other form acceptable to Lender
in its sole discretion.

 

3.1.5 Eligible Accounts. The Account Collateral shall be Eligible Accounts. The
Account Collateral 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 Account Collateral 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 accordance with the
provisions of this Agreement and the Cash Management Agreement. Borrower shall
be the beneficial owner of the Account Collateral for federal income tax
purposes and shall report all income on the Account Collateral.

 

3.1.6 Cash Management Bank. Lender shall have the right at Borrower’s sole cost
and expense to replace the Cash Management Bank with a financial institution
satisfactory to Lender in the event that (i) the Cash Management Bank fails, in
any

 

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material respect, to comply with the Cash Management Agreement or (ii) the Cash
Management Bank named herein is no longer the Cash Management Bank. Upon the
occurrence and during the continuance of an Event of Default, Lender shall have
the right at Borrower’s sole cost and expense to replace Cash Management Bank at
any time, without notice to Borrower. Borrower shall cooperate with Lender in
connection with the appointment of any replacement Cash Management Bank and the
execution by the Cash Management Bank and the Borrower of a Cash Management
Agreement and delivery of same to Lender.

 

3.1.7 Borrower’s Account Representations, Warranties and Covenants.

 

(a) Borrower represents, warrants and covenants that (i) on or prior to the date
hereof, Borrower has delivered a letter directing all Tenants under the Leases
to mail all checks and wire all funds with respect to any payments due under
such Leases directly to the Lockbox Account pursuant to an irrevocable direction
letter approved by Lender and (ii) Borrower shall deliver an irrevocable
direction letter substantially in such form or another form approved by Lender
to Tenants under all Leases entered into after the date hereof.

 

(b) Borrower further represents, warrants and covenants that (i) Borrower shall
cause Manager to deposit all amounts payable to Borrower pursuant to the
Management Agreement directly into the Lockbox Account, (ii) Borrower shall pay
or cause to be paid all Rents, Cash and Cash Equivalents or other items of
Operating Income not covered by the preceding subsection (a) within one Business
Day after receipt thereof by Borrower or its Affiliates directly into the
Lockbox Account and, until so deposited, any such amounts held by Borrower or
Manager shall be held in trust by it for the benefit, and as the property, of
Lender and shall not be commingled with any other funds or property of Borrower
or Manager, (iii) there are no accounts other than the Account Collateral
maintained by Borrower or any other Person with respect to Property or the
collection of Rents, and (iv) so long as the Loan shall be outstanding, neither
Borrower nor any other Person shall open any other operating accounts with
respect to the Property or the collection of Rents, except for the Account
Collateral; provided that, Borrower and Manager shall not be prohibited from
utilizing one or more separate accounts for the disbursement or retention of
funds that have been transferred to the Borrower pursuant to Section 3.1.2(b).

 

3.1.8 Account Collateral and Remedies.

 

(a) Upon the occurrence and during the continuance of an Event of Default,
without additional notice from Lender to Borrower, (i) Lender may, in addition
to and not in limitation of Lender’s other rights, make any and all withdrawals
from, and transfers between and among, the Account Collateral as Lender shall
determine in its sole and absolute discretion to pay any Obligations, Operating
Expenses and/or Capital Expenditures for the Property; (ii) all Excess Cash Flow
shall be retained in the Cash Management Account or applicable Reserve Funds,
and (iii) Lender may liquidate and transfer any amounts then invested in
Permitted Investments to the Account Collateral to which they relate or reinvest
such amounts in other Permitted Investments as Lender may reasonably determine
is necessary to perfect or protect any security interest granted or purported to
be granted hereby or to enable Lender to exercise and enforce Lender’s rights
and remedies hereunder with respect to any Account Collateral or to preserve the
value of the Account Collateral.

 

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(b) Upon the occurrence and during the continuance of an Event of Default,
Borrower hereby irrevocably constitutes and appoints Lender 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 or might do or which Lender may deem necessary or desirable to
more fully vest in Lender 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, Lender may perform or cause performance of
any such agreement, and any reasonable expenses of Lender incurred in connection
therewith shall be paid by Borrower as provided in Section 5.1.16.

 

(c) Borrower hereby expressly waives, to the fullest extent permitted by law,
presentment, demand, protest or any notice of any kind in connection with this
Agreement or 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.

 

3.1.9 Transfers and Other Liens. Borrower agrees that it will not (i) sell or
otherwise dispose of any of the Account Collateral or (ii) 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 Lender under this Agreement.

 

3.1.10 Reasonable Care. Beyond the exercise of reasonable care in the custody
thereof, Lender 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. Lender 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 Lender
accords its own property, it being understood that Lender 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 Lender, its
Affiliates, agents, employees or bailees, except to the extent that such loss or
damage results from Lender’s or such other Person’s gross negligence or willful
misconduct. In no event shall Lender 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 Lender’s 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 (i) Lender does not have custody of the Account
Collateral, (ii) Cash Management Bank has custody of the Account Collateral,
(iii) the initial Cash Management Bank was chosen by Borrower and (iv) Lender
has no obligation or duty to supervise Cash Management Bank or to see to the
safe custody of the Account Collateral.

 

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3.1.11 Lender’s Liability.

 

(a) Lender shall be responsible for the performance only of such duties with
respect to the Account Collateral as are specifically set forth in this Section
3.1 or elsewhere in the Loan Documents, and no other duty shall be implied from
any provision hereof. Lender shall not be under any obligation or duty to
perform any act with respect to the Account Collateral which would cause it to
incur any expense or liability or to institute or defend any suit in respect
hereof, or to advance any of its own monies. Borrower shall indemnify and hold
Lender, its employees and officers harmless from and against any loss, cost or
damage (including, without limitation, reasonable attorneys’ fees and
disbursements) incurred by Lender 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 Lender, its employees,
officers or agents.

 

(b) Lender 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. Lender 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.

 

3.1.12 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 Indebtedness. Upon payment in full of the
Indebtedness, 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 Lender shall execute such
instruments and documents as may be reasonably requested by Borrower to evidence
such termination and the release of the Account Collateral.

 

IV. REPRESENTATIONS AND WARRANTIES

 

Section 4.1 Borrower Representations.

 

Borrower represents and warrants on behalf of itself and, where applicable, the
Guarantor, as of the Closing Date and as of the date of the second disbursement
of the Loan made pursuant to Section 2.1.2 of this Agreement, that:

 

4.1.1 Organization. Borrower is a Delaware limited liability company and has
been duly organized and is validly existing and in good standing pursuant to the
laws of the State of Delaware with requisite power and authority to own its
properties and to transact the businesses in which it is now engaged. Guarantor
is a Delaware limited partnership and has been duly organized and is validly
existing and in good standing pursuant to the laws of the State of Delaware with
requisite power and authority to own its properties and to transact the
businesses in which it is now engaged. Each of Borrower and the Guarantor has
duly qualified to do business and is in good standing in each jurisdiction where
it is required to be so qualified in

 

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connection with its properties, businesses and operations, except where the
failure to be so qualified does not have a material adverse effect upon such
property, businesses and operations. Each of Borrower and the Guarantor possess
all rights, licenses, permits and authorizations, governmental or otherwise,
necessary to entitle it to own its properties and to transact the businesses in
which it is now engaged, and the sole business of Borrower is the management and
operation of the Property. The organizational structure of Borrower is
accurately depicted by the schematic diagram attached hereto as Schedule VII.

 

4.1.2 Proceedings. Each of Borrower and the Guarantor has full power to and has
taken all necessary action to authorize the execution, delivery and performance
of this Agreement and the other Loan Documents. This Agreement and the other
Loan Documents have been duly executed and delivered by, or on behalf of, each
of Borrower and the Guarantor, as applicable, and constitute legal, valid and
binding obligations of each of Borrower and the Guarantor, as applicable,
enforceable against each of Borrower and the Guarantor, as applicable, in
accordance with their respective terms, subject only to applicable bankruptcy,
insolvency and similar laws affecting rights of creditors generally, and
subject, as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).

 

4.1.3 No Conflicts. The execution, delivery and performance of this Agreement
and the other Loan Documents by Borrower and Guarantor, as applicable, will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance (other than pursuant to the Loan Documents) upon any of
the property or assets of Borrower or Guarantor pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement, organizational document or
other agreement or instrument to which Borrower or Guarantor is a party or by
which any of Borrower’s or Guarantor’s property or assets is subject (unless
consents from all applicable parties thereto have been obtained), nor will such
action result in any violation of the provisions of any statute or any order,
rule or regulation of any Governmental Authority, and any consent, approval,
authorization, order, registration or qualification of or with any Governmental
Authority required for the execution, delivery and performance by Borrower or
Guarantor of this Agreement or any other Loan Documents has been obtained and is
in full force and effect.

 

4.1.4 Litigation. Except as set forth on Schedule III attached hereto, there are
no material arbitration proceedings, governmental investigations, actions, suits
or proceedings at law or in equity by or before any Governmental Authority now
pending or, to the best of Borrower’s knowledge, threatened against or affecting
Borrower, Guarantor or the Property. The actions, suits or proceedings
identified on Schedule III, if determined against Borrower, Guarantor or the
Property, would not materially and adversely affect the condition (financial or
otherwise) or business of Borrower, Guarantor or the condition or operation of
the Property.

 

4.1.5 Agreements. Borrower is not a party to any agreement or instrument or
subject to any restriction which is reasonably likely to materially and
adversely affect Borrower or Borrower’s business, properties or assets,
operations or condition, financial or otherwise. Borrower is not in default in
any material respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or

 

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instrument to which it is a party or by which Borrower or the Property is bound.
Borrower has no material financial obligation (contingent or otherwise) under
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which Borrower is a party or by which Borrower or the Property is
otherwise bound, other than (a) obligations incurred in the ordinary course of
the operation of the Property which are permitted under the definition of a
Single Purpose Entity and (b) obligations under the Loan Documents.

 

4.1.6 Title. Borrower has good, marketable and insurable fee simple title to, or
leasehold estate in, the Land and the Improvements, free and clear of all Liens
whatsoever except the Permitted Encumbrances. Borrower has good and marketable
title to the remainder of the Property, free and clear of all Liens whatsoever
except the Permitted Encumbrances. The Security Instrument, when properly
recorded in the appropriate records, together with any Uniform Commercial Code
financing statements required to be filed in connection therewith, will create
(a) a valid, perfected first mortgage lien on the Land and the Improvements or
the leasehold estate therein, as applicable, subject only to Permitted
Encumbrances, and (b) perfected security interests in and to, and perfected
collateral assignments of, all personalty (including the Leases), all in
accordance with the terms thereof, in each case subject only to any applicable
Permitted Encumbrances. There are no claims for payment for work, labor or
materials affecting the Property which are or may become a lien prior to, or of
equal priority with, the Liens created by the Loan Documents. Borrower
represents and warrants that none of the Permitted Encumbrances will materially
and adversely affect (i) the ability of Borrower to pay any of its obligations
to any Person as and when due, (ii) the fair market value of the Property, (iii)
the marketability of title to the Property, or (iv) the use or operation of the
Property as presently used and operated as of the Closing Date and thereafter.
Borrower shall preserve its right, title and interest in and to the Property for
so long as the Note remains outstanding and will warrant and defend same and the
validity and priority of the Lien hereof from and against any and all claims
whatsoever other than the Permitted Encumbrances.

 

4.1.7 Solvency. Borrower has (a) not entered into the transaction contemplated
by this Agreement and the Loan Documents or executed the Note, this Agreement or
any other Loan Documents with the actual intent to hinder, delay or defraud any
creditor and (b) received reasonably equivalent value in exchange for its
obligations under such Loan Documents. Giving effect to the Loan, the fair
saleable value of Borrower’s assets exceeds and will, immediately following the
making of the Loan, exceed Borrower’s total liabilities, including, without
limitation, subordinated, unliquidated, disputed and contingent liabilities. The
fair saleable value of Borrower’s assets is and will, immediately following the
making of the Loan, be greater than Borrower’s probable liabilities, including
the maximum amount of its contingent liabilities on its debts as such debts
become absolute and matured. Borrower’s assets do not and, immediately following
the making of the Loan will not, constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted. Borrower does not
intend to, and does not believe that it will, incur debt and liabilities
(including contingent liabilities and other commitments) beyond its ability to
pay such debt and liabilities as they mature (taking into account the timing and
amounts of cash to be received by Borrower and the amounts to be payable on or
in respect of obligations of Borrower). No petition in bankruptcy has been filed
against Borrower, Manager, Guarantor or any constituent Person thereof in the
last seven (7) years, and neither Borrower, Manager, Guarantor nor any
constituent Person thereof in the last seven (7) years has ever made an
assignment for the benefit of creditors

 

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or taken advantage of any insolvency act for the benefit of debtors. Neither
Borrower, Manager, Guarantor nor any of their constituent Persons are
contemplating 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
Borrower’s assets or property, and Borrower has no knowledge of any Person
contemplating the filing of any such petition against it, Manager, Guarantor or
such constituent Persons.

 

4.1.8 Full and Accurate Disclosure. No statement of fact made by Borrower in
this Agreement or in any of the other Loan Documents contains any untrue
statement of a material fact or omits to state any material fact necessary to
make statements contained herein or therein not misleading. There is no material
fact presently known to Borrower which has not been disclosed to Lender which
adversely affects, nor as far as Borrower can foresee, might adversely affect,
any Individual Property or the business, operations or condition (financial or
otherwise) of Borrower.

 

4.1.9 All Property. The Property constitutes all of the real property, personal
property, equipment and fixtures currently (i) owned or leased by Borrower or
(ii) used in the operation of the business located on the Property, other than
items owned by Manager or any Tenants.

 

4.1.10 No Plan Assets.

 

(a) Borrower does not maintain an employee benefit plan as defined by Section
3(3) of ERISA, which is subject to Title IV of ERISA, and Borrower (i) has no
knowledge of any material liability which has been incurred or is expected to be
incurred by Borrower which is or remains unsatisfied for any taxes or penalties
with respect to any “employee benefit plan,” within the meaning of Section 3(3)
of ERISA, or any “plan,” within the meaning of Section 4975(e)(1) of the
Internal Revenue Code or any other benefit plan (other than a multiemployer
plan) maintained, contributed to, or required to be contributed to by Borrower
or by any entity that is under common control with Borrower within the meaning
of ERISA Section 4001(a)(14) (a Plan) or any plan that would be a Plan but for
the fact that it is a multiemployer plan within the meaning of ERISA Section
3(37); and (ii) has made and shall continue to make when due all required
contributions to all such Plans, if any. Each such Plan has been and will be
administered in compliance with its terms and the applicable provisions of
ERISA, the Internal Revenue Code, and any other applicable federal or state law;
and no action shall be taken or fail to be taken that would result in the
disqualification or loss of tax-exempt status of any such Plan intended to be
qualified and/or tax exempt; and

 

(b) Borrower is not an employee benefit plan, as defined in Section 3(3) of
ERISA, subject to Title I of ERISA, none of the assets of Borrower constitutes
or will constitute plan assets of one or more such plans within the meaning of
29 C.F.R. Section 2510.3-101 and Borrower is not a governmental plan within the
meaning of Section 3(32) of ERISA and transactions by or with Borrower are not
subject to state statutes regulating investment of, and fiduciary obligations
with respect to, governmental plans similar to the provisions of Section 406 of
ERISA or Section 4975 of the Code currently in effect, which prohibit or
otherwise restrict the transactions contemplated by this Agreement.

 

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4.1.11 Compliance. Borrower 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. To the best of Borrower’s
knowledge, Borrower is not in default or in violation of any order, writ,
injunction, decree or demand of any Governmental Authority. To the best of
Borrower’s knowledge, there has not been committed by Borrower any act or
omission affording the federal government or any other Governmental Authority
the right of forfeiture as against the Property or any part thereof or any
monies paid in performance of Borrower’s obligations under any of the Loan
Documents. Borrower is in compliance with the Patriot Laws.

 

4.1.12 Financial Information. All financial data including, without limitation,
the statements of cash flow and income and operating expense, that have been
delivered by or on behalf of Borrower to Lender in respect of the Property in
the aggregate (i.e. such representation is not made with respect to any data on
any Individual Property as of the Closing Date or as of any date after the
Closing Date on which the representations and warranties set forth in this
Article IV are re-made or otherwise brought down in accordance with this
Agreement) in connection with the Loan, (i) are true, complete and correct in
all material respects, (ii) fairly and accurately represent the financial
condition of the Borrower and the Property, taken as a whole, as of the date of
such reports, and (iii) to the extent prepared or audited by an independent
certified public accounting firm, have been prepared in accordance with GAAP
throughout the periods covered, except as disclosed therein; provided, that the
representation and warranty set forth above in this sentence is made to the best
of the Borrower’s knowledge with respect to any such financial data prepared by
a third party. Borrower does not have any contingent liabilities, liabilities
for taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments that are known to Borrower and could
reasonably be expected to have a Material Adverse Effect. Since the date of such
financial statements, there has been no Material Adverse Change in the financial
condition, operations or business of Borrower from that set forth in said
financial statements.

 

4.1.13 Condemnation. Except as set forth on Schedule III hereto, no Taking has
been commenced or, to Borrower’s knowledge, is contemplated with respect to all
or any portion of the Property or for the relocation of roadways providing
access to the Property.

 

4.1.14 Federal Reserve Regulations. None of the proceeds of the Loan will be
used for the purpose of purchasing or carrying any “margin stock” as defined in
Regulation U, Regulation X or Regulation T or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
“margin stock” or for any other purpose which might constitute this transaction
a “purpose credit” within the meaning of Regulation U or Regulation X. As of the
Closing Date, Borrower does not own any “margin stock.”

 

4.1.15 Utilities and Public Access. Each Individual Property has rights of
access to public ways and is served by water, sewer, sanitary sewer and storm
drain facilities adequate to service the Property for its intended uses. All
utilities necessary to the existing use of the Property are located either in
the public right-of-way abutting the Property (which are connected so as to
serve the Property without passing over other property) or in recorded easements
serving the Property and such easements are set forth in and insured by the
Title Policy. All roads necessary for the use of the Property for its current
purposes have been completed and, if necessary, dedicated to public use.

 

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4.1.16 Not a Foreign Person. Borrower is not a foreign person within the meaning
of §1445(f)(3) of the Code.

 

4.1.17 Separate Lots. Each Individual Parcel is comprised of one (1) or more
contiguous parcels which constitute a separate tax lot or lots and does not
constitute or include a portion of any other tax lot not a part of such
Individual Parcel.

 

4.1.18 Assessments. To the best of Borrower’s knowledge, there are no pending or
proposed special or other assessments for public improvements or otherwise
affecting the Property, nor are there any contemplated improvements to the
Property that may result in such special or other assessments.

 

4.1.19 Enforceability. The Loan Documents are not subject to any existing right
of rescission, set-off, counterclaim or defense by Borrower or Guarantor,
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 (subject to applicable bankruptcy, insolvency and
similar laws affecting rights of creditors generally, and subject as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law)), and Borrower and
Guarantor have not asserted any right of rescission, set-off, counterclaim or
defense with respect thereto.

 

4.1.20 No Prior Assignment. There are no prior sales, transfers or assignments
of the Leases or any portion of the Rents due and payable or to become due and
payable which are presently outstanding following the funding of the Loan, other
than those being terminated or assigned to Lender concurrently herewith.

 

4.1.21 Insurance. Borrower has obtained and has delivered to Lender certificates
evidencing all insurance policies required under this Agreement, reflecting the
insurance coverages, amounts and other requirements set forth in this Agreement.
Borrower has not, and to the best of Borrower’s knowledge no Person has, done by
act or omission anything which would impair the coverage of any such policy.

 

4.1.22 Use of Property. The Property is used exclusively for office, bank
branch, bank operation center and retail purposes and other appurtenant and
related uses.

 

4.1.23 Licenses. Except as described on the zoning reports for each Individual
Property prepared by The Planning and Zoning Resource Corporation and delivered
to Lender prior to the Closing Date, all certifications, permits, licenses and
approvals, including without limitation, certificates of completion and
occupancy permits required of Borrower for the legal use, occupancy and
operation of the Property as office buildings, bank branches and bank operations
centers (collectively, the Licenses), have been obtained and are in full force
and effect, except where the failure to have any License would not reasonably be
expected to have a material adverse effect on the current use and occupancy of
the affected Individual Property. Borrower shall keep and maintain all Licenses
necessary for the operation of the Property as office buildings, bank branches
and bank operations centers. The use being made of the Property is in conformity
with the certificate of occupancy issued for the Property.

 

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4.1.24 Flood Zone. None of the Improvements on any Individual Property are
located in an area as identified by the Federal Emergency Management Agency as
an area having special flood hazards and, if so located, the flood insurance
required pursuant to Section 6.1.7 is in full force and effect with respect to
each such Individual Property.

 

4.1.25 Physical Condition. To the best of Borrower’s knowledge, and except as
expressly disclosed in the Physical Conditions Report, the Property, including,
without limitation, all buildings, Improvements, parking facilities, sidewalks,
storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection
systems, electrical systems, equipment, elevators, exterior sidings and doors,
landscaping, irrigation systems and all structural components, are in good
condition, order and repair in all material respects; to the best of Borrower’s
knowledge, and except as disclosed in the Physical Conditions Report, there
exists no structural or other material defects or damages in or to the Property,
whether latent or otherwise, and Borrower has not received any written notice
from any insurance company or bonding company of any defects or inadequacies in
the Property, or any part thereof, which would adversely affect the insurability
of the same or cause the imposition of extraordinary premiums or charges thereon
or of any termination or threatened termination of any policy of insurance or
bond.

 

4.1.26 Boundaries. To the best of Borrower’s knowledge and in reliance on the
Surveys, (a) all of the Improvements lie wholly within the boundaries and
building restriction lines of the Land, (b) no improvements on adjoining
properties encroach upon the Real Property, and (c) no easements or other
encumbrances upon the Individual Property encroach upon any of the Improvements,
except in each case where such encroachment would not have a material adverse
effect on the value or marketability of the Real Property or, if it could have
such an effect, where such encroachment is insured against by the Title Policy,
or Lender has agreed to waive such encroachment by acceptance of the Title
Policy.

 

4.1.27 Leases. The Property is not subject to any Leases other than the Leases
described in the certified rent roll attached hereto as Schedule X and made a
part hereof. Such certified rent roll is true, complete and correct in all
material respects as of the date set forth therein. Borrower is the owner and
lessor of landlord’s interest in the Leases. No Person has any possessory
interest in the Property or right to occupy the same except under and pursuant
to the provisions of the Leases. The current Leases are in full force and effect
and there are no material defaults thereunder by Borrower or, to Borrower’s
knowledge, any other party thereto (other than as expressly disclosed on the
certified rent roll delivered to Lender or the Tenant estoppel certificates
delivered to Lender in connection with the closing of the Loan) and there are no
conditions that, with the passage of time or the giving of notice, or both,
would constitute material defaults thereunder by Borrower or, to Borrower’s
knowledge, any other party thereto. No Rent has been paid more than one (1)
month in advance of its due date, except as disclosed in the Tenant estoppel
certificates delivered to Lender in connection with the closing of the Loan.
There has been no prior sale, transfer or assignment, hypothecation or pledge by
Borrower of any Lease or of the Rents received therein, which will be
outstanding following the funding of the Loan, other than those being assigned
to Lender concurrently herewith. No Tenant under any Lease has a right or option
pursuant to such Lease or otherwise to purchase all or any part of the property
of which the leased premises are a part.

 

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4.1.28 Filing and Recording Taxes. All transfer taxes, deed stamps, intangible
taxes or other amounts in the nature of transfer taxes required to be paid by
any Person under applicable Legal Requirements currently in effect in connection
with the transfer of the Property to Borrower have been promptly paid, and the
granting and recording of the Security Instrument and the UCC financing
statements required to be filed in connection with the Loan have been or will be
promptly made. All mortgage, mortgage recording, stamp, intangible or other
similar tax required to be paid by any Person under applicable Legal
Requirements currently in effect in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement of any of the Loan
Documents, including, without limitation, the Security Instrument, have been or
will be promptly paid and, under current Legal Requirements, each of the
Security Instruments are enforceable in accordance with their respective terms
by Lender (or any subsequent holder thereof), subject to principles of equity
and bankruptcy, insolvency and other laws generally applicable to creditors’
rights and the enforcement of debtors’ obligations.

 

4.1.29 Single Purpose Entity/Separateness.

 

(a) Since the date of its formation, Borrower has been a Single Purpose Entity,
except for the entering into and performance by Borrower under (i) the documents
identified on Schedule XIII hereto in connection with the warehouse financing
with Deutsche Bank AG, Cayman Islands Branch, as agent, and LaSalle Bank,
National Association, as collateral agent (it being understood that the proceeds
of the Loan shall be used to repay such warehouse financing on the Closing
Date), (ii) the documents identified on Schedule XIII hereto in connection with
Borrower’s acquisition of certain assets and the conveyance of such assets by
Borrower to one of its Affiliates, and (iii) the Indemnity Guaranty.

 

(b) All of the assumptions made in the Non-Consolidation Opinion, including, but
not limited to, any exhibits attached thereto, are true and correct in all
respects and any assumptions made in any subsequent non-consolidation opinion
delivered in connection with the Loan Documents (an Additional Non-Consolidation
Opinion), including, but not limited to, any exhibits attached thereto, will
have been and shall be true and correct in all respects. Borrower has complied
and will comply with all of the assumptions made with respect to it in the
Non-Consolidation Opinion. Borrower will have complied and will comply with all
of the assumptions made with respect to it in any Additional Non-Consolidation
Opinion. Each entity other than Borrower with respect to which an assumption
shall be made in any Additional Non-Consolidation Opinion will have complied and
will comply with all of the assumptions made with respect to it in any
Additional Non-Consolidation Opinion.

 

4.1.30 Management Agreement. The Management Agreement is in full force and
effect and there is no default thereunder by any party thereto and no event has
occurred that, with the passage of time and/or the giving of notice would
constitute a default thereunder. The Manager is an affiliate of Borrower.

 

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4.1.31 Illegal Activity. No portion of the Property has been or will be
purchased with proceeds of any illegal activity.

 

4.1.32 No Change in Facts or Circumstances; Disclosure. All financial statements
and rent rolls submitted by Borrower in connection with the Loan are accurate,
complete and correct in all material respects. All other written information,
reports, certificates and other documents submitted by Borrower to Lender in
connection with the Loan are, to the best of Borrower’s knowledge, accurate,
complete and correct in all material respects. Except with respect to such
representations and warranties contained in this Agreement or in any other Loan
Document which are qualified as being made to the best of Borrower’s knowledge,
all representations and warranties made by Borrower in this Agreement or in any
other Loan Document, are accurate, complete and correct in all material
respects. There has been no material adverse change known to Borrower in any
condition, fact, circumstance or event that would make any such information
inaccurate, incomplete or otherwise misleading in any material respect or that
otherwise materially and adversely affects the Property or the business
operations or the financial condition of Borrower. Borrower has disclosed to
Lender all material facts known to Borrower and has not failed to disclose any
material fact known to Borrower that is likely to cause any representation or
warranty made herein to be materially misleading.

 

4.1.33 Tax Filings. Borrower has filed (or has obtained effective extensions for
filing) all federal, state and local tax returns required to be filed by
Borrower and has paid or made adequate provision for the payment of all federal,
state and local taxes, charges and assessments payable by Borrower.

 

4.1.34 Investment Company Act. Borrower is not (a) an investment company or a
company Controlled by an investment company, within the meaning of the
Investment Company Act of 1940, as amended, (b) a holding company or a
subsidiary company of a holding company or an affiliate of either a holding
company or a subsidiary company within the mean of the Public Utility Holding
Company Act of 1935, as amended or (c) subject to any other federal or state law
or regulation which purports to restrict or regulate its ability to borrow
money.

 

4.1.35 Embargoed Person. As of the Closing Date, (a) none of the funds or other
assets of Borrower constitute property of, or are beneficially owned, directly
or indirectly, by any Embargoed Person; (b) no Embargoed Person has any interest
of any nature whatsoever in Borrower with the result that the investment in
Borrower (whether directly or indirectly), is prohibited by law or the Loan is
in violation of law; and (c) none of the funds of Borrower have been derived
from any unlawful activity with the result that the investment in Borrower
(whether directly or indirectly), is prohibited by law or the Loan is in
violation of law.

 

4.1.36 Labor. No organized work stoppage or labor strike is pending or
threatened by employees and other laborers at the Property. Neither Borrower nor
Manager (i) is involved in or threatened with any labor dispute, grievance or
litigation relating to labor matters involving any employees and 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, (ii) has engaged in any
unfair labor practices within the meaning of the National Labor Relations Act or
the Railway

 

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Labor Act or (iii) is a party to, or bound by, any collective bargaining
agreement or union contract with respect to employees and other laborers at the
Property and no such agreement or contract is currently being negotiated by the
Borrower, Manager or any of its Affiliates.

 

4.1.37 Brokers. Borrower has not dealt with any broker or finder with respect to
the transactions contemplated by the Loan Documents and has not done any acts,
had any negotiations or conversations, or made any agreements or promises which
will in any way create or give rise to any obligation or liability for the
payment by either party of any brokerage fee, charge, commission or other
compensation to any Person with respect to the transactions contemplated by the
Loan Documents. Borrower shall indemnify and hold harmless the Lender from and
against any loss, liability, cost or expense, including any judgments,
attorneys’ fees, or costs of appeal, incurred by the other party and arising out
of or relating to any breach or default by the indemnifying party of its
representations, warranties and/or agreements set forth in this Section 4.1.38.
The provisions of this Section 4.1.38 shall survive the expiration and
termination of this Agreement and the payment of the Indebtedness.

 

4.1.38 No Other Debt. Borrower has not borrowed or received debt financing that
has not been heretofore or simultaneously with the initial drawing hereunder
repaid in full, other than the Permitted Debt.

 

4.1.39 Taxpayer Identification Number. Borrower’s Federal taxpayer
identification number is 20-1656923.

 

4.1.40 Leases and REAs. Borrower represents that it has heretofore delivered to
Lender true, correct and complete copies of all Leases, Ground Leases and REAs
and any and all amendments or modifications thereof. No events or circumstances
exist which with or without the giving of notice, the passage of time or both,
may constitute a default on the part of Borrower or, to the Borrower’s
knowledge, any party thereto other than Borrower under any Leases, Ground Leases
or REAs. Borrower or its predecessors have complied with and performed all of
its or their material construction, improvement and alteration obligations with
respect to the Property required as of the date hereof and any other obligations
under the REAs, Ground Leases or the Leases that are required as of the date
hereof have either been complied with or the failure to comply with the same
does not and could not reasonably be expected to have a Material Adverse Effect.
The REAs are in full force and effect and neither Borrower nor, to Borrower’s
knowledge, any other party to the REAs, is in default thereunder, and to the
best of Borrower’s knowledge, there are no conditions which, with the passage of
time or the giving of notice, or both, would constitute a default thereunder.
The REAs have not been modified, amended or supplemented except as set forth on
Schedule IV.

 

4.1.41 Floating Interest Rate.

 

(a) Borrower acknowledges, agrees and understands that the floating rate for the
Loan has been set at a spread to LIBOR that is below the rate that would
otherwise be available to Borrower and that the fixed rate for the Loan will be
slightly higher as a result.

 

(b) Borrower shall apply such accounting treatment to the Loan as it deems
appropriate, after discussions with its independent outside auditors. Borrower
shall make such disclosure of the Loan as it deems appropriate, after
discussions with and with the advice of its outside counsel.

 

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Section 4.2 Survival of Representations. Borrower agrees that all of the
representations and warranties of Borrower set forth in Section 4.1 and
elsewhere in this Agreement and in the other Loan Documents shall be deemed
given and made as of the date of the funding of the Loan and survive for so long
as any amount remains owing to Lender under this Agreement or any of the other
Loan Documents by Borrower or Guarantor unless a longer survival period is
expressly stated in a Loan Document with respect to a specific representation or
warranty, in which case, for such longer period. All representations,
warranties, covenants and agreements made in this Agreement or in the other Loan
Documents by Borrower shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.

 

V. BORROWER COVENANTS

 

Section 5.1 Affirmative Covenants.

 

From the Closing Date and until payment and performance in full of all
obligations of Borrower under the Loan Documents, Borrower hereby covenants and
agrees with Lender that:

 

5.1.1 Existence; Compliance with Legal Requirements; Insurance. Subject to
Borrower’s right of contest pursuant to Section 7.3, Borrower shall at all times
comply and cause the Property to be in compliance with all Legal Requirements
applicable to the Borrower and the Property and the uses permitted upon the
Property. Borrower shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its existence, rights,
licenses, permits and franchises necessary to comply with all Legal Requirements
applicable to it and the Property. There shall never be committed by Borrower,
and Borrower shall not knowingly permit any other Person in occupancy of or
involved with the operation or use of the Property to commit, any act or
omission affording the federal government or any state or local government the
right of forfeiture as against the Property or any part thereof or any monies
paid in performance of Borrower’s obligations under any of the Loan Documents.
Borrower hereby covenants and agrees not to commit, knowingly permit or suffer
to exist any act or omission affording such right of forfeiture. Borrower shall
at all times maintain, preserve and protect all franchises and trade names and
preserve all the remainder of its property used in the conduct of its business
and shall keep the Property in good working order and repair, and from time to
time make, or cause to be made, all reasonably necessary repairs, renewals,
replacements, betterments and improvements thereto, all as more fully set forth
in the Security Instrument. Borrower shall keep the Property insured at all
times to such extent and against such risks, and maintain liability and such
other insurance, as is more fully set forth in this Agreement. Borrower shall at
all times comply with the Patriot Laws.

 

5.1.2 Intentionally Omitted.

 

5.1.3 Litigation. Borrower shall give prompt written notice to Lender of any
litigation or governmental proceedings pending or threatened in writing against
Borrower or Guarantor which, if determined adversely to Borrower or Guarantor
would have a Material Adverse Effect.

 

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5.1.4 Single Purpose Entity.

 

(a) Until the Indebtedness has been paid in full, Borrower shall be a Single
Purpose Entity except as described in Section 4.1.29(a) of this Agreement.

 

(b) Borrower shall act independently of each of its Affiliates and conduct its
business functions and operations and manage itself in all respects consistent
with the representations, warranties and covenants contained in the Loan
Documents to which it is a party relating to its separateness. Borrower shall
take all steps necessary to make it apparent to third parties that Borrower is
an entity with assets and liabilities distinct from those of any of its
Affiliates.

 

(c) Borrower shall not commingle or pool any of its funds or other assets or any
business functions with those of any other Person, nor maintain any joint bank
account or other joint depository arrangement with any other Person. Borrower
shall hold its assets in its own name and effectively ensure that its funds are
clearly traceable at each step in any financial transaction involving such
funds. Borrower shall continue to maintain its own deposit account or accounts,
separate from those of any Affiliate, with an Approved Bank.

 

(d) To the extent that Borrower jointly contracts with any of its Affiliates, as
applicable, to do business with vendors or service providers or to share
overhead expenses, the costs incurred in so doing shall be allocated fairly
among such entities, and each such entity shall bear its fair share of such
costs. To the extent that Borrower contracts or does business with vendors or
service providers where the goods and services provided are partially for the
benefit of any other Person, the costs incurred in so doing shall be fairly
allocated to or among such entities for whose benefit the goods and services are
provided, and each such entity shall bear its fair share of such costs. All
material transactions between (or among) Borrower and any of its respective
Affiliates shall be conducted on substantially the same terms (or on more
favorable terms for Borrower) as would be conducted with third parties.

 

(e) Borrower shall conduct its affairs strictly in accordance with its
organizational documents, and observe all necessary, appropriate and customary
corporate, limited liability company or partnership formalities, as applicable,
including, but not limited to, obtaining any and all members’ consents necessary
to authorize actions taken or to be taken, and maintaining accurate and separate
books, records and accounts, including, without limitation, payroll and
intercompany transaction accounts.

 

(f) Borrower shall: (i) maintain books and records separate from those of any
other Person; (ii) maintain its assets in such manner that it is not costly,
difficult, or time consuming to ascertain or identify them or segregate them
from those of all other Person; (iii) hold regular meetings of its board of
directors, shareholders, partners or members, as the case may be, and observe
all other corporate, partnership or limited liability company, as the case may
be, formalities; (iv) hold itself out to creditors and the public as a legal
entity separate and distinct from any other entity; (v) to the extent it is a
taxpayer, file its own tax returns or, if it is a

 

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member of a consolidated group, such consolidation shall be effected duly in
accordance with generally accepted accounting principles and the Code and
Borrower shall join in the consolidated return of such group as a separate
member thereof; and (vi) not incur any indebtedness or assume or guarantee any
indebtedness of any other Person, secured or unsecured, direct or indirect,
fixed or contingent other than (A) the Loan and other indebtedness incurred
under the Loan Documents, (B) indebtedness and other liabilities for trade
payables and accrued expenses incurred in the ordinary course of business of
operating the Property and (C) any other permitted indebtedness under the Loan
Documents.

 

(g) Borrower shall, to the extent it has funds available, pay when due all of
its own operating expenses, debts and obligations, including, without
limitation, liabilities in respect of salaries of its employees and fair and
reasonable allocations of overhead for any shared office space, shared services
and services performed by employees of others, solely with its own funds, and
Borrower shall not permit any Affiliate to use any of its funds to pay any of
its operating expenses, debts, obligations or liabilities of Borrower.

 

(h) Borrower shall not make any loan or advance to any other Person; Borrower
shall not receive or receive the benefit of any loan or advance from any other
Person except as contemplated by the Loan Documents.

 

(i) Borrower shall not pledge its assets to or for the benefit of any Affiliate
or, except as expressly contemplated by the Loan Documents, any other Person.

 

(j) Borrower shall not hold itself out as responsible for the debts of any
Affiliate.

 

(k) Borrower shall maintain sufficient personnel in view of its contemplated
business operations and will compensate such personnel from its own funds, to
the extent funds are available, for services rendered to Borrower.

 

(l) In addition, for so long as any Indebtedness is outstanding, Borrower shall
not consolidate with or merge with or into any other Person, nor sell all or
substantially all of its assets (other than in connection with the repayment of
the Indebtedness), nor institute proceedings to have itself adjudicated bankrupt
or insolvent, nor consent to the institution of bankruptcy or insolvency
proceedings with respect to itself, nor file a petition seeking nor consent to
any reorganization or other debtor relief with respect to itself under any
applicable federal or state law relating to bankruptcy or insolvency, nor
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator or other similar official for itself or a substantial part of its
property, nor make an assignment for the benefit of its creditors, nor admit in
writing its inability generally to pay its debts as they become due, nor take
any action in furtherance of any of the foregoing, nor, to the fullest extent
its refraining from doing so is permitted by law, dissolve or liquidate itself
or suffer any such dissolution or liquidation, except in each such case with the
unanimous written consent of the Board (including all Independent Managers).

 

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(m) Without in any way limiting the provisions of Section 5.1.4 above, the
treatment of the Borrower for tax purposes only as an entity whose separate
existence from its sole member is disregarded shall not in and of itself violate
this Section 5.1.4.

 

5.1.5 Consents. If Borrower is a corporation, the board of directors of such
Person may not take any action requiring the unanimous affirmative vote of 100%
of the members of the board of directors unless all of the directors, including
the Independent Directors, shall have participated in such vote. If Borrower is
a limited liability company, (a) if such Person is managed by a board of
managers, the board of managers of such Person may not take any action requiring
the unanimous affirmative vote of 100% of the members of the board of managers
unless all of the managers, including the Independent Managers, shall have
participated in such vote, (b) if such Person is not managed by a board of
managers, the members of such Person may not take any action requiring the
affirmative vote of 100% of the members of such Person unless all of the
members, including the Independent Members, shall have participated in such
vote. An affirmative vote of 100% of the directors, board of managers or
members, as applicable, of Borrower shall be required to (i) file a bankruptcy
or insolvency petition or otherwise institute insolvency proceedings or to
authorize Borrower to do so or (ii) file an involuntary bankruptcy petition
against any Affiliate, Manager, or any Affiliate of Manager. Furthermore,
Borrower’s formation documents shall expressly state that for so long as the
Loan is outstanding, Borrower shall not be permitted to (i) dissolve, liquidate,
consolidate, merge or sell all or substantially all of Borrower’s assets other
than in connection with the repayment of the Loan or (ii) engage in any other
business activity and such restrictions shall not be modified or violated for so
long as the Loan is outstanding.

 

5.1.6 Access to Property. Borrower shall permit agents, representatives and
employees of Lender and, in connection with a Securitization, the Rating
Agencies to inspect the Property or any part thereof during normal business
hours on Business Days upon reasonable advance notice or as otherwise permitted
by the Leases, subject to such limitations on such access provided by the
Leases.

 

5.1.7 Notice of Default. Borrower shall promptly advise Lender (a) of any event
or condition that has or is likely to have a Material Adverse Effect and (b) of
the occurrence of any Default or Event of Default of which Borrower has
knowledge.

 

5.1.8 Cooperate in Legal Proceedings. Borrower shall cooperate fully with Lender
with respect to any proceedings before any court, board or other Governmental
Authority which would reasonably be expected to affect in any material adverse
way the rights of Lender hereunder or under any of the other Loan Documents and,
in connection therewith, permit Lender, at its election, to participate in any
such proceedings which may have a Material Adverse Effect.

 

5.1.9 Perform Loan Documents.

 

(a) Borrower shall pay when due all costs, fees and expenses to the extent
required, under the Loan Documents executed and delivered by, or applicable to,
Borrower.

 

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(b) Borrower shall in a timely manner observe, perform and fulfill each and
every covenant, term and provision of each Loan Document executed and delivered
by, or applicable to, Borrower, and shall not enter into or otherwise suffer or
permit any amendment, waiver, supplement, termination or other modification of
any Loan Document executed and delivered by, or applicable to, Borrower without
the prior written consent of Lender.

 

5.1.10 Insurance.

 

(a) Borrower shall cooperate with Lender in obtaining for Lender the benefits of
any Proceeds lawfully or equitably payable in connection with the Property, and
Lender shall be reimbursed for any expenses incurred in connection therewith
(including reasonable attorneys’ fees and disbursements) out of such Proceeds.

 

(b) Borrower shall comply with all Insurance Requirements and shall not bring or
keep or permit to be brought or kept any article upon any of the Property or
cause or permit any condition to exist thereon which would be prohibited by any
Insurance Requirement, or would invalidate insurance coverage required hereunder
to be maintained by Borrower on or with respect to any part of the Property
pursuant to Section 6.1.

 

5.1.11 Further Assurances.

 

(a) Borrower shall execute and acknowledge (or cause to be executed and
acknowledged) and deliver to Lender all documents, and take all actions,
reasonably required by Lender from time to time to confirm the rights created or
now or hereafter intended to be created under this Agreement and the other Loan
Documents and any security interest created or purported to be created
thereunder, to protect and further the validity, priority and enforceability of
this Agreement and the other Loan Documents, to subject to the Loan Documents
any property of Borrower intended by the terms of any one or more of the Loan
Documents to be encumbered by the Loan Documents, or otherwise carry out the
purposes of the Loan Documents and the transactions contemplated thereunder.
Borrower agrees that it shall, upon request and at the sole cost and expense of
Borrower, provide any new Opinions of Counsel required by the Rating Agencies in
connection with a Securitization of the Loan with respect to any matters covered
by any opinions given by Borrower’s counsel on the Closing Date.

 

(b) In addition, Borrower shall, at Borrower’s sole cost and expense:

 

(i) furnish to Lender all instruments, documents, boundary surveys, footing or
foundation surveys, certificates, plans and specifications, appraisals, title
and other insurance reports and agreements, and each and every other document,
certificate, agreement and instrument required to be furnished by Borrower
pursuant to the terms of the Loan Documents;

 

(ii) execute and deliver, from time to time, such further instruments
(including, without limitation, delivery of any financing statements under the
UCC) as may be reasonably requested by Lender to confirm the Lien of the
Security Instrument on any Individual Property, Building Equipment or
Intangible;

 

(iii) execute and deliver to Lender such documents, instruments, certificates,
assignments and other writings, and do such other acts necessary 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 Lender may
reasonably require; and

 

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(iv) do and execute all and such further lawful and reasonable acts, conveyances
and assurances for the carrying out of the terms and conditions of this
Agreement and the other Loan Documents, as Lender shall reasonably require from
time to time.

 

5.1.12 Mortgage Taxes. Borrower shall pay all mortgage taxes, charges, filing,
registration and recording fees, excises and levies and similar taxes payable
with respect to the Note or the Liens created or secured by the Loan Documents.

 

5.1.13 Business and Operations.

 

(a) Borrower shall, and shall cause Manager to, (i) promptly perform and/or
observe all of the covenants and agreements required to be performed and
observed by it under the Management Agreement and do all things necessary to
preserve and to keep unimpaired its material rights thereunder; (ii) promptly
notify Lender of any “event of default” under the Management Agreement of which
it is aware; (iii) promptly deliver to Lender a copy of each financial
statement, capital expenditures plan, property improvement plan and any other
notice, report and estimate received by it under the Management Agreement; and
(iv) enforce in a commercially reasonable manner the performance and observance
of all of the covenants and agreements required to be performed and/or observed
by the Manager under the Management Agreement.

 

(b) Borrower shall continue to engage in the businesses presently conducted by
it as and to the extent the same are necessary for the ownership, maintenance,
management and operation of the Property. Borrower shall qualify to do business
and shall remain in good standing under the laws of the State in which each
parcel of the Property is located and as and to the extent required for the
ownership, maintenance, management and operation of the Property. Borrower shall
at all times during the term of the Loan, continue to own all Building Equipment
and Personal Property which is necessary to operate the Property in the manner
required hereunder and in the manner in which it is currently operated (except
for such Building Equipment and Personal Property which is owned by the
Tenants).

 

5.1.14 Principal Place of Business, State of Organization. Borrower will not
cause or permit any change to be made in its name, identity (including its trade
name or names), place of organization or formation or Borrower’s corporate, or
partnership or other structure unless Borrower shall have first notified Lender
in writing of such change at least ten (10) Business Days prior to the effective
date of such change, and shall have first taken all action required by Lender
for the purpose of perfecting or protecting the lien and security interests of
Lender pursuant to this Agreement, the Cash Management Agreement and the other
Loan Documents and, in the case of a change in Borrower’s structure, without
first obtaining the prior consent of Lender. Upon Lender’s request, Borrower
shall execute and deliver additional financing statements, security agreements
and other instruments which may be necessary to effectively evidence or perfect
Lender’s security interest in the Property as a result of such change of
principal place of business or place of organization. Borrower’s principal place
of business and chief executive office, and the place where Borrower keeps its
books and records,

 

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including recorded data of any kind or nature, regardless of the medium or
recording, including software, writings, plans, specifications and schematics,
has been for the preceding four months (or, if less, the entire period of the
existence of Borrower) and will continue to be the address of Borrower set forth
at the introductory paragraph of this Agreement (unless Borrower notifies Lender
in writing at least ten (10) Business Days prior to the date of such change).
Borrower’s organizational identification number assigned by the State of
Delaware is 3858721. Borrower shall promptly notify Lender of any change in its
organizational identification number.

 

5.1.15 Title to the Property. Borrower shall warrant and defend (a) its title to
the Property and every part thereof, subject only to Liens permitted hereunder
(including Permitted Encumbrances) and (b) the validity and priority of the
Liens of the Security Instrument, the Assignment of Leases and this Agreement on
the Property, subject only to Liens permitted hereunder (including Permitted
Encumbrances), in each case against the claims of all Persons whomsoever. To the
extent not paid to Lender under Lender’s Title Policy, Borrower shall reimburse
Lender for any losses, costs, damages or expenses (including reasonable
attorneys’ fees and court costs) incurred by Lender if an interest in the
Property, other than as permitted hereunder, is claimed by another Person.

 

5.1.16 Costs of Enforcement. In the event (a) that this Agreement or any
Security Instrument is foreclosed upon in whole or in part or that this
Agreement or any Security Instrument is put into the hands of an attorney for
collection, suit, action or foreclosure, (b) of the foreclosure of any security
agreement prior to or subsequent to this Agreement in which proceeding Lender is
made a party, or a mortgage prior to or subsequent to any Security Instrument in
which proceeding Lender is made a party, or (c) of the bankruptcy, insolvency,
rehabilitation or other similar proceeding in respect of Borrower or any of its
constituent Persons or an assignment by Borrower or any of its constituent
Persons for the benefit of its creditors, Borrower, its successors or assigns,
shall be chargeable with and agrees to pay all costs of collection and defense,
including reasonable attorneys’ fees and costs, incurred by Lender or Borrower
in connection therewith and in connection with any appellate proceeding or
post-judgment action involved therein, together with all required service or use
taxes.

 

5.1.17 Estoppel Statement.

 

(a) Borrower shall, from time to time, upon thirty (30) days’ prior written
request from Lender, execute, acknowledge and deliver to the Lender, an
Officer’s Certificate, stating that this Agreement and the other Loan Documents
are unmodified and in full force and effect (or, if there have been
modifications, that this Agreement and the other Loan Documents are in full
force and effect as modified and setting forth such modifications), stating the
amount of accrued and unpaid interest and the outstanding principal amount of
the Note and containing such other information with respect to the Borrower, the
Property and the Loan as Lender shall reasonably request. The estoppel
certificate shall also state either that no Event of Default exists hereunder
or, if any Event of Default shall exist hereunder, specify such Event of Default
and the steps being taken to cure such Event of Default.

 

(b) Borrower shall use commercially reasonable efforts to deliver to Lender,
within fifteen (15) Business Days of Lender’s request, tenant estoppel
certificates from each Tenant in form and substance reasonably satisfactory to
Lender, provided, that, so long as an

 

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Event of Default has not occurred and is not continuing, Borrower shall not be
required to deliver such certificates from any one tenant more frequently than
two times in any calendar year and shall not be required to make a blanket
request for estoppel certificates from all of the tenants at the Property more
than one time in every twelve months.

 

5.1.18 Loan Proceeds. Borrower shall use the proceeds of the Loan received by it
on the Closing Date only for the purposes set forth in Section 2.1.4.

 

5.1.19 No Joint Assessment. Borrower shall not 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) which constitutes real property 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 such real
property portion of the Property.

 

5.1.20 No Further Encumbrances. Borrower shall do, or cause to be done, all
things necessary to keep and protect the Property and all portions thereof
unencumbered from any Liens, easements or agreements granting rights in or
restricting the use or development of the Property, except for (a) Permitted
Encumbrances and (b) Liens permitted pursuant to the Loan Documents.

 

5.1.21 Leases and REAs. Borrower shall promptly after receipt thereof deliver to
Lender a copy of any notice received with respect to the REAs and the Leases
claiming that Borrower is in default in the performance or observance of any of
the material terms, covenants or conditions of any of the REAs or the Leases.

 

5.1.22 Embargoed Person. Borrower has performed and shall perform reasonable due
diligence to insure that at all times throughout the term of the Loan, including
after giving effect to any Transfers permitted pursuant to the Loan Documents,
(a) none of the funds or other assets of Borrower and Guarantor constitute
property of, or are beneficially owned, directly or indirectly, by any person,
entity or government subject to trade restrictions under U.S. law, including,
but not limited to, Patriot Laws, with the result that the investment in
Borrower or Guarantor, as applicable (whether directly or indirectly), is
prohibited by law or the Loan made by the Lender is in violation of law
(Embargoed Person); (b) no Embargoed Person has any interest of any nature
whatsoever in Borrower or Guarantor, as applicable, with the result that the
investment in Borrower or Guarantor, as applicable (whether directly or
indirectly), is prohibited by law or the Loan is in violation of law; and (c)
none of the funds of Borrower or Guarantor, as applicable, have been derived
from, or are the proceeds of, any unlawful activity, including money laundering,
terrorism or terrorism activities, with the result that the investment in
Borrower or Guarantor, as applicable (whether directly or indirectly), is
prohibited by law or the Loan is in violation of law, or may cause the Property
to be subject to forfeiture or seizure.

 

5.1.23 Confirmation of Representations. Borrower shall deliver, in connection
with the initial Securitization if such Securitization closes sixty (60) or more
calendar days following the Closing Date (but not otherwise), an Officer’s
Certificate certifying as to the accuracy of all representations made by
Borrower in the Loan Documents as of the date of the closing of such
Securitization, subject to any exceptions thereto set forth in an attachment to
such Officer’s Certificate.

 

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5.1.24 Manager.

 

(a) Borrower shall notify Lender in writing (and shall deliver a copy of the
proposed management agreement) of any entity proposed to be designated as a
Qualified Manager of the Property not less than thirty (30) days before such
Qualified Manager begins to manage the Property, and, if a Securitization or
Securitizations shall have occurred, shall obtain prior to any appointment of a
Qualified Manager a Rating Agency Confirmation, with respect to any proposed
Qualified Manager;

 

(b) If (a) an Event of Default has occurred and is continuing or (b) the Manager
shall become insolvent, Borrower shall, at the request of Lender, terminate the
Management Agreement and replace the Manager with a Qualified Manager in
accordance with this Section 5.1.24 and shall deliver an acceptable
Non-Consolidation Opinion covering such replacement Manager if such Person (i)
is not covered by the Non-Consolidation Opinion or an Additional
Non-Consolidation Opinion, and (ii) is an Affiliate of Borrower; and

 

(c) Upon the retention of a Qualified Manager, Lender, and if a Securitization
or Securitizations shall have occurred, the Rating Agencies, shall have the
right to approve any new management agreement with such Qualified Manager (which
approval by Lender shall not be unreasonably withheld or delayed).

 

Section 5.2 Negative Covenants.

 

From the Closing Date until payment and performance in full of all obligations
of Borrower under the Loan Documents or the earlier release of the Lien of this
Agreement or the Security Instrument in accordance with the terms of this
Agreement and the other Loan Documents, Borrower covenants and agrees with
Lender that it will not do, directly or indirectly, any of the following:

 

5.2.1 Incur Debt. Incur, create or assume any Debt, other than Permitted Debt,
without the consent of Lender, or Transfer or Lease all or any part of the
Property or any interest therein, except as permitted in the Loan Documents;

 

5.2.2 Encumbrances. Incur, create or assume or permit the incurrence, creation
or assumption of any Debt secured by an interest in Borrower and shall not
Transfer or permit the Transfer of any interest in Borrower except as permitted
pursuant to Article VIII;

 

5.2.3 Engage in Different Business. Engage, directly or indirectly, in any
business other than that of entering into this Agreement and the other Loan
Documents to which Borrower is a party and the use, ownership, management,
leasing, renovation, financing, development, operation and maintenance of the
Property and activities related thereto;

 

5.2.4 Make Advances. Make advances or make loans to any Person, or hold any
investments, except as expressly permitted pursuant to the terms of this
Agreement or any other Loan Document;

 

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5.2.5 Partition. Partition any Individual Property;

 

5.2.6 Commingle. Commingle its assets with the assets of any of its Affiliates;

 

5.2.7 Guarantee Obligations. Guarantee any obligations of any Person;

 

5.2.8 Transfer Assets. Transfer any asset other than in the ordinary course of
business or Transfer any interest in the Property except as may be permitted
hereby or in the other Loan Documents;

 

5.2.9 Amend Organizational Documents. Amend or modify any of its organizational
documents without Lender’s consent, other than in connection with any Transfer
permitted pursuant to Article VIII or to reflect any change in capital accounts,
contributions, distributions, allocations or other provisions that do not and
could not reasonably be expected to have a Material Adverse Effect and provided
that Borrower remains a Single Purpose Entity;

 

5.2.10 Dissolve. Dissolve, wind-up, terminate, liquidate, merge with or
consolidate into another Person, except as expressly permitted pursuant to this
Agreement;

 

5.2.11 Bankruptcy. (i) File a bankruptcy or insolvency petition or otherwise
institute insolvency proceedings or (ii) file or solicit the filing of an
involuntary bankruptcy petition against Borrower, Manager or any Affiliate of
Borrower or Manager, without obtaining the prior consent of all of the
Independent Managers;

 

5.2.12 ERISA. Engage in any activity that would subject it to regulation under
ERISA or qualify it as an “employee benefit plan” (within the meaning of Section
3(3) of ERISA) to which ERISA applies and Borrower’s assets do not and will not
constitute plan assets within the meaning of 29 C.F.R. Section 2510.3-101;

 

5.2.13 Distributions. From and after the occurrence and during the continuance
of an Event of Default, make any distributions to or for the benefit of any of
its partners or members or its or their Affiliates;

 

5.2.14 Manager. Borrower shall not, without the prior written consent of Lender,
which consent shall not be unreasonably withheld or delayed (provided, if a
Securitization shall have occurred, Borrower obtains a Rating Agency
Confirmation with respect to such action): (i) materially modify, change,
supplement, alter or amend the Management Agreement or waive or release any of
its right and remedies under the Management Agreement that would have a Material
Adverse Effect or (ii) replace the Manager with a Person other than a Qualified
Manager.

 

5.2.15 Modify REAs. Without the prior consent of Lender, which shall not be
unreasonably withheld, delayed or conditioned, Borrower shall not execute
modifications to the REAs which could reasonably be expected to have a material
adverse effect on the use, occupancy or value of the affected Individual
Property;

 

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5.2.16 Modify Cash Management Agreement. Without the prior consent of Lender,
which shall not be unreasonably withheld, delayed or conditioned (and if a
Securitization shall have occurred, a Rating Agency Confirmation obtained by
Borrower), execute any modification to the Cash Management Agreement;

 

5.2.17 Zoning Reclassification. (a) Initiate or consent to any zoning
reclassification of any portion of the Property, (b) seek any variance under any
existing zoning ordinance that could result in the use of the Property becoming
a non-conforming use under any zoning ordinance or any other applicable land use
law, rule or regulation, or (c) allow any portion of the Property to be used in
any manner that could result in the use of the Property becoming a
non-conforming use under any zoning ordinance or any other applicable land use
law, rule or regulation;

 

5.2.18 Debt Cancellation. Cancel or otherwise forgive or release any material
claim or debt owed to it by any Person, except for adequate consideration or in
the ordinary course of its business and except for termination of a Lease as
permitted by Section 8.8;

 

5.2.19 Misapplication of Funds. Distribute any revenue from the Property or any
Proceeds in violation of the provisions of this Agreement, fail to remit amounts
to the Lockbox Account or Cash Management Account, as applicable, as required by
Section 3.1, misappropriate any security deposit or portion thereof or apply the
proceeds of the Loan in violation of Section 2.1.4; or

 

5.2.20 Single-Purpose Entity. Fail to be a Single-Purpose Entity or take or
suffer any action or inaction the result of which would be to cause Borrower to
cease to be a Single-Purpose Entity.

 

VI. INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

 

Section 6.1 Insurance Coverage Requirements. Borrower shall, at its sole cost
and expense (whether directly or by the inclusion of such obligations as tenant
obligations in the applicable Leases), keep in full force and effect insurance
coverage of the types and minimum limits as follows during the term of this
Agreement:

 

6.1.1 Property Insurance. Insurance against loss customarily included under so
called “All Risk” policies including flood, earthquake, vandalism, any type of
windstorm or hail on the Improvements and the Personal Property, and malicious
mischief, boiler and machinery, 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 Improvements and Building Equipment in nature, use,
location, height, and type of construction. Such insurance policy shall also
insure the additional expense of demolition and if any of the Improvements or
the use of the Property shall at any time constitute legal non-conforming
structures or uses, provide coverage for contingent liability from Operation of
Building Laws, Demolition Costs and Increased Cost of Construction Endorsements
and containing an “Ordinance or Law Coverage” or “Enforcement” endorsement. The
amount of such “All Risk” insurance shall be not less than one hundred percent
(100%) of the replacement cost value of the Improvements and the Building
Equipment. Each such insurance policy shall contain an agreed amount

 

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(coinsurance waiver) and replacement cost value endorsement and shall cover,
without limitation, all tenant improvements and betterments which Borrower is
required to insure in accordance with any Lease. Lender shall be named “Loss
Payee” on a “Standard Mortgagee Endorsement” and be provided not less than
thirty (30) days advance notice of change in coverage, cancellation or
non-renewal.

 

6.1.2 Liability Insurance. “General Public Liability” insurance, including,
without limitation, “Commercial General Liability” insurance; “Owned” (if any),
“Hired” and “Non Owned Auto Liability”; and “Umbrella Liability” coverage for
“Personal Injury”, “Bodily Injury”, “Death, Accident and Property Damage”,
providing in combination no less than $100,000,000 per occurrence and in the
annual aggregate. The policies described in this paragraph shall cover, without
limitation: elevators, escalators, independent contractors, “Contractual
Liability” (covering, to the maximum extent permitted by law, Borrower’s
obligation to indemnify Lender as required under this Agreement and “Products
and Completed Operations Liability” coverage). All public liability insurance
shall name Lender as “Additional Insured” either on a specific endorsement or
under a blanket endorsement satisfactory to Lender.

 

6.1.3 Workers’ Compensation Insurance. Workers compensation and disability
insurance as required by law.

 

6.1.4 Commercial Rents Insurance. “Commercial rents” insurance in an amount
equal to eighteen (18) months actual rental loss plus a twelve (12) month
extended period of indemnity endorsement and with a limit of liability
sufficient to avoid any co-insurance penalty and to provide Proceeds which will
cover the actual loss of profits and rents sustained during the period of at
least eighteen (18) months following the date of casualty. Such policies of
insurance shall be subject only to exclusions that are acceptable to Lender and,
if the Loan is the subject of a Securitization, the Rating Agencies; provided,
however, that such exclusions are reasonably consistent with those required for
loans similar to the Loan provided herein. Such insurance shall be deemed to
include “loss of rental value” insurance where applicable. The term “rental
value” means the sum of (A) the total then ascertainable Rents payable under the
Leases and (B) the total ascertainable amount of all other amounts to be
received by Borrower from third parties which are the legal obligation of
Tenants, reduced to the extent such amounts would not be received because of
operating expenses not incurred during a period of non-occupancy of that portion
of such Property then not being occupied.

 

6.1.5 Builder’s All-Risk Insurance. During any period of repair or restoration,
builder’s “All-Risk” insurance in an amount equal to not less than the full
insurable value of the relevant Individual Property against such risks
(including so called “All Risk” perils coverage and collapse of the Improvements
to agreed limits as Lender may request, in form and substance acceptable to
Lender).

 

6.1.6 Boiler and Machinery Insurance. Comprehensive boiler and machinery
insurance (without exclusion for explosion) covering all mechanical and
electrical equipment against physical damage, rent loss and improvements loss
and covering, without limitation, all tenant improvements and betterments that
Borrower is required to insure pursuant to any Lease on a replacement cost
basis. The minimum amount of limits to be provided shall be $10,000,000 per
accident.

 

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6.1.7 Flood Insurance. If any portion of the Improvements is located within an
area designated as “flood prone” or a “special flood hazard area” (as defined
under the regulations adopted under the National Flood Insurance Act of 1968 and
the Flood Disaster Protection Act of 1973), flood insurance shall be provided,
in an amount not less than the maximum limit of coverage available under the
Federal Flood Insurance plan with respect to the Property. Lender reserves the
right to require flood insurance in excess of that available under the Federal
Flood Insurance plan.

 

6.1.8 Terrorism Insurance. Terrorism insurance, including insurance coverage
relating to the acts of terrorist groups or individuals, in an amount not less
than one hundred percent (100%) of the replacement cost value of the
Improvements and the Building Equipment and including “commercial rents”
insurance covering a period of restoration of at least eighteen (18) months in
form and substance acceptable to Lender. Borrower agrees that if any property
insurance policy covering the Property provides for any exclusions of coverage
for acts of terrorism, then a separate terrorism insurance policy in the
coverage amount required under this Section and in form and substance acceptable
to Lender will be obtained by Borrower for the Property.

 

6.1.9 Environmental Insurance. Environmental liability insurance policies, which
shall be non-cancelable at any time prior to the Maturity Date, against any and
all claims, including, without limitation, unknown environmental hazards
requiring remediation as of the date of this Agreement and known environmental
conditions not requiring remediation as of the date of this Agreement, in an
amount of not less than $5,000,000 per loss or $10,000,000 in the aggregate
arising out of or connected with the presence of any Hazardous Materials at the
Property. Lender shall be named in such environmental insurance as an additional
insured and the environmental insurance policy shall provide that it shall be
assignable to Lender upon a foreclosure or assignment in lieu of foreclosure of
the Security Instrument.

 

6.1.10 Seismic Insurance. Seismic (i.e. earthquake) insurance with respect to
any Individual Property with a maximum probable loss (i.e. PML) above 20%.

 

6.1.11 Other Insurance. At Lender’s reasonable request, such other insurance
with respect to the Property against loss or damage of the kinds from time to
time customarily insured against and in such amounts as are generally required
by institutional lenders on loans of similar amounts and secured by properties
comparable to, and in the general vicinity of, the Property.

 

6.1.12 Ratings of Insurers. Borrower shall maintain the insurance coverage
described in Section 6.1.1 through Section 6.1.11, in all cases, with one or
more domestic primary insurers reasonably acceptable to Lender, having
claims-paying-ability and financial strength ratings by S&P of not less than “A”
and its equivalent by the other Rating Agencies, provided that, with respect to
any layered or quota share insurance policy for the insurance that is issued by
more than five (5) insurers, the requirements of this clause (x) will be
satisfied if at least sixty percent (60%) of the limits provided shall be with
insurers that meet such claims-paying-ability and financial strength ratings.
All insurers providing insurance required by this Agreement shall be authorized
to issue insurance in the State.

 

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6.1.13 Form of Insurance Policies; Endorsements. All insurance policies shall be
in such form and with such endorsements as are satisfactory to Lender (and
Lender shall have the right to approve amounts, form, risk coverage,
deductibles, loss payees and insureds). A certificate of insurance with respect
to all of the above-mentioned insurance policies has been delivered to Lender
and originals or certified copies of all such policies shall be delivered to
Lender when the same are available (but no later than ninety (90) days after the
date hereof) and shall be held by Lender. All policies shall name Lender as an
additional insured, shall provide that all Proceeds (except with respect to
Proceeds of general liability and workers’ compensation insurance) be payable to
Lender as and to the extent set forth in Section 6.2, and shall contain:

 

(i) a standard “non-contributory mortgagee” endorsement or its equivalent
relating, inter alia, to recovery by Lender notwithstanding the negligent or
willful acts or omissions of Borrower;

 

(ii) a waiver of subrogation endorsement in favor of Lender;

 

(iii) an endorsement providing that no policy shall be impaired or invalidated
by virtue of any act, failure to act, negligence of, or violation of
declarations, warranties or conditions contained in such policy by Borrower,
Lender or any other named insured, additional insured or loss payee, except for
the willful misconduct of Lender knowingly in violation of the conditions of
such policy;

 

(iv) an endorsement providing for a deductible per loss of an amount not more
than that which is customarily maintained by prudent owners of properties with a
standard of operation and maintenance comparable to and in the general vicinity
of the Property, but in no event in excess of an amount reasonably acceptable to
Lender; and

 

(v) a provision that such policies shall not be canceled, terminated or expire
without at least thirty (30) days’ prior written notice to Lender, in each
instance.

 

No insurance policy required hereunder shall include any so called “terrorist
exclusion” or similar exclusion or exception to insurance coverage relating to
the acts of terrorist groups or individuals. Each insurance policy shall contain
a provision whereby the insurer:

 

(vi) agrees that such policy shall not be canceled or terminated, the coverage,
deductible, and limits of such policy shall not be modified, other provisions of
such policy shall not be modified if such policy, after giving effect to such
modification, would not satisfy the requirements of this Agreement, and such
policy shall not be canceled or fail to be renewed, without in each case, at
least thirty (30) days prior written notice to Lender,

 

(vii) waives any right to claim any premiums and commissions against Lender,
provided that the policy need not waive the requirement that the premium be paid
in order for a claim to be paid to the insured, and

 

(viii) provides that Lender at its option, shall be 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 insurance policy (except for general
public and other

 

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liability and workers compensation insurance) shall contain breach of warranty
provisions, such policy shall provide that with respect to the interest of
Lender, such insurance policy shall not be invalidated by and shall insure
Lender 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 Lender pursuant to any provision of this Agreement.

 

6.1.14 Certificates. Borrower shall deliver to Lender annually, concurrently
with the renewal of the insurance policies required hereunder, a certificate
from Borrower’s insurance agent stating that the insurance policies required to
be delivered to Lender pursuant to this Section 6.1 are maintained with insurers
who comply with the terms of Section 6.1.12, setting forth a schedule describing
all premiums required to be paid by Borrower to maintain the policies of
insurance required under this Section 6.1, and stating that Borrower has paid
such premiums. Certificates of insurance with respect to all replacement
policies shall be delivered to Lender not less than fifteen (15) Business Days
prior to the expiration date of any of the insurance policies required to be
maintained hereunder which certificates shall bear notations evidencing payment
of applicable premiums. Upon the request of Lender, Borrower shall deliver to
Lender originals (or certified copies) of such replacement insurance policies on
or before the earlier to occur of (i) ninety (90) days after the request
therefor from Lender and (ii) five (5) Business Days after Borrower’s receipt
thereof. If Borrower fails to maintain and deliver to Lender the certificates of
insurance and certified copies or originals required by this Agreement, upon
five (5) Business Days’ prior notice to Borrower, Lender may procure such
insurance, and all costs thereof (and interest thereon at the Default Rate)
shall be added to the Indebtedness. Lender shall not, by the fact of approving,
disapproving, accepting, preventing, obtaining or failing to obtain any
insurance, incur any liability for or with respect to the amount of insurance
carried, the form or legal sufficiency of insurance contracts, solvency of
insurance companies, or payment or defense of lawsuits, and Borrower hereby
expressly assumes full responsibility therefor and all liability, if any, with
respect to such matters. Borrower agrees that any replacement insurance policy
required hereunder shall not include any so called “terrorist exclusion” or
similar exclusion or exception to insurance coverage relating to the acts of
terrorist groups or individuals.

 

6.1.15 Separate Insurance. Borrower shall not take out separate insurance
contributing in the event of loss with that required to be maintained pursuant
to this Section 6.1 unless such insurance complies with this Section 6.1.

 

6.1.16 Blanket Policies. The insurance coverage required under this Section 6.1
may be effected under a blanket policy or policies covering the Property and
other properties and assets not constituting a part of the Property; provided
that any such blanket policy shall specify, except in the case of public
liability insurance, the portion of the total coverage of such policy that is
allocated to the Property, and any sublimits in such blanket policy applicable
to the Property, which amounts shall not be less than the amounts required
pursuant to this Section 6.1 and which shall in any case comply in all other
respects with the requirements of this Section 6.1. Upon Lender’s request,
Borrower shall deliver to Lender an Officer’s Certificate setting forth (i) the
number of properties covered by such policy, (ii) the location by zip code, city
(if available, otherwise, county) and state of the properties, and (iii) such
other information as Lender may reasonably request.

 

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Section 6.2 Condemnation and Insurance Proceeds.

 

6.2.1 Notification. Borrower shall promptly notify Lender in writing upon
obtaining knowledge of (i) the institution of any proceedings relating to any
Taking (whether material or immaterial) of, or (ii) the occurrence of any
casualty, damage or injury to, the Property or any portion thereof, the
restoration of which is estimated by Borrower in good faith to cost more than
the Casualty Amount. In addition, each such notice shall set forth such good
faith estimate of the cost of repairing or restoring such casualty, damage,
injury or Taking in reasonable detail if the same is then available and, if not,
as soon thereafter as it can reasonably be provided.

 

6.2.2 Proceeds. In the event of any Taking of or any casualty or other damage or
injury to the Property, Borrower’s right, title and interest in and to all
compensation, awards, proceeds, damages, claims, insurance recoveries, causes
and rights of action (whether accrued prior to or after the date hereof) and
payments which Borrower may receive or to which Borrower may become entitled
with respect to the Property or any part thereof (collectively, Proceeds), in
connection with any such Taking of, or casualty or other damage or injury to,
the Property or any part thereof are hereby assigned by Borrower to Lender and,
except as otherwise herein provided, shall be paid to the Lender. Borrower
shall, in good faith and in a commercially reasonable manner, file and prosecute
the adjustment, compromise or settlement of any claim for Proceeds and, subject
to Borrower’s right to receive the direct payment of any Proceeds as herein
provided, will cause the same to be paid directly to Lender to be held and
applied in accordance with the provisions of this Agreement. Except upon the
occurrence and during the continuance of an Event of Default, Borrower may
settle any insurance claim with respect to Proceeds which does not exceed the
Casualty Amount. Whether or not an Event of Default shall have occurred and be
continuing, Lender shall have the right to approve, such approval not to be
unreasonably withheld, any settlement which might result in any Proceeds in
excess of the Casualty Amount and Borrower shall deliver or cause to be
delivered to Lender all instruments reasonably requested by Lender to permit
such approval. Borrower shall pay all reasonable out-of-pocket costs, fees and
expenses reasonably incurred by Lender (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 ten (10) Business Days
after delivery of a request for reimbursement by Lender accompanied by an
invoice and other evidence of such costs, fees and expenses in connection with
the settlement of any claim for Proceeds and seeking and obtaining of any
payment on account thereof in accordance with the foregoing provisions. If any
Proceeds are received by Borrower and may be retained by Borrower pursuant to
this Section 6.2, such Proceeds shall, until the completion of the related Work,
be held in trust for Lender and shall be segregated from other funds of Borrower
to be used to pay for the cost of the Work in accordance with the terms hereof,
and in the event such Proceeds exceed the Casualty Amount, the amount by which
such Proceeds exceeds the Casualty Amount shall be forthwith paid directly to
and held by Lender in trust for Borrower, in each case to be applied or
disbursed in accordance with this Section 6.2. If an Event of Default shall have
occurred and be continuing, or if Borrower fails to file and/or prosecute any
insurance claim for a period of fifteen (15) Business Days following Borrower’s

 

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receipt of written notice from Lender requesting Borrower to file and/or
prosecute such insurance claim, Borrower hereby irrevocably empowers Lender, 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
Lender 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 Lender pursuant to this Section 6.2). Notwithstanding
anything to the contrary set forth in this Agreement or any other Loan Document,
unless an Event of Default has occurred and is continuing hereunder, to the
extent any Proceeds do not exceed the Casualty Amount, such Proceeds are to be
paid directly to Borrower to be applied to the restoration of the Property in
accordance with the terms hereof (except that Proceeds paid in respect of the
insurance described in Section 6.1.4 shall be deposited directly to the Lockbox
Account as revenue of the Property).

 

6.2.3 Lender to Take Proceeds. If

 

(i) the Proceeds with respect to any affected Individual Property shall exceed
20% of the related Allocated Loan Amount or the Proceeds with respect to the
Property in aggregate exceed 25% of the Principal Amount;

 

(ii) an Event of Default shall have occurred and be continuing;

 

(iii) a Total Loss with respect to Property shall have occurred;

 

(iv) the Work is not capable of being completed before the earlier to occur of
the date which is six (6) months prior to the Maturity Date and the date on
which the business interruption insurance carried by Borrower with respect to
the Property shall expire (the Cut-Off Date);

 

(v) the Property is not capable of being restored substantially to its condition
prior to such Taking or casualty and such incapacity shall have a Material
Adverse Effect;

 

(vi) Leases demising in the aggregate less than 50% of the total rentable space
in the affected Individual Property which has been demised under executed and
delivered Leases in effect as of the date of the occurrence of such fire or
other casualty remain in full force and effect during and after the completion
of the restoration; or

 

(vii) Lender reasonably determines that upon the completion of the restoration,
the gross cash flow and the net cash flow of the Property will not be restored
to a level sufficient to cover all carrying costs and operating expenses of the
Property, including, without limitation, debt service on the Note at a coverage
ratio (after deducting all required reserves as required by Lender from net
operating income) of at least 1.59 to 1.0, which coverage ratio shall be
determined by Lender in its sole and absolute discretion;

 

then in any such case, all Proceeds shall be paid over to Lender (if not paid
directly to Lender) and any Proceeds remaining after reimbursement of Lender’s
or its agent’s reasonable out-of-pocket costs and expenses actually incurred in
connection with recovery of any such Proceeds (including, without limitation,
reasonable out-of-pocket administrative costs and inspection fees)

 

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shall be applied by Lender to prepay the Indebtedness (without payment of any
Liquidated Damages Amount), except to the extent Borrower is required to apply
such Proceeds to restore the Property pursuant to the BofA Lease and does not
have the right to elect not to restore the Property in accordance with the
provisions thereof and the balance, if any shall be paid to Borrower and, if
such Proceeds shall equal or exceed the Release Price applicable to the affected
Individual Property, such payment shall be treated as payment of such Release
Price and, upon satisfaction of the requirements of Section 8.7 (other than
Section 8.7(i), (ii), (vi) and (vii)), such Individual Property shall be a
Release Property.

 

6.2.4 Borrower to Restore.

 

(a) Promptly after the occurrence of any damage or destruction to all or any
portion of the Property or a Taking of a portion of the Property, Borrower shall
commence and diligently prosecute, or cause to be commenced and diligently
prosecuted, to completion, subject to Excusable Delays, the repair, restoration
and rebuilding of the Property (in the case of a partial Taking, to the extent
it is capable of being restored) so damaged, destroyed or remaining after such
Taking in full compliance with all material Legal Requirements and free and
clear of any and all Liens except Permitted Encumbrances (such repair,
restoration and rebuilding are sometimes hereinafter collectively referred to as
the Work). The plans and specifications shall require that the Work be done in a
first-class workmanlike manner at least equivalent to the quality and character
prior to the damage or destruction (provided, however, that in the case of a
partial Taking, the Property restoration shall be done to the extent reasonably
practicable after taking into account the consequences of such partial Taking),
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 any partial Taking
of, or casualty or other damage or injury to, the Property, if the Work actually
performed, if any, or failed to be performed, shall have no Material Adverse
Effect on the value of the Property from the value that the Property would have
had if the same had been restored to its condition immediately prior to such
Taking or casualty. Subject to Borrower’s rights pursuant to Section 2.3.3 to
cause the Property to be released from the Liens of the Security Instrument,
Borrower shall be obligated to restore the Property suffering a casualty or
which has been subject to a partial Taking in accordance with the provisions of
this Section 6.2 at Borrower’s sole cost and expense whether or not the Proceeds
shall be sufficient, provided that, if applicable, the Proceeds shall be made
available to Borrower by Lender in accordance with this Agreement.

 

(b) If Proceeds are not required to be applied toward payment of the
Indebtedness pursuant to Section 6.2.3, then Lender shall make the Proceeds
which it is holding pursuant to the terms hereof (after payment of any
reasonable out-of-pocket expenses actually incurred by Lender in connection with
the collection thereof plus interest thereon at the Default Rate (from the date
advanced through the date of reimbursement) to the extent the same are not paid
within ten (10) Business Days after request for reimbursement by Lender)
available to Borrower for payment of or reimbursement of Borrower’s or the
applicable Tenant’s expenses incurred with respect to the Work, upon the terms
and subject to the conditions set forth in paragraphs (i), (ii), (iii) and (iv)
below and in Section 6.2.5:

 

(i) at the time of loss or damage or at any time thereafter while Borrower is
holding any portion of the Proceeds, there shall be no continuing Event of
Default;

 

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(ii) if, at any time, the estimated cost of the Work (as estimated by the
Independent Architect referred to in clause (iii) below) shall exceed the
Proceeds (a Deficiency) and for so long as a Deficiency shall exist, Lender
shall not be required to make any Proceeds disbursement to Borrower unless
Borrower delivers to Lender evidence of Borrower’s ability to meet such
Deficiency and which is reasonably satisfactory to Lender and satisfactory to
the Rating Agencies (if the Loan is the subject of a Securitization);

 

(iii) Each of Lender and the Independent Architect shall have reasonably
approved the plans and specifications for the Work and any change orders in
connection with such plans and specifications; and

 

(iv) Lender shall, within a reasonable period of time prior to request for
initial disbursement, be furnished with an estimate of the cost of the Work
accompanied by an Independent Architect’s certification as to such costs and
appropriate plans and specifications for the Work. Borrower shall restore all
Improvements such that when they are fully restored and/or repaired, such
Improvements and their contemplated use fully comply with all applicable Legal
Requirements including zoning, environmental and building laws, codes,
ordinances and regulations.

 

6.2.5 Disbursement of Proceeds.

 

(a) Disbursements of the Proceeds in Cash or Cash Equivalents to Borrower
hereunder shall be made from time to time (but not more frequently than once in
any month) by Lender but only for so long as no Event of Default shall have
occurred and be continuing, as the Work progresses upon receipt by Lender of

 

(i) an Officer’s Certificate dated not more than ten (10) Business Days prior to
the application for such payment, (1) requesting such payment or reimbursement,
(2) describing the Work performed that is the subject of such request, the
parties that performed such Work and the actual cost thereof, (3) certifying
that such Work and materials are or, upon disbursement of the payment requested
to the parties entitled thereto, will be free and clear of Liens other than
Permitted Encumbrances, and (4) certifying that no notices of pendancy, stop
orders, mechanic’s liens or notices of intention to file same (unless the same
is required by the applicable State law as a condition to the payment of a
contractor) or any liens or encumbrances of any nature whatsoever on the
Property arising out of the work exist which have not been either fully bonded
to the satisfaction of Lender, discharged of record, or fully insured to the
satisfaction of Lender by the Title Company that issued the Title Policy;

 

(ii) evidence reasonably satisfactory to Lender that all materials installed and
work and labor performed in connection with such Work have been paid for in
full; and

 

(iii) an Independent Architect’s certificate certifying performance of the Work
together with an estimate of the cost to complete the Work.

 

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No payment made prior to the final completion of the Work, as certified by the
Independent Architect, except for payment made to contractors whose Work shall
have been fully completed and from which final lien waivers have been received,
shall exceed ninety percent (90%) of the value of the Work performed and
materials furnished and incorporated into the Improvements from time to time,
and at all times the undisbursed balance of said Proceeds together with all
amounts deposited, bonded, guaranteed or otherwise provided for pursuant to
Section 6.2.4(b) above, shall be at least sufficient to pay for the estimated
cost of completion of the Work; final payment of all Proceeds remaining with
Lender shall be made upon receipt by Lender of a certification by an Independent
Architect, as to the completion of the Work substantially in accordance with the
submitted plans and specifications, final lien releases, and the filing of a
notice of completion and the expiration of the period provided under the law of
the applicable State for the filing of mechanics’ and materialmens’ liens which
are entitled to priority as to other creditors, encumbrances and purchasers, as
certified pursuant to an Officer’s Certificate, and delivery of a certificate of
occupancy with respect to the Work, or, if not applicable, an Officer’s
Certificate to the effect that a certificate of occupancy is not required.

 

(b) If, after the Work is completed in accordance with the provisions hereof and
Lender receives evidence that all costs of completion have been paid, there are
excess Proceeds, Lender shall apply such excess Proceeds with respect to the
Taking of or casualty to the Property to the payment or prepayment of all or any
portion of the Indebtedness secured hereby without penalty or premium, and any
balance thereof, shall be paid over to Borrower.

 

VII. IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS

 

Section 7.1 Borrower to Pay Impositions and Other Charges. Except for any
Impositions to be paid directly by Bank of America, N.A. pursuant to the BofA
Lease, Borrower shall pay all Impositions now or hereafter levied or assessed or
imposed against the Property or any part thereof prior to the imposition of any
interest, charges or expenses for the non-payment thereof and shall pay all
Other Charges on or before the date they are due. Borrower shall deliver to
Lender annually, no later than fifteen (15) Business Days after the first day of
each Fiscal Year of Borrower, and shall update as new information is received, a
schedule describing all Impositions, payable or estimated to be payable during
such Fiscal Year attributable to or affecting the Property or Borrower. Subject
to Borrower’s right of contest set forth in Section 7.3, Lender, on behalf of
Borrower, shall pay or direct the Cash Management Bank to pay, all Impositions
and Other Charges which are attributable to or affect the Property or Borrower,
prior to the date such Impositions or Other Charges shall become delinquent or
late charges may be imposed thereon, directly to the applicable taxing authority
with respect thereto, to the extent funds in the Tax Escrow Fund are sufficient
to pay such Impositions. Nothing contained in this Agreement or the Security
Instrument shall be construed to require Borrower to pay any tax, assessment,
levy or charge imposed on Lender in the nature of a franchise, capital levy,
estate, inheritance, succession, income or net revenue tax.

 

Section 7.2 No Liens. Subject to its right of contest set forth in Section 7.3,
Borrower shall at all times keep, or cause to be kept, the Property free from
all Liens (other than Permitted Encumbrances) and shall pay when due and payable
(or bond over) all claims and demands of mechanics, materialmen, laborers and
others which, if unpaid, might result in or permit the creation of a Lien on the
Property or any portion thereof and shall in any event cause

 

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the prompt, full and unconditional discharge of all Liens imposed on or against
the Property or any portion thereof within forty-five (45) days after receiving
written notice of the filing (whether from Lender, the lienor or any other
Person) thereof. Borrower shall do or cause to be done, at the sole cost of
Borrower, everything reasonably necessary to fully preserve the first priority
of the Liens of the Security Instrument against the Property, subject to the
Permitted Encumbrances. Upon the occurrence and during the continuance of an
Event of Default with respect to its Obligations as set forth in this Article
VII, Lender may (but shall not be obligated to) make such payment or discharge
such Lien, and Borrower shall reimburse Lender on demand for all such advances
pursuant to Section 19.12 (together with interest thereon at the Default Rate).

 

Section 7.3 Contest. Nothing contained herein shall be deemed to require
Borrower to pay, or cause to be paid, any Imposition or Other Charge or to
satisfy any Lien, or to comply with any Legal Requirement or Insurance
Requirement, so long as Borrower at its own expense is in good faith, and by
proper legal proceedings, where appropriate, diligently contesting the validity,
amount or application thereof, 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:

 

(i) no Default or Event of Default shall exist and be continuing hereunder,

 

(ii) Borrower shall keep Lender informed of the status of such contest at
reasonable intervals,

 

(iii) with respect to any Ground Lease, Borrower is permitted to do so under the
provisions of any mortgage or deed of trust superior in lien to the applicable
Security Instrument;

 

(iv) such proceeding shall be permitted under and be conducted in accordance
with the provisions of any other instrument to which Borrower is subject and
shall not constitute a default thereunder and such proceeding shall be conducted
in accordance with all applicable statutes, laws and ordinances;

 

(v) Borrower shall promptly upon final determination thereof pay the amount of
any such Impositions or Other Charges, together with all costs, interest and
penalties which may be payable in connection therewith;

 

(vi) if Borrower is not providing security as provided in clause (vii) below,
adequate reserves with respect thereto are maintained on Borrower’s books in
accordance with GAAP or in the Tax Reserve Account or Insurance Reserve Account,
as applicable,

 

(vii) either (x) such contest operates to suspend collection or enforcement as
the case may be, of the contested Imposition, Lien or Legal Requirement and such
contest is maintained and prosecuted continuously and with diligence or (y) the
Imposition or Lien is bonded,

 

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(viii) in the case of any Insurance Requirement, the failure of Borrower to
comply therewith shall not impair the validity of any insurance required to be
maintained by Borrower under Section 6.1 or the right to full payment of any
claims thereunder, and

 

(ix) in the case of Impositions and Liens which are not bonded in excess of
$500,000 individually, or in the aggregate, during such contest, Borrower, shall
deposit with or deliver to Lender either Cash and Cash Equivalents or a Letter
or Letters of Credit in an amount equal to 125% of (A) the amount of Borrower’s
obligations being contested plus (B) any additional interest, charge, or penalty
arising from such contest.

 

Notwithstanding the foregoing, the creation of any such reserves or the
furnishing of any bond or other security, Borrower promptly shall comply with
any contested Legal Requirement or Insurance Requirement or shall pay any
contested Imposition or Lien, and compliance therewith or payment thereof shall
not be deferred, if, at any time any Individual Property or any portion thereof
shall be, in Lender’s reasonable judgment, in imminent danger of being sold,
terminated, cancelled, forfeited or lost or Lender is likely to be subject to
civil or criminal damages as a result thereof. If such action or proceeding is
terminated or discontinued adversely to Borrower, Borrower shall deliver to
Lender reasonable evidence of Borrower’s compliance with such contested
Imposition, Lien, Legal Requirements or Insurance Requirements, as the case may
be. Lender may pay over any such cash deposit or part thereof held by Lender to
the claimant entitled thereto at any time when, in the judgment of Lender, any
Individual Property (or part thereof or interest therein) shall be in danger of
being sold, forfeited, terminated, cancelled or lost or there shall be any
danger of the Lien of any Security Agreement being primed by any related Lien.

 

VIII. TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS

 

Section 8.1 Restrictions on Transfers. Unless such action is permitted by the
provisions of this Article VIII, Borrower shall not, and shall not permit any
other Person holding any direct or indirect ownership interest in Borrower or
the Property to, except with the prior written consent of Lender, (i) Transfer
all or any part of the Property, (ii) permit any Transfer (directly or
indirectly) of any interest in Borrower, or (iii) permit any merger,
consolidation or reorganization of Borrower, First States Group, L.P. or
American Financial Realty Trust.

 

Section 8.2 Sale of Building Equipment. Borrower may Transfer or dispose of
Building Equipment which is being replaced or which is no longer necessary in
connection with the operation of the Property free from the Liens of the
Security Instrument provided that such Transfer or disposal will not have a
Material Adverse Effect on the value of the Property taken as a whole, will not
materially impair the utility of the Property, and will not result in a
reduction or abatement of, or right of offset against, the Rents payable under
any Lease, in either case as a result thereof, and provided further that any new
Building Equipment acquired by Borrower (and not so disposed of) shall be
subject to the Liens of the Security Instrument. Lender shall, from time to
time, upon receipt of an Officer’s Certificate requesting the same and
confirming satisfaction of the conditions set forth above, execute a written
instrument in form reasonably satisfactory to Lender to confirm that such
Building Equipment which is to be, or has been, sold or disposed of is free from
the Liens of the Security Instrument.

 

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Section 8.3 Immaterial Transfers and Easements, etc. Borrower may, without the
consent of Lender, (i) make immaterial Transfers of portions of the Property to
Governmental Authorities for dedication or public use (subject to the provisions
of Section 6.2) or, portions of the Property to third parties for the purpose of
erecting and operating additional structures whose use is integrated with the
use of the Property, and (ii) grant easements, restrictions, covenants,
reservations and rights of way in the ordinary course of business for access,
water and sewer lines, telephone and telegraph lines, electric lines or other
utilities or for other similar purposes, provided that no such Transfer,
conveyance or encumbrance set forth in the foregoing clauses (i) and (ii) shall
materially impair the utility and operation of the Property or have a Material
Adverse Effect on the value of the Property taken as a whole. In connection with
any Transfer permitted pursuant to this Section 8.3, Lender shall execute and
deliver any instrument reasonably necessary or appropriate, in the case of the
Transfers referred to in clause (i) above, to release the portion of the
Property affected by such Taking or such Transfer from the Liens of the Security
Instrument or, in the case of clause (ii) above, to subordinate the Lien of a
Security Instrument to such easements, restrictions, covenants, reservations and
rights of way or other similar grants upon receipt by Lender of:

 

(a) a copy of the instrument or instruments of Transfer;

 

(b) an Officer’s Certificate stating (x) with respect to any Transfer, the
consideration, if any, being paid for the Transfer and (y) that such Transfer
does not materially impair the utility and operation of the Property, materially
reduce the value of the Property or have a Material Adverse Effect; and

 

(c) reimbursement of all of Lender’s reasonable costs and expenses incurred in
connection with such Transfer.

 

Section 8.4 Intentionally Omitted.

 

Section 8.5 Permitted Interest Transfers.

 

(a) Except as provided in Section 8.5(b) and 8.5(c), a Transfer (but not a
pledge or encumbrance) of a direct or indirect beneficial interest in Borrower
shall be permitted without Lender’s consent if (i) following such Transfer, one
hundred percent (100%) of the direct and indirect beneficial interests in
Borrower are owned by First States Group, L.P.; (ii) following such Transfer,
American Financial Realty Trust, directly or indirectly, owns one hundred
percent (100%) of the beneficial interests in all of the general partners of
First States Group, L.P.; (iii) following such Transfer, no Person or group of
Persons acting in concert, other than American Financial Realty Trust and
Persons directly or indirectly wholly owned by American Financial Realty Trust,
(1) acquires in the aggregate with prior holdings in First States Group, L.P.
more than forty-nine percent (49%) of the beneficial interests in First States
Group, L.P. or (2) acquires direct or indirect management control of First
States Group, L.P.; (iv) Lender receives at least thirty (30) days prior written
notice thereof; and (v) immediately prior to such Transfer, no Event of Default
shall have occurred and be continuing. Lender may condition its consent to any
Transfer, which when taken together with all other Transfers, involves more than
forty-nine percent (49%) of the direct or indirect beneficial interests in
Borrower, prior to such Transfer, upon the delivery by Borrower of a Additional
Non-Consolidation Opinion in a form satisfactory to Lender.

 

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(b) Notwithstanding any provision in this Agreement or in any other Loan
Document to the contrary, Section 8.5(a) shall not restrict the right of (i) any
shareholder in American Financial Realty Trust to Transfer its shares in
American Financial Realty Trust or to cause or permit its interest in American
Financial Realty Trust to be redeemed or (ii) any limited partner of First
States Group, L.P. (other than American Financial Realty Trust) to Transfer its
limited partnership interest in First States Group, L.P. or to cause or permit
its limited partnership interest in First States Group, L.P. to be redeemed;
provided, that any such Transfer or redemption in connection with a merger,
consolidation or reorganization of American Financial Realty Trust or First
States Group, L.P. where American Financial Realty Trust or First States Group,
L.P. will not be the surviving entity shall be subject to the proviso to Section
8.5(c) below.

 

(c) Any Transfer of any direct or indirect beneficial interest in Borrower,
First States Group, L.P. or American Financial Realty Trust, other than as
permitted in Section 8.5(a), or (b), shall require the prior written consent of
Lender, which may be granted or withheld in Lender’s sole and absolute
discretion; provided, that in the event the Loan is subject to a Securitization,
Lender’s consent shall not be required, in connection with a merger,
consolidation or reorganization of American Financial Realty Trust or First
States Group, L.P. where American Financial Realty Trust or First States Group,
L.P. shall not be the surviving Person, if (i) Borrower delivers an Additional
Non-Consolidation Opinion in a form satisfactory to Lender and (ii) and either
(1) Borrower delivers a Rating Agency Confirmation to Lender with respect to
such Transfer, or (2) the surviving Person following such merger, consolidation
or reorganization (A) has a net worth of $500,000,000 or more (exclusive of the
Property), (B) has total assets of $1,500,000,000 or more (exclusive of the
Property), and (C) has a substantial portion of its business involving the
ownership and operation of institutional office and related properties, as
reasonably determined by Lender or the Rating Agencies.

 

Section 8.6 Deliveries to Lender. Not less than thirty (30) days prior to the
closing of any transaction subject to the provisions of this Article VIII (other
than as expressly provided in Section 8.5), Borrower shall deliver to Lender an
Officer’s Certificate describing the proposed transaction and stating that such
transaction is permitted by this Article VIII, together with any appraisal or
other documents upon which such Officer’s Certificate is based. In addition,
Borrower shall provide Lender with copies of executed deeds or other similar
closing documents within ten (10) Business Days after such closing.

 

Section 8.7 Release of Properties. Borrower shall have the right to obtain a
release of one or more of the Individual Properties (each, a Property Release
and such Individual Property being a Release Property) in whole, but not in
part, from the Lien of the Security Instrument (1) at any time during the
Prepayment Period with respect to any Individual Property and (2) at any time
following the expiration of the Defeasance Lockout Period with respect to any
Individual Property in connection with a Defeasance consummated in accordance
with Article IX, provided that in any case all of the following conditions are
satisfied:

 

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(i) Borrower delivers a Prepayment Notice with respect to such Property Release
no less than ten (10) Business Days prior to the proposed date of such Property
Release (the Release Date). In no event shall a Property Release occur (and
Lender shall have no obligation to release any Individual Property) on a date
that is not a Release Date.

 

(ii) The Individual Property to be released shall be conveyed to a Person other
than the Borrower or any of its Affiliates. If the Individual Property to be
released is subject to the BofA Lease, then the release shall be made in
accordance with and subject to the terms of the BofA Lease and such Individual
Property shall be released from the BofA Lease and be made subject to a separate
lease.

 

(iii) On such Release Date, concurrently with Lender’s release of such Release
Property, (1) if the Release Date occurs prior to the expiration of the
Prepayment Period, Borrower shall repay a portion of the Principal Amount equal
to the Release Price applicable to the Release Property (provided no releases
pursuant to this clause (1) will be permitted during the Prepayment Period once
Borrower has made an aggregate of $19,220,000 in prepayments and no Releases
pursuant to clause (1) or (2) of this Section 8.7(iii) shall be permitted during
the period commencing at the expiration of the Prepayment Period through the
expiration of the Defeasance Lockout Period), (2) if such Release Date occurs
following the expiration of the Defeasance Lockout Period, Borrower satisfies
the Defeasance requirements pursuant to Article IX with respect to the
applicable Individual Property which is such Release Property, including,
without limitation, providing Lender with Defeasance Collateral that satisfies
the Defeasance Collateral Requirement with respect to such Release Property and
(3) Borrower pays all other amounts required to be paid pursuant to Section
2.3.1(e) and (f) of this Agreement.

 

(iv) No Event of Default shall have occurred and is then continuing on the date
on which Borrower delivers the Prepayment Notice and on the Release Date.

 

(v) Upon satisfaction of the requirements contained in this Section 8.7,
Borrower shall submit to Lender not less than one (1) Business Day prior to the
Release Date for execution and delivery by Lender, a release of Liens (and
related Loan Documents) for each applicable Release Property in a form customary
in the applicable state and otherwise satisfactory to Lender in its reasonable
discretion and all other documentation Lender reasonably requires to be
delivered by Borrower in connection with such release (collectively, Release
Instruments) for the Release Property (for execution by Lender) together with an
Officer’s Certificate certifying that (1) the Release Instruments are in
compliance with all Legal Requirements, (2) the release to be effected will not
violate the terms of this Agreement, and (3) the release to be effected will not
impair or otherwise adversely affect the Liens, security interests and other
rights of Lender under the Loan Documents with respect to the Individual
Properties and other collateral not being released.

 

(vi) Lender shall have received evidence reasonably acceptable to Lender that

 

(1) the Release Property shall constitute a separate conveyable legal parcel in
accordance with the subdivision map act or the equivalent thereof in the
jurisdiction of the applicable Release Property or other relevant granted
government approvals in such jurisdiction;

 

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(2) to the extent any easements benefiting or burdening such Release Property
are necessary or appropriate for the use or operation of the other Individual
Properties that are not subject to the Property Release (such remaining
Individual Properties, the Remaining Property), such easements shall have been
granted or reserved prior to or at the time of the release or reconveyance of
such Release Parcel;

 

(3) at the time of, but not prior to, any Property Release, each Release
Property shall be transferred to a person or entity that does not result in a
breach of Borrower’s obligation to be a Single Purpose Entity; and

 

(4) if the Release Property is less than an entire Individual Property, (A) the
Remaining Property shall remain legal parcels in compliance in all material
respects with all Legal Requirements, zoning, subdivision, land use and other
applicable laws and regulations, (B) Lender shall have received satisfactory
evidence that any tax, bond or assessment that constitutes a Lien against the
Release Property has (i) prior to such Property Release, been properly allocated
between the Release Property and the Remaining Property and (ii) after such
Property Release, will be properly assessed against the Release Property and the
Remaining Property separately; and (C) Lender shall have received such
endorsements to the Title Policy (or substantially equivalent assurance) for the
applicable Remaining Property as Lender may reasonably require confirming
continuing title insurance and that (i) the Security Instrument constitutes a
first priority lien (subject to Permitted Encumbrances) on the Remaining
Property after the Property Release, (ii) the Remaining Property constitutes a
separate tax lot or tax lots and (iii) such Property Release shall not result in
the Remaining Property ceasing to comply in all material respects with all
applicable Legal Requirements, zoning, land use and subdivision laws.

 

(vii) Borrower shall execute and deliver such other instruments, certificates,
Opinions of Counsel and documentation as Lender and, if the Loan is the subject
of a Securitization, the Rating Agencies shall reasonably request in order to
preserve, confirm or secure the Liens and security granted to Lender by the Loan
Documents, including any amendments, modification or supplements to any of the
Loan Documents and partial release endorsements to the Title Policy.

 

(viii) Borrower shall pay for any and all reasonable out of pocket costs and
expenses incurred in connection with any proposed release, including Lender’s
reasonable attorneys’ fees and disbursements and all title insurance premiums
for any endorsements to the Title Policy reasonably required by Lender in
connection with such proposed Property Release; and

 

(ix) Prior to the Release Date, Borrower shall deliver to Lender evidence
reasonably satisfactory to Lender that all amounts owing by Borrower to any
parties in connection with the transaction relating to the proposed Property
Release have been paid in full, or are simultaneously paid in full at the
Release Date or adequate reserves therefor are established by Borrower in cash
with respect to contingent or other liabilities that may arise out of such
transaction.

 

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Section 8.8 Leases.

 

8.8.1 New Leases and Lease Modifications. Except as otherwise provided in this
Section 8.8, Borrower shall not (x) enter into any Lease (a New Lease) or (y)
consent to the assignment of any Lease (unless required to do so by the terms of
such Lease) that releases the original Tenant from its obligations under the
Lease, or (z) modify any Lease, accept a surrender of any portion of the
Property subject to a Lease (unless such surrender is required by law or the
applicable Lease), allow a reduction in the term of any Lease or a reduction in
the Rent payable under any Lease, change any renewal provisions of any Lease,
materially increase the obligations of the landlord or materially decrease the
obligations of any Tenant, or terminate any Lease (any such action referred to
in clauses (y) and (z) being referred to herein as a Lease Modification) without
the prior written consent of Lender, which consent shall not be unreasonably
withheld or delayed. Any New Lease or Lease Modification that requires Lender’s
consent shall be delivered to Lender for approval not less than ten (10)
Business Days prior to the effective date of such New Lease or Lease
Modification. Any such request for consent or approval shall state in prominent
bold-faced type that “YOUR RESPONSE TO THIS REQUEST FOR CONSENT OR APPROVAL IS
REQUIRED WITHIN SEVEN (7) BUSINESS DAYS AFTER YOUR RECEIPT OF THIS REQUEST.” In
the event Lender fails to respond to such first request for consent or approval
with respect to any New Lease or Lease Modification, Borrower shall send Lender
a second request for such consent or approval, which second request shall state
in prominent bold-faced type that “THIS IS A SECOND REQUEST FOR YOUR CONSENT OR
APPROVAL. YOUR RESPONSE TO THIS SECOND REQUEST FOR CONSENT OR APPROVAL IS
REQUIRED WITHIN THREE (3) BUSINESS DAYS AFTER YOUR RECEIPT OF THIS REQUEST.
FAILURE TO RESPOND TO THIS REQUEST WITHIN (3) BUSINESS DAYS WILL BE DEEMED TO BE
YOUR APPROVAL OF THE CONSENT TO THE NEW LEASE OR LEASE MODIFICATION REQUESTED IN
THIS NOTICE.” In the event Lender fails to respond to a second request for any
consent or approval that includes the notice required herein within three (3)
Business Days after Lender’s receipt of such second request, such failure shall
be deemed an approval of the matter for which the second request is delivered.

 

8.8.2 Leasing Conditions. Subject to terms of this Section 8.8, provided no
Event of Default shall have occurred and be continuing, Borrower may enter into
a New Lease or Lease Modification, without Lender’s prior written consent, that
satisfies each of the following conditions:

 

(a) such New Lease is written on the standard form of lease to be approved by
Lender within thirty (30) days of the date hereof (the Standard Form of Lease),
with only such changes as are commercially reasonable given the then-current
market conditions, none of which changes shall violate the subordination,
attornment and non-disturbance provisions contained in the Standard Form of
Lease;

 

(b) with respect to a New Lease or Lease Modification, the premises demised
thereunder is not more than 15,000 net rentable square feet of the Property;

 

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(c) the term of such New Lease or Lease Modification, as applicable, does not
exceed 240 months, plus up to two (2) 60-month option terms (or equivalent
combination of renewals), provided that the rental rate during each such option
term is at least equal to the greater of (x) 95% of the prevailing market rate
as of the commencement of such option term and (y) during the first such option
term, the rental rate in effect under such New Lease or Lease Modification, as
applicable, during the initial term, and during the second such option term, the
rental rate in effect under such New Lease or Lease Modification, as applicable,
during the first option term;

 

(d) the rental rate under such New Lease or Lease Modification, as applicable,
is at least equal to 95% of the then prevailing market rate;

 

(e) such New Lease or Lease Modification, as applicable, provides that the
premises demised thereby cannot be used for any of the following uses: any
pornographic or obscene purposes, any commercial sex establishment, any
pornographic, obscene, nude or semi-nude performances, modeling, materials,
activities or sexual conduct or any other use that has or could reasonably be
expected to have a Material Adverse Effect;

 

(f) the Tenant under such New Lease or Lease Modification, as applicable, is not
an Affiliate of Borrower (other than any property management offices);

 

(g) the New Lease or Lease Modification, as applicable, does not impose any
burden, duty or liability on Borrower that is materially greater than is
provided in the Standard Form of Lease subject to clause (a) above other than
rent concessions and tenant improvement allowances which are consistent with the
then current market conditions;

 

(h) the New Lease or Lease Modification, as applicable, does not contain any
provision whereby the Rent payable thereunder would be based, in whole or in
part, upon the net income or profits derived by any Person from the Property
(which, for the avoidance of doubt, does not include percentage rent);

 

(i) the New Lease or Lease Modification, as applicable, does not prevent
Proceeds from being held and disbursed by Lender in accordance with the terms
hereof;

 

(j) the New Lease or Lease Modification, as applicable, shall not entitle any
Tenant to receive and retain Proceeds except those that may be specifically
awarded to it in condemnation proceedings because of the Taking of its trade
fixtures and its leasehold improvements which have not become part of the
Property and such business loss as Tenant may specifically and separately
establish; and

 

(k) the New Lease or Lease Modification, as applicable satisfies the
requirements of Section 8.8.7 and Section 8.8.8.

 

8.8.3 Delivery of New Lease or Lease Modification. Upon the execution of any New
Lease or Lease Modification, as applicable, Borrower shall deliver to Lender an
executed copy of the Lease and an additional copy marked to show all changes
from the Standard Form of Lease.

 

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8.8.4 Lease Amendments. Borrower agrees that it shall not have the right or
power, as against Lender without its consent, to cancel, abridge, amend or
otherwise modify any Lease unless such modification complies with this Section
8.8; provided that notwithstanding the foregoing, so long as an Event of Default
has not occurred and is not continuing, the Borrower shall be permitted to
retain and not turn over to the Lender any termination fees payable by a Tenant
to the Borrower in connection with a Lease Modification which is a termination
of the related Lease that has been consented to by the Lender.

 

8.8.5 Security Deposits. All security or other deposits of Tenants of the
Property shall be treated as trust funds and such deposits, to the extent made
with a letter of credit shall be delivered to Lender. Within ten (10) Business
Days after written request by Lender, Borrower shall furnish to Lender
reasonably satisfactory evidence of compliance with this Section 8.8.5, together
with a statement of the location and account number of the account in which such
security deposits are held. The rent roll delivered to Lender identifies all
security deposits and the amounts thereof, currently in Borrower’s possession.
In the event any Tenant has the right to receive a refund of its security
deposit pursuant to the terms of such Tenant’s Lease, Borrower shall promptly
return the same to the applicable Tenant.

 

8.8.6 No Default Under Leases. Borrower shall (i) promptly perform and observe
all of the material terms, covenants and conditions required to be performed and
observed by Borrower under the Leases and the REAs, if the failure to perform or
observe the same would have a Material Adverse Effect; (ii) exercise, within ten
(10) Business Days after a written request by Lender, any right to request from
the Tenant under any Lease, or the party to any REAs, a certificate with respect
to the status thereof and (iii) not collect any of the Rents, more than one (1)
month in advance (except that Borrower may collect such security deposits and
last month’s Rents as are permitted by Legal Requirements and are commercially
reasonable in the prevailing market and collect other charges in accordance with
the terms of each Lease).

 

8.8.7 Subordination. All New Leases entered into by Borrower after the date
hereof shall by their express terms be subject and subordinate to this Agreement
and the Security Instrument (through a subordination provision contained in such
Lease or otherwise) and shall provide that the Person holding any rights
thereunder shall attorn to Lender or any other Person succeeding to the
interests of Lender upon the exercise of its remedies hereunder or any transfer
in lieu thereof on the terms set forth in this Section 8.8.

 

8.8.8 Attornment. Each New Lease entered into from and after the date hereof
shall provide that in the event of the enforcement by Lender of any remedy under
this Agreement or the Security Instrument, the Tenant under such Lease shall, at
the option of Lender or of any other Person succeeding to the interest of Lender
as a result of such enforcement, attorn to Lender or to such Person and shall
recognize Lender or such successor in the interest as lessor under such Lease
without change in the provisions thereof; provided, however, Lender or such
successor in interest shall not be liable for or bound by (i) any payment of an
installment of rent or additional rent made more than thirty (30) days before
the due date of such installment, (ii) any act or omission of or default by
Borrower under any such Lease (but the Lender, or such successor, shall be
subject to the continuing obligations of the landlord to the extent arising from
and after such succession to the extent of Lender’s, or such successor’s,
interest in the Property), (iii) any credits, claims, setoffs or defenses which
any Tenant may have against Borrower, (iv)

 

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any obligation under such Lease to maintain a fitness facility at the Property,
(v) any obligation on Borrower’s part, pursuant to such Lease, to perform any
tenant improvement work or (vi) any obligation on Borrower’s part, pursuant to
such Lease, to pay any sum of money to any Tenant. Each such New Lease shall
also provide that, upon the reasonable request by Lender or such successor in
interest, the Tenant shall execute and deliver an instrument or instruments
confirming such attornment.

 

8.8.9 Non-Disturbance Agreements. Lender shall enter into, and, if required by
applicable law to provide constructive notice or requested by a Tenant, record
in the county where the subject Property is located, a subordination, attornment
and non-disturbance agreement, in a form approved by Lender (a Non-Disturbance
Agreement), with any Tenant (other than an Affiliate of Borrower) entering into
a New Lease for which Lender’s prior written consent is required by this Section
8.8 and has been obtained, within ten (10) Business Days after written request
therefor by Borrower, provided that, such request is accompanied by an Officer’s
Certificate stating that such Lease complies in all material respects with this
Section 8.8. All reasonable third party costs and expenses incurred by Lender in
connection with the negotiation, preparation, execution and delivery of any
Non-Disturbance Agreement, including, without limitation, reasonable attorneys’
fees and disbursements, shall be paid by Borrower (in advance, if requested by
Lender).

 

IX. DEFEASANCE.

 

Section 9.1 Defeasance and Release.

 

(a) On any Payment Date after the expiration of the Defeasance Lockout Period
and prior to the Prepayment Lockout Release Date, provided that no Event of
Default has occurred and is continuing and all of the conditions set forth in
Section 9.1(b) are complied with, Borrower shall have the right to obtain a
release of the Liens of the Security Instrument and the Assignment of Leases on
either an Individual Property that has not been subject to a prior Property
Release or all of the Individual Properties that have not been subject to prior
Property Releases pursuant to and in accordance with the requirements of Section
8.7, upon at least thirty (30) days prior written notice (or such shorter period
of time as Lender permits in its sole discretion) and upon satisfaction of the
following (such a release, after satisfaction of the other provisions of this
Section 9.1(a), a Defeasance):

 

(i) if only a portion of the Loan is the subject of the Defeasance, Borrower
shall prepare all necessary documents to modify this Agreement, and to amend and
restate the Notes and issue, with respect to each Individual Property that is
the subject of a Defeasance, a substitute note in form and substance reasonably
acceptable to Lender, dated as of the date of the Defeasance (which must be on a
Payment Date), payable to Lender, having a principal balance equal to the
Defeasance Collateral Requirement Percentage of the Allocated Loan Amount of the
Individual Property which is the Release Property in connection with such
Defeasance (each a Defeasance Note) and a series of other notes having an
aggregate principal balance equal to the undefeased portion of the Loan (each an
Undefeased Note). For purposes of determining the principal balance of each
individual Undefeased Note, the principal amount of each Defeasance Note shall
be applied on a pro rata basis to reduce the principal amount of each Undefeased
Note. Each Defeased Note and Undefeased Note shall otherwise have terms
identical to the Notes, except that a Defeased Note cannot be the subject of any
further Defeasance Event.

 

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(ii) Borrower shall execute and deliver a pledge and security agreement (the
Defeasance Security Agreement), in form and substance reasonably acceptable to
Lender, dated as of the date of the Defeasance (which must be on a Payment
Date), in favor of the Lender, pursuant to which the Lender is granted a
perfected first priority security interest in the Defeasance Collateral.

 

(iii) In connection with any Defeasance, Borrower may at its option, or if so
required by the Lender or, if the Loan is the subject of a Securitization,
applicable Rating Agencies shall, establish or designate a successor entity
(Successor Borrower) acceptable to Lender and, if the Loan is the subject of a
Securitization, the Rating Agencies, which shall be a single purpose bankruptcy
remote entity, and Borrower shall transfer and assign all obligations, rights
and duties under and to the Defeased Note(s), together with the Defeasance
Collateral to such Successor Borrower. Such Successor Borrower shall assume the
obligations under the Defeased Note(s) and the Security Agreement and Borrower
shall be relieved of its obligations under such documents. Borrower shall pay
One Thousand and 00/100 Dollars ($1,000) to any such Successor Borrower as
consideration for assuming the obligations under the Defeased Note(s) and the
Security Agreement.

 

(iv) if a Securitization has occurred, Borrower shall deliver a Rating Agency
Confirmation.

 

(v) Borrower shall deliver an Officer’s Certificate certifying that the
requirements set forth in this Section 9.1 have been satisfied and that the
information delivered to Lender for purposes of making the calculations referred
to in Section 9.1(a)(vii) below is true and correct.

 

(vi) Borrower shall have paid to Lender all accrued and unpaid interest on the
Principal Amount of the Loan, together with all other sums (not including
scheduled interest or principal payments) then due under this Agreement, the
Security Instruments and the other Loan Documents.

 

(vii) The Lender shall have determined that the Loan to Value Test is satisfied
and the Release DSCR Test is satisfied.

 

(viii) Borrower shall pay all costs and expenses of Lender incurred in
connection with the Defeasance, including (A) any costs and expenses associated
with a release of the Lien of the Security Instrument as provided in Section
2.3.3 hereof, (B) reasonable accountants and attorneys’ fees and expenses
incurred in connection with the Defeasance, (C) the costs and expenses of the
Rating Agencies, if the Loan is the subject of a Securitization, (D) any
revenue, documentary stamp or intangible taxes or any other tax or charge due in
connection with the transfer of the Note, or otherwise required to accomplish
the Defeasance (including any costs and expenses incurred or to be incurred in
the purchase of the Defeasance Collateral) and (E) the costs and expenses of
Servicer and any trustee, including reasonable attorneys’ fees.

 

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(b) With respect to a Defeasance pursuant to Section 9.1(a), the Borrower shall
deposit the Defeasance Collateral in accordance with Section 9.1(b)(ii) to the
Defeasance Collateral Account. Defeasance shall be permitted at such time as all
of the following events shall have occurred:

 

(i) the Defeasance Collateral Account shall have been established pursuant to
Section 9.1(e);

 

(ii) Borrower shall have delivered or caused to have been delivered to Lender
the Defeasance Collateral for deposit into the Defeasance Collateral Account
such that it will satisfy the Defeasance Collateral Requirement at the time of
delivery and all such Defeasance Collateral, if in registered form, shall be
registered in the name of Lender or its nominee (and, if registered in nominee
name endorsed to Lender or in blank) and, if issued in book-entry form, the name
of Lender or its nominee shall appear as the owner of such securities on the
books of the Federal Reserve Bank or other party maintaining such book-entry
system;

 

(iii) Borrower shall have granted or caused to have been granted to Lender a
valid perfected first priority security interest in the Defeasance Collateral
and all proceeds thereof;

 

(iv) Borrower shall have delivered or caused to be delivered to Lender an
Officers’ Certificate, dated as of the date of such delivery (x) that sets forth
the aggregate face amount or unpaid principal amount, interest rate and maturity
of all such Defeasance Collateral, a copy of the transaction journal, if any, or
such other notification, if any, published by or on behalf of the Federal
Reserve Bank or other party maintaining a book-entry system advising that Lender
or its nominee is the owner of such securities issued in book-entry form, and
(y) that states that:

 

(1) Borrower owns the Defeasance Collateral being delivered to Lender free and
clear of any and all Liens, security interests or other encumbrances (other than
the Defeasance Security Agreement), and has not assigned any interest or
participation therein (or, if any such interest or participation has been
assigned, it has been released), and Borrower has full power and authority to
pledge such Defeasance Collateral to Lender;

 

(2) such Defeasance Collateral consists solely of Defeasance Eligible
Investments;

 

(3) such Defeasance Collateral satisfies the Defeasance Collateral Requirement,
determined as of the date of delivery; and

 

(4) the information set forth in the schedule attached to such Officer’s
Certificate is correct and complete in all material respects as of the date of
delivery (such schedule, which shall be attached to and form a part of such
Officer’s Certificate, shall demonstrate satisfaction of the requirement set
forth in clause (2) above, in a form reasonably acceptable to Lender);

 

(v) Borrower shall have delivered a certificate of Borrower’s independent
certified public accountant certifying that the Defeasance Collateral purchased
in

 

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connection with the Defeasance generates monthly amounts equal to or greater
than the Defeasance Collateral Requirement and that such amounts are generated
in each month prior to the related Payment Date (or in the case of the payment
due on the Maturity Date, prior to the Maturity Date) in each such month;

 

(vi) Borrower shall have delivered or caused to be delivered to Lender a Rating
Agency Confirmation, if a Securitization has occurred, and such other documents
and certificates as Lender or the Rating Agencies, may reasonably request,
including a Non-Disqualification Opinion and Opinions of Counsel demonstrating
that Borrower has satisfied the provisions of this Section 9.1(b) (including,
but not limited to, an Opinion of Counsel stating, among other things, that
Lender has a perfected first priority security interest in the Defeasance
Collateral and that the Defeasance Security Agreement is enforceable in
accordance with its terms).

 

(c) For purposes of determining whether sufficient amounts of Defeasance
Collateral are on deposit in the Defeasance Collateral Account, there shall be
included only payments of principal and predetermined and certain income thereon
(as reasonably determined by Lender and agreed to by Borrower without regard to
any reinvestment of such amounts) that will occur on a stated date for a stated
payment on or before the dates when such amounts may be required to be applied
to pay the principal and interest when due on the Defeasance Notes (and/or any
substitute notes, as applicable), including, without limitation, the outstanding
principal balance of the Defeasance Notes (and/or any substitute notes, as
applicable) as of the Maturity Date.

 

(d) Upon or after the delivery of Defeasance Collateral in accordance with
Section 9.1(b) and the satisfaction of all other conditions provided for in this
Section 9.1, Lender shall enter into appropriate release documentation.

 

(e) On or before the date on which Borrower delivers Defeasance Collateral to
Lender pursuant to Section 9.1(b), Borrower shall open at any Eligible
Institution (or other bank subject to the next sentence hereof) at the time and
acting as custodian for Lender, a defeasance collateral account (the Defeasance
Collateral Account) which shall at all times be an Eligible Account, in which
Borrower shall grant to Lender or reconfirm the grant to Lender of a security
interest. The Defeasance Collateral Account shall contain (i) all Defeasance
Collateral delivered by Borrower pursuant to Section 9.1(b), (ii) all payments
received on Defeasance Collateral held in the Defeasance Collateral Account and
(iii) all income or other gains from investment of moneys or other property
deposited in the Defeasance Collateral Account. All such amounts, including all
income from the investment or reinvestment thereof, shall be held by Lender,
subject to withdrawal by Lender for the purposes set forth in this Section 9.1.
Borrower shall be the owner of the Defeasance Collateral Account and shall
report all income accrued on Defeasance Collateral for federal, state and local
income tax purposes in its income tax return.

 

(f) Lender shall withdraw, draw on or collect and apply the amounts that are on
deposit in the Defeasance Collateral Account to pay when due the principal and
all installments of interest and principal on the Defeasance Notes. Funds and
other property in the Defeasance Collateral Account shall not be commingled with
any other monies or property of Borrower or any Affiliate of Borrower. Lender
shall not in any way be held liable by reason of any insufficiency in the
Defeasance Collateral Account.

 

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(g) Borrower and Lender shall enter into any appropriate amendments to the Loan
Documents necessitated by a Defeasance of the Loan, such amendments to be in
form and substance reasonably acceptable to both Borrower and Lender.

 

X. MAINTENANCE OF PROPERTY; ALTERATIONS

 

Section 10.1 Maintenance of Property. Borrower shall keep and maintain, or cause
to be kept and maintained, including by enforcement of the provisions of the
BofA Lease, the Property and every part thereof in good condition and repair,
subject to ordinary wear and tear, and, subject to Excusable Delays and the
provisions of this Agreement with respect to damage or destruction caused by
casualty events or Takings, shall not permit or commit any waste, impairment, or
deterioration of any portion of the Property in any material respect. Borrower
further covenants to do all other acts which from the character or use of the
Property may be reasonably necessary to protect the security hereof, the
specific enumerations herein not excluding the general. Borrower shall not
remove or demolish any Improvement on the Property except as the same may be
necessary in connection with an Alteration or a restoration in connection with a
Taking or casualty, or as otherwise permitted herein, in each case in accordance
with the terms and conditions hereof.

 

Section 10.2 Conditions to Alteration. Subject to the proviso to this sentence,
Borrower shall have the right, without Lender’s consent, to undertake any
alteration, improvement, demolition or removal of the Property or any portion
thereof (any such alteration, improvement, demolition or removal, an Alteration)
so long as either (a) Bank of America, N.A. is permitted to undertake such
Alteration without the consent of Borrower pursuant to the BofA Lease or (b):

 

(i) no Event of Default shall have occurred and be continuing,

 

(ii) Borrower provides Lender with prior written notice of any Material
Alteration, and

 

(iii) such Alteration is (1) undertaken in the ordinary course of business in
accordance with the applicable provisions of this Agreement and the other Loan
Documents and is not prohibited by any relevant REAs and the Leases and (2)
shall not (unless provided for in the Annual Budget) involve costs and expenses
in excess of $500,000; provided, that not withstanding the foregoing, any such
Alteration of the structural aspects, the heating, ventilation and air
conditioning systems (HVAC) and life safety components of any Individual
Property shall require the prior written consent of the Lender (such consent not
to be unreasonably withheld, delayed or conditioned).

 

Except for Material Alterations performed by Bank of America, N.A. pursuant to
the BofA Lease that do not require the consent of Borrower (which Borrower shall
provide notice to Lender and which shall be performed in accordance with BofA
Lease), any Material Alteration shall be conducted under the supervision of an
Independent Architect and, in connection with any Material Alteration, Borrower
shall deliver to Lender, for information purposes only and not

 

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for approval by Lender, detailed plans and specifications and cost estimates
therefor, prepared by such Independent Architect, as well as an Officer’s
Certificate stating that such Alteration will involve an estimated cost of not
more than the Threshold Amount for Alterations at the Property. Such plans and
specifications may be revised at any time and from time to time by such
Independent Architect provided that material revisions of such plans and
specifications are filed with Lender, for information purposes only. All work
done in connection with any Alteration shall be performed with due diligence in
a good and workmanlike manner, all materials used in connection with any
Alteration shall not be less than the standard of quality of the materials
currently used at the Property and all materials used shall be in accordance
with all applicable material Legal Requirements and Insurance Requirements.

 

Section 10.3 Costs of Alteration. Notwithstanding anything to the contrary
contained in this Article X, no Material Alteration or Alteration which when
aggregated with all other Alterations (other than Material Alterations) then
being undertaken by Borrower (exclusive of Alterations being directly paid for
by Tenants at the Property) exceeds the Threshold Amount, shall be performed by
or on behalf of Borrower unless Borrower shall have delivered to Lender Cash and
Cash Equivalents and/or a Letter of Credit as security in an amount not less
than the estimated cost of the Material Alteration or the Alterations minus the
Threshold Amount (as set forth in the Independent Architect’s written estimate
referred to above). In addition to payment or reimbursement from time to time of
Borrower’s expenses incurred in connection with any Material Alteration or any
such Alteration, the amount of such security shall be reduced on any given date
to the Independent Architect’s written estimate of the cost to complete the
Material Alteration or the Alterations (including any retainages), free and
clear of Liens, other than Permitted Encumbrances. Costs which are subject to
retainage (which in no event shall be less than 5% in the aggregate) shall be
treated as due and payable and unpaid from the date they would be due and
payable but for their characterization as subject to retainage. In the event
that any Material Alteration or Alteration shall be made in conjunction with any
restoration with respect to which Borrower shall be entitled to withdraw
Proceeds pursuant to Section 6.2, the amount of the Cash and Cash Equivalents
and/or Letter of Credit to be furnished pursuant hereto need not exceed the
aggregate cost of such restoration and such Material Alteration or Alteration
(as estimated by the Independent Architect), less the sum of the amount of any
Proceeds which Borrower may be entitled to withdraw pursuant to Section 6.2 and
which are held by Lender in accordance with Section 6.2. Payment or
reimbursement of Borrower’s expenses incurred with respect to any Material
Alteration or any such Alteration shall be accomplished upon the terms and
conditions specified in Section 6.2.

 

At any time after substantial completion of any Material Alteration or any such
Alteration in respect of which Cash and Cash Equivalents and/or a Letter of
Credit is deposited pursuant hereto, the whole balance of any Cash and Cash
Equivalents so deposited by Borrower with Lender and then remaining on deposit
(together with earnings thereon), as well as all retainages, may be withdrawn by
Borrower and shall be paid by Lender to Borrower, and any other Cash and Cash
Equivalents and/or a Letter of Credit so deposited or delivered shall, to the
extent it has not been called upon, reduced or theretofore released, be released
to Borrower, within ten (10) days after receipt by Lender of an application for
such withdrawal and/or release together with an Officer’s Certificate, and
signed also (as to the following clause (a)) by the Independent Architect,
setting forth in substance as follows:

 

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(a) that the Material Alteration or Alteration in respect of which such Cash and
Cash Equivalents and/or a Letter of Credit was deposited has been substantially
completed in all material respects substantially in accordance with any plans
and specifications therefor previously filed with Lender under Section 10.2 and
that, if applicable, a certificate of occupancy has been issued with respect to
such Material Alteration or Alteration by the relevant Governmental
Authority(ies) or, if not applicable, that a certificate of occupancy is not
required; and

 

(b) that to the knowledge of the certifying Person all amounts which Borrower is
or may become liable to pay in respect of such Material Alteration or Alteration
through the date of the certification have been paid in full or adequately
provided for or are being contested in accordance with Section 7.3 and that lien
waivers have been obtained from the general contractor and major subcontractors
performing such Material Alterations or Alterations (or such waivers are not
customary and reasonably obtainable by prudent managers in the area where the
Property is located).

 

For the purposes of this Section 10.3 only, Alterations and Material Alterations
shall not include tenant improvement alterations, improvements, demolitions or
removals undertaken pursuant to a Lease in which the costs thereof are being
fully paid out of funds held by Lender in the Reserve Funds or Alterations by
Bank of America, N.A. pursuant to the BofA Lease that are permitted to be
undertaken by Bank of America, N.A. without the consent of Borrower.

 

XI. BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION

 

11.1.1 Books and Records. Borrower shall keep and maintain on a Fiscal Year
basis proper books and records separate from any other Person, in which accurate
and complete entries shall be made of all dealings or transactions of or in
relation to the Notes, the Property and the business and affairs of Borrower
relating to the Property which shall reflect all items of income and expense in
connection with the operation on an individual basis of the Property and in
connection with any services, equipment or furnishings provided in connection
with the operation of the Property, in accordance with GAAP. Lender and its
authorized representatives shall have the right at reasonable times and upon
reasonable notice to examine the books and records of Borrower relating to the
operation of the Property and to make such copies or extracts thereof as Lender
may reasonably require. After the occurrence of an Event of Default, Borrower
shall pay any costs and expenses incurred by Lender to examine Borrower’s
accounting records with respect to the Property, as Lender shall determine to be
necessary or appropriate in the protection of Lender’s interest. Upon Lender’s
reasonable request, Borrower shall provide such other information necessary and
sufficient to fairly represent the financial condition of Borrower and the
Property.

 

Section 11.2 Financial Statements.

 

11.2.1 Monthly Reports. Not later than thirty (30) days following the end of
each calendar month, Borrower will deliver, or will cause Manager to deliver, to
Lender unaudited statements of revenue and expenses, internally prepared, in
accordance with GAAP,

 

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consistently applied, for the twelve (12) month period then ended (but only
including periods during which Borrower or an Affiliate of Borrower owned the
Property). Such financial statements shall be accompanied by one or more
Officer’s Certificates or a certificate executed by an officer of Manager
certifying to the signer’s actual knowledge, (A) that such statements fairly
represent, in all material respects, the financial condition and results of
operations of Borrower in accordance with GAAP consistently applied, (B) that as
of the date of such certificate, no Default exists under this Agreement 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 such certificate, no litigation
exists involving Borrower, the Property or the Guarantor in which the amount
involved is $500,000 (in the aggregate) or more or 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) the amount by which actual Operating Expenses were greater than or less than
the Operating Expenses anticipated in the applicable Annual Budget. Such
statements of revenue and expenses shall contain such other information as shall
be reasonably requested by Lender for purposes of the calculations to be made by
Lender pursuant to the terms hereof. Schedule XIV attached hereto contains the
form of monthly report that the Borrower shall deliver pursuant to this Section.

 

11.2.2 Quarterly Reports. Not later than sixty (60) days following the end of
each fiscal quarter, Borrower shall deliver to Lender unaudited financial
statements for Borrower and the Guarantor, internally prepared in accordance
with GAAP, consistently applied, including a balance sheet and profit and loss
statement as of the end of such quarter and for the corresponding quarter of the
previous year, and a statement of revenues and expenses for the year to date,
and a comparison of the year to date results with (i) the results for the same
period of the previous year, (ii) the results that had been projected by
Borrower and the Guarantor for such period and (iii) the Annual Budget for such
period and the Fiscal Year and containing, if requested by Lender, a detailed
explanation of any variances of five percent (5%) or more between the budgeted
and actual amounts for such periods, all in form satisfactory to Lender.
Borrower shall also deliver a projection of the real estate tax contribution of
Bank of America, N.A. as additional rent under the BofA Lease during the
immediately following fiscal quarter and a description of the Individual
Properties to which such tax contribution relates. Such statements for each
quarter shall be accompanied by an Officer’s Certificate certifying to the best
of the signer’s knowledge, (A) that such statements fairly represent the
financial condition and results of operations of Borrower and the Guarantor, (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
Officer’s Certificate, no litigation exists involving Borrower, the Property or
either Guarantor in which the amount involved is $500,000 (in the aggregate) or
more and which potential liability is not covered by insurance, or, if so,
specifying such litigation and the actions being taking in relation thereto and
(D) the amount by which actual Operating Expenses were greater than or less than
the Operating Expenses anticipated in the applicable Annual Budget. Furthermore,
such Officer’s Certificate shall also state that the representations and
warranties of Borrower set forth in Section 4.1.29 are true and correct as of
the date of such Officer’s Certificate and that there are no trade payables
outstanding for more than sixty (60) days. Such financial statements shall
contain such other information as shall be reasonably requested by Lender for
purposes of calculations to be made by Lender pursuant to the terms hereof.
Schedule XIV attached hereto contains the form of quarterly report that the
Borrower shall deliver pursuant to this Section.

 

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11.2.3 Annual Reports. Not later than one hundred twenty (120) days after the
end of each Fiscal Year of Borrower’s and the Guarantor’s operations, Borrower
shall deliver to Lender audited financial statements for Borrower and the
Guarantor certified by an Independent Accountant in accordance with GAAP,
covering the Property, Borrower and the Guarantor, including a balance sheet as
of the end of such year and a statement of revenues and expenses for such year.
Such annual financial statements shall also be accompanied by an Officer’s
Certificate in the form required pursuant to Section 11.2.1. In connection
therewith, Borrower shall also deliver statements of revenue and expenses for
each Individual Property; provided such statements for each Individual Property
need not be audited or certified or accompanied by, or referred to in, an
Officer’s Certificate; and provided, further that, such Individual Property
financial information may contain the following disclaimer: “The financial
information contained herein was prepared by Borrower for internal purposes
only, and no representation or warranty is given with respect to the accuracy or
completeness of such information. No person is entitled to rely on any such
information in connection with any extension of credit to the Borrower nor its
decision to participate in the loan or any offering of securities related
thereto.” Not later than fifteen (15) days after the filing thereof, Borrower
shall deliver or cause to be delivered to Lender copies of all federal income
tax returns filed by the Borrower or Guarantor. Schedule XIV attached hereto
contains the form of statement of revenues and expenses that the Borrower shall
deliver as part of the annual report pursuant to this Section.

 

11.2.4 Leasing Reports. Not later than sixty (60) days after the end of each
fiscal quarter of Borrower’s operations, Borrower shall deliver to Lender a true
and complete rent roll for the Property, dated as of the last month of such
fiscal quarter, showing the percentage of net rentable area of the Property, if
any, leased as of the last day of the preceding calendar quarter, the current
annual rent for the Property, the expiration date of each lease, whether to
Borrower’s knowledge any portion of the Property has been sublet, and if it has,
the name of the subtenant, and such rent roll shall be accompanied by an
Officer’s Certificate certifying that such rent roll is true, correct and
complete in all material respects as of its date and stating whether Borrower,
within the past three (3) months, has issued a notice of default with respect to
any Lease which has not been cured and the nature of such default.

 

11.2.5 Annual Budget. Borrower shall submit to Lender an Annual Budget not later
than sixty (60) days prior to the commencement of each Fiscal Year in form
reasonably satisfactory to Lender. Neither Borrower nor Manager shall change or
modify the Annual Budget that has been approved by Lender (the Approved Annual
Budget) without the prior written consent of Lender.

 

11.2.6 Notice of Certain Occurrences; Extraordinary Expenses. In addition to all
other notices required to be given by Borrower hereunder, Borrower shall give
notice to Lender promptly upon the occurrence of: (a) any litigation or
proceeding affecting Borrower or the Property or any part thereof in which the
amount involved is $500,000 (in the aggregate) or more and not covered by
insurance or in which injunctive or similar relief is sought and likely to be
obtained; and (b) a material adverse change in the business, operations,
property

 

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or financial condition of Borrower or the Property. Furthermore, in the event
that Borrower must incur an extraordinary Operating Expense or Capital
Expenditure not set forth in the Approved Annual Budget then Borrower shall
promptly deliver to Lender a reasonably detailed explanation of such proposed
expense for Lender’s approval.

 

11.2.7 Reports in Connection with a Securitization. To the extent requested by
Lender in connection with a Securitization, Borrower shall provide any financial
information otherwise required to be provided to Lender on a periodic basis
pursuant to this Article XI along with any additional or updated financial
statements or financial, statistical or operating information, as Lender shall
request. Such financial information shall be accompanied by an Officers
Certificate certifying to the best of signer’s knowledge that such statements
fairly represent the financial condition and results of operations of Borrower
and, if applicable, the Guarantor; provided that any financial information
related solely to an Individual Property will be subject to the conditions set
forth in the third sentence of Section 11.2.3.

 

11.2.8 Other Information. Borrower shall, promptly after written request by
Lender furnish or cause to be furnished to Lender, in such manner and in such
detail as may be reasonably requested by Lender, such reasonable additional
information as may be reasonably requested with respect to the Property.

 

11.2.9 Form of Reports. Any reports, statements or other information required to
be delivered under this Agreement shall be delivered (i) in paper form, (ii) on
a diskette, and (iii) if requested by Lender and within the capabilities of
Borrower’s data systems without change or modification thereto, in electronic
form and prepared using a Microsoft Word for Windows or WordPerfect for Windows
files (which files may be prepared using a spreadsheet program and saved as word
processing files).

 

11.2.10 Disclosure of Financial Statements.

 

(a) Any revenue and expense information provided by Borrower to Lender pursuant
to this Article XI on an Individual Property level basis shall not be included
in any Disclosure Document utilized by Lender and its Affiliates (other than in
connection with a private Securitization) nor provided to any investors in any
Securitization (other than a private Securitization), it being understood that
Individual Property occupancy levels based on rent rolls provided by Borrower
and any information relating to Individual Properties that has been provided by
parties other than the Borrower (which information may include, without
limitation, appraised Individual Property values, square footage and Lender
underwritten revenues and expenses) may be provided to such investors or
disclosed in the applicable Disclosure Document utilized by Lender and its
Affiliates in such non-private Securitization. Notwithstanding the foregoing,
Borrower acknowledges that, in connection with a Securitization in which all or
a portion of the Securities issued are issued privately (i.e. under Rule 144(a),
Regulation D or Regulation S), all information provided pursuant to this Article
XI, including, without limitation, any information provided by Borrower on an
Individual Property level basis, may be disclosed to prospective investors in
such privately issued Securities and in any Disclosure Document relating to the
issuance of such privately issued Securities; provided, that any information
with respect an Individual Property will be subject to the conditions set forth
in the third sentence of Section 11.2.3 (it being understood and agreed that the
Lender and its Affiliates shall not by virtue of

 

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such condition, have any obligation to include the disclaimer language in any
Disclosure Document). Furthermore, any investors in such privately issued
Securities may request, and shall be entitled to receive, any information that
Lender is entitled to receive on a periodic basis pursuant to this Article XI on
an ongoing basis. Notwithstanding the foregoing, Borrower acknowledges that any
information provided by Borrower to Lender pursuant to this Article XI on an
aggregate Property basis may be disclosed to any prospective investor at any
time.

 

(b) Borrower acknowledges that all information that Lender is entitled to
receive pursuant to this Article XI may, at Lender’s option, be delivered to the
Rating Agencies.

 

XII. ENVIRONMENTAL MATTERS

 

Section 12.1 Representations. Borrower hereby represents and warrants that
except as set forth in the environmental reports and studies delivered to Lender
(the Environmental Reports),

 

(i) Borrower has not engaged in or knowingly permitted any operations or
activities upon, or any use or occupancy of the Property, or any portion
thereof, for the purpose of or in any way involving the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal of any Hazardous Materials on, under, in or about the Property, or
transported any Hazardous Materials to, from or across the Property, except in
all cases in material compliance with Environmental Laws and only in the course
of legitimate business operations at the Property;

 

(ii) to the best of Borrower’s knowledge, no tenant, occupant or user of the
Property, or any other Person, has engaged in or permitted any operations or
activities upon, or any use or occupancy of the Property, or any portion
thereof, for the purpose of or in any material way involving the handling,
manufacture, treatment, storage, use, generation, release, discharge, refining,
dumping or disposal of any Hazardous Materials on, in or about the Property, or
transported any Hazardous Materials to, from or across the Property, except in
all cases in material compliance with Environmental Laws and only in the course
of legitimate business operations at the Property;

 

(iii) no Hazardous Materials are presently constructed, deposited, stored, or
otherwise located on, under, in or about the Property except in material
compliance with Environmental Laws;

 

(iv) no Hazardous Materials have migrated from the Property upon or beneath
other properties which would reasonably be expected to result in material
liability for Borrower; and

 

(v) no Hazardous Materials have migrated or threaten to migrate from other
properties upon, about or beneath the Property which would reasonably be
expected to result in material liability for Borrower.

 

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Section 12.2 Covenants.

 

12.2.1 Compliance with Environmental Laws. Subject to Borrower’s right to
contest under Section 7.3, Borrower covenants and agrees with Lender that it
shall comply in all material respects with all Environmental Laws. If at any
time during the continuance of the Liens of the Security Instrument, a
Governmental Authority having jurisdiction over the Property requires remedial
action to correct the presence of Hazardous Materials in, around, or under the
Property (an Environmental Event), Borrower shall deliver prompt notice of the
occurrence of such Environmental Event to Lender. Within thirty (30) days after
Borrower has knowledge of the occurrence of an Environmental Event, Borrower
shall deliver to Lender an Officer’s Certificate (an Environmental Certificate)
explaining the Environmental Event in reasonable detail and setting forth the
proposed remedial action, if any. Borrower shall promptly provide Lender with
copies of all notices which allege or identify any actual or potential violation
or noncompliance received by or prepared by or for Borrower in connection with
any Environmental Law. For purposes of this paragraph, the term “notice” shall
mean any summons, citation, directive, order, claim, pleading, letter,
application, filing, report, findings, declarations or other materials pertinent
to compliance of the Property and Borrower with such Environmental Laws. If any
Security Instrument is foreclosed, Borrower shall deliver the Property in
material compliance with all applicable Environmental Laws.

 

12.2.2 Compliance with O&M Plan. Listed on Schedule VIII hereto are asbestos
operations and maintenance programs for one or more of the Individual Properties
(the O&M Program). Borrower agrees to use commercially reasonable efforts to
implement each and every recommendation contained in the O&M Program within
thirty (30) days after the Closing Date. Compliance with the O&M Program shall
be considered a material covenant of this Agreement. On the first day of each
calendar month during the term, Borrower shall deliver to Lender copies of all
materials, reports, and data prepared or generated in connection with the O&M
Program. In the event that any Alterations or tenant improvement work would
involve the O&M Program, Borrower shall deliver Lender evidence of Borrower’s
compliance with the O&M Program.

 

Section 12.3 Environmental Reports. Upon the occurrence and during the
continuance of an Environmental Event with respect to the Property or an Event
of Default, Lender shall have the right to have its consultants perform a
comprehensive environmental audit of the Property. Such audit shall be conducted
by an environmental consultant chosen by Lender and may include a visual survey,
a record review, an area reconnaissance assessing the presence of hazardous or
toxic waste or substances, PCBs or storage tanks at the Property, an asbestos
survey of the Property, which may include random sampling of the Improvements
and air quality testing, and such further site assessments as Lender may
reasonably require due to the results obtained from the foregoing. Borrower
grants Lender, its agents, consultants and contractors the right to enter the
Property as reasonable or appropriate for the circumstances for the purposes of
performing such studies and the reasonable cost of such studies shall be due and
payable by Borrower to Lender upon demand and shall be secured by the Liens of
the Security Instrument. Lender shall not unreasonably interfere with, and
Lender shall direct the environmental consultant to use its commercially
reasonable efforts not to interfere with, Borrower’s or any Tenant’s, other
occupant’s or Manager’s operations upon the Property when conducting such audit,
sampling or inspections. By undertaking any of the measures identified in and
pursuant to this Section 12.3, Lender shall not be deemed to be exercising any
control over the operations of Borrower or the handling of any environmental
matter or hazardous wastes or substances of Borrower for purposes of incurring
or being subject to liability therefor.

 

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Section 12.4 Environmental Indemnification. Borrower shall protect, indemnify,
save, defend, and hold harmless the Indemnified Parties from and against any and
all liability, loss, damage, actions, causes of action, costs or expenses
whatsoever (including reasonable attorneys’ fees and expenses) and any and all
claims, suits and judgments which any Indemnified Party may suffer, as a result
of or with respect to: (a) any Environmental Claim relating to or arising from
the Property; (b) the violation of any Environmental Law in connection with the
Property; (c) any release, spill, or the presence of any Hazardous Materials
affecting the Property; (d) the presence at, in, on or under, or the release,
escape, seepage, leakage, discharge or migration at or from, the Property of any
Hazardous Materials, whether or not such condition was known or unknown to
Borrower and (e) any toxic mold contamination at or affecting any Individual
Property; provided that, in each case, Borrower shall be relieved of its
obligation under this subsection if any of the matters referred to in clauses
(a) through (e) above did not occur (but need not have been discovered) prior to
(1) the foreclosure of any Security Instrument, (2) the delivery by Borrower to
Lender or its designee of a deed-in-lieu of foreclosure with respect to the
Property, or (3) Lender’s or its designee’s taking possession and control of the
Property after the occurrence of an Event of Default hereunder. If any such
action or other proceeding shall be brought against Lender, upon written notice
from Borrower to Lender (given reasonably promptly following Lender’s notice to
Borrower of such action or proceeding), Borrower shall be entitled to assume the
defense thereof, at Borrower’s expense, with counsel reasonably acceptable to
Lender; provided, however, Lender may, at its own expense, retain separate
counsel to participate in such defense, but such participation shall not be
deemed to give Lender a right to control such defense, which right Borrower
expressly retains. Notwithstanding the foregoing, each Indemnified Party shall
have the right to employ separate counsel at Borrower’s expense if, in the
reasonable opinion of legal counsel, a conflict or potential conflict exists
between the Indemnified Party and Borrower that would make such separate
representation advisable. Borrower shall have no obligation to indemnify an
Indemnified Party for damage or loss resulting from such Indemnified Party’s
gross negligence or willful misconduct.

 

Section 12.5 Recourse Nature of Certain Indemnifications. Notwithstanding
anything to the contrary provided in this Agreement or in any other Loan
Document, the indemnification provided in Section 12.4 shall be fully recourse
to Borrower and shall be independent of, and shall survive, the discharge of the
Indebtedness, the release of the Liens created by the Security Instrument,
and/or the conveyance of title to the Property to Lender or any purchaser or
designee in connection with a foreclosure of any Security Instrument or
conveyance in lieu of foreclosure.

 

XIII. THE GROUND LEASES

 

Section 13.1 Leasehold Representations, Warranties. Other than the Ground Leases
and the leaseholds described on Schedule XII, the Property does not consist of a
leasehold estate in whole or in part. Subject to the exceptions set forth on
Schedule XI, Borrower hereby represents and warrants as follows with respect to
the Ground Lease:

 

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(a) The Ground Lease or a memorandum thereof, including all amendments and
modifications thereto, or a separate agreement signed by the Ground Lessor has
been duly recorded and by its terms permits the interest of the Borrower
thereunder to be encumbered by the applicable Security Instrument and there has
been no change in the terms of the Ground Lease since its recordation.

 

(b) The Ground Lease is not subject to any Liens or encumbrances other than the
Security Instrument, subject to the Permitted Encumbrances, and the Ground Lease
is prior to all Liens, charges and encumbrances on the fee interest of the
Ground Lessor thereunder.

 

(c) The Ground Lease is valid and subsisting and is in full force and effect in
accordance with its terms and no uncured default has occurred under the Ground
Lease.

 

(d) The Security Instrument encumbering the Ground Lease conforms and complies
with the Ground Lease, does not constitute a violation or default under the
Ground Lease, and is and shall at all times constitute a valid Lien (subject
only to Permitted Encumbrances) on the Borrower’s entire estate under the Ground
Lease.

 

(e) All Ground Rent due and payable through and including the Closing Date has
been paid.

 

(f) All terms, conditions, and agreements contained in the Ground Lease have
been performed to the extent they apply to periods through and including the
Closing Date.

 

(g) The Ground Lease grants any leasehold mortgagee standard protections
necessary to protect the security of a leasehold mortgagee (including the right
of the leasehold mortgagee to receive notice of lessee’s default under the
Ground Lease, the right of the leasehold mortgagee, with adequate time, to cure
such default and, in the case of incurable defaults of lessee, the right of the
leasehold mortgagee to enter into a New Ground Lease with Ground Lessor on the
same terms as the existing Ground Lease).

 

(h) The Ground Lease has an original term which extends not less than twenty
(20) years beyond the term of the related Security Instrument.

 

(i) The Ground Lease requires the Ground Lessor to enter into a New Ground Lease
upon the termination of the Ground Lease for any reason, including the rejection
of a Ground Lease in bankruptcy.

 

Section 13.2 Cure by Lender. In the event of a default by Borrower in the
performance of any of its obligations under Ground Lease, including, without
limitation, any default in the payment of any sums payable thereunder, then, in
each and every such case, Lender may, at its option, cause the default or
defaults to be remedied and otherwise exercise any and all rights of Borrower
thereunder in the name of and on behalf of Borrower. Borrower shall, on demand,
reimburse Lender for all advances made and expenses incurred by Lender in curing
any such default (including, without limitation, reasonable attorneys’ fees and
disbursements), together with interest thereon computed at the Default Rate from
the date that such advance is made to and including the date the same is paid to
Lender.

 

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Section 13.3 Option to Renew or Extend the Ground Leases. Borrower shall give
Lender written notice of its intention not to exercise each and every option, if
any, to renew or extend the term of the Ground Lease, at least thirty (30) days
prior to the expiration of the time to exercise such option under the terms
thereof. If required by Lender, Borrower shall duly exercise any renewal or
extension option with respect to the Ground Lease if Lender reasonably
determines that the exercise of such option is necessary to protect Lender’s
security for the Loan. If Borrower intends to renew or extend the term of the
Ground Lease, it shall deliver to Lender, with the notice of such decision, a
copy of the notice of renewal or extension delivered to the applicable Fee
Owner, together with the terms and conditions of such renewal or extension. If
Borrower does not renew or extend the term of the Ground Lease, Lender may, at
its option, exercise the option to renew or extend in the name of and on behalf
of Borrower. Borrower hereby irrevocably appoints Lender as its
attorney-in-fact, coupled with an interest, to execute and deliver, for and in
the name of Borrower, all instruments and agreements necessary under the Ground
Lease or otherwise to cause any renewal or extension of the Ground Lease.

 

Section 13.4 Ground Lease Covenants.

 

13.4.1 Waiver of Interest In New Ground Lease. In the event the Ground Lease
shall be terminated by reason of a default thereunder by Borrower and Lender
shall require from the applicable Fee Owner a new ground lease, Borrower hereby
waives any right, title and interest in and to such new ground lease or the
leasehold estate created thereby, waiving all rights of redemption now or
hereafter operable under any law.

 

13.4.2 No Election to Terminate. Borrower shall not elect to treat the Ground
Lease as terminated, canceled or surrendered pursuant to the applicable
provisions of the Bankruptcy Code (including, without limitation, Section
365(h)(1) thereof) without Lender’s prior written consent in the event of any
Fee Owner’s bankruptcy. Any such election made without Lender’s prior written
consent shall be void. In addition, Borrower shall, in the event of any Fee
Owner’s bankruptcy, reaffirm and ratify the legality, validity, binding effect
and enforceability of the Ground Lease and shall remain in possession of the
applicable Property and the applicable Leasehold Estate, notwithstanding any
rejection thereof by such Fee Owner or any trustee, custodian or receiver.

 

13.4.3 Notice Prior to Rejection. Borrower shall give Lender not less than
thirty (30) days prior written notice of the date on which Borrower shall apply
to any court or other governmental authority for authority and permission to
reject the Ground Lease in the event that there shall be filed by or against
Borrower any petition, action or proceeding under the Bankruptcy Code or under
any other similar federal or state law now or hereafter in effect and if
Borrower determines to reject the Ground Lease. Lender shall have the right, but
not the obligation, to serve upon Borrower within such thirty (30) day period a
notice stating that (i) Lender demands that Borrower assume and assign the
Ground Lease to Lender subject to and in accordance with the Bankruptcy Code,
and (ii) Lender covenants to cure or provide reasonably adequate assurance
thereof with respect to all defaults reasonably susceptible of being cured by
Lender and of future performance under the Ground Lease. If Lender serves upon
Borrower the notice described above, Borrower shall not seek to reject the
Ground Lease and shall comply with the demand provided for clause (i) above
within fifteen (15) days after the notice shall have been given by Lender.

 

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13.4.4 Lender Right to Perform. During the continuance of an Event of Default,
Lender shall have the right, but not the obligation, (i) to perform and comply
with all obligations of Borrower under the Ground Lease without relying on any
grace period provided therein, (ii) to do and take, without any obligation to do
so, such actions as Lender deems necessary or desirable to prevent or cure any
default by Borrower under the Ground Lease, including, without limitation, any
act, deed, matter or thing whatsoever that Borrower may do in order to cure a
default under the Ground Lease and (iii) to enter in and upon the Property or
any part thereof to such extent and as often as Lender deems necessary or
desirable in order to prevent or cure any default of Borrower under the Ground
Lease. Borrower shall, within five (5) Business Days after written request is
made therefor by Lender, execute and deliver to Lender or to any party
designated by Lender, such further instruments, agreements, powers, assignments,
conveyances or the like as may be reasonably necessary to complete or perfect
the interest, rights or powers of Lender pursuant to this Section or as may
otherwise be required by Lender.

 

13.4.5 Lender Attorney in Fact. In the event of any arbitration under or
pursuant to the Ground Lease in which Lender elects to participate, Borrower
hereby irrevocably appoints Lender as its true and lawful attorney-in-fact
(which appointment shall be deemed coupled with an interest) to exercise, during
the continuance of an Event of Default, all right, title and interest of
Borrower in connection with such arbitration, including, without limitation, the
right to appoint arbitrators and to conduct arbitration proceedings on behalf of
Borrower and Lender. All costs and expenses incurred by Lender in connection
with such arbitration and the settlement thereof shall be borne solely by
Borrower, including, without limitation, attorneys’ fees and disbursements.
Nothing contained in this Section shall obligate Lender to participate in any
such arbitration.

 

13.4.6 No Defaults. Borrower shall not do, permit or suffer any event or
omission as a result of which there could occur a default by the Borrower under
the Ground Lease or any event which, with the giving of notice or the passage of
time, or both, would constitute a default by the Borrower under the Ground Lease
which could permit any party to the Ground Lease validly to terminate the Ground
Lease (including, without limitation, a default in any payment obligation), and
Borrower shall obtain the consent or approval of the applicable Fee Owner to the
extent required pursuant to the terms of any Ground Lease.

 

13.4.7 No Modification. Borrower shall not cancel, terminate, surrender, modify
or amend or in any way alter, surrender all or any portion of the Property,
permit the alteration of any of the provisions of the Ground Lease or agree to
any termination, amendment, modification or surrender of the Ground Lease in a
manner that materially increases Borrower’s obligations or materially decreases
Borrower’s rights without Lender’s prior written consent in each instance, which
consent shall not be unreasonably withheld.

 

13.4.8 No Merger. Unless Lender shall otherwise consent, the fee title and the
Leasehold Estate in the Property shall not merge but shall always be kept
separate and distinct, notwithstanding the union on said estates either in the
Ground Lessor or in Borrower, or in a third party, by purchase or otherwise.

 

13.4.9 Extension of Lien. Upon acquisition of the fee title or any other estate,
title or interest in the Property, the Lien of the Security Instrument with
respect to the

 

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Ground Lease shall, automatically and without the necessity of execution of any
other documents, attach to and cover and be a lien upon such other estate so
acquired, such other estate shall be considered as mortgaged, assigned and
conveyed to Lender and the Lien hereof spread to cover such estate with the same
force and effect as though specifically herein mortgaged, assigned and conveyed.
The provisions of Section 13.4.9 shall not apply if Lender acquires title to the
Property unless Lender shall so elect.

 

13.4.10 Notices of Default. Borrower shall deliver to Lender copies of any
notice of default by any party under the Ground Lease, or of any notice from any
Fee Owner of its intention to terminate the Ground Lease or to re-enter and take
possession of any portion of the Property, immediately upon delivery or receipt
of such notice, as the case may be.

 

13.4.11 Delivery of Information. Borrower shall promptly furnish to Lender
copies of such information and evidence as Lender may request concerning
Borrower’s due observance, performance and compliance with the terms, covenants
and conditions of the Ground Lease.

 

13.4.12 No Subordination. Borrower shall not consent to the subordination of the
Ground Lease to any mortgage or other lease of the fee interest in any portion
of the Property.

 

13.4.13 Further Assurances. Borrower, at its sole cost and expense, shall
execute and deliver to Lender, within five (5) Business Days after request, such
documents, instruments or agreements as may be required to permit Lender to cure
any default under the Ground Lease.

 

13.4.14 Estoppel Certificates. Borrower shall use its commercially reasonable
efforts to obtain and deliver to Lender within twenty (20) days after written
demand by Lender but no more than once in any calendar year, an estoppel
certificate from the Fee Owner setting forth (i) the name of the lessee and the
lessor thereunder, (ii) that the Ground Lease is in full force and effect and
has not been modified or, if it has been modified, the date of each modification
(together with copies of each such modification), (iii) the date to which all
rental charges have been paid by the lessee under the Ground Lease, (iv) whether
there are any alleged defaults of the lessee under the Ground Lease and, if
there are, setting forth the nature thereof in reasonable detail, (v) if the
lessee under the Ground Lease shall be in default, the default and (vi) such
other matters as Lender shall reasonably request.

 

Section 13.5 Lender Right to Participate. Lender shall have the right, but not
the obligation, to proceed in respect of any claim, suit, action or proceeding
relating to the rejection of the Ground Lease by any Fee Owner as a result of a
Fee Owner’s bankruptcy, including, without limitation, the right to file and
prosecute any and all proofs of claims, complaints, notices and other documents
in any case in respect of such Fee Owner under and pursuant to the Bankruptcy
Code.

 

Section 13.6 No Liability. Lender shall have no liability or obligation under
the Ground Lease by reason of its acceptance of the Security Instrument, this
Agreement and the other Loan Documents. Lender shall be liable for the
obligations of the lessee arising under the

 

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Ground Lease for only that period of time during which Lender is in possession
of the portion of the Property covered by the Ground Lease or has acquired, by
foreclosure or otherwise, and is holding all of Borrower’s right, title and
interest therein.

 

XIV. SECURITIZATION AND PARTICIPATION

 

Section 14.1 Sale of Notes and Securitization. Borrower acknowledges and agrees
that, subject to Article XV hereof, Lender may sell, transfer or assign all or
any portion of the Loan and the Loan Documents, or issue one or more
participations therein, or consummate one or more private or public
securitizations of rated single- or multi-class securities (the Securities)
secured by or evidencing ownership interests in all or any portion of the Loan
and the Loan Documents or a pool of assets that include the Loan and the Loan
Documents (such sales, participations and/or securitizations, collectively, a
Securitization). At the request of Lender, and to the extent not already
required to be provided by or on behalf of Borrower under this Agreement,
Borrower shall use reasonable efforts to provide information not in the
possession of Lender or which may be reasonably required by Lender or take other
actions reasonably required by Lender, in each case in order to satisfy the
market standards to which Lender customarily adheres or which may be reasonably
required by prospective investors and/or the Rating Agencies in connection with
any such Securitization including, without limitation, to:

 

(a) (i) subject to Sections 11.2.3, 11.2.7 and 11.2.10 hereof, provide such
financial and other information (but not projections) with respect to the
Property, Borrower, Guarantor, Manager and Bank of America, N.A. to the extent
such information is reasonably available to Borrower, Guarantor, or Manager and
(ii) cooperate with the holder of the Note (and its representatives) in
obtaining such site inspection, appraisals, market studies, environmental
reviews and reports, engineering reports and other due diligence investigations
of the Property, as may be reasonably requested by the holder of the Note or
reasonably requested by the Rating Agencies together, if customary, with
appropriate verification of and/or consents to such information, through letters
of auditors or Opinions of Counsel of independent attorneys acceptable to
Lender, prospective investors and the Rating Agencies (all information provided
pursuant to this Section 14.1 together with all other information heretofore
provided to Lender in connection with the Loan, as such may be updated, at
Lender’s request, in connection with a Securitization, or hereafter provided by
or on behalf of Borrower to Lender in connection with the Loan or a
Securitization, being herein collectively called the Provided Information);

 

(b) deliver (i) an Additional Non-Consolidation Opinion and such other customary
Opinions of Counsel as may be reasonably requested by Lender, prospective
investors and/or the Rating Agencies, including, without limitation, a so called
“10b-5” opinion, and (ii) revised organizational documents for Borrower (which
revised documents do not affect Borrower and its Affiliates in a material and
adverse manner), which Opinions of Counsel and organizational documents shall be
reasonably satisfactory to Lender, prospective investors and/or the Rating
Agencies;

 

(c) if requested by Lender, a Rating Agency or any prospective investor, provide
estoppel certificates and other non-financial information and assurances in form
and content satisfactory to Lender, the Rating Agencies and/or any prospective
investor, as applicable, and such additional and updated non-financial
information on the Properties, Borrower, and/or Guarantor as Lender, the Rating
Agencies or any prospective investor may request;

 

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(d) execute such amendments to the Loan Documents as may be reasonably requested
by Lender, prospective investors and/or the Rating Agencies to effect the
Securitization; provided that (i) such amendments will not increase Borrower’s
obligations or decrease Borrower’s rights in any material respect or result in
an increase in any monetary obligation of Borrower except as provided in Section
14.2) and (ii) to the extent that, pursuant to one or more Securitizations,
Lender assigns portions of the Loan or issues participations in the Loan to more
than five (5) Persons, Borrower and Lender shall cooperate to take all actions
necessary to cause the Loan to be in registered form for purposes of Section
163(f) of the Code (including effecting appropriate modifications to the Loan or
any Loan Document) unless Lender receives an opinion of counsel to the effect
that the Loan is not a “registration-required obligation” for purposes of
Section 163(f) of the Code, it being understood that (1) causing the Loan to be
in registered form for purposes of Section 163(f) of the Code shall not be
deemed to have a materially adverse economic effect to Borrower for purposes of
this Section 14.1(d) and (2) for purposes of the aforementioned determination of
five (5) Persons, multiple investors in Securities issued in connection with a
single Securitization trust shall constitute one Person;

 

(e) if requested by Lender, review any information regarding the Properties,
Borrower, American Financial Realty Trust, Guarantor, Manager and the Loan which
is contained in a preliminary or final private placement memorandum, prospectus,
prospectus supplement (including any amendment or supplement to either thereof),
or other Disclosure Document to be used by Lender or any affiliate thereof; and

 

(f) subject to Section 5.1.23, update and/or restate Officer’s Certificates,
title insurance and other items originally delivered to Lender on the Closing
Date or in connection with the closing of the Loan, as may be required by the
Lender or the Rating Agencies.

 

Section 14.2 Loan Components; Uncross of Properties.

 

(a) Notwithstanding anything in this Agreement to the contrary (including
Section 14.1 hereof but subject to Section 14.1(d)(ii) hereof), Borrower
covenants and agrees that in connection with any Securitization of the Loan,
upon Lender’s request Borrower shall deliver one or more new component notes to
replace the original Note or modify the original Note to reflect multiple
components of the Loan or create one or more mezzanine loans (including amending
Borrower’s organizational structure to provide for one or more mezzanine
borrowers) or re-size the components of the Loan (each a Resizing Event);
provided that the aggregated financial terms of the Loan immediately following
the Resizing Event will be materially equivalent to the Loan immediately prior
to the Resizing Event. Lender and Borrower agree that such new notes or modified
note and mezzanine notes or re-sized components shall immediately after the
Resizing Event have the same initial weighted average coupon as the original
note prior to such Resizing Event, but that such new notes or modified note and
mezzanine notes or re-sized components may, in connection with the application
of principal to such new notes or modified note and mezzanine notes or re-sized
components as a result of only (i) mandatory prepayments in connection with the
receipt of Proceeds or (ii) the occurrence and during the continuation of an
Event of Default, subsequently cause the weighted average coupon

 

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of such new notes or modified note and mezzanine notes or re-sized components to
change and Lender may apply principal, interest rates and amortization of the
Loan between such new components and/or mezzanine loans in a manner specified by
Lender in its sole discretion such that the pricing and marketability of the
Securities and the size of each class of Securities and the rating assigned to
each such class by the Rating Agencies shall provide the most favorable rating
levels and achieve the optimum bond execution for the Loan; provided that Lender
agrees that any such application of principal as a result of voluntary
prepayments in connection with a Property Release as provided in Section 2.3.1
shall not result in an adverse effect to Borrower. In connection with any
Resizing Event, Borrower covenants and agrees to modify the Cash Management
Agreement with respect to the newly created components and/or mezzanine loans.

 

(b) Borrower agrees that at any time Lender shall have the unilateral right to
elect to uncross any of the Properties (the Affected Property). In furtherance
thereof, Lender shall have the right to (i) sever or divide the Note and the
other Loan Documents in order to allocate to such Affected Property the portion
of the Loan allocable to such Property (the Uncrossed Allocated Loan Amount)
evidenced by a new note and secured by such other loan documents (collectively,
the Uncrossed Note) having a principal amount equal to the Principal Amount
applicable to such Affected Property, (ii) segregate the applicable portion of
each of the Reserve Funds relating to the Affected Property, (iii) release any
cross-default and/or cross-collateralization provisions applicable to such
Affected Property and (iv) take such additional action consistent therewith;
provided, that such Uncrossed Note secured by such Affected Property, together
with the Loan Documents secured by the remaining Properties, shall not increase
in the aggregate (A) any monetary obligation of Borrower under the Loan
Documents, or (B) any other obligation of Borrower under the Loan Documents. In
connection with the transfer of any such Affected Property as provided for in
this Section 14.2(b), the Loan shall be reduced by an amount equal to amount of
the Uncrossed Note applicable to such Affected Property and the new loan secured
by such Affected Property and evidenced by the Uncrossed Note shall be in an
amount equal to such Uncrossed Allocated Loan Amount. Subsequent to the release
of the Affected Property from the Lien of the Security Instrument pursuant to
this Section 14.2(b), the balances of the components of the Loan shall be the
same as they would have been had a prepayment occurred in an amount equal to the
Uncrossed Allocated Loan Amount of the Affected Property. At the request of
Lender, Borrower shall otherwise cooperate with Lender in its attempt to satisfy
all requirements necessary in order for Lender to obtain a Rating Confirmation,
which requirements shall include, without limitation: (A) delivery of an
Additional Non-Consolidation Opinion; and (B) the execution of such documents
and instruments and delivery by Lender of such Opinions of Counsel as are
typical for similar transactions, including, an Opinion of Counsel that the
release of the Affected Property will not be a “significant modification” of
this Loan within the meaning of Section 1.1001-3 of the regulations of the
United States Department of the Treasury and that all other requirements
applicable, if any, to a REMIC, have been satisfied or have not otherwise been
violated. Provided that no Event of Default shall have occurred and be
continuing under the Loan Documents, Lender shall cause all reasonable costs and
expenses incurred by Borrower in connection with this Section 14.2(b)
(including, without limitation, any costs and expenses incurred by Borrower in
connection with the transfer of the Affected Property to a special purpose
entity and the maintenance and operation of such special purpose entity) to be
paid by Lender.

 

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Section 14.3 Cooperation. Borrower shall, subject to Sections 11.2.7 and
11.2.10, (i) at Lender’s request, meet with representatives of the Rating
Agencies at reasonable times to discuss the business and operations of the
Property, (ii) cooperate with the reasonable requests of the Rating Agencies in
connection with the Property, and (iii) cooperate in any manner that may
reasonably be requested by Lender in connection with a Securitization. Until the
Obligations are paid in full, Borrower shall provide the Rating Agencies with
all financial reports required hereunder and such other information as they
shall reasonably request, including copies of any default notices or other
material notices delivered to and received from Lender hereunder, to enable them
to continuously monitor the creditworthiness of Borrower and to permit an annual
surveillance of the implied credit rating of the Securities.

 

Section 14.4 Securitization Costs. All reasonable third party costs and expenses
incurred by Borrower in connection with the Securitization of the Loan, the
creation of separate notes or the bifurcation of the Loan (including, without
limitation, the fees and expenses of the Rating Agencies) shall be paid by
Borrower up to a maximum amount of $100,000.

 

Section 14.5 Securitization Indemnification.

 

14.5.1 Disclosure Documents. Borrower understands that certain of the Provided
Information may be included in disclosure documents in connection with the
Securitization, including a prospectus, prospectus supplement or private
placement memorandum, public registration statement or similar offering
memorandum or offering circular, or such other information reasonably requested
by Lender, in each case in preliminary or final form (each, a Disclosure
Document), and may also be included in filings with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended (the Securities
Act) or the Securities and Exchange Act of 1934, as amended (the Exchange Act),
or provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, upon request, Borrower shall
reasonably cooperate with the holder of the Note in updating the Provided
Information for inclusion or summary in the Disclosure Document by providing all
current information pertaining to Borrower and the Property reasonably requested
by Lender.

 

14.5.2 Indemnification Certificate. (a) In connection with each of (x) a
preliminary and final private placement memorandum, or (y) a preliminary and
final prospectus, as applicable, Borrower agrees to provide upon five (5) days
prior written notice from Lender in connection with each Securitization, at
Lender’s reasonable request, an indemnification certificate:

 

(i) certifying that (1) Borrower has carefully examined those portions of the
applicable Disclosure Documents that relate to or include any Provided
Information or any information regarding the Property, Borrower, Manager and/or
the Loan) (the Relevant Portions) (except, in the case Borrower does not agree
with statements therein, to the extent specified by Borrower in a written notice
given to Lender a reasonable amount of time prior to the printing of the
applicable Disclosure Document) do not, to the best knowledge of Borrower,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not

 

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misleading; provided that, any such certificate may explicitly state that
Borrower is not certifying to the accuracy of any revenue and expense
information on an Individual Property-by-Individual Property basis, and

 

(ii) indemnifying Lender, Deutsche Bank Securities, Inc., Bear Stearns Inc. and
their respective Affiliates (collectively, DBS/BSI) that have prepared the
Disclosure Document relating to the Securitization, each of their directors,
each of their officers who have signed the Disclosure Document and each person
or entity who controls DBS/BSI within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively, the DBS/BSI
Group), and DBS/BSI together with the DBS/BSI Group, each of their respective
directors and each person who controls DBS/BSI or the DBS/BSI Group, within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act
(collectively, the Underwriter Group) for any actual, out-of-pocket losses,
third party claims, damages (excluding lost profits, diminution in value and
other consequential damages) or liabilities arising out of third party claims
(the Liabilities) to which any member of the Underwriter Group may become
subject to the extent such Liabilities arise out of or are based upon any untrue
statement of any material fact contained in the Relevant Portions or arise out
of or are based upon the omission to state therein a material fact required to
be stated in the Relevant Portions in order to make the statements in the
Relevant Portions in light of the circumstances under which they were made, not
misleading.

 

(b) Borrower’s liability under clause (a) above shall be limited to Liabilities
arising out of or based upon any such untrue statement or omission made in a
Disclosure Document in reliance upon and in conformity with information
furnished to Lender by, or furnished at the direction and on behalf of, Borrower
in connection with the preparation of those portions of the Disclosure Document
pertaining to Borrower, the Property as a whole or the Loan, including financial
statements of Borrower and operating statements with respect to the Property (as
a whole) and shall not include, in connection with any Disclosure Document
relating to a private Securitization, Liabilities arising out of or based upon
any such untrue statement or omission made in such Disclosure Document in
reliance upon and in conformity with revenue and expense information relating
solely to one or more Individual Properties and furnished to Lender by, or
furnished at the direction and on behalf of, Borrower on an Individual
Property-by-Individual Property basis to the extent Borrower had no actual
knowledge of such untrue statement or omission at the time the certificate
referred to in clause (a) above was delivered to Lender (it being understood
that, in accordance with Section 11.2.10, any Disclosure Document relating to a
non-private Securitization shall not include Borrower provided revenue and
expense information on a Individual Property-by-Individual Property basis). This
indemnity agreement will be in addition to any liability which Borrower may
otherwise have. Moreover, the indemnification and reimbursement obligations
provided for under clause (a) above shall be effective, valid and binding
obligations of the indemnifying party, whether or not an indemnification
agreement is provided.

 

(c) Promptly after receipt by an indemnified party under this Section 14.5 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 14.5, notify the indemnifying party in writing of the commencement
thereof, but the omission to so notify the indemnifying party will not relieve
the indemnifying party from any liability which the

 

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indemnifying party may have to any indemnified party hereunder except to the
extent that failure to notify causes prejudice to the indemnifying party. In the
event that any action is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof, the indemnifying party will
be entitled, jointly with any other indemnifying party, to participate therein
and, to the extent that it (or they) may elect by written notice delivered to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. After notice from the indemnifying party
to such indemnified party under this Section 14.5 of its assumption of such
defense, the indemnifying party shall not be liable for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there are any legal defenses available to
it and/or other indemnified parties that are different from or in conflict with
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party or parties at the expense of the indemnifying party. The
indemnifying party shall not be liable for the expenses of separate counsel
unless an indemnified party shall have reasonably concluded that there may be
legal defenses available to it that are different from or in conflict with those
available to another indemnified party.

 

(d) In order to provide for just and equitable contribution in circumstances in
which the indemnity provided for in this Section 14.5 is for any reason held to
be unenforceable by an indemnified party in respect of any actual, out-of-pocket
losses, claims, damages or liabilities relating to third party claims (or action
in respect thereof) referred to therein which would otherwise be indemnifiable
under this Section 14.5, the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such actual, out of
pocket losses, third party claims, damages or liabilities (or action in respect
thereof) (but excluding damages for lost profits, diminution in value of the
Property and consequential damages); provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution for Liabilities arising
therefrom from any person who was not guilty of such fraudulent
misrepresentation. In determining the amount of contribution to which the
respective parties are entitled, the following factors shall be considered: (i)
the DBS/BSI Group’s and Borrower’s relative knowledge and access to information
concerning the matter with respect to which the claim was asserted; (ii) the
opportunity to correct and prevent any statement or omission; (iii) the limited
responsibilities and obligations of Borrower as specified herein; and (iv) any
other equitable considerations appropriate in the circumstances.

 

Section 14.6 Retention of Servicer. Lender reserves the right, at Borrower’s
sole cost and expense, to retain the Servicer. Lender has advised Borrower that
the Servicer initially retained by Lender shall be Orix Capital Markets Inc.
Borrower shall pay any expenses of the Servicer and any fees and third party
expenses of any special servicer (including, without limitation, reasonable
attorneys fees and disbursement), and any servicing advances and interest
thereon.

 

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XV. ASSIGNMENTS AND PARTICIPATIONS

 

Section 15.1 Assignment and Acceptance. (a) Lender may assign to one or more
Persons all or a portion of its rights and obligations under this Agreement and
the other Loan Documents (including, without limitation, all or a portion of the
Note); provided that the parties to each such assignment shall execute and
deliver to Lender, for its acceptance and recording in the Register (as
hereinafter defined), an Assignment and Acceptance. In the event of any such
assignment by the initial two Persons comprising the Lender prior to a
Securitization of the Loan, each such Person as a holder of rights and
obligations under this Agreement and the other Loan Documents shall designate a
single separate person to act as agent or lead lender on behalf of all the
holders of the portion of the Loan originally held by such initial Lender on the
Closing Date to exercise the rights of Lender under this Agreement and the other
Loan Documents, and Borrower shall have no obligation to send notices to, or
obtain consents or approvals from, any other person as “Lender” hereunder (i.e.,
Borrower shall interact with two Persons as agent and lead lender hereunder,
shall be required to obtain the consent and approval of each such Person and
shall send copies of notices, documents, reports and financial statements to
each such Person). In addition, Lender may participate to one or more Persons
all or any portion of its rights and obligations under this Agreement and the
other Loan Documents (including without limitation, all or a portion of the
Note) utilizing such documentation to evidence such participation and the
parties’ respective rights thereunder as Lender, in its sole discretion, shall
elect. In connection with the initial Securitization of the Loan and from time
to time thereafter, Lender and/or the assignees, as the case may be, shall
designate one agent through which Borrower shall request all approvals and
consents required or contemplated by this Agreement and on whose statements
Borrower may rely (it being understood and agreed by the parties hereto that
such agent may be required to obtain the consent or approval of other parties).
Borrower shall not assign any portion of its rights and obligations under this
Agreement and the other Loan Documents.

 

(b) Each Lender agrees that it has, independently and without reliance on the
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Borrower and its Affiliates and
decision to enter into this Agreement and that it will, independently and
without reliance upon the other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
under any other Loan Document.

 

Section 15.2 Effect of Assignment and Acceptance. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in such
Assignment and Acceptance, (i) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and obligations
of Lender, as the case may be, hereunder and such assignee shall be deemed to
have assumed such rights and obligations, and (ii) Lender shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement and the other Loan Documents (and, in the case
of an Assignment and Acceptance covering all or the remaining portion of
Lender’s rights and obligations under this Agreement and the other Loan
Documents, Lender shall cease to be a party hereto) accruing from and after

 

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the effective date of the Assignment and Acceptance, except with respect to (A)
any payments made by Borrower to Lender pursuant to the terms of the Loan
Documents after the effective date of the Assignment and Acceptance and (B) any
letter of credit, cash deposit or other deposits or security (other than the
Liens of the Security Instrument and the other Loan Documents) delivered to or
deposited with German American Capital Corporation and Bear Stearns Commercial
Mortgage, Inc., as Lender, for which German American Capital Corporation and
Bear Stearns Commercial Mortgage, Inc. shall remain responsible for the proper
disposition thereof until such items are delivered to a party who is qualified
as an Approved Bank and agrees to hold the same in accordance with the terms and
provisions of the agreement pursuant to which such items were deposited.

 

Section 15.3 Content. By executing and delivering an Assignment and Acceptance,
Lender and the assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided in such Assignment
and Acceptance, Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any other 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, this Agreement or any other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; (ii) Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or the
performance or observance by Borrower of any of its obligations under any Loan
Documents or any other instrument or document furnished pursuant thereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon
Lender and 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 this Agreement and the other Loan Documents; (v) such assignee
appoints and authorizes Lender to take such action as agent on its behalf and to
exercise such powers and discretion under the Loan Documents as are delegated to
Lender by the terms hereof together with such powers and discretion as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform, in accordance with their terms, all of the obligations which by the
terms of this Agreement and the other Loan Documents are required to be
performed by Lender.

 

Section 15.4 Register. Lender shall maintain a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the recordation of
the names and addresses of Lender and each assignee pursuant to this Article XV
and the principal amount of the Loan owing to each such assignee from time to
time (the Register). The entries in the Register shall, with respect to such
assignees, be conclusive and binding for all purposes, absent manifest error.
The Register shall be available for inspection by Borrower or any assignee
pursuant to this Article XV at any reasonable time and from time to time upon
reasonable prior written notice.

 

Section 15.5 Substitute Notes. Subject to Article XIV, upon its receipt of an
Assignment and Acceptance executed by an assignee, together with any Note or
Notes subject to such assignment, Lender shall, if such Assignment and
Acceptance has been completed and is in

 

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a form acceptable to Lender, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register, and (iii) give prompt
written notice thereof to Borrower. Within five (5) Business Days after its
receipt of such notice, Borrower, at Lender’s own expense, shall execute and
deliver to Lender in exchange and substitution for the surrendered Note or Notes
a new Note to the order of such assignee in an amount equal to the portion of
the Loan assigned to it and a new Note to the order of Lender in an amount equal
to the portion of the Loan retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate then
outstanding principal amount of such surrendered Note or Notes, shall be dated
the effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of the Note (modified, however, to the extent necessary
so as not to impose duplicative or increased obligations on Borrower and to
delete obligations previously satisfied by Borrower). Notwithstanding the
provisions of this Article XV, Borrower shall not be responsible or liable for
any additional taxes, reserves, adjustments or other costs and expenses that are
related to, or arise as a result of, any transfer of the Loan or any interest or
participation therein that arise solely and exclusively from the transfer of the
Loan or any interest or participation therein or from the execution of the new
Note contemplated by this Section 15.5, including, without limitation, any
mortgage tax.

 

Section 15.6 Participations. Lender or any assignee pursuant to this Article XV
may sell participations to one or more Persons (other than Borrower or any of
its Affiliates) in or to all or a portion of its rights and obligations under
this Agreement and the other Loan Documents (including, without limitation, all
or a portion of the Note held by it); provided, however, that (i) such
assignee’s obligations under this Agreement and the other Loan Documents shall
remain unchanged, (ii) such assignee shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) such
assignee shall remain the holder of any such Note for all purposes of this
Agreement and the other Loan Documents, and (iv) Borrower, Lender and the
assignees pursuant to this Article XV shall continue to deal solely and directly
with such assignee in connection with such assignee’s rights and obligations
under this Agreement and the other Loan Documents. In the event that more than
one (1) party comprises Lender, Lender shall designate one party to act on the
behalf of all parties comprising Lender in providing approvals and all other
necessary consents under the Loan Documents and on whose statements Borrower may
rely.

 

Section 15.7 Disclosure of Information. Any assignee pursuant to this Article XV
may, in connection with any assignment or participation or proposed assignment
or participation pursuant to this Article XV, disclose to the assignee or
participant or proposed assignee or participant, any information relating to
Borrower furnished to such assignee by or on behalf of Borrower; provided,
however, that, prior to any such disclosure, the assignee or participant or
proposed assignee or participant shall agree in writing for the benefit of
Borrower to preserve the confidentiality of any confidential information
received by it.

 

Section 15.8 Security Interest in Favor of Federal Reserve Bank.

 

Notwithstanding any other provision set forth in this Agreement or any other
Loan Document, any assignee pursuant to this Article XV may at any time create a
security interest in all or any portion of its rights under this Agreement or
the other Loan Documents (including, without limitation, the amounts owing to it
and the Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.

 

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XVI. RESERVE FUNDS

 

Section 16.1 Required Repairs.

 

16.1.1 Deposits. On the Closing Date, Borrower shall deposit with Lender the
amount for each Individual Property set forth on such Schedule V hereto to
perform the Required Repairs for such Individual Property, which amount shall
equal $2,886,577.70 in aggregate. Borrower shall perform the repairs at the
Property, as more particularly set forth on Schedule V hereto (such repairs
hereinafter referred to as Required Repairs). Borrower shall use commercially
reasonable efforts to complete in an expeditious manner the Required Repairs.
If, in the reasonable judgment of the Lender, (a) Borrower is not completing the
Required Repairs at each Individual Property in an expeditious manner (giving
due consideration to the obligation of Borrower to obtain the approval of Bank
of America, N.A. under the BofA Lease with respect to such Required Repairs, if
applicable), or (b) Borrower does not satisfy each condition contained in
Section 16.1.2 hereof, then Lender, at its option, may withdraw all amounts in
the Required Repair Fund and apply such funds to completion of the Required
Repairs at the Property. Upon the occurrence of such an Event of Default,
Lender, at its option, may withdraw all amounts in the Required Repair Fund and
apply such funds either to completion of the Required Repairs at one or more of
the Properties or toward payment of the Indebtedness in such order, proportion
and priority as Lender may determine in its sole discretion. Lender’s right to
withdraw and apply amounts in the Required Repair Fund shall be in addition to
all other rights and remedies provided to Lender under this Agreement and the
other Loan Documents. Amounts so deposited and the account in which such amounts
are held shall hereinafter be referred to as Borrower’s Required Repair Fund.

 

16.1.2 Release of Required Repair Fund. Lender shall disburse to Borrower the
amounts in the Required Repair Fund from time to time upon satisfaction by
Borrower of each of the following conditions:

 

(a) Borrower shall submit a written request for payment to Lender at least ten
(10) days prior to the date on which Borrower requests such payment be made and
specifies the Required Repairs to be paid,

 

(b) on the date such request is received by Lender and on the date such payment
is to be made, no Default or Event of Default shall exist and remain uncured,

 

(c) Lender shall have received an Officers’ Certificate (i) stating that all
Required Repairs at the applicable Individual Property funded by prior
disbursements have been completed in good and workmanlike manner and in
accordance with all applicable federal, state and local laws, rules and
regulations, (ii) identifying each Person that supplied or will supply materials
or labor in connection with the Required Repairs performed or to be performed at
such Individual Property and in each instance to be funded by the requested
disbursement, and (iii) stating that all prior disbursements have been applied
to pay each Person identified in a previous Officer’s Certificate, such
Officers’ Certificate to be accompanied by evidence of payment satisfactory to
Lender, and

 

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(d) Lender shall have received such other evidence as Lender shall reasonably
request that the Required Repairs at such Individual Property to be funded by
the requested disbursement are being completed and are paid for or will be paid
upon such disbursement to Borrower.

 

Lender shall not be required to make disbursements of the Required Repair Fund
with respect to any Individual Property unless such requested disbursement is in
an amount greater than Twelve Thousand Five Hundred and 00/100 Dollars
($12,500.00) (or a lesser amount if the total amount in the Required Repair Fund
is less than Twelve Thousand Five Hundred and 00/100 Dollars ($12,500.00), in
which case only one disbursement of the amount remaining in the account shall be
made) and such disbursement shall be made only upon satisfaction of each
condition contained in this Section 16.1.2.

 

16.1.3 Letter of Credit. Borrower may, in substitution of the Required Repair
Fund, provide Lender with a Letter of Credit in the amount required in Section
16.1.1 above. In the event Borrower satisfies the conditions for the
disbursement of amounts in the Required Repair Fund pursuant to Section 16.1.2
above, Borrower shall be entitled to a corresponding reduction of the amount of
the Letter of Credit.

 

Section 16.2 Environmental Remediation.

 

16.2.1 Deposits. On the Closing Date, Borrower shall deposit with Lender the
amount for each Individual Property set forth on such Schedule IX hereto to
perform the Environmental Remediation for such Individual Property, which amount
shall equal $4,332,196.00 in the aggregate. Borrower shall perform the
environmental remediation at the Property, as more particularly set forth on
Schedule IX hereto (such repairs hereinafter referred to as the Environmental
Remediation). Borrower shall use commercially reasonable efforts to complete in
an expeditious manner the Environmental Remediation. If, in the reasonable
judgment of the Lender, (a) Borrower is not completing the Environmental
Remediation at each Individual Property in an expeditious manner (giving due
consideration to the obligation of Borrower to obtain the approval of Bank of
America, N.A. under the BofA Lease with respect to such Environmental
Remediation, if applicable), or (b) Borrower does not satisfy each condition
contained in Section 16.2.2 hereof, then Lender, at its option, may withdraw all
amounts in the Environmental Remediation Reserve Fund and apply such funds to
completion of the Environmental Remediation at the Property. Upon the occurrence
of such an Event of Default, Lender, at its option, may withdraw all amounts in
the Environmental Remediation Reserve Fund and apply such funds either to
completion of the Environmental Remediation at one or more of the Properties or
toward payment of the Indebtedness in such order, proportion and priority as
Lender may determine in its sole discretion. Lender’s right to withdraw and
apply amounts in the Environmental Remediation Reserve Fund shall be in addition
to all other rights and remedies provided to Lender under this Agreement and the
other Loan Documents. Amounts so deposited and the account in which such amounts
are held shall hereinafter be referred to as Borrower’s Environmental
Remediation Reserve Fund.

 

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16.2.2 Release of Environmental Remediation Reserve Fund.

 

(a) Lender shall disburse to Borrower the amounts in the Environmental
Remediation Reserve Fund from such account from time to time upon satisfaction
by Borrower of each of the following conditions:

 

(i) Borrower shall submit a written request for payment to Lender at least ten
(10) days prior to the date on which Borrower requests such payment to be made
and specifies the Environmental Remediation to be paid,

 

(ii) on the date such request is received by Lender and on the date such payment
is to be made, no Default or Event of Default shall exist and remain uncured,

 

(iii) Lender shall have received an Officers’ Certificate (x) stating that all
Environmental Remediation at the applicable Individual Property funded by prior
disbursements has been completed in good and workmanlike manner and in
accordance with all applicable federal, state and local laws, rules and
regulations, (y) identifying each Person that supplied or will supply materials
or labor in connection with the Environmental Remediation performed or to be
performed at such Individual Property and in each instance to be funded by the
requested disbursement, and (z) stating that all prior disbursements have been
applied to pay each Person identified in a previous Officer’s Certificate, such
Officers’ Certificate to be accompanied by other evidence of payment
satisfactory to Lender, and

 

(iv) Lender shall have received such other evidence as Lender shall reasonably
request that the Environmental Remediation at such Individual Property to be
funded by the requested disbursement is being completed and is paid for or will
be paid upon such disbursement to Borrower.

 

Lender shall not be required to make disbursements from the Environmental
Remediation Reserve Fund with respect to any Individual Property unless such
requested disbursement is in an amount greater than Twelve Thousand Five Hundred
and 00/100 Dollars ($12,500.00) (or a lesser amount if the total amount in the
Environmental Remediation Reserve Fund for such Individual Property as set forth
on Schedule IX is less than Twelve Thousand Five Hundred and 00/100 Dollars
($12,500.00), in which case only one disbursement of the amount remaining in the
account shall be made) and such disbursement shall be made only upon
satisfaction of each condition contained in this Section 16.2.2. In addition,
Lender shall not be required to make aggregate disbursements from the
Environmental Remediation Reserve Fund with respect to an Individual Property in
excess of the amount set forth on Schedule IX for such Individual Property.

 

(b) Lender shall disburse to Borrower the balance of the undisbursed amount in
the Environmental Remediation Reserve Fund for an Individual Property set forth
on Schedule IX upon the satisfaction by Borrower of each of the following
conditions, or, in the case of a disbursement contemplated by clause (c)(iii)
below, the entire undisbursed amount less such amount as reasonably determined
by Lender for the costs of any ongoing monitoring required in connection with
such completion:

 

(i) Borrower shall submit a written request for a payment to Lender at least ten
(10) days prior to the date on which Borrower requests such payment to be made
and specifies the Environmental Remediation to be paid,

 

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(ii) on the date such request is received by Lender and on the date such payment
is to be made, no Default or Event of Default shall exist and remain uncured and

 

(iii) Lender shall have received one of the following:

 

(x) an Officer’s Certificate stating that the Individual Property has been
released from the Lien hereunder in accordance with the terms hereof;

 

(y) an environmental indemnity from Bank of America, N.A. in form and substance
satisfactory to Lender or

 

(z) an Officer’s Certificate (1) stating that all Environmental Remediation at
the applicable Individual Property has been completed in good and workmanlike
manner and in accordance with all applicable federal, state and local laws,
rules and regulations, (2) identifying each person that supplied materials or
labor in connection with the Environmental Remediation preformed at such
Individual Property and (3) accompanied by evidence of such completion
satisfactory to Lender.

 

(c) Lender shall disburse to Borrower the amount set forth in clause (iii)(y)
below from the Environmental Remediation Reserve Fund from time to time upon
satisfaction by Borrower of each of the following conditions:

 

(i) Borrower shall submit a written request for payment to Lender at least ten
(10) days prior to the date on which Borrower requests such payment to be made,

 

(ii) on the date such request is received by Lender and on the date such payment
is to be made, no Default or Event of default shall exist and remain uncured,
and

 

(iii) Lender shall have received an Officer’s Certificate (x) stating that the
Borrower has received an updated estimate of the Environmental Remediation to be
completed at an Individual Property and attaching thereto the updated revised
estimate of the environmental remediation at the applicable property and (y)
setting forth the amount to be disbursed as a calculation of the difference
between the amount set forth on Schedule IX with respect to the applicable
Individual Property, as such amount has been reduced pursuant thereto from time
to time, and 125% of the amount set forth on the revised estimate.

 

16.2.3 Letter of Credit. Borrower may, in substitution of the Environmental
Remediation Reserve Fund, provide Lender with a Letter of Credit in the amount
required in Section 16.2.1 above. In the event Borrower satisfies the conditions
for the disbursement of amounts in the Environmental Remediation Reserve Account
pursuant to Section 16.2.2 above, Borrower shall be entitled to a corresponding
reduction of the amount of the Letter of Credit.

 

Section 16.3 Tax, Insurance and Other Charges Funds.

 

16.3.1 Tax Escrow Fund. On the Closing Date Borrower shall deposit in the Tax
Escrow Fund $1,206,011. Borrower shall pay to Lender on each Payment Date
one-twelfth (1/12) of the Impositions that Lender estimates will be payable
during the ensuing twelve

 

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(12) months in order to accumulate with Lender sufficient funds to pay all such
Impositions at least thirty (30) days prior to their respective due dates (other
than such Impositions payable by Bank of America, N.A. pursuant to the BofA
Lease, provided Bank of America N.A. is not in default of its obligations to pay
same pursuant to the BofA Lease) (said amounts and the account in which such
amounts are held hereinafter called the Tax Escrow Fund). Lender will apply the
Tax Escrow Fund to payments of Impositions required to be made by Borrower
pursuant hereto and under the Security Instruments. In making any payment
relating to the Tax Escrow Fund, Lender may do so according to any bill,
statement or estimate procured from the appropriate public office (with respect
to Impositions), 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 Escrow Fund shall exceed the
amounts due for Impositions pursuant hereto, Lender shall, in its sole
discretion, return any excess to Borrower or credit such excess against future
payments to be made to the Tax Escrow Fund. Any amount remaining in the Tax
Escrow Fund after the Indebtedness has been paid in full shall be returned to
Borrower. In allocating such excess, Lender may deal with the Person shown on
the records of Lender to be the owner of the Property. If at any time Lender
reasonably determines that the Tax Escrow Fund is not or will not be sufficient
to pay Impositions by the dates set forth above, Lender shall notify Borrower of
such determination and Borrower shall increase its monthly payments to Lender by
the amount that Lender estimates is sufficient to make up the deficiency at
least thirty (30) days prior to the due date of the Impositions.

 

16.3.2 Insurance Escrow Fund. On the Closing Date Borrower shall deposit in the
Insurance Escrow Fund $902,236.50. Borrower shall pay to Lender on each Payment
Date one-twelfth (1/12) of the Insurance Premiums that Lender estimates will be
payable for the renewal of the coverage afforded by the insurance policies
required to be maintained pursuant to this Agreement upon the expiration thereof
in order to accumulate with Lender sufficient funds to pay all such Insurance
Premiums at least thirty (30) days prior to the expiration of such insurance
policies (other than such Insurance Premiums payable by Bank of America, N.A.
pursuant to the BofA Lease, provided Bank of America N.A. is not in default of
its obligations to pay same pursuant to the BofA Lease) (said amounts and the
account in which such amounts are held hereinafter called the Insurance Escrow
Fund). Lender will apply the Insurance Escrow Fund to payments of Insurance
Premiums required to be made by Borrower pursuant hereto and under the Security
Instruments. In making any payment relating to the Insurance Escrow Fund, Lender
may do so according to any insurer or agent (with respect to Insurance
Premiums), without inquiry into the accuracy of such bill, statement or estimate
or into the validity of any tax, assessment, sale, forfeiture, tax lien or title
or claim thereof. If the amount of the Insurance Escrow Fund shall exceed the
amounts due for Insurance Premiums pursuant hereto, Lender shall, in its sole
discretion, return any excess to Borrower or credit such excess against future
payments to be made to the Insurance Escrow Fund. Any amount remaining in the
Insurance Escrow Fund after the Indebtedness has been paid in full shall be
returned to Borrower. In allocating such excess, Lender may deal with the Person
shown on the records of Lender to be the owner of the Property. If at any time
Lender reasonably determines that the Insurance Escrow Fund is not or will not
be sufficient to pay Insurance Premiums by the dates set forth above, Lender
shall notify Borrower of such determination and Borrower shall increase its
monthly payments to Lender by the amount that Lender estimates is sufficient to
make up the deficiency at least thirty (30) days prior to expiration of the
insurance policies.

 

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16.3.3 Other Charges Escrow Fund. On the Closing Date Borrower shall deposit in
the Other Charges Escrow Fund $27,449.64. Borrower shall pay to Lender on each
Payment Date one-twelfth (1/12) of the Other Charges that Lender estimates will
be payable during the ensuing twelve (12) months in order to accumulate with
Lender sufficient funds to pay all such Other Charges at least thirty (30) days
prior to their respective due dates (other than such Other Charges payable by
Bank of America, N.A. pursuant to the BofA Lease, provided Bank of America N.A.
is not in default of its obligations to pay same pursuant to the BofA Lease)
(said amounts and the account in which such amounts are held hereinafter called
the Other Charges Escrow Fund). Lender will apply the Other Charges Escrow Fund
to payments of Other Charges required to be made by Borrower pursuant hereto and
under the Security Instruments. In making any payment relating to the Other
Charges Escrow Fund, Lender may do so according to any bill, statement or
estimate procured from the appropriate public office (with respect to Other
Charges), 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 Other Charges Escrow Fund shall exceed
the amounts due for Other Charges pursuant hereto, Lender shall, in its sole
discretion, return any excess to Borrower or credit such excess against future
payments to be made to the Other Charges Escrow Fund. Any amount remaining in
the Other Charges Escrow Fund after the Indebtedness has been paid in full shall
be returned to Borrower. In allocating such excess, Lender may deal with the
Person shown on the records of Lender to be the owner of the Property. If at any
time Lender reasonably determines that the Other Charges Escrow Fund is not or
will not be sufficient to pay Other Charges by the dates set forth above, Lender
shall notify Borrower of such determination and Borrower shall increase its
monthly payments to Lender by the amount that Lender reasonably estimates is
sufficient to make up the deficiency at least thirty (30) days prior to the due
date of the Other Charges.

 

Section 16.4 Replacements and Replacement Reserve.

 

16.4.1 Replacement Reserve Fund. On the Closing Date Borrower shall deposit in
the Replacement Reserve Fund $26,538.18. Borrower shall pay to Lender on each
Payment Date one-twelfth (1/12) of an annual amount equal to $0.20 per rentable
square foot (excluding any such rentable square footage leased to Bank of
America, N.A. pursuant to the BofA Lease, provided Bank of America N.A. is not
in default of its obligations to pay same pursuant to the BofA Lease) (the
Replacement Reserve Monthly Deposit) reasonably estimated by Lender in its sole
discretion to be due for replacements and repairs required to be made to the
Properties during the calendar year (collectively, the Replacements). Amounts so
deposited and the account in which such amounts are held shall hereinafter be
referred to as Borrower’s Replacement Reserve Fund. Lender may reassess its
estimate of the amount necessary for the Replacement Reserve Fund from time to
time, and may increase the monthly amounts required to be deposited into the
Replacement Reserve Fund upon thirty (30) days notice to Borrower if Lender
determines in its reasonable discretion that an increase is necessary to
maintain the proper maintenance and operation of the Property. Any amount held
in the Replacement Reserve Fund and allocated for an Individual Property shall
be retained by Lender and credited toward the future Replacement Reserve Monthly
Deposits required by Lender hereunder in the event such Individual Property is
released from the Lien of its related Security Instrument in accordance with
Section 2.3 hereof.

 

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16.4.2 Disbursements from Replacement Reserve Fund. (a) Lender shall make
disbursements from the Replacement Reserve Fund to pay Borrower only for the
costs of the Replacements. Lender shall not be obligated to make disbursements
from the Replacement Reserve Fund to reimburse Borrower for the costs of routine
maintenance to an Individual Property, replacements of inventory or for costs
which are to be reimbursed from the Required Repair Fund, the Vacant B Space
Rollover Reserve Fund or Rollover Reserve Fund.

 

(b) Lender shall, upon written request from Borrower and satisfaction of the
requirements set forth in this Section 16.4.2, disburse to Borrower amounts from
the Replacement Reserve Fund necessary to pay for the actual approved costs of
Replacements or to reimburse Borrower therefor, upon completion of such
Replacements (or, upon partial completion in the case of Replacements made
pursuant to Section 16.4.2(e) hereof) as determined by Lender. In no event shall
Lender be obligated to disburse funds from the Replacement Reserve Fund if a
Default or an Event of Default exists and is continuing.

 

(c) Each request for disbursement from the Replacement Reserve Fund shall be in
a form specified or approved by Lender and shall specify (i) the specific
Replacements for which the disbursement is requested, (ii) the quantity and
price of each item purchased, if the Replacement includes the purchase or
replacement of specific items, (iii) the price of all materials (grouped by type
or category) used in any Replacement other than the purchase or replacement of
specific items, and (iv) the cost of all contracted labor or other services
applicable to each Replacement for which such request for disbursement is made.
With each request Borrower shall certify that all Replacements have been made in
accordance with all applicable Legal Requirements of any Governmental Authority
having jurisdiction over the applicable Individual Property to which
Replacements are being provided. Each request for disbursement shall include
copies of invoices for all items or materials purchased and all contracted labor
or services provided and, unless Lender has agreed to issue joint checks as
described below in connection with a particular Replacement, each request shall
include evidence satisfactory to Lender of payment of all such amounts. Except
as provided in Section 16.4.2(e) hereof, each request for disbursement from the
Replacement Reserve Fund shall be made only after completion of the Replacement
for which disbursement is requested. Borrower shall provide Lender evidence of
completion of the subject Replacement satisfactory to Lender in its reasonable
judgment.

 

(d) Borrower shall pay all invoices in connection with the Replacements with
respect to which a disbursement is requested prior to submitting such request
for disbursement from the Replacement Reserve Fund or, at the request of
Borrower, Lender will issue joint checks, payable to Borrower and the
contractor, supplier, materialman, mechanic, subcontractor or other party to
whom payment is due in connection with a Replacement. In the case of payments
made by joint check, Lender may require a waiver of lien from each Person
receiving payment prior to Lender’s disbursement from the Replacement Reserve
Fund. In addition, as a condition to any disbursement, Lender may require
Borrower to obtain lien waivers from each contractor, supplier, materialman,
mechanic or subcontractor who receives payment in an amount equal to or greater
than Twelve Thousand Five Hundred and 00/100 Dollars ($12,500.00) for completion
of its work or delivery of its materials. Any lien waiver delivered hereunder
shall conform to the requirements of applicable law and shall cover all work
performed and materials supplied (including equipment and fixtures) for the
applicable

 

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Individual Property by that contractor, supplier, subcontractor, mechanic or
materialman through the date covered by the current reimbursement request (or,
in the event that payment to such contractor, supplier, subcontractor, mechanic
or materialmen is to be made by a joint check, the release of lien shall be
effective through the date covered by the previous release of funds request).

 

(e) If (i) the cost of a Replacement exceeds Twelve Thousand Five Hundred and
00/100 Dollars ($12,500.00) and (ii) the contractor performing such Replacement
requires periodic payments pursuant to terms of a written contract, a request
for reimbursement from the Replacement Reserve Fund may be made after completion
of a portion of the work under such contract, provided (A) such contract
requires payment upon completion of such portion of the work, (B) the materials
for which the request is made are on site at the applicable Individual Property
and are properly secured or have been installed in such Individual Property, (C)
all other conditions in this Agreement for disbursement have been satisfied, (D)
funds remaining in the Replacement Reserve Fund are, in Lender’s judgment,
sufficient to complete such Replacement and other Replacements when required,
and (E) if required by Lender, each contractor or subcontractor receiving
payments under such contract shall provide a waiver of lien with respect to
amounts which have been paid to that contractor or subcontractor.

 

(f) Borrower shall not make a request for disbursement from the Replacement
Reserve Fund more frequently than once in any calendar month and (except in
connection with the final disbursement) the total cost of all Replacements in
any request shall not be less than Twelve Thousand Five Hundred and 00/100
Dollars ($12,500.00).

 

16.4.3 Performance of Replacements. (a) Borrower shall make Replacements when
required in order to keep each Individual Property in condition and repair
consistent with the condition and repair such retail banking property was in on
the Closing Date, and to keep each Individual Property or any portion thereof
from deteriorating. Borrower shall complete all Replacements in a good and
workmanlike manner as soon as practicable following the commencement of making
each such Replacement.

 

(b) Subject to the rights of Bank of America, N.A. under the BofA Lease, Lender
reserves the right, at its option, to approve all contracts or work orders with
materialmen, mechanics, suppliers, subcontractors, contractors or other parties
providing labor or materials in connection with Replacements in excess of
$300,000 for any Individual Property. Upon Lender’s request, Borrower shall
assign any contract or subcontract to Lender.

 

(c) In the event Lender determines in its reasonable discretion that any
Replacement in excess of $300,000 for any Individual Property is not being
performed in a workmanlike or timely manner or that such Replacement has not
been completed in a workmanlike or timely manner, Lender shall have the option,
upon not less than thirty (30) days prior written notice to the Borrower, to
withhold disbursement for such unsatisfactory Replacement and to proceed under
existing contracts or to contract with third parties to complete such
Replacement and to apply the Replacement Reserve Fund toward the labor and
materials necessary to complete such Replacement.

 

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(d) In order to facilitate Lender’s completion or making of such Replacements
pursuant to Section 16.4.3(c) above, with respect to any Replacements that are
life safety items, Borrower grants Lender the right to enter onto any Individual
Property and perform any and all work and labor necessary to complete or make
such Replacements and/or employ watchmen to protect such Individual Property
from damage. All sums so expended by Lender, to the extent not from the
Replacement Reserve Fund, shall be deemed to have been advanced under the Loan
to Borrower and secured by the Security Instruments.

 

(e) Nothing in this Section 16.4.3 shall: (i) make Lender responsible for making
or completing any Replacements; (ii) require Lender to expend funds in addition
to the Replacement Reserve Fund to make or complete any Replacement; (iii)
obligate Lender to proceed with any Replacements; or (iv) obligate Lender to
demand from Borrower additional sums to make or complete any Replacement.

 

(f) Borrower shall permit Lender and Lender’s agents and representatives
(including, without limitation, Lender’s engineer, architect, or inspector) or
third parties making Replacements pursuant to this Section 16.4.3 to enter onto
each Individual Property during normal business hours (subject to the rights of
tenants under their Leases) to inspect the progress of any Replacements and all
materials being used in connection therewith, and to examine all plans and shop
drawings relating to such Replacements which are or may be kept at each
Individual Property. Borrower shall cause all contractors and subcontractors to
cooperate with Lender or Lender’s representatives or such other persons
described above in connection with inspections described in this Section
16.4.3(f).

 

(g) With respect to Replacements in excess of $300,000 for any Individual
Property, Lender may require an inspection of the Individual Property at
Borrower’s expense prior to making a monthly disbursement from the Replacement
Reserve Fund in order to verify completion of the Replacements for which
reimbursement or payment is sought. Lender may require that such inspection be
conducted by an appropriate independent qualified professional selected by
Lender and/or may require a copy of a certificate of completion by an
independent qualified professional acceptable to Lender prior to the
disbursement or payment of any amounts from the Replacement Reserve Fund.
Borrower shall pay the expense of the inspection as required hereunder, whether
such inspection is conducted by Lender or by an independent qualified
professional.

 

16.4.4 Failure to Make Replacements. (a) Upon the occurrence of an Event of
Default which results from Borrower’s failure to comply in any material respect
with any provision of this Section 16.4, Lender may use the Replacement Reserve
Fund (or any portion thereof) for any purpose, including but not limited to
completion of the Replacements as provided in Section 16.4.3, or for any other
repair or replacement to any Individual Property or toward payment of the
Indebtedness in such order, proportion and priority as Lender may determine in
its sole discretion. Lender’s right to withdraw and apply the Replacement
Reserve Funds shall be in addition to all other rights and remedies provided to
Lender under this Agreement and the other Loan Documents.

 

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(b) Nothing in this Agreement shall obligate Lender to apply all or any portion
of the Replacement Reserve Fund on account of an Event of Default to payment of
the Indebtedness or in any specific order or priority.

 

16.4.5 Balance in the Replacement Reserve Fund. The insufficiency of any balance
in the Replacement Reserve Fund shall not relieve Borrower from its obligation
to fulfill all preservation and maintenance covenants in the Loan Documents.

 

16.4.6 Letter of Credit. Borrower may, in substitution of the Replacement
Reserve Fund, provide Lender with a Letter of Credit in the amount required in
Section 16.4.1 above. In the event Borrower satisfies the conditions for the
disbursement of amounts in the Replacement Reserve Fund pursuant to Section
16.4.2 above, Borrower shall be entitled to a corresponding reduction of the
amount of the Letter of Credit.

 

Section 16.5 Vacant B Space Rollover Reserve.

 

16.5.1 Deposits to Vacant B Space Rollover Reserve Fund. On the Closing Date,
Borrower shall deposit in the Vacant B Space Rollover Reserve Fund, $3,890,301,
which amount represents $6.75 per square foot of Vacant B Space as of the
Closing Date. In the event the Borrower leases any Vacant B Space at an
Individual Property for which any portion of the funds deposited into the Vacant
B Space Rollover Reserve Fund pursuant to the preceding sentence remains on
deposit therein, then, upon the related tenant taking occupancy of the
applicable Vacant B Space, commencing the payment of rent and delivering an
estoppel certificate acceptable to the Lender, the Borrower may request that
such unspent funds be transferred to the Rollover Reserve Fund. Provided no
Event of Default shall have occurred and be continuing, in the event the
Borrower obtains a Property Release of an Individual Property for which any
portion of the funds deposited into the Vacant B Space Rollover Reserve Fund
pursuant to the second preceding sentence remains on deposit therein, then, at
the time of such Property Release the Borrower may request that such unspent
funds be distributed to the Borrower. Amounts shall be deposited with and held
by Lender in the Vacant B Space Rollover Reserve Fund for tenant improvement and
leasing commission obligations incurred following the date hereof in connection
with the Vacant B Space. Amounts so deposited and the account in which such
amounts are held shall hereinafter be referred to as the Vacant B Space Rollover
Reserve Fund.

 

16.5.2 Withdrawal of Vacant B Space Rollover Reserve Funds. Provided no Event of
Default shall have occurred and be continuing, Lender shall make disbursements
from the Vacant B Space Rollover Reserve Fund for tenant improvement and leasing
commission obligations incurred by Borrower; provided that Lender shall not be
obligated to make disbursements for any tenant improvements that constitute
capital improvements. All such expenses shall be approved by Lender in its sole
discretion. Lender shall make disbursements as requested by Borrower on a
quarterly basis in increments of no less than $5,000.00 upon delivery by
Borrower of Lender’s standard form of draw request accompanied by copies of paid
invoices for the amounts requested and, if required by Lender, lien waivers and
releases from all parties furnishing materials and/or services in connection
with the requested payment. Lender may require an inspection of the Properties
at Borrower’s expense prior to making a disbursement in order to verify
completion of improvements for which reimbursement is sought.

 

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16.5.3 Letter of Credit. Borrower may, in substitution of the Vacant B Space
Rollover Reserve Fund, provide Lender with a Letter of Credit in the amount
required in Section 16.5.1 above. In the event Borrower satisfies the conditions
for the disbursement of amounts in the Vacant B Space Rollover Reserve Fund
pursuant to Section 16.5.2 above, Borrower shall be entitled to a corresponding
reduction of the amount of the Letter of Credit.

 

Section 16.6 Rollover Reserve.

 

16.6.1 Deposits to Rollover Reserve Fund. On the Closing Date, Borrower shall
deposit in the Rollover Reserve Fund $2,125,000. Borrower shall pay to Lender on
each Payment Date for deposit into the Rollover Reserve Fund $125,000 until the
amount on deposit in the Rollover Reserve Fund equals $9,500,000.00 (the
Rollover Reserve Fund Cap) for the initial time. After the funds on deposit in
the Rollover Reserve Fund equal the Rollover Reserve Fund Cap for the initial
time, Borrower shall pay to Lender on each Payment Date for deposit into the
Rollover Reserve Fund an amount, if any, equal to the lesser of (A) $125,000 and
(B) the amount, if any, needed to cause the amount on deposit in the Rollover
Reserve Fund to equal the Rollover Reserve Fund Cap. Any funds transferred from
the Vacant B Space Rollover Reserve Fund to the Rollover Reserve Fund pursuant
to Section 16.5.1 shall count as funds on deposit in the Rollover Reserve Fund
for purposes of the determination of the payment obligation described in the
immediately preceding two sentences. In the event the Borrower leases any
rollover space at an Individual Property after the expiration of the related
tenant lease (which rollover space is not subject to the BofA Lease) pursuant to
a lease for five (5) years or more on terms acceptable to and approved by
Lender, then the Lender shall distribute to the Borrower from the funds on
deposit in the Rollover Reserve Fund an amount equal to (i) the product of $6.75
multiplied by the rentable square footage covered by the new lease minus (ii)
any tenant improvement costs and leasing commissions incurred by Borrower in
connection with leasing such space; provided, that notwithstanding such release
of funds from the Rollover Reserve Fund, the amount of funds required to be
deposited therein on each Payment Date as described above shall not be affected.
In the event the Borrower leases any rollover space at an Individual Property
after the expiration of the related tenant lease (which rollover space is not
subject to the BofA Lease) pursuant to a lease which is for a term at least
coterminous with the Loan (or later) to a Tenant that is rated at least “BBB”
(or the equivalent) by S&P, Fitch and Moody’s and is otherwise on terms
acceptable to and approved by Lender, then the Rollover Reserve Fund Cap shall
be reduced by an amount equal to the product of (x) the then current Rollover
Reserve Fund Cap (i.e. initially $9,500,000.00, subject to any reductions
pursuant to this sentence) multiplied by (y) a fraction expressed as a
percentage the numerator of which is the rentable square footage covered by the
applicable lease and the denominator of which is 515,161 (i.e. the total square
footage of space at the Property (excluding the space occupied by Bank of
America, N.A. under the BofA Lease) which has Tenant leases that expire during
the term of the Loan). Amounts shall be deposited with and held by Lender in the
Rollover Reserve Fund for tenant improvement and leasing commission obligations
incurred following the date hereof in connection with tenant leases that expire
during the term of the Loan. Amounts so deposited and the account in which such
amounts are held shall hereinafter be referred to as the Rollover Reserve Fund.

 

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16.6.2 Withdrawal of Rollover Reserve Funds. Provided no Event of Default has
occurred and is continuing, Lender shall make disbursements from the Rollover
Reserve Fund for tenant improvement and leasing commission obligations incurred
by Borrower; provided that Lender shall not be obligated to make disbursements
for any tenant improvements that constitute capital improvements. All such
expenses shall be approved by Lender in its sole discretion. Lender shall make
disbursements as requested by Borrower on a quarterly basis in increments of no
less than $5,000.00 upon delivery by Borrower of Lender’s standard form of draw
request accompanied by copies of paid invoices for the amounts requested and, if
required by Lender, lien waivers and releases from all parties furnishing
materials and/or services in connection with the requested payment. Lender may
require an inspection of the Properties at Borrower’s expense prior to making a
quarterly disbursement in order to verify completion of improvements for which
reimbursement is sought. All earnings or interest on the Rollover Reserve Fund
shall be and become part of such Rollover Reserve Fund and shall be controlled
by Lender and disbursed as provided in this Section 16.

 

16.6.3 Letter of Credit. Borrower may, in substitution of the Rollover Reserve
Fund, provide Lender with a Letter of Credit in the amount required in Section
16.6.1 above. In the event Borrower satisfies the conditions for the
disbursement of amounts in the Rollover Reserve Fund pursuant to Section 16.6.2
above, Borrower shall be entitled to a corresponding reduction of the amount of
the Letter of Credit.

 

Section 16.7 BofA Reserve.

 

16.7.1 Deposits to BofA Reserve Fund. On the Closing Date, Borrower shall
deposit in the BofA Reserve Fund $6,992,355.00, which amount represents three
months of Basic Annual Rent (as such term is defined in the BofA Lease) due
under the BofA Lease. Such amounts shall be deposited with and held by Lender
for debt service payments on the Loan in the event the amounts on deposit in the
Cash Management Account are insufficient on a Payment Date to make such
payments. Amounts so deposited shall hereinafter be referred to as the BofA
Reserve Fund.

 

16.7.2 Withdrawal of BofA Reserve Funds. Lender shall make disbursements from
the BofA Reserve Fund to make required debt service payments on the Loan in the
event the amounts on deposit in the Cash Management Account are insufficient on
a Payment Date to make such payments. Lender may make such disbursements from
the BofA Reserve Fund in its sole discretion. In the event Lender makes such a
disbursement from the BofA Reserve Fund (or corresponding Letter of Credit),
Borrower shall replenish the amount so disbursed within five (5) Business Days
of such disbursement. All earnings or interest on the BofA Reserve Fund shall be
and become part of such BofA Reserve Fund and shall be controlled by Lender and
disbursed as provided in this Section 16.

 

16.7.3 Letter of Credit. Borrower may, in substitution of the BofA Reserve Fund,
provide Lender with a Letter of Credit in the amount required in Section 16.7.1
above. In the event Borrower satisfies the conditions for the disbursement of
amounts in the BofA Reserve Fund pursuant to Section 16.7.2 above, Borrower
shall be entitled to a corresponding reduction of the amount of the Letter of
Credit.

 

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Section 16.8 Debt Service Reserve Fund.

 

16.8.1 Deposits to the Debt Service Reserve Fund. On the Closing Date, Borrower
shall deposit in the Debt Service Reserve Fund $525,167.00, which amount
represents the then-current Debt Service payment. On the June 2005 Payment Date,
Borrower shall deposit into the Debt Service Reserve Fund an amount equal to the
amount by which the Monthly Debt Service Payment Amount for the July 2005
Payment Date exceeds the amount then on deposit in the Debt Service Reserve
Fund. Such amounts shall be deposited with and held by Lender for debt service
payments on the Loan in the event the amount on deposit in the Cash Management
Account is insufficient on a Payment Date to make such payments. Amounts so
deposited shall hereinafter be referred to as the Debt Service Reserve Fund.

 

16.8.2 Withdrawals from the Debt Service Reserve Fund. Lender shall make
disbursements from the Debt Service Reserve Fund to make required debt service
payments on the Loan in the event the amount on deposit in the Cash Management
Account is insufficient on a Payment Date to make such payments. Lender may make
such disbursements from the Debt Service Reserve Fund in its sole discretion. In
the event Lender makes such a disbursement from the Debt Service Reserve Fund
(or corresponding Letter of Credit), Borrower shall replenish the amount so
disbursed by depositing in the Debt Service Reserve Fund (or replenishing the
corresponding Letter of Credit) the amount, if any, by which the Monthly Debt
Service Payment Amount exceeds the amount then on deposit in the Debt Service
Reserve Fund within five (5) Business Days of such disbursement. All earnings or
interest on the Debt Service Reserve Fund shall be and become part of such Debt
Service Reserve Fund and shall be controlled by Lender and disbursed as provided
in this Section 16.

 

16.8.3 Letter of Credit. Borrower may, in substitution of the Debt Service
Reserve Fund, provide Lender with a Letter of Credit in the amount required in
Section 16.9.1 above. In the event Borrower satisfies the conditions for the
disbursement of amounts in the Debt Service Reserve Account pursuant to Section
16.9.2 above, Borrower shall be entitled to a corresponding reduction of the
amount of the Letter of Credit.

 

Section 16.9 Reserve Funds, Generally. Borrower grants to Lender a
first-priority perfected security interest in each of the Reserve Funds and any
and all monies now or hereafter deposited in each Reserve Fund as additional
security for payment of the Indebtedness. Until expended or applied in
accordance herewith, the Reserve Funds shall constitute additional security for
the Indebtedness. Upon the occurrence of an Event of Default, Lender may, in
addition to any and all other rights and remedies available to Lender, apply any
sums then present in any or all of the Reserve Funds to the payment of the
Indebtedness in any order in its sole discretion. The Reserve Funds shall not
constitute trust funds and may be commingled with other funds of the Borrower
held by Lender. The Reserve Funds shall be held in one or more Eligible Accounts
at the Cash Management Bank in accordance with the terms and provisions of the
Cash Management Agreement. Borrower shall be responsible for payment of any
federal, state or local income or other tax applicable to the interest earned on
the Reserve Funds credited or paid to Borrower. Borrower shall not, without
obtaining the prior written consent of Lender, further pledge, assign or grant
any security interest in any Reserve Fund or the monies deposited therein 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 Lender as the
secured party, to be filed

 

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with respect thereto. Lender shall not be liable for any loss sustained on the
investment of any funds constituting the Reserve Funds. Borrower shall indemnify
Lender and hold Lender harmless from and against any and all actions, suits,
claims, demands, liabilities, losses, damages, obligations and costs and
expenses (including litigation costs and reasonable attorneys fees and expenses)
arising from or in any way connected with the Reserve Funds or the performance
of the obligations for which the Reserve Funds were established, except to the
extent that such loss or damage results from Lender’s gross negligence or
willful misconduct. Borrower shall assign to Lender all rights and claims
Borrower may have against all persons or entities supplying labor, materials or
other services which are to be paid from or secured by the Reserve Funds;
provided, however, that Lender may not pursue any such right or claim unless an
Event of Default has occurred and remains uncured.

 

Section 16.10 Letter of Credit.

 

(a) At any time Borrower may substitute for the funds then required to be on
deposit in each of the Required Repair Fund, Environmental Remediation Reserve
Fund, Vacant B Space Rollover Reserve Fund, Rollover Reserve Fund, BofA Reserve
Fund and Debt Service Fund one or more Letters of Credit, each in an amount
equal to the amount of funds then required to be on deposit in the Reserve Fund
for which Borrower desires to substitute a Letter of Credit. After the
occurrence and during the continuance of an Event of Default, Lender may make
draws of amounts then required to be available under each Letter of Credit to
repay the Indebtedness. Each Letter of Credit delivered to the Lender or its
assigns by the Borrower shall be received and held by such Person in trust for
the benefit of the Lender as security for the Loan. If a Letter of Credit is
delivered and Borrower subsequently in lieu thereof deposits funds in an amount
equal to the amount of funds then required to be on deposit in a Reserve Fund
into the applicable Reserve Fund, then upon request of Borrower, Lender shall
thereupon return to Borrower the original Letter of Credit relating to such
Reserve Fund. If a Letter of Credit is delivered and subsequently the amount of
funds then required to be on deposit in a Reserve Fund decreases, then upon
request of Borrower and delivery by Borrower of a replacement Letter of Credit
reflecting such decreased amount, Lender shall thereupon return to Borrower the
original Letter of Credit relating to such Reserve Fund.

 

(b) As of any date of determination until the expiration of a Letter of Credit,
the maximum amount available to be drawn thereunder shall equal the initial
amount thereof less any amounts drawn thereunder in accordance with the terms
hereof. The amount of each such Letter of Credit shall not be reinstated after
any withdrawal or reduction in the amount available. The Guarantor shall be
responsible for the payment of all fees incurred in maintaining a Letter of
Credit and the issuer of any such Letter of Credit shall not have any interest
in the Property. No draw under a Letter of Credit may exceed the stated amount
of such Letter of Credit at the time of such draw. On a semi-annual basis until
the expiration of the Letter of Credit, the Borrower shall calculate the amount
available under any Letter of Credit, shall confirm such amount with each Letter
of Credit Provider and shall notify the Lender of such amounts.

 

(c) Not later than thirty days prior to the stated expiration date of each
Letter of Credit (if such Letter of Credit is due to expire prior to the LC
Expiration Date), such Letter of Credit shall be renewed to the extent funds are
available thereunder for the succeeding twelve month period by notice given by
the Letter of Credit Provider. If the Letter of Credit is not so

 

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renewed on or prior to such date, not later than twenty (20) days prior to the
effective date of the termination of such Letter of Credit, the Lender or its
assigns shall draw the entire amount then available under such Letter of Credit
in accordance with the terms thereof and deposit such amount in the
corresponding Reserve Fund, unless there is delivered to the Lender a
replacement letter of credit therefor or alternative form of credit enhancement
acceptable to the Lender and the Rating Agencies (if the Loan has been included
in a Securitization). In addition, if at any time the Letter of Credit Provider
ceases to be an Approved Bank, the Borrower or the Lender (to the extent either
party has knowledge of the foregoing) shall notify the other in writing that the
Letter of Credit Provider has ceased to be an Approved Bank. In such event, the
Lender shall draw the entire amount then available to be drawn under the
applicable Letter of Credit, unless there is delivered to the Lender a
replacement letter of credit or alternative form of credit enhancement
acceptable to the Lender and the Rating Agencies (if the Loan has been included
in a Securitization) within twenty (20) days after the delivery of such written
notice. The amount so drawn shall be deposited in the corresponding Reserve
Fund.

 

(d) The Borrower shall take all action requested by the Lender to enforce its
rights under any Letter of Credit in the event of a default by the Letter of
Credit Provider and shall not waive, amend or otherwise modify any of its rights
thereunder. The Borrower shall, at any time, if in the Lender’s reasonable
judgment such action is necessary in order to maintain the ratings from the
Rating Agencies if the Loan has been included in a Securitization, modify this
Section 16.10 or extend any Letter of Credit or obtain another letter of credit
or similar form of credit enhancement providing a source of funds on terms
substantially similar to those provided by such Letter of Credit.

 

XVII. DEFAULTS

 

Section 17.1 Event of Default.

 

(a) Each of the following events shall constitute an event of default hereunder
(an Event of Default):

 

(i) if (A) the Indebtedness is not paid in full on the Maturity Date, (B) any
regularly scheduled monthly payment of interest or principal due under the Note
is not paid in full on the applicable Payment Date, (C) the Liquidated Damages
Amount is not paid when due, (D) any deposit to the Lockbox Account is not made
on the required deposit date therefor, (E) any prepayment is not made on the
Prepayment Date set forth in the related Prepayment Notice, or (F) except as to
any amount included in (A), (B), (C), (D) and/or (E) of this clause (i), any
other amount payable pursuant to this Agreement, the Note or any other Loan
Document is not paid in full when due and payable in accordance with the
provisions of the applicable Loan Document, with such failure continuing for
five (5) calendar days after Lender delivers written notice thereof to Borrower;

 

(ii) subject to Borrower’s right to contest as set forth in Section 7.3, if any
of the Impositions are not paid prior to the imposition of any interest,
penalty, charge or expense for the non-payment thereof;

 

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(iii) if the insurance policies required by Section 6.1 are not kept in full
force and effect, or if certificates evidencing such insurance policies are not
delivered to Lender within thirty (30) days of the effective date of such
insurance policies;

 

(iv) if, except as permitted pursuant to Article VII or VIII, (a) any Transfer
of any direct or indirect legal, beneficial or equitable interest in all or any
portion of the Property, (b) any Transfer of any direct or indirect interest in
Borrower or Guarantor, (c) any Lien or encumbrance on all or any portion of the
Property, (d) any pledge, hypothecation, creation of a security interest in or
other encumbrance of any direct or indirect interests in Borrower or Guarantor,
(e) any merger, consolidation or reorganization of Borrower, First States Group,
L.P. or American Financial Realty Trust, or (f) the filing of a declaration of
condominium with respect to any Individual Property;

 

(v) if any representation or warranty made by Borrower herein or by Borrower,
Guarantor or any Affiliate of Borrower in any other Loan Document, or in any
report, certificate, financial statement or other instrument, agreement or
document furnished to Lender shall have been false or misleading in any material
respect as of the date the representation or warranty was made;

 

(vi) if Borrower or Guarantor shall make an assignment for the benefit of
creditors;

 

(vii) if a receiver, liquidator or trustee shall be appointed for Borrower or
Guarantor or if Borrower or Guarantor shall be adjudicated a bankrupt or
insolvent, or if any petition for bankruptcy, reorganization or arrangement
pursuant to federal bankruptcy law, or any similar federal or state law, shall
be filed by or against, consented to, or acquiesced in by, Borrower or
Guarantor, or if any proceeding for the dissolution or liquidation of Borrower
or Guarantor shall be instituted; provided, however, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by
Borrower or Guarantor upon the same not being discharged, stayed or dismissed
within ninety (90) days;

 

(viii) if Borrower or Guarantor, as applicable, 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;

 

(ix) with respect to any term, covenant or provision set forth herein (other
than the other subsections of this Section 17.l) which specifically contains a
notice requirement or grace period, if Borrower or either Guarantor shall be in
default under such term, covenant or condition after the giving of such notice
or the expiration of such grace period;

 

(x) if any of the assumptions contained in the Non-Consolidation Opinion, in any
Additional Non-Consolidation Opinion or in any other non-consolidation opinion
delivered to Lender in connection with the Loan, or in any other
non-consolidation opinion delivered subsequent to the closing of the Loan, is or
shall become untrue in any material respect;

 

(xi) if Borrower shall fail to comply with any covenants set forth in Section
5.1.4, Section 5.2.9 and Section 5.2.20;

 

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(xii) except as provided clause (xi) above, if Borrower shall fail to comply
with any covenants set forth in Article V, Article XI or Article XIV with such
failure continuing for ten (10) Business Days after Lender delivers written
notice thereof to Borrower;

 

(xiii) if Borrower shall fail to comply with any covenants set forth in Section
4 of the Security Instrument with such failure continuing for ten (10) Business
Days after Lender delivers written notice thereof to Borrower;

 

(xiv) if this Agreement or any other Loan Document or any Lien granted hereunder
or thereunder, in whole or in part, shall terminate or shall cease to be
effective or shall cease to be a legally valid, binding and enforceable
obligation of Borrower or any Guarantor, or any Lien securing the Indebtedness
shall, in whole or in part, cease to be a perfected first priority Lien, subject
to the Permitted Encumbrances (except in any of the foregoing cases in
accordance with the terms hereof or under any other Loan Document or by reason
of any affirmative act of Lender);

 

(xv) if there shall occur any default by Borrower, as lessee under any Ground
Lease, in the observance or performance of any term, covenant or condition of
any Ground Lease on the part of Borrower to be observed or performed, and said
default is not cured prior to the expiration of any applicable grace or cure
period therein provided and would allow the Lessor thereunder to terminate such
Ground Lease, or if any one or more of the events referred to in any Ground
Lease shall occur which would cause such Ground Lease to terminate without
notice or action by the applicable Fee Owner under such Ground Lease or if any
Leasehold Estate shall be surrendered or any Ground Lease shall be lawfully
terminated or cancelled for any reason or under any circumstances whatsoever, or
if any of the terms, covenants or conditions of any Ground Lease shall in any
manner be modified, changed, supplemented, altered or amended in contradiction
of the provisions of Article XIII without the prior written consent of Lender,
which consent shall not be unreasonably withheld, conditioned or delayed;

 

(xvi) if the Management Agreement is terminated and a Qualified Manager is not
appointed as a replacement manager pursuant to the provisions of Section 5.2.14
within sixty (60) days after such termination;

 

(xvii) if Borrower shall default beyond the expiration of any applicable cure
period under any existing easement, covenant or restriction which affects any
Individual Property, the default of which shall have a Material Adverse Effect;

 

(xviii) if Borrower shall continue to be in Default under any of the other
terms, covenants or conditions of this Agreement or of any Loan Document not
specified in subsections (i) to (xvii) above, for thirty (30) days after notice
from Lender; provided, however, that if such Default is susceptible of cure but
cannot reasonably be cured within such thirty (30) day period and provided
further that Borrower shall have commenced to cure such Default within such
thirty (30) day period and thereafter diligently proceeds to cure the same, such
thirty (30) 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.

 

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(b) Unless waived in writing by Lender, upon the occurrence and during the
continuance of an Event of Default (other than an Event of Default described in
clauses (a)(vi), (vii) or (viii) above) Lender may, without notice or demand, 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
that Lender deems advisable to protect and enforce its rights against Borrower
and in the Property, including, without limitation, (i) declaring immediately
due and payable the entire Principal Amount together with interest thereon and
all other sums due by Borrower under the Loan Documents, (ii) collecting
interest on the Principal Amount at the Default Rate whether or not Lender
elects to accelerate the Note and (iii) enforcing or availing itself of any or
all rights or remedies set forth 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 subsections(a)(vi),
(vii) or (viii) above, the Indebtedness 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. The foregoing provisions shall not be
construed as a waiver by Lender of its right to pursue any other remedies
available to it under this Agreement, the Security Instrument or any other Loan
Document. Any payment hereunder may be enforced and recovered in whole or in
part at such time by one or more of the remedies provided to Lender in the Loan
Documents.

 

Section 17.2 Remedies.

 

(a) Unless waived in writing by Lender, upon the occurrence and during the
continuance of an Event of Default, all or any one or more of the rights,
powers, privileges and other remedies available to Lender against Borrower under
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 Lender at any
time and from time to time, whether or not all or any of the Indebtedness shall
be declared due and payable, and whether or not Lender shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and
remedies under any of the Loan Documents with respect to the Property. Any such
actions taken by Lender shall be cumulative and concurrent and may be pursued
independently, singly, successively, together or otherwise, at such time and in
such order as Lender may determine in its sole discretion, to the fullest extent
permitted by law, without impairing or otherwise affecting the other rights and
remedies of Lender permitted by law, equity or contract or as set forth 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) Lender
shall not be subject to any one action or election of remedies law or rule and
(ii) all liens and other rights, remedies or privileges provided to Lender shall
remain in full force and effect until Lender has exhausted all of its remedies
against the Property and the Security Instrument have been foreclosed, sold
and/or otherwise realized upon in satisfaction of the Indebtedness or the
Indebtedness has been paid in full.

 

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(b) Upon the occurrence and during the continuance of an Event of Default, with
respect to the Account Collateral, the Lender may:

 

(i) without notice to Borrower, except as required by law, and at any time or
from time to time, charge, set-off and otherwise apply all or any part of the
Account Collateral against the Obligations, Operating Expenses and/or Capital
Expenditures for the Property or any part thereof;

 

(ii) in Lender’s sole discretion, at any time and from time to time, exercise
any and all rights and remedies available to it under this Agreement, and/or as
a secured party under the UCC;

 

(iii) demand, collect, take possession of or receipt for, settle, compromise,
adjust, sue for, foreclose or realize upon the Account Collateral (or any
portion thereof) as Lender may determine in its sole discretion; and

 

(iv) take all other actions provided in, or contemplated by, this Agreement.

 

(c) With respect to Borrower, the Account Collateral, and the Property, nothing
contained herein or in any other Loan Document shall be construed as requiring
Lender to resort to any Individual Property for the satisfaction of any of the
Indebtedness, and Lender may seek satisfaction out of the Property or any part
thereof, in its absolute discretion in respect of the Indebtedness. In addition,
Lender shall have the right from time to time to partially foreclose this
Agreement and the Security Instrument in any manner and for any amounts secured
by this Agreement or the Security Instrument then due and payable as determined
by Lender 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 or
interest, Lender may foreclose this Agreement and the Security Instrument to
recover such delinquent payments, or (ii) in the event Lender elects to
accelerate less than the entire outstanding principal balance of the Loan,
Lender may foreclose this Agreement and the Security Instrument to recover so
much of the principal balance of the Loan as Lender may accelerate and such
other sums secured by this Agreement or the Security Instrument as Lender may
elect. Notwithstanding one or more partial foreclosures, the Property shall
remain subject to this Agreement and the Security Instrument to secure payment
of sums secured by this Agreement and the Security Instrument and not previously
recovered.

 

Section 17.3 Remedies Cumulative; Waivers.

 

The rights, powers and remedies of Lender under this Agreement and the Loan
Documents shall be cumulative and not exclusive of any other right, power or
remedy which Lender may have against Borrower pursuant to this Agreement or the
other Loan Documents, or existing at law or in equity or otherwise. Lender’s
rights, powers and remedies may be pursued singly, concurrently or otherwise, at
such time and in such order as Lender may determine in Lender’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 or any Guarantor shall
not be construed to be a waiver of any subsequent Default or Event of Default by
Borrower or any Guarantor or to impair any remedy, right or power consequent
thereon.

 

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Section 17.4 Costs of Collection. In the event that after an Event of Default:
(i) the Note or any of the Loan Documents is placed in the hands of an attorney
for collection or enforcement or is collected or enforced through any legal
proceeding; (ii) an attorney is retained to represent Lender in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors’ rights
and involving a claim under the Note or any of the Loan Documents; or (iii) an
attorney is retained to protect or enforce the lien or any of the terms of this
Agreement, the Security Instrument or any of the Loan Documents; then Borrower
shall pay to Lender all reasonable attorney’s fees, costs and expenses actually
incurred in connection therewith, including costs of appeal, together with
interest on any judgment obtained by Lender at the Default Rate.

 

XVIII. SPECIAL PROVISIONS

 

Section 18.1 Exculpation.

 

18.1.1 Exculpated Parties. The Loan shall be fully recourse to Borrower. Except
as set forth in the Recourse Guaranty and the Environmental Indemnity, no
personal liability shall be asserted, sought or obtained by Lender or
enforceable against (i) any Affiliate of Borrower, (ii) any Person owning,
directly or indirectly, any legal or beneficial interest in Borrower or any
Affiliate of Borrower or (iii) any direct or indirect partner, member,
principal, officer, director, controlling person, beneficiary, trustee, advisor,
shareholder, employee, agent of any Persons described in clauses (i) or (ii)
above (collectively, the Exculpated Parties) and none of the Exculpated Parties
shall have any personal liability (whether by suit deficiency judgment or
otherwise) in respect of the Obligations, this Agreement, the Note or any other
Loan Document.

 

XIX. MISCELLANEOUS

 

Section 19.1 Survival. This Agreement and all covenants, indemnifications,
agreements, representations and warranties made herein and in the certificates
delivered pursuant hereto shall survive the making by Lender of the Loan and the
execution and delivery to Lender of the Note, and shall continue in full force
and effect so long as all or any of the Indebtedness is outstanding and unpaid
unless a longer period is expressly set forth herein or in the other Loan
Documents. Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the successors and assigns of such
party. All covenants, promises and agreements in this Agreement, by or on behalf
of Borrower, shall inure to the benefit of the successors and assigns of Lender.
If Borrower consists of more than one person, the obligations and liabilities of
each such person hereunder and under the other Loan Documents shall be joint and
several.

 

Section 19.2 Lender’s Discretion. Whenever pursuant to this Agreement, Lender
exercises any right given to it to approve or disapprove, or any arrangement or
term is to be satisfactory to Lender, the decision of 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 Lender and shall be final and conclusive.

 

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Section 19.3 Governing Law.

 

(A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BY
LENDER AND ACCEPTED BY BORROWER IN 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 AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT 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.

 

(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT
OF OR RELATING TO THIS AGREEMENT MAY AT LENDER’S OPTION 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 BORROWER 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 BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR
PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:

 

CORPORATION SERVICE COMPANY

80 STATE STREET

ALBANY, NEW YORK 12207-2543

 

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

 

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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 LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH 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 19.4 Modification, Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement,
or of the Note, or of any other Loan Document, or consent to any departure
therefrom, shall in any event be effective unless the same shall be in a writing
signed by the party against whom enforcement is sought (and, if a Securitization
shall have occurred, a Rating Agency Confirmation is obtained), 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 19.5 Delay Not a Waiver. Neither any failure nor any delay on the part
of Lender in insisting upon strict performance of any term, condition, covenant
or agreement, or exercising any right, power, remedy or privilege hereunder, or
under the Note or under any other Loan Document, or any other instrument given
as security therefor, 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, the Note or any other Loan Document, Lender shall
not be deemed to have waived any right either to require prompt payment when due
of all other amounts due under this Agreement, the Note or the other Loan
Documents, or to declare a default for failure to effect prompt payment of any
such other amount.

 

Section 19.6 Notices. All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document shall be given in writing
and shall be effective for all purposes if hand delivered or sent by (a)
certified or registered United States mail, postage prepaid, return receipt
requested, (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery or (c) telecopier (with
answer back acknowledged), addressed as follows (or at such other address and
Person as shall be designated from time to time by any party hereto, as the case
may be, in a written notice to the other parties hereto in the manner provided
for in this Section):

 

If to Lender:  

German American Capital Corporation

60 Wall Street, 10th Floor

New York New York 10005

    Attention:   Chris Tognola         and General Counsel     Telecopy No.:  
(212) 250-4542     Confirmation No.:   (212) 797-4487

 

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    Bear Stearns Commercial Mortgage, Inc.     383 Madison Avenue     New York,
New York 10179     Attention:   J. Christopher Hoeffel     Telecopy No.:   (212)
272-7047     Confirmation No.:   (212) 272-7918 With a copy to:   Orix Capital
Markets Inc.     1717 Main Street     Dallas, Texas 75201     Attention:  
Daniel K. Olsen     Telecopy No.:   (214) 237-2018     Confirmation No.   (214)
237-2190 With a copy to:   Sidley Austin Brown & Wood LLP     787 Seventh Avenue
    New York, New York 10019     Attention:   Brian Krisberg, Esq.     Telecopy
No.:   (212) 839-5599     Confirmation No.:   (212) 839-5300 If to Borrower:  
First States Investors 5200, LLC     c/o First States Group, L.P.     1725 The
Fairway     Jenkintown, Pennsylvania 19046     Attention:   Edward J. Matey Jr.
    Telecopy No.:   (215) 887-9856     Confirmation No.:   (215) 887-2280

 

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With a copy to:   Morgan, Lewis & Bockius LLP     101 Park Avenue     New York,
New York 10178     Attention:   Patricia F. Brennan     Telecopy No.:   (212)
309-6814     Confirmation No.:   (212) 309-6273

 

All notices, elections, requests and demands under this Agreement shall be
effective and deemed received upon the earliest of (i) the actual receipt of the
same by personal delivery or otherwise, (ii) one (1) Business Day after being
deposited with a nationally recognized overnight courier service as required
above, (iii) three (3) Business Days after being deposited in the United States
mail as required above or (iv) on the day sent if sent by facsimile with
confirmation on or before 5:00 p.m. New York time on any Business Day or on the
next Business Day if so delivered after 5:00 p.m. New York time or on any day
other than a Business Day. Rejection or other refusal to accept or the inability
to deliver because of changed address of which no notice was given as herein
required shall be deemed to be receipt of the notice, election, request, or
demand sent.

 

Section 19.7 TRIAL BY JURY. BORROWER AND ALL PERSONS CLAIMING BY, THROUGH OR
UNDER IT, HEREBY EXPRESSLY, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I)
ARISING UNDER THIS AGREEMENT, THE SECURITY INSTRUMENT, THE NOTE OR ANY OTHER
LOAN DOCUMENT, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION
THEREOF OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT,
THE SECURITY INSTRUMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT (AS NOW OR
HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO,
IN EACH CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE; AND BORROWER HEREBY AGREES AND CONSENTS THAT AN ORIGINAL COUNTERPART
OR A COPY OF THIS SECTION MAY BE FILED WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT HERETO TO THE WAIVER OF ANY RIGHT TO TRIAL BY JURY. BORROWER
ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL COUNSEL REGARDING THE MEANING OF
THIS WAIVER AND ACKNOWLEDGES THAT THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR THE
MAKING OF THE LOAN. THIS WAIVER SHALL SURVIVE THE REPAYMENT OF THE LOAN.

 

Section 19.8 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 19.9 Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law,

 

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but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

 

Section 19.10 Preferences. To the extent Borrower makes a payment or payments to
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 Lender.

 

Section 19.11 Waiver of Notice. Borrower shall not be entitled to any notices of
any nature whatsoever from Lender except with respect to matters for which this
Agreement or the other Loan Documents specifically and expressly provide for the
giving of notice by Lender to Borrower and except with respect to matters for
which Borrower is not, pursuant to applicable Legal Requirements, permitted to
waive the giving of notice. Borrower hereby expressly waives the right to
receive any notice from Lender with respect to any matter for which this
Agreement or the other Loan Documents do not specifically and expressly provide
for the giving of notice by Lender to Borrower.

 

Section 19.12 Expenses; Indemnity.

 

(a) Borrower covenants and agrees to pay or, if Borrower fails to pay, to
reimburse, Lender upon receipt of written notice from Lender for all reasonable
actual out-of-pocket costs and expenses (including reasonable attorneys’ fees
and disbursements) incurred by Lender in connection with:

 

(i) the preparation, negotiation, execution and delivery of this Agreement and
the other Loan Documents and the consummation of the transactions contemplated
hereby and thereby and all the costs of furnishing all opinions by counsel for
Borrower (including without limitation any opinions requested by Lender pursuant
to this Agreement);

 

(ii) Lender’s ongoing performance of and compliance with all agreements and
conditions contained in this Agreement and the other Loan Documents on its part
to be performed or complied with after the Closing Date;

 

(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 as required herein
or under the other Loan Documents;

 

(iv) securing Borrower’s compliance with any requests made pursuant to the
provisions of this Agreement;

 

(v) the filing and recording fees and expenses, mortgage recording taxes, title
insurance and reasonable fees and expenses of counsel for providing to Lender
all

 

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required legal opinions, and other similar expenses incurred in creating and
perfecting the Lien in favor of Lender pursuant to this Agreement and the other
Loan Documents (including, without limitation, all such fees and expenses
incurred by the Lender in connection with the exercise of the Lender’s right to
adjust the Allocated Loan Amounts as described in the definition of “Allocated
Loan Amount”);

 

(vi) enforcing or preserving any rights, in response to third party claims or
the prosecuting or defending of any action or proceeding or other litigation, in
each case against, under or affecting Borrower, this Agreement, the other Loan
Documents, the Property, or any other security given for the Loan;

 

(vii) enforcing any obligations of or collecting any payments due from Borrower
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;

 

(viii) procuring insurance policies pursuant to Section 6.1.11; and

 

(ix) the Securitization of the Loan.

 

Notwithstanding anything in this Agreement to the contrary, Borrower shall not
be required to pay aggregate expenses related to the Securitization of the Loan,
the creation of separate notes or the bifurcation of the Loan pursuant to
Section 14.1 and Section 14.2 in excess of $100,000. Any cost and expenses due
and payable to Lender may be paid from any amounts in the Lockbox Account or the
Cash Management Account.

 

(b) Subject to the non-recourse provisions of Section 18.1, Borrower shall
protect, indemnify and save harmless Lender, and all officers, directors,
stockholders, members, partners, employees, agents, successors and assigns
thereof (collectively, the Indemnified Parties) from and against all
liabilities, obligations, claims, damages, penalties, causes of action, costs
and expenses (including all reasonable attorneys’ fees and expenses actually
incurred) imposed upon or incurred by or asserted against the Indemnified
Parties or the Property or any part of its interest therein, by reason of the
occurrence or existence of any of the following (to the extent Proceeds payable
on account of the following shall be inadequate; it being understood that in no
event will the Indemnified Parties be required to actually pay or incur any
costs or expenses as a condition to the effectiveness of the foregoing
indemnity) prior to (i) the acceptance by Lender or its designee of a
deed-in-lieu of foreclosure with respect to the Property, or (ii) an Indemnified
Party or its designee taking possession or control of the Property or (iii) the
foreclosure of any Security Instrument, except to the extent caused by the
actual willful misconduct or gross negligence of the Indemnified Parties (other
than such willful misconduct or gross negligence imputed to the Indemnified
Parties because of their interest in the Property):

 

(1) ownership of Borrower’s interest in the Property, or any interest therein,
or receipt of any Rents or other sum therefrom,

 

(2) any accident, injury to or death of any persons or loss of or damage to
property occurring on or about the Property or any appurtenances thereto,

 

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(3) any design, construction, operation, repair, maintenance, use, non-use or
condition of the Property or appurtenances thereto, including claims or
penalties arising from violation of any Legal Requirement or Insurance
Requirement, as well as any claim based on any patent or latent defect, whether
or not discoverable by Lender, any claim the insurance as to which is
inadequate, and any Environmental Claim,

 

(4) any Default under this Agreement or any of the other Loan Documents or any
failure on the part of Borrower to perform or comply with any of the terms of
any Lease or REA within the applicable notice or grace periods,

 

(5) any performance of any labor or services or the furnishing of any materials
or other property in respect of the Property or any part thereof,

 

(6) any negligence or tortious act or omission on the part of Borrower or any of
its agents, contractors, servants, employees, sublessees, licensees or invitees,

 

(7) any contest referred to in Section 7.3 hereof,

 

(8) any obligation or undertaking relating to the performance or discharge of
any of the terms, covenants and conditions of the landlord contained in the
Leases, or

 

(9) the presence at, in or under the Property or the Improvements of any
Hazardous Materials in violation of any Environmental Law.

 

Any amounts the Indemnified Parties are legally entitled to receive under this
Section 19.12 which are not paid within fifteen (15) Business Days after written
demand therefor by the Indemnified Parties or Lender, setting forth in
reasonable detail the amount of such demand and the basis therefor, shall bear
interest from the date of demand at the Default Rate, and shall, together with
such interest, be part of the Indebtedness and secured by the Security
Instrument. In case any action, suit or proceeding is brought against the
Indemnified Parties by reason of any such occurrence, Borrower shall at
Borrower’s expense resist and defend such action, suit or proceeding or will
cause the same to be resisted and defended by counsel at Borrower’s reasonable
expense for the insurer of the liability or by counsel designated by Borrower
(unless reasonably disapproved by Lender promptly after Lender has been notified
of such counsel); provided, however, that nothing herein shall compromise the
right of Lender (or any Indemnified Party) to appoint its own counsel at
Borrower’s expense for its defense with respect to any action which in its
reasonable opinion presents a conflict or potential conflict between Lender and
Borrower that would make such separate representation advisable; provided
further that if Lender shall have appointed separate counsel pursuant to the
foregoing, Borrower shall not be responsible for the expense of additional
separate counsel of any Indemnified Party unless in the reasonable opinion of
Lender a conflict or potential conflict exists between such Indemnified Party
and Lender. So long as Borrower is resisting and defending such action, suit or
proceeding as provided above in a prudent and commercially reasonable manner,
Lender and the Indemnified Parties shall not be entitled to settle such action,
suit or proceeding without Borrower’s consent which shall not be unreasonably
withheld or delayed, and claim the benefit of this Section 19.12 with respect to
such action, suit or proceeding and Lender agrees that it will

 

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not settle any such action, suit or proceeding without the consent of Borrower;
provided, however, that if Borrower is not diligently defending such action,
suit or proceeding in a prudent and commercially reasonable manner as provided
above, and Lender has provided Borrower with thirty (30) days’ prior written
notice, or shorter period if mandated by the requirements of applicable law, and
opportunity to correct such determination, Lender may settle such action, suit
or proceeding and claim the benefit of this Section 19.12 with respect to
settlement of such action, suit or proceeding. Any Indemnified Party will give
Borrower prompt notice after such Indemnified Party obtains actual knowledge of
any potential claim by such Indemnified Party for indemnification hereunder. The
Indemnified Parties shall not settle or compromise any action, proceeding or
claim as to which it is indemnified hereunder without notice to Borrower.

 

Section 19.13 Exhibits and Schedules Incorporated. The Exhibits and Schedules
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 19.14 Offsets, Counterclaims and Defenses. 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 19.15 Liability of Assignees of Lender. No assignee of Lender shall have
any personal liability, directly or indirectly, under or in connection with this
Agreement or any other Loan Document or any amendment or amendments hereto made
at any time or times, heretofore or hereafter, any different than the liability
of Lender hereunder. In addition, no assignee shall have at any time or times
hereafter any personal liability, directly or indirectly, under or in connection
with or secured by any agreement, lease, instrument, encumbrance, claim or right
affecting or relating to the Property or to which the Property is now or
hereafter subject any different than the liability of Lender hereunder. The
limitation of liability provided in this Section 19.15 is (i) in addition to,
and not in limitation of, any limitation of liability applicable to the assignee
provided by law or by any other contract, agreement or instrument, and (ii)
shall not apply to any assignee’s gross negligence or willful misconduct.

 

Section 19.16 No Joint Venture or Partnership; No Third Party Beneficiaries.

 

(a) Borrower and Lender 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 Lender nor
to grant Lender 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
Lender and Borrower and nothing contained in this Agreement or the other Loan
Documents

 

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shall be deemed to confer upon anyone other than Lender and Borrower any right
to insist upon or to enforce the performance or observance of any of the
obligations contained herein or therein. All conditions to the obligations of
Lender to make the Loan hereunder are imposed solely and exclusively for the
benefit of Lender and no other Person shall have standing to require
satisfaction of such conditions in accordance with their terms or be entitled to
assume that Lender will refuse to make the Loan in the absence of strict
compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender’s sole
discretion, Lender deems it advisable or desirable to do so.

 

Section 19.17 Publicity. All news releases, publicity or advertising by Borrower
or its Affiliates through any media intended to reach the general public which
refers to the Loan Documents or the financing evidenced by the Loan Documents,
to Lender, or any of its Affiliates shall be subject to the prior written
approval of Lender, provided that Lender’s approval shall not be required in
connection with any required Securities and Exchange Commission filings by
Borrower or Guarantor or in any prospectus or offering materials filed therewith
and provided to third parties.

 

Section 19.18 Waiver of Marshalling of Assets. To the fullest extent permitted
by law, Borrower, for itself and its successors and assigns, waives all rights
to a marshalling of the assets of Borrower, Borrower’s members and others with
interests in Borrower and of the Property, and agrees not to assert any right
under any laws pertaining to the marshalling of assets, the sale in inverse
order of alienation, homestead exemption, the administration of estates of
decedents, or any other matters whatsoever to defeat, reduce or affect the right
of Lender under the Loan Documents to a sale of the Property for the collection
of the Indebtedness without any prior or different resort for collection or of
the right of Lender to the payment of the Indebtedness out of the net proceeds
of the Property in preference to every other claimant whatsoever.

 

Section 19.19 Waiver of Counterclaim and other Actions. Borrower hereby
expressly and unconditionally waives, in connection with any suit, action or
proceeding brought by Lender on this Agreement or any Loan Document, any and
every right it may have to (i) interpose any counterclaim therein (other than a
counterclaim which can only be asserted in the suit, action or proceeding
brought by Lender on this Agreement or any Loan Document and cannot be
maintained in a separate action) and (ii) have any such suit, action or
proceeding consolidated with any other or separate suit, action or proceeding.

 

Section 19.20 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 which 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 Lender or any parent, subsidiary or
Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in
the exercise of any rights or remedies available to it under

 

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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 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 Lender’s exercise of any
such rights or remedies. Borrower acknowledges that Lender engages in the
business of real estate financings and other real estate transactions and
investments which may be viewed as adverse to or competitive with the business
of Borrower or its Affiliates.

 

Section 19.21 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, are superseded by the terms of
this Agreement and the other Loan Documents and unless specifically set forth in
a writing contemporaneous herewith the terms, conditions and provisions of any
and all such prior agreements do not survive execution of this Agreement.

 

Section 19.22 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which shall
constitute one document.

 

Section 19.23 VCOC. At any time following the creation of a mezzanine loan
pursuant to Section 14.2 of this Agreement, upon the request of Lender or any of
Lender’s successors, assigns or participants in the Loan, the management of
Borrower shall consult with Lender or any of Lender’s successors, assigns or
participants on significant business issues relating to the operation of the
Property and make itself available quarterly either personally or by telephone
at mutually agreeable times for such consultation. The aforementioned
consultation rights are intended to satisfy the requirement of management rights
for purposes of the Department of Labor “plan assets” regulation 29 C.F.R.,
Section 2510.3-101.

 

[NO FURTHER TEXT ON THIS PAGE]

 

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

 

BORROWER: FIRST STATES INVESTORS 5200, LLC, a Delaware limited liability company
By:  

 

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Name:   Sonya A. Huffman Title:   Vice President

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LENDERS: GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation By:  

 

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Name:   Christopher E. Tognola Title:   Vice President By:  

 

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Name:     Title:     BEAR STEARNS COMMERCIAL MORTGAGE, INC., a New York
corporation By:  

 

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Name:     Title:    

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COMMONWEALTH OF PENNSYLVANIA   )     ) ss. COUNTY OF PHILADELPHIA   )

 

On the      day of                      in the year 2005 before me, the
undersigned, a notary public in and for said state, personally appeared Sonya A.
Huffman, 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 she executed the same in her capacity, and that by
her signature on the instrument, the individual, or the person upon behalf of
which the individual acted, executed the instrument.

 

   

 

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Notary Public

[Notary Seal]                     My commission expires:

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SCHEDULE I

 

REQUIRED TENANT ESTOPPEL CERTIFICATES

--------------------------------------------------------------------------------

SCHEDULE II

 

PROPERTY, ALLOCATED LOAN AMOUNTS, AND VACANT B SPACE

--------------------------------------------------------------------------------

SCHEDULE III

 

LITIGATION SCHEDULE

 

None

--------------------------------------------------------------------------------

SCHEDULE IV

 

REA SCHEDULE

--------------------------------------------------------------------------------

SCHEDULE V

 

REQUIRED DEFERRED MAINTENANCE

--------------------------------------------------------------------------------

SCHEDULE VI

 

GROUND LEASES

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SCHEDULE VII

 

BORROWER ORGANIZATIONAL STRUCTURE

--------------------------------------------------------------------------------

SCHEDULE VIII

 

O&M PROGRAMS

 

To be provided

--------------------------------------------------------------------------------

SCHEDULE IX

 

REQUIRED ENVIRONMENTAL REMEDIATION

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SCHEDULE X

 

RENT ROLL

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SCHEDULE XI

 

EXCEPTIONS TO GROUND LEASE REPRESENTATIONS AND WARRANTIES

 

None.

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SCHEDULE XII

 

ADDITIONAL LEASE SCHEDULE

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SCHEDULE XIII

 

WAREHOUSE FINANCING DOCUMENTS AND NON-FINANCED PROPERTY

ACQUISITION AND CONVEYANCE DOCUMENTS

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SCHEDULE XIV

 

SAMPLE MONTHLY REPORT, QUARTERLY REPORT AND ANNUAL REPORT