Exhibit 10.2

LOAN AGREEMENT

for a loan in the amount of

$30,000,000

MADE BY AND BETWEEN

WELLS VAF-330 COMMERCE STREET, LLC

WELLS VAF-PARKWAY AT OAK HILL, LLC, and

WELLS VAF-6000 NATHAN LANE, LLC

each a Delaware limited liability company

Collectively, as “Borrowers”

and

Individually, a “Borrower”

AND

NXT CAPITAL, LLC,

a Delaware limited liability company

As “Lender”

Wells VAF Portfolio

Dated as of December 17, 2010

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TABLE OF CONTENTS

 

ARTICLE 1 PARTIES, BASIC LOAN TERMS AND DEFINITIONS      1      1.1      Parties
and Basic Terms      1      1.2      Incorporation of Exhibits and Schedule     
4      1.3      Definitional Provisions      4    ARTICLE 2 LOAN AND LOAN
DOCUMENTS      4      2.1      Conditions Precedent to Initial Funding      4   
  2.2      Disbursements      5      2.3      Interest      7      2.4      Term
of the Loan      7      2.5      Monthly Payments      8      2.6     
Prepayments      9      2.7      Exit Fee      9      2.8      Late Charge     
10      2.9      Application of Payments and Blocked Accounts      10      2.10
     Project Partial Prepayments, Partial Releases      11    ARTICLE 3
FINANCIAL REPORTING COVENANTS      11      3.1      Financial Information
Reporting      11      3.2      Other Information; Financial Information Form
and Examination      12    ARTICLE 4 OPERATIONAL AND OTHER COVENANTS      13   
  4.1      Leasing and Operational Covenants      13      4.2      Other
Borrower Covenants      16      4.3      Authorized Representative      31   
ARTICLE 5 BORROWERS’ REPRESENTATIONS AND WARRANTIES      32      5.1     
Borrowers’ Representations and Warranties      32    ARTICLE 6 ENVIRONMENTAL
MATTERS      40      6.1      Environmental Representations and Warranties     
40      6.2      Environmental Covenants      41      6.3      Right of Entry
and Disclosure of Environmental Reports      42      6.4      Environmental
Indemnitor’s Remedial Work      43      6.5      Environmental Indemnity      44
     6.6      Remedies Upon an Environmental Default      46      6.7     
Unconditional Environmental Obligations      47      6.8      Assignment of
Environmental Obligations Prohibited      47      6.9      Indemnification
Separate from the Loan      47    ARTICLE 7 CASUALTIES AND CONDEMNATION      48
     7.1      Lender’s Election to Apply Insurance Proceeds on Indebtedness     
48   

 

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  7.2      Borrowers’ Obligation to Rebuild and Use of Insurance Proceeds
Therefor      50    ARTICLE 8 EVENTS OF DEFAULT AND REMEDIES      50      8.1
     Events of Default      50      8.2      Remedies Conferred Upon Lender     
53    ARTICLE 9 LOAN EXPENSE, COSTS AND ADVANCES      54      9.1      Loan and
Administration Expenses      54      9.2      Right of Lender to Make Advances
to Cure Borrowers’ Defaults      55      9.3      Increased Costs      55     
9.4      Borrower Withholding      56      9.5      Document and Recording Tax
Indemnification      57    ARTICLE 10 ASSIGNMENTS BY LENDER AND DISCLOSURE     
57      10.1      Assignments and Participations      57      10.2     
Disclosure of Information and Confidentiality      59      10.3     
Dissemination of Information      60    ARTICLE 11 GENERAL PROVISIONS      60   
  11.1      Captions      60      11.2      Waiver of Jury Trial; Waiver of
Counterclaims      60      11.3      Jurisdiction      61      11.4     
Governing Law      61      11.5      Lawful Rate of Interest      62      11.6
     Modification; Consent      62      11.7      Waivers; Acquiescence or
Forbearance Not to Constitute Waiver of Lender’s Requirements      62      11.8
     Disclaimer by Lender; No Third Party Beneficiaries      63      11.9     
Partial Invalidity; Severability      64      11.10      Definitions Include
Amendments      64      11.11      Execution in Counterparts      64      11.12
     Entire Agreement      64      11.13      Waiver of Damages      64     
11.14      Claims Against Lender      65      11.15      Set-Offs      65     
11.16      Relationship      65      11.17      Agents      65      11.18     
Interpretation      65      11.19      Successors and Assigns      66      11.20
     Time is of the Essence      66      11.21      Notices      66      11.22
     Advertisement      68      11.23      Joint and Several
Liability/Contribution      68   

 

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LIST OF EXHIBITS AND SCHEDULES TO LOAN AGREEMENT

[REVISE AS APPROPRIATE]

 

Joinder    Guarantor’s Limited Joinder Exhibit A-1    Legal Description of Land
(Commerce Project) Exhibit A-2    Legal Description of Land (Parkway Project)
Exhibit A-3    Legal Description of Land (Nathan Project) Exhibit B    Reserved
Exhibit C    Reserved Exhibit D    Rent Roll Exhibit E    Insurance Requirements
Exhibit F    Environmental Documents Exhibit G    Litigation Exhibit H   
Reserved Exhibit I    Form of Owner’s Statement Exhibit J    Form of
Disbursement & Requisition Exhibit K    Organizational Chart Exhibit L   
Minimum Release Prices Schedule I    Definitions Schedule II    Minimum
Effective Rent Schedule III    Capital Improvements Schedule IV    Form of IDB
Recognition Agreements Schedule V    Non-Disturbance Agreements

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LOAN AGREEMENT

THIS LOAN AGREEMENT (as amended, modified, restated, extended, waived,
supplemented or replaced from time to time, this “Agreement”) is dated as of
December 17, 2010, is by and between Borrowers and Lender (defined below). In
consideration of the mutual covenants, conditions and agreements herein
contained, Borrowers and Lender agree as follows:

ARTICLE 1

PARTIES, BASIC LOAN TERMS AND DEFINITIONS

1.1      Parties and Basic Terms.

The terms set forth below, as used in this Agreement, shall have the meanings
given them in this Section. Schedule I and the text of this Agreement also
contain defined terms.

(a)      Borrowers and Guarantor.

(i)      Collectively, jointly and severally, Borrowers, and individually, a
Borrower: Wells VAF-330 Commerce Street, LLC, Wells VAF-Parkway at Oak Hill,
LLC, and Wells VAF-6000 Nathan Lane, LLC, each a Delaware limited liability
company, together with its successors and permitted assigns.

(ii)     Borrowers’ Address:  is 6200 The Corners Parkway, Norcross, Georgia
30092, Attention: Christopher Daniels. Facsimile No. (770) 243-8594. Borrowers’
principal place of business address is 6200 The Corners Parkway, Norcross,
Georgia 30092.

(iii)    Borrowers’ Counsel: James M. Phipps, Esq.

(iv)    Borrowers’ Counsel’s Address:  DLA Piper LLP (US), 203 N. LaSalle
Street, Suite 1900, Chicago, Illinois 60601-1293 Facsimile No. (312) 251-5736.

(v)     Collectively, jointly and severally, “Environmental Indemnitors, and
individually, “Environmental Indemnitor: Each Borrower and Guarantor.

(vi)    Guarantor:  Wells Mid-Horizon Value-Added Fund I, LLC, a Georgia limited
liability company, together with its heirs, successors and permitted assigns.

(b)      Lender.

(i)      Lender:  NXT Capital, LLC, a Delaware limited liability company,
together with its successors and assigns.

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(ii)     Lender’s Address:  191 North Wacker Drive, Suite 1200, Chicago,
Illinois 60606-1615. Facsimile No. (312) 450-8100.

(iii)    Lender’s Counsel: Adam M. Laser, Esq.

(iv)    Lender’s Counsel’s Address:  Goldberg Kohn Ltd., 55 East Monroe Street,
Suite 3300, Chicago, Illinois 60603. Facsimile No. (312) 332-2196.

(c)      The Projects.

(i)      Improvements:    All improvements currently located on or under the
Land or subsequently constructed on or under the Land generally consisting of
improvements containing in the aggregate approximately 445,844 net square feet
of rentable space. The general purpose and use of each Project is as an office
project.

(ii)     Land:  Collectively, (i) that certain air rights parcel located in
Nashville, Tennessee and legally described on Exhibit A-1 attached hereto
(together with all improvements located thereon, the “Commerce Project”),
(ii) that certain parcel of land located in Austin, Texas and legally described
on Exhibit A-2 attached hereto (together with all improvements located therein,
the “Parkway Project”), and (iii) that certain parcel of land located in
Plymouth, Minnesota which is legally described on Exhibit A-3 attached hereto
(together with all improvements located thereon, the “Nathan Project”).

(d)      The Loan.

(i)      Authorized Representative:  Kevin A. Hoover

(ii)     Base Rate:  For each calendar month in the Loan term, the rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
equal to the rate of interest per annum which is identified and normally
published as the “One Month London Interbank Offered Rate” in the Money Rates
page of the Market Data section of The Wall Street Journal online
(http://online.wsj.com) (“LIBOR”) for the Business Day which is two Business
Days prior to the first calendar day of such month. If The Wall Street Journal
does not publish the LIBOR, or Lender determines in good faith that the rate
published in the Money Rates section of The Wall Street Journal for a one month
or thirty (30) day period does not accurately reflect the “London Interbank
Offered Rate” available to Lender for a one month or thirty (30) day period, or
if such rate no longer exists, Lender may select a replacement rate or
replacement source, in its reasonable discretion.

(iii)    Exit Fee:  an exit fee equal to one percent (1%) of the outstanding
Loan Amount.

Holdback:    A portion of the Loan Amount equal to Ten Million and No/100ths
($10,000,000.00) retained by Lender for the costs and expenses incurred in

 

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connection with certain Tenant Improvements and Leasing Commissions approved by
Lender.

(iv)     Initial Funding Amount: an amount equal to $19,000,000.

(v)      Interest Rate:  A rate equal to three and three-fourths percent
(3.75%) plus the Base Rate, but in no event shall the Interest Rate be lower
than seven and one-fourth percent (7.25%). Interest shall be calculated based on
360 day year and charged for the actual number of days elapsed.

(vi)     Interest Reserve:  A portion of the Loan Amount equal to One Million
and No/100ths Dollars ($1,000,000.00).

(vii)    Loan Amount:    Thirty Million and No/100ths Dollars ($30,000,000.00).

(viii)   Loan Application:  That certain Loan Application accepted by Kevin A.
Hoover on October 15, 2010.

(ix)     Loan Fee:  An amount equal to Three Hundred thousand and No/100ths
Dollars ($300,000.00).

(x)      Wells Manager:    Wells Investment Management Company, LLC, a Georgia
limited liability company.

(xi)     Maturity Date:  December 16, 2013, subject to acceleration pursuant to
Section 8.2 or extension pursuant to Section 2.4. Borrowers have the right to
extend the Maturity Date for two twelve (12) month periods on the terms and
conditions set forth in Section 2.4.

(xii)    Minimum Interest Recovery:  The amount, if any, by which One Million
Three Hundred Seventy-Seven Thousand Five Hundred and No/100ths Dollars
($1,377,500.00) exceeds the amount of interest actually paid by Borrowers to
Lender prior to repayment of the Loan in full or acceleration of the Loan.

(xiii)   Payment Commencement Date:      The first day of February, 2011.

(e)      Third Parties.

(i)      Mortgage Broker:  Holiday Fenoglio Fowler, L.P.

(ii)     Property Manager:  For the Commerce Project and Parkway Project, Wells
Real Estate Services, LLC and for the Nathan Project, Piedmont Office Management
LLC, and any successor manager of the Projects approved by Lender in writing
pursuant to Section 4.1(c).

 

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(iii)      Leasing Broker:  For the Commerce Project, Colliers Turley Martin
Tucker, for the Nathan Project, CB Richard Ellis, Inc., and for the Parkway
Project, Stream Realty Partners-Austin, L.P., and any successor leasing broker
of the Projects approved by Lender in writing pursuant to Section 4.1(c).

(iv)      Title Insurer:  Fidelity National Title Insurance Company, or such
other title insurance company licensed in the States of Texas, Tennessee and
Minnesota, as may be approved in writing by Lender in Lender’s sole and absolute
discretion.

1.2      Incorporation of Exhibits and Schedule.

Exhibits A through L, the Limited Joinder, Schedules I-V to this Agreement,
attached hereto are incorporated in this Agreement and expressly made a part
hereof by this reference.

1.3      Definitional Provisions.

All terms defined in Schedule I of this Agreement or otherwise in this Agreement
shall, unless otherwise defined therein, have the same meanings when used in the
Note, Security Instruments, any other Loan Documents, or any certificate or
other document made or delivered pursuant hereto. The words “hereof”, “herein”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement. All article, section or subsection references when used
in this Agreement shall, unless otherwise described, refer to the applicable
article, section or subsection of this Agreement. The word “include(s)” when
used in this Agreement and the other Loan Documents means “include(s), without
limitation,” and the word “including” means “including, but not limited to.”
Unless otherwise expressly modified in the Loan Documents, the term “days”
refers to calendar days.

ARTICLE 2

LOAN AND LOAN DOCUMENTS

2.1      Conditions Precedent to Initial Funding.

(a)      Borrowers agree that Lender’s obligation to close the Loan is
conditioned upon Borrowers’ delivery, performance and satisfaction, as
applicable, all in Lender’s sole and absolute discretion, of (i) all items set
forth in the Loan Application, including Borrowers’ payment to Lender of the
Loan Fee, (ii) this Agreement and the other Loan Documents, (iii) a legal
opinion for the benefit of Lender and satisfactory to Lender issued by counsel
for Borrowers and Guarantor in Illinois, Texas, Tennessee, Minnesota and
Delaware, (iv) all other items on that certain Closing Checklist issued with
respect to such Loan Application, and (v) such other documents, instruments or
certificates as Lender and its counsel may require, including such documents as
Lender deems necessary or appropriate to effectuate the terms and conditions of
this Agreement and the other Loan Documents, and to comply with the Laws of the
states of Illinois, Tennessee, Texas and Minnesota.

 

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(b)      The underwritten in-place net income for the Projects is equal to or
greater than $1,478,000 at Closing, calculated by Lender based on a forward
looking 12 month rent roll (assuming no rent abatement under the Wells Fargo
Lease and otherwise adjusted by Lender in its discretion) and trailing 12 month
operating expenses.

(c)      Borrowers shall have provided Lender with copies of invoices, lien,
waivers, applications for payments, cancelled checks and other evidence of
payments reasonably requested by Lender related to costs of Tenant Improvements
and Leasing Commissions for which Borrowers are reimbursed at Closing.

2.2      Disbursements.

(a)      Initial Funding Amount.      Subject to the terms, provisions and
conditions of this Agreement and the other Loan Documents, on the Closing Date,
Borrowers agree to borrow from Lender and Lender shall disburse to Borrowers
from the proceeds of the Loan the Initial Funding Amount.

(b)      Holdback and Interest Reserve.    The Holdback shall be retained by
Lender for the costs and expenses incurred in connection with the Tenant
Improvements and Leasing Commissions. In addition, the Interest Reserve shall be
retained by Lender and applied to the payment of monthly interest in accordance
with the provisions of Section 2.5. Once the maximum stated amount for any
category is disbursed, no further disbursements for that category will be made.
The Holdback and Interest Reserve shall not bear interest until the funds are
disbursed in accordance with the terms hereof.

(c)      All Requests for Disbursement.    At Lender’s option, disbursements
shall be made by Lender to Borrowers, or directly to the architect, contractor,
supplier, broker or other third party entitled to payment, or through an escrow
pursuant to an agreement with the Title Insurer (for payments with respect to
work or services for which any third party has a statutory right to file a lien
against any Project which may be superior in priority to the lien of any
Security Instrument). Any and all disbursements made in connection with hard
costs for Tenant Improvements shall be subject to retainage of ten percent
(10%) of the value of work performed, as reasonably determined by Lender.
Holdback funds allocated to one category may not be reallocated to another
category without Lender’s prior written consent. Absent a default hereunder or
under any of the other Loan Documents, Lender shall make disbursements of
portions of the Holdback subject to each of the following conditions (except to
the extent waived in writing by Lender and any such condition waived by Lender
as to any particular disbursement may be re-imposed as a condition of subsequent
disbursements):

(i)      All disbursements from the Holdback to be made pursuant to this
Section 2.2 shall be made by Lender not more frequently than once during any
calendar month pursuant to a single monthly disbursement request from Borrowers
covering all amounts to be disbursed. Each monthly disbursement shall be in a
minimum amount of $250,000 or, if less, the remaining undisbursed amount of the
Holdback. At least 10 Business Days prior to the date of any such disbursement,

 

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Borrowers shall provide Lender with a written request for payment, including a
certification executed by Borrowers and acceptable to Lender as to the validity
and accuracy of the information contained in such request in the form of the
Disbursement Requisition attached hereto as Exhibit J, together with a completed
and executed Owner’s Statement in the form attached hereto as Exhibit I, with
copies of invoices, lien waivers, applications for payments, canceled checks, or
other evidence of payment of amounts incurred and/or due and payable by
Borrowers in connection with the Tenant Improvements and Leasing Commissions. It
shall be a condition of the final disbursement with respect to any Tenant
Improvements Project which includes disbursement of the retainage for such
project, that Lender shall have received full and final waivers of lien from the
general contractor and all subcontractors who have performed work on or supplied
materials to such Tenant Improvements Project, and Lender shall have received an
estoppel statement from the Tenant that the Tenant has accepted the Tenant
Improvements without qualification.

(ii)     Lender shall have approved, in its reasonable discretion, the Tenant
Improvements, Leasing Commissions and with respect to each Tenant Improvements
Project a schedule for completion of such Tenant Improvements Project (each, a
“Tenant Improvements Completion Schedule”) and a construction budget (each, a
“Tenant Improvements Budget”).

(iii)    Lender’s Consultant shall have inspected and approved the portion of
the Tenant Improvements Project completed.

(iv)    Lender shall have received, at Borrowers’ expense, an endorsement to the
Title Policies insuring the priority of the Security Instruments with respect to
such disbursement and indicating that no intervening liens exist against the
Projects.

(v)     Such disbursement shall be utilized to pay the actual costs of the
Tenant Improvements and Leasing Commissions as portions of the same are
completed.

(vi)    Borrowers shall have paid the Disbursement Processing Fee and, upon
demand, any and all reasonable out-of-pocket fees due Lender and any and all
costs incurred by Lender up to the date of such disbursement (and Borrowers
hereby authorize Lender to increase the disbursement request by such amounts to
effectuate payment to Lender via a disbursement of the Loan).

(vii)   Lender shall have approved or deemed approved the applicable Lease (if
required hereunder) to which the requested disbursement relates and such Lease
shall be in full force and effect. If such disbursement is for Leasing
Commissions and all or a portion of the Leasing Commissions is due upon
occupancy, Lender shall have received an estoppel statement from the Tenant
stating that Tenant has accepted possession and taken occupancy of the
applicable Project.

 

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(viii)    The Project Yield must be equal to or greater than twelve percent
(12.0%).

(ix)      If, as a result of one or more Partial Releases, the sole remaining
Project is the Commerce Project, the funds available for disbursement from the
Holdback shall equal the lesser of (i) the funds then remaining in the Holdback
and (ii) $4,000,000.

2.3      Interest.

  Until (a) the occurrence of an Event of Default or (b) February 11, 2011 if
the Borrowers have failed to deliver to Lender the fully executed IDB
Recognition Agreements on or before February 10, 2011, the principal amount of
the Loan outstanding from time to time shall bear interest at the Interest Rate.
If an Event of Default exists or from and after February 11, 2011 if the fully
executed IDB Recognition Agreements have not been received by Lender on or
before February 10, 2011, interest shall accrue on the outstanding principal
amount of the Loan at the Default Rate and all references to “Interest Rate”
herein and in the other Loan Documents shall mean the Default Rate in either
case. Notwithstanding the foregoing, if the fully executed IDB Recognition
Agreements are received by Lender after February 10, 2011 and prior to the
occurrence of an Event of Default hereunder, the interest rate payable on the
principal amount of the Loan outstanding thereafter shall be the original
Interest Rate and not the Default Rate.

2.4      Term of the Loan.

(a)      Unless due and payable sooner pursuant to Section 2.5 or Article 8, all
Indebtedness shall be due and payable in full on the Maturity Date, provided
that Borrower shall have the right to extend the Maturity Date (each a
“Extension Option”) for two additional 12-month terms (each 12 month period is
hereinafter referred to as an “Extension Term”), thereby extending the Maturity
Date to the last day of the applicable Extension Term.

(b)      Borrower may only exercise an Extension Option upon satisfying the
following conditions:

(i)        Borrower shall have delivered to Lender written notice of such
election no earlier than 120 days and no later than 90 days prior to the then
current Maturity Date;

(ii)       Such notice is accompanied by a non-refundable extension fee equal to
$150,000;

(iii)      Lender shall have received Borrowers’ and Guarantor’s most recent
financial statements required pursuant to Article 3 and there must be no
Material Adverse Change in any Borrower’s or Guarantor’s financial condition, as
reflected in such financial statements;

 

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(iv)      The Capital Improvements have been Completed in accordance with all
requirements of this Loan Agreement;

(v)       No Default exists and no Event of Default previously occurred or
exists under the Loan Documents;

(vi)      For the first Extension Term Project Yield must be equal to or greater
than 10.5%; and

(vii)     For the first Extension Term, the Debt Service Coverage Ratio is not
less than 1.45: 1.00; and

(viii)    For the second Extension Term, the Project Yield must be equal to or
greater than 11.0%; and

(ix)      For the second Extension Term, the Debt Service Coverage Ratio is not
less than 1.50: 1.00.

2.5      Monthly Payments.

Commencing on the Payment Commencement Date and continuing on the first day of
each month thereafter, Borrowers shall pay to Lender a Monthly Net Cash Flow
Payment which shall be applied toward payment of Accrued Interest for the
previous month. In the event the Monthly Net Cash Flow Payment exceeds Accrued
Interest, then such excess shall be retained by Borrowers. To the extent the
Monthly Net Cash Flow Payment is less than Accrued Interest, absent a Default
hereunder or under any of the other Loan Documents, funds remaining in the
Interest Reserve, if any, shall be disbursed by Lender to pay such unpaid
Accrued Interest. Upon each disbursement of funds from the Interest Reserve,
such funds shall be added to principal outstanding on the Loan, shall bear
interest at the Interest Rate and the Interest Reserve shall be concurrently
reduced by the amount disbursed by Lender to pay such Accrued Interest.
Commencing on the date upon which no undisbursed funds remain in the Interest
Reserve, no further draws from the Interest Reserve shall be permitted. If the
Interest Reserve is exhausted or an Event of Default has occurred and is
continuing, Borrowers shall immediately commence making monthly payments of
Accrued Interest from its own funds, whether or not the Monthly Net Cash Flow
payment is sufficient therefor.

Borrowers shall pay Lender, in advance, on the date hereof, interest only on the
outstanding principal balance of the Loan at the Interest Rate from the date
hereof through and including the last day of the calendar month in which this
Agreement is executed.

At Lender’s option, all monthly and quarterly (if any) payments due to Lender
shall be paid to Lender by Automated Clearing House debit of immediately
available funds from the financial institution account designated by Borrowers
in the Automated Clearing House debit authorization executed by Borrowers in
connection with this Agreement; and shall be effective upon receipt. Borrowers
shall execute any and all forms and documentation

 

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necessary from time to time to effectuate such automatic debiting. In no event
shall any such payments be refunded to Borrowers.

2.6      Prepayments.

Except as expressly permitted pursuant to Section 2.10 herein in connection with
a Partial Release, Borrowers shall have the right to make prepayments of the
Loan, in full, but not in part, at any time provided Borrowers (i) give Lender
at least five (5) days’ prior written notice, (ii) pay the Exit Fee due
hereunder based upon the amount of the Loan prepaid at such time, and (iii) pay
the Minimum Interest Recovery, if any. Any prepayment received hereunder shall
be applied to the Indebtedness in the manner set forth in Section 2.9. All
amounts applied to reduce the outstanding principal balance of the Loan shall
result in a permanent principal reduction of the Loan and Borrower shall not
have any right to reborrow any such amounts.

In the event Borrowers receive any payment or deposit proceeds with respect to a
purchase contract, other agreement, or a Lease of the Project (other than rental
payments and expense reimbursements) including lease termination, retention of
deposits, cancellation or similar fees, such payment shall be deposited into the
Guarantor Level Blocked Account and used by Borrowers exclusively for Eligible
Expenses and the costs and expenses of Tenant Improvements, Leasing Commissions
and other capital improvements actually incurred by Borrowers in connection with
the Projects. Insurance Proceeds applied to the principal balance of the Loan in
accordance with Article 7 herein, shall be applied partly in reduction of the
principal balance of the Loan and partly to pay a portion of the Exit Fee in
proportion to the amount of the principal reduction.

2.7      Exit Fee.

Upon any repayment of the Loan in full, whether on the Maturity Date or on any
other date (including upon the acceleration of the Loan by Lender as provided
herein), Borrowers will pay to Lender the Exit Fee, PLUS, the Minimum Interest
Recovery. Upon any repayment of the Loan in part pursuant to a Partial Release
expressly permitted under Section 2.10 herein or as otherwise expressly
permitted hereunder, Borrowers will pay to Lender the Exit Fee in proportion to
the amount being repaid, and upon final payment the Exit Fee due Lender shall be
reduced by any amounts received by Lender and applied toward the Exit Fee as a
result of any previous repayment. The Exit Fee and Minimum Interest Recovery
shall be deemed earned upon the execution of this Agreement, and Borrowers
hereby acknowledge and agree that the Exit Fee and Minimum Interest Recovery is
each a bargained for consideration and a material inducement to Lender’s making
the Loan and is not a penalty. No Exit Fee or Minimum Interest Recovery shall be
due or payable in connection with the application by Lender of Insurance
Proceeds to the Loan in accordance with Article 7 herein.

 

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2.8      Late Charge.

If any payment of principal (other than the final payment of principal due at
maturity, whether by acceleration or otherwise), interest due on the Loan, or
any other amounts due hereunder or per the Note or the other Loan Documents is
not timely received by Lender within five (5) days of the due date therefor,
Borrowers, without notice or demand by Lender, promptly shall pay an amount
equal to five percent (5%) of each delinquent payment (“Late Charge”).

2.9      Application of Payments and Blocked Accounts.

(a)      Application of Payments.    Except as otherwise provided in this
Agreement, (i) provided that no Event of Default exists, payments made on the
Loan will be applied, at Lender’s option, first to any Expenses or other costs
Borrowers are obligated to pay under this Agreement or the other Loan Documents,
second to interest due on the Note, third to the outstanding principal balance
of the Note in the inverse order of maturity, fourth to the Minimum Interest
Recovery payable to Lender, fifth to the Exit Fee payable to Lender and sixth to
all other Indebtedness due under the Loan Documents, and (ii) so long as an
Event of Default remains outstanding, payments made on the Loan shall be applied
to the Indebtedness in such order, priority and manner as Lender may elect.

(b)      Blocked Accounts:

(i)      Borrowers will cause all Gross Revenues to be deposited to the Property
Level Blocked Accounts and shall give irrevocable notices to tenants and other
account debtors of Borrowers or the Projects to make all payments made by wire
transfer, directly to the applicable Property Level Blocked Account or if by
check to the applicable Lockbox.

(ii)      At Closing, Borrower shall deposit into the Guarantor Level Blocked
Account from the proceeds of the Initial Funding Amount the amount of $3,875,000
(the “Project Improvement Funds”), which funds shall be held and disbursed in
accordance with the terms of this Agreement. Provided no Default or Event of
Default has occurred and is continuing hereunder or under any of the other Loan
Documents, Borrower may withdraw funds from the Guarantor Level Blocked Account
for the sole purpose of paying or reimbursing Borrowers for the payment of costs
and expenses of Tenant Improvements, Capital Improvements and Leasing
Commissions actually incurred by Borrowers. The Project Improvement Funds shall
be allocated as follows: (i) $634,250 for Capital Improvements, (ii) $431,792
for the costs and expenses of Tenant Improvements and Leasing Commissions
actually incurred by Borrower prior to the Closing Date and (iii) $2,808,958 for
Tenant Improvements and Leasing Commissions in connection with Leases and/or
Lease renewals entered into by any of the Borrowers following the Closing Date,
capital improvements deemed necessary by Borrowers to lease the Projects or
working capital costs and expenses in connection with the operation of the
Projects . Funds allocated to one category may not be reallocated to another
category without Lender’s

 

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prior written consent. Either prior to or promptly after disbursing any Project
Improvement Funds from the Guarantor Level Blocked Account, Borrowers shall
provide Lender with copies of invoices, lien waivers, applications for payments,
cancelled checks, or other evidence of payment of amounts incurred and/or due
and payable by Borrowers in connection with any such disbursement. Project
Improvement Funds shall be only be disbursed in accordance with this
Section 2.9(b)(ii) and any failure to comply with the terms hereof shall
constitute an immediate Event of Default under this Agreement.

2.10    Project Partial Prepayments, Partial Releases.

Borrowers shall have the right to obtain a release (a “Partial Release”) of
Lender’s liens against a Project in connection with a partial prepayment of the
Loan provided that each of the following conditions are satisfied: (a) the
partial prepayment is in an amount equal to or greater than the sum of the
Release Price for such Project or such lesser amount as Lender agrees to accept
as a partial prepayment, in its sole and absolute discretion (which Release
Price payable hereunder shall not exceed the then outstanding principal balance
of the Loan), plus that portion of the Exit Fee payable under Section 2.6 in
connection therewith, (b) no Default under the Loan Documents has occurred and
is then continuing, (c) at least one of the Projects will remain as collateral
for Borrowers’ obligations under the Loan Documents, (d) Project Yield for the
Project(s) remaining as collateral will be equal to or greater than twelve
percent (12%), and (e) such release Project is refinanced with or sold, in an
arms-length transaction, to an unrelated third party who or which is not an
Affiliate of any Borrower, Guarantor or Wells Manager. Upon any such permitted
prepayment and the satisfaction of the conditions set forth in this Section 2.10
Lender will release its liens encumbering such Project and, except for all
obligations accruing prior to such prepayment and those obligations which under
the terms hereof or under any other Loan Document would otherwise expressly
survive the repayment of the Loan, such Project and the Borrower owning such
Project shall be released and shall no longer be subject to the Loan Documents.

ARTICLE 3

FINANCIAL REPORTING COVENANTS

3.1      Financial Information Reporting.

(a)      Monthly Information.    Within 15 days following the end of each
calendar month, Borrowers shall deliver to Lender: (i) monthly unaudited
operating statements for the Projects, showing actual sources and uses of cash
during such month, (ii) a current rent roll (including monthly delinquency
reports and a monthly schedule of delinquency receipts and payments), (iii) a
summary of all leasing activity then taking place with respect to the Projects,
particularly describing the status of all pending non-residential lease
negotiations, if any, (iv) for any period in which Borrowers are obligated to
pay Lender all or a portion of Net Cash Flow (or at other times as requested by
Lender), a Net Cash Flow Statement for such month, and (v) monthly bank
statements for the Projects in the aggregate, including for the Property Level
Blocked Accounts and the Guarantor Level Blocked Account.

 

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(b)      Quarterly Information.    Within 45 days following the end of each
calendar quarter, Borrowers shall deliver to Lender quarterly unaudited
financial statements (including a balance sheet, an income statement and a
statement of cash flows) of Borrowers.

(c)      Annual Information.  Within 45 days following the end of each fiscal
year, Borrowers shall deliver to Lender the Projects’ updated annual operating
budgets for the following fiscal year. Within 90 days following the end of each
fiscal year, Borrowers shall deliver to Lender its annual unaudited financial
statements (including, balance sheet, an income statement and a statement of
cash flows). Borrowers shall further cause each Guarantor to deliver the annual
guarantor information set forth in Section 3.1(d).

(d)      Guarantor Information.  Unless otherwise requested more frequently by
Lender, within 60 days after each calendar quarter, Borrowers shall cause each
Guarantor to deliver to Lender its quarterly financial statements showing all
contingent liabilities of such Guarantor (including a balance sheet, an income
statement and a statement of cash flows showing results for both the quarter and
year to date) and within 120 days after its fiscal year, its annual audited
financial statements).

(e)      Promptly upon their becoming available and to the extent not otherwise
readily publicly available, Borrower shall cause Guarantor to deliver copies of
all regular and periodic reports and all registration statements and
prospectuses, if any, filed by Guarantor with any securities exchange or with
the Securities and Exchange Commission or any governmental or private regulatory
authority.

3.2      Other Information; Financial Information Form and Examination.

In addition to the foregoing required information, Borrowers shall provide to
Lender any Other Information as Lender may from time to time reasonably request
relating to the Borrowers, Guarantor or the Projects. Except as otherwise
specified herein or agreed to in writing by Lender, all financial statements to
be provided to Lender shall be prepared in accordance with sound accounting
practices applied on a consistent basis, fairly presenting the financial
condition as of the date indicated, and shall be certified as true, complete and
correct by the party who has prepared such information. Lender may request that
either Borrowers’ or Guarantor’s annual financial statement be audited by an
independent certified public accountant reasonably acceptable to Lender, at
Borrowers’ sole cost and expense, at any time after an Event of Default has
occurred or after Lender asserts any claim under the Limited Joinder attached
hereto. Borrowers shall during regular business hours upon reasonable notice
(except during the existence of an Event of Default) permit or cause to permit
Lender or any of Lender’s representatives (including an independent firm of
certified public accountants) to have access to and examine all books and
records of Borrowers and Guarantor. Unless otherwise approved by Lender in
writing, all books and records will be located at Borrowers’ or Guarantor’s, as
applicable, primary place of business.

 

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ARTICLE 4

OPERATIONAL AND OTHER COVENANTS

4.1      Leasing and Operational Covenants.

(a)      Leasing Restrictions.  Without the prior written consent of Lender,
Borrowers shall not (i) enter into any leases, (ii) modify the form of lease
previously approved by Lender, (iii) modify, amend or terminate any Lease,
(iv) accept any rental payment more than 30 days in advance of its due date or
(v) enter into any ground lease of the Project. Borrowers shall provide Lender
not less than 10 Business Days to review any proposed leases and any proposed
modifications or amendments to any Lease. All Leases must contain an automatic
attornment provision whereby in the event of a foreclosure, the tenant
automatically shall recognize the successor owner as landlord and such tenant
shall have no right to terminate its Lease in the event of such foreclosure. If
Borrowers enter into any new Lease or any modification or renewal of any
existing Lease, at Lender’s request, Borrowers shall cause the Tenant thereunder
to execute a subordination, non-disturbance and attornment agreement in form and
substance reasonably satisfactory to Lender. Borrowers shall provide Lender with
a copy of the fully executed original of all Leases promptly following their
execution. Within 10 Business Days after written request from Borrower, Lender
shall execute and deliver a subordination, non-disturbance and attornment
agreement substantially in the form reasonably approved by Lender (with such
modifications thereto requested by the tenant as may be reasonably acceptable to
Lender) to any tenant under any Lease and shall negotiate in good faith the
terms of such subordination, non-disturbance and attornment agreements with
proposed tenants under proposed Leases (or existing tenants under proposed
extensions or renewals of existing Leases).

Notwithstanding the foregoing, so long as no Event of Default exists Borrowers
may, without Lender’s prior written consent, enter into any Lease for 10,000 net
rentable square feet of space or less in any Project so long as: (A) such Lease
is on the form previously approved by Lender without material modifications;
(B) the term of such Lease is at least five (5) years; (C) the rent for such
Lease is not less than 95% of the market rent and the rent for any renewal
option is not less than 95% of the market rent at the time of renewal; (D) the
tenant improvement costs and leasing commissions relating to such Lease to be
paid by Borrowers are “market” and otherwise comparable to improvements and
commissions for other tenants engaged in a similar business; and (E) the
aggregate rentable square feet leased pursuant to all Leases entered into
without Lender’s consent pursuant to this sentence during the term of the Loan
at any Project does not exceed, in the aggregate, 15% of the net rentable square
feet at any such Project.

If Lender fails to approve or disapprove any matter for which Borrowers have
requested consent or approval pursuant to this Section 4.1(a) within seven
(7) Business Days after Lender’s receipt of Borrowers’ written request therefor,
Borrowers shall send a second written request for consent to Lender which the
first page thereof states, in bold type and all capital letters:

 

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“YOUR FAILURE TO RESPOND TO THIS SECOND REQUEST WITHIN FIVE (5) BUSINESS DAYS OF
YOUR RECEIPT HEREOF SHALL BE DEEMED, PURSUANT TO THE TERMS OF THE LOAN AGREEMENT
BETWEEN YOU AND THE UNDERSIGNED, TO BE YOUR GRANTING OF CONSENT FOR THE MATTER
FOR WHICH CONSENT WAS REQUESTED.”

Lender’s failure to respond to such second request within such five (5) Business
Day period shall be deemed Lender’s approval of the matter for which approval
was requested pursuant to this Section 4.1.(a).

(b)      Defaults Under Leases.    Borrowers will not suffer or permit (i) any
breach or default to occur in any of Borrowers’ or landlord’s obligations under
any of the Leases, or (ii) any Lease termination by reason of any failure of any
Borrower or landlord to meet any requirement of any Lease, including those with
respect to any time limitation within which any of Borrowers’ work is to be done
or the space is to be available for occupancy by the lessee. Borrowers shall
notify Lender in writing in the event a Tenant commits a material default under
a Lease, promptly after any Borrower becomes aware of any such material default.

(c)      Project Management/Leasing.  Borrowers shall not change the Property
Manager or Leasing Broker or enter into, terminate or cancel any management or
leasing contracts, or modify or amend any existing management or leasing
contract to increase the fees or other obligations thereunder, without the prior
written approval of Lender, which approval shall not be unreasonably withheld,
conditioned or delayed.

(d)      Furnishing Notices.  Borrowers shall provide Lender with copies of all
material notices pertaining to any Borrower, Guarantor or Wells Manager or any
Project received by any Borrower from any Tenant, Guarantor, Wells Manager,
Governmental Authority or insurance company within seven (7) days after such
notice is received, but with respect to Wells Manager and Guarantor, only to
extent such notice relates to the Project. In addition, Borrowers shall promptly
provide Lender with written notice of any litigation, arbitration, or other
proceeding or governmental investigation pending or, to any Borrower’s or
Guarantor’s knowledge, threatened against any Borrower, or Guarantor or Wells
Manager relating to any Project. Notwithstanding the foregoing, Borrowers shall
not be obligated to provide Lender with such written notice in respect of
uninsured personal injury litigation against any Borrower or any Project if the
amount claimed is less than $100,000.00, as long as the maximum liability under
such cases is covered in its entirety by liability insurance maintained by
Borrowers and the insurance carrier has not refused the tender of defense or
coverage.

(e)      Alterations.    Without the prior written consent of Lender, Borrowers
shall not make any material alterations to any Project, except for tenant
improvements required by the terms of Leases approved or deemed approved by
Lender or for which no approval is required.

 

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(f)      Cash Distributions.  Borrowers shall not make any distributions to its
partners, members or shareholders while the Loan is outstanding, except that so
long as no Default or Event of Default exists and all payments then owing to
Lender have been paid, Borrowers may, distribute monthly Excess Cash Flow.

(g)      Reserved.

(h)      Compliance With Laws.  Borrowers shall comply with all applicable Laws
and requirements of any Governmental Authority having jurisdiction over
Borrowers or the Projects including all building, zoning, density, land use,
covenants, conditions and restrictions, and subdivision requirements (including
parcel maps and environmental impact and other environmental requirements),
whether now existing or later to be enacted and whether foreseen or unforeseen.

(i)      Use of Projects.  Unless required by applicable Law, Borrowers shall
not, without Lender’s prior written consent, permit changes in the use of the
Projects from that of the time this Agreement was executed other than as
consistent with such provisions set forth in Section 2.2. Without Lender’s prior
written consent, Borrowers shall not (i) initiate or acquiesce in a change in
the plat of subdivision, or zoning classification or use of the Projects, or
(ii) grant any encumbrances or easements burdening the Projects, except such
encumbrances or easements that do not adversely affect the current or
anticipated use of the Projects.

(j)      No Commingling of Funds.  Borrowers shall not commingle the funds
related to the Projects with funds from any other property.

(k)      Maintenance and Preservation of the Projects.  Borrowers shall keep the
Projects in good condition and repair (normal wear and tear excepted) and if all
or part of any Project becomes damaged or destroyed, Borrowers shall promptly
and completely repair and/or restore such Project in a good and workmanlike
manner in accordance with sound building practices. Borrowers shall not commit
or allow waste or permit impairment or deterioration of the Projects. Borrowers
shall not abandon the Projects.

(l)      Construction.  Each Tenant Improvements Project shall be Completed in
substantial accordance with the Tenant Improvements Construction Documents and
in compliance with all applicable Laws, regulations, ordinances, codes, permits,
licenses, declarations, covenants, or restrictions of record or other agreements
relating to the Projects or any part thereof.

(m)      Completion.  Borrowers shall cause Completion of construction of the
Capital Improvements in accordance with the terms of this Agreement and the
timeframes set forth in Schedule III. “Complete” or “Completed” or “Completion”
means one hundred percent (100%) completion of the Capital Improvements and/or
Tenant Improvements, in a good and workmanlike manner and in compliance with all
applicable Laws and private restrictions included in the Permitted Exceptions,
and with respect to each Tenant Improvements Projects in substantial accordance
with Tenant Improvement Construction

 

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Documents, in all cases free and clear of all liens, claims, encumbrances and
rights of others (other than those created by liens for taxes and assessments
that are not delinquent and those liens which Borrowers are contesting in
accordance with the terms of this Agreement), as evidenced by the issuance of
certificates of completion by Lender or its consultant and a final certificate
of occupancy and as applicable, acceptance of completion by the applicable
Tenant.

(n)      Replacement Reserve.  In addition to any other construction, renovation
and maintenance requirements set forth in this Agreement, commencing with the
first Loan Year, Borrowers shall expend at least $0.20 per square foot of net
rentable space (exclusive of Insurance Proceeds and proceeds from the Holdback)
on maintenance of the Projects. To the extent Borrowers do not provide evidence,
reasonably satisfactory to Lender, that Borrowers have spent such sum on an
annual basis, Borrowers shall deposit with Lender such amount not spent. Lender
shall hold such sum in reserve (the “Replacement Reserve”) for Borrowers’ use to
fund future maintenance expenses incurred by Borrowers in any Loan Year after
Borrowers have spent in the aggregate at least $0.20 per square foot of net
rentable space on maintenance of the Projects during the then current Loan Year.
Such amounts shall be disbursed from the Replacement Reserve upon satisfaction
of the same conditions applicable to the Holdback (other than obtaining a date
down endorsement to the Title Policies). Borrowers hereby grant Lender a first
priority security interest in the Replacement Reserve, all funds contained
therein and all products and proceeds thereof and all such funds are pledged as
additional collateral for the Loan and Borrowers shall execute any other
documents and take any other actions necessary to provide Lender with such a
perfected security interest in such funds. Upon the Maturity Date or at any time
following an Event of Default, the moneys then remaining in the Replacement
Reserve shall, at Lender’s option, be applied against the Indebtedness. All sums
held in the Replacement Reserve may be commingled with other borrower reserves
held by Lender and shall not be deemed to be held in trust for the benefit of
Borrowers. The Replacement Reserve shall be maintained at a financial
institution designated by Lender from time to time, in its sole and absolute
discretion (so long as such institution’s deposits are insured by the Federal
Deposit Insurance Corporation), and shall be under the sole dominion and control
of Lender, and Borrowers shall have no right to control or direct the investment
of funds therein. Sums held by Lender in the Replacement Reserve shall accrue
interest at rates determined by Lender to be equivalent to any interest received
by Lender on its own general funds, and any interest accruing and paid on such
amounts shall be deemed to be part of the Replacement Reserve and absent an
Event of Default hereunder, shall be applied in accordance with this
Section 4.1(n).

4.2      Other Borrower Covenants.

Borrowers further covenant and agree as follows:

(a)      Loan Closing.  If the conditions precedent to the closing of the Loan
are not complied with as of the Closing Date, Lender may terminate Lender’s
obligation to fund the Loan by written notice to Borrowers.

 

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(b)      Prohibition of Assignments and Transfers by Borrowers.

(i)      Generally.  Borrowers shall not assign or attempt to assign its rights
under this Agreement or any of the other Loan Documents or the Loan or delegate
or attempt to delegate any of its duties or obligations under this Agreement or
any of the other Loan Documents or the Loan and any purported assignment or
delegation shall be void. Without the prior written consent of Lender, which
consent may be withheld in Lender’s sole and absolute discretion, Borrowers
shall not suffer or permit any Transfer. In addition, Wells Manager (in its
capacity as sole Manager of Guarantor the sole member of each Borrower), shall
at all times Control the day-to-day management and operation of Borrowers’
business and all material business decisions (including a sale or refinance) for
Borrowers until the Indebtedness is repaid in full. Notwithstanding any
provision of this Agreement or the other Loan Documents to the contrary, the
issuance, conveyance, sale, assignment, transfer, pledge, encumbrance or other
disposition of any direct or indirect interest in the Guarantor shall be
permitted without any consent, notice (unless expressly provided below), fees or
costs and shall not constitute a Default or Event of Default hereunder; provided
that:

           (A)       no such Transfer shall be to a Blocked Person or would
result in the breach by Borrowers of this Loan Agreement or the other Loan
Documents, and following such Transfer, Wells Manager shall continue to Control
the day-to-day management and operation of Borrowers’ business and all material
business decisions (including a sale or refinance) for Borrowers, and

           (B)      in the event that any such Transfer results in any Person,
together with any other Person Controlling, Controlled by or Under Common
Control with such Person, owning or encumbering more than 20% of the direct or
indirect interests in Guarantor:

      (1)      Borrowers shall give Lender at least thirty (30) days prior
written notice of such Transfer, and

      (2)      Lender shall have the right to conduct its customary background
and internal compliance checks as to such Person or Persons.

(ii)      Transfers Prohibited by ERISA.  In addition to the prohibitions set
forth in Section 4.2(b)(i), above, Borrowers shall not engage in or permit a
Transfer that would constitute or result in the occurrence of one or more
non-exempt prohibited transactions under ERISA or the Internal Revenue Code.
Borrowers agree to unwind any such Transfer upon notice from Lender or, at
Lender’s option, to assist Lender in obtaining such prohibited transaction
exemption(s) from the Employee Benefits Security Administration with respect to
such Transfer as are necessary to remedy such prohibited transactions. In
addition to its general obligation to

 

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indemnify Lender under Section 4.2(l), Borrowers shall reimburse Lender for any
Expenses incurred by Lender to obtain any such prohibited transaction
exemptions. Borrowers’ obligations under this Section 4.2(b)(ii) shall survive
the expiration or termination of the Loan Documents, Borrowers shall not engage
in any transaction which would cause any obligation, or action taken or to be
taken, hereunder (or the exercise by Lender of any of its rights under any of
the Loan Documents) to be a non-exempt (under a statutory or administrative
class exemption) prohibited transaction under ERISA. Borrowers further covenant
and agree to deliver to Lender such certifications or other evidence from time
to time throughout the term of the Loan Documents, as reasonably requested by
Lender, that (i) Borrowers are not an “employee benefit plan” as defined in
Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental
plan” within the meaning of Section 3(32) of ERISA; (ii) Borrowers are not
subject to Federal or state statutes regulating investments and fiduciary
obligations with respect to governmental plans; and (iii) one or more of the
following circumstances is true:

(1)      Equity interests in Borrowers are publicly offered securities within
the meaning of 29 C.F.R. Section 2510.3-101(b)(2);

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

(3)      Each Borrower qualifies as an “operating company” within the meaning of
29 C.F.R. Section 2510.3-101 or an investment company registered under the
Investment Company Act of 1940.

Borrowers shall indemnify Lender and defend and hold Lender harmless from and
against all civil penalties, excise taxes, or other loss, cost damage and
expense (including, without limitation, reasonable attorneys’ fees and
disbursements and costs incurred in the investigation, defense and settlement of
claims and losses incurred in correcting any prohibited transaction or in the
sale of a prohibited loan, and in obtaining any individual prohibited
transaction exemption under ERISA that may be required, in Lender’s reasonable
discretion) that Lender may incur, directly or indirectly, as a result of a
Default under this Section 4.2(b)(ii). This indemnity shall survive any
termination of the Loan Documents or, satisfaction or foreclosure of the
Security Instruments.

(c)      Mechanics’ Liens and Contest Thereof.  Borrowers will not suffer or
permit any mechanics’ lien claims to be filed or otherwise asserted against the
Projects and will promptly discharge the same in case of the filing of any
claims for lien or proceedings for the enforcement thereof, provided, however,
that Borrowers shall have the right to contest in good faith and with reasonable
diligence the validity of any such lien or claim provided that Borrowers notify
Lender of their desire to do so in writing and, within 20 days of the earlier of
written notice by Borrowers to Lender of the existence of such lien or written
notice by Lender to Borrowers of the existence of the lien, either (i) post a
statutory lien bond

 

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that removes such lien from title to the applicable Project, (ii) provide a
letter of credit (in a form reasonably acceptable to Lender) or cash deposit in
an amount sufficient to pay one hundred twenty-five percent (125%) of such lien
claim or other security reasonably satisfactory to Lender to protect Lender’s
interest and security should the contest be unsuccessful or (iii) cause such
lien claim to be fully insured to the reasonable satisfaction of Lender by the
Title Company that issued the Title Policy. Lender will not be required to make
any further disbursements of the proceeds of the Loan until either (i) such
mechanic’s lien claim has been completely removed, bonded over, insured or as to
which a letter of credit or cash sufficient to pay one hundred twenty-five
percent (125%) of such claim has been deposited with Lender or, (ii) at
Borrowers’ sole option, Borrower elects to restrict disbursements from the
Holdback to amounts in excess of one hundred twenty-five percent (125%) of such
lien claim (or all such lien claims being contested for which Borrowers have
elected to proceed under this Section 4.2(c)). In the event Borrowers shall fail
to discharge any such lien or prosecute such contest as set forth above, or such
lien is not otherwise fully reserved for or bonded over as set forth above,
Lender may, at its election in its sole and absolute discretion, cause such lien
to be satisfied and released or otherwise provide security to the Title Insurer
to indemnify over such lien. Any amounts so expended by Lender, including
premiums paid or security furnished in connection with the issuance of any
surety company bonds, shall be deemed to constitute disbursement of the proceeds
of the Loan hereunder owing to Lender by Borrowers. In settling, compromising or
discharging any claims for lien, Lender shall not be required to inquire into
the validity or amount of any such claim.

(d)      Maintenance of Insurance.    Borrowers shall not bring or keep any
article on the Projects or cause or allow any condition to exist if that could
invalidate or would be prohibited by any insurance coverage required to be
maintained by Borrowers on the Projects. When any insurance policies expire,
Borrowers shall furnish to Lender any additional and renewal insurance policies
(along with evidence of the prepaid premiums) or certificates thereof acceptable
to Lender, satisfying the Minimum Insurance Requirements. Unless Borrowers
provide Lender with appropriate evidence of the insurance coverage required by
this Agreement, Lender may purchase insurance at Borrowers’ expense to protect
Lender’s interests in the Projects and to maintain the insurance required by
this Agreement. Prior to purchasing any such insurance, Lender will use its good
faith efforts to provide notice to Borrowers of its intention to do so,
provided, however, that Lender’s failure to provide such notice shall not affect
Borrowers’ responsibility for the expense of such insurance purchased by Lender.
This insurance may, but need not, protect Borrowers’ interests. The coverage
purchased by Lender may not pay any claim made by any Borrower or any claim that
is made against any Borrower in connection with the Projects or any required
insurance policy. Borrowers may later cancel any insurance purchased by Lender,
but only after providing Lender with appropriate evidence that Borrowers have
obtained insurance as required by this Agreement. If Lender purchases insurance
for the Projects or insurance otherwise required by this Agreement, Borrowers
will be responsible for the costs of that insurance and other charges reasonably
imposed by Lender in connection with the placement of the insurance until the
effective date of the cancellation or expiration of the insurance. The costs of
the insurance may be added to the Indebtedness effective as of the

 

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date Lender purchases such insurance and such costs may be more than the cost of
insurance Borrowers are able to obtain on their own. The effective date of
coverage may be the date the prior coverage lapsed or the date on which
Borrowers failed to provide Lender proof of coverage.

(e)      Payment of Insurance.  Borrowers shall timely pay all premiums on all
insurance policies to assure that at all times Borrowers have in effect
insurance as required pursuant to the Minimum Insurance Requirements attached
hereto as Exhibit E. In order to effectuate the timely payment of all premiums,
Borrowers shall pay to Lender, at the time of and in addition to the monthly
installments of principal and/or interest due under the Note, a sum equal to
1/12 of the amount estimated by Lender to be sufficient to enable Lender to pay
at least 60 days before they become due and payable, all insurance premiums
relating to Borrowers and the Projects as determined by Lender (the “Insurance
Escrow”). Notwithstanding the foregoing to the contrary, so long as (i) Lender
has provided written approval of the blanket insurance policy covering the
Projects, including with respect to carrier and coverage (and such coverage
shall comply in all respects with the form of insurance required by the Minimum
Insurance Requirements), (ii) the protection afforded Borrowers under any
blanket insurance approved hereunder shall be no less than that which would have
been afforded under a separate policy or policies relating to the Projects,
(iii) such carrier has agreed to provide Lender with written notice of
cancellation of such policy 30 days prior thereto, (iv) Borrowers at all times
during the term of the Loan provide evidence of timely payment of all insurance
premiums in respect of such policy prior to the due date thereof, and (v) no
Event of Default exists hereunder, Borrowers’ obligation to impound funds in the
Insurance Escrow pursuant to this Section 4.2(e) shall be suspended.

(f)      Payment of Taxes.    Borrowers shall pay all real estate taxes and
assessments and charges of every kind upon the Projects (the “Property Taxes”)
before the same become delinquent, and, unless Lender has paid such taxes
directly on Borrowers’ behalf, furnish to Lender evidence that the Property
Taxes are paid at least five (5) Business Days prior to the last date for
payment of such taxes and before imposition of any penalty or accrual of
interest. In order to effectuate the timely payment of all Property Taxes,
Borrowers shall pay to Lender, at the time of and in addition to the monthly
installments of principal and/or interest due under the Note, a sum equal to
1/12 of the amount estimated by Lender to be sufficient to enable Lender to pay
at least 60 days before they become due and payable, all Property Taxes as
determined by Lender (the “Property Tax Escrow”). Borrowers shall have the right
to pay Property Taxes under protest or to otherwise contest any such tax or
assessment, but only if (i) such contest has the effect of preventing the
collection of such taxes so contested and also of preventing the sale or
forfeiture of the Projects or any part thereof or any interest therein,
(ii) Borrowers have notified Lender of Borrowers’ intent to contest such taxes,
and (iii) if the Property Tax Escrow is determined to be insufficient to pay
such Property Taxes which are being protested, Borrowers have deposited security
in form and amount reasonably satisfactory to Lender, which shall be added to
the Property Tax Escrow. If Borrowers fail to commence such contest or, having
commenced to contest the same, shall thereafter fail to prosecute such contest
in good faith or with due diligence (as determined by Lender), or, upon adverse
conclusion of any such contest, shall fail to pay

 

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such Property Taxes, Lender shall apply the sums held in the Property Tax Escrow
to pay such Property Taxes, and if such sums are insufficient, Lender may, at
its election (but shall not be required to), pay and discharge any such Property
Taxes and any interest or penalty thereon, and any amounts so expended by Lender
shall be deemed to constitute disbursements of the Loan proceeds hereunder (even
if the total amount of disbursements would exceed the face amount of the Note).

(g)      Property Tax Escrow and Insurance Escrow.  So long as no Event of
Default exists hereunder and provided that Borrowers shall have delivered to
Lender a copy of the insurance premium bill or Property Tax bill, as the case
may be, and the Insurance Escrow or Property Tax Escrow is sufficient for the
purpose of paying such insurance premium or Property Tax, respectively, then
Lender shall apply the sums in the Insurance Escrow to pay such insurance
premiums and the sums in the Property Tax Escrow to pay such Property Taxes. If
the amount held in the applicable escrow with Lender is insufficient to fully
pay such amounts, Borrowers shall, within the earlier of (i) 10 days following
notice at any time from Lender or (ii) five (5) days prior to when such payment
is due, remit such additional sum as may be required for the full payment of
such insurance premiums or Property Taxes, and if Borrowers fail to do so,
Lender may disburse such amounts from the Loan (even if the total amount of
disbursements would exceed the face amount of the Note). All sums reserved or
held in the Property Tax Escrow and the Insurance Escrow may be commingled with
the general funds of Lender, and shall not be deemed to be held in trust for the
benefit of Borrowers. The Property Tax Escrow and Insurance Escrow shall be
maintained at a financial institution designated by Lender from time to time in
its sole and absolute discretion (so long as such institution’s deposits are
insured by the Federal Deposit Insurance Corporation). Borrowers hereby grant
Lender a first priority security interest in funds held in the Property Tax
Escrow and the Insurance Escrow, including all interest accruing thereon, and
all such funds are pledged as additional collateral for the Loan and Borrowers
shall execute any other documents and take any other actions necessary to
provide Lender with such a perfected security interest in such funds. Sums held
by Lender in the Property Tax Escrow and Insurance Escrow shall accrue interest
at rates determined by Lender to be equivalent to any interest received by
Lender on its own general funds, and any interest accruing and paid on such
amounts shall be deemed to be part of the Property Tax Escrow or Insurance
Escrow, as applicable, and absent an Event of Default hereunder, shall be
applied in accordance with this Section 4.2(g). Upon the Maturity Date or at any
time following an Event of Default, the moneys then remaining in escrow with
Lender or its agent shall, at Lender’s option, be applied against the
Indebtedness. The obligation of Borrowers to pay Property Taxes and insurance
premiums is not affected or modified by the provisions of this paragraph.

(h)      Personal Property.    All of Borrowers’ personal property, fixtures,
attachments and equipment delivered upon, attached to, used or required to be
used in connection with the operation of the Projects (collectively, the
“Personal Property”) shall always be located at the Projects and shall be kept
free and clear of all liens, encumbrances and security interests. Borrowers
shall not (nor shall it knowingly permit any Tenant to), without the prior
written consent of Lender, sell, assign, transfer, encumber, remove or

 

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permit to be removed from the Projects any of the Personal Property. So long as
no Event of Default has occurred and is continuing, Borrowers may sell or
otherwise dispose of the Personal Property when obsolete, worn out, inadequate,
unserviceable or unnecessary for use in the operation of the Projects, but, if
material to the operation of the Projects, only upon replacing the same with
other Personal Property at least equal in value and utility to the Personal
Property that is disposed.

(i)      Appraisals.    Lender shall have the right to obtain a new or updated
Appraisal of the Projects from time to time, and Borrowers shall cooperate with
Lender in this regard. The Borrowers shall pay for any such Appraisal if (a) an
Event of Default exists, (b) the Appraisal is the first Appraisal obtained by
Lender during any Loan Year (except for the first Loan Year), or (c) if the
Appraisal is obtained to comply with any Laws or regulatory requests, or Lender
policy promulgated to comply therewith.

(j)      Loss of Note or other Loan Documents.    Upon notice from Lender of the
loss, theft, or destruction of the Note and upon receipt of an affidavit of lost
note and an indemnity reasonably satisfactory to Borrowers from Lender, or in
the case of mutilation of the Note, upon surrender of the mutilated Note,
Borrowers shall make and deliver a new note of like tenor in lieu of the then to
be superseded Note. If any of the other Loan Documents were lost or mutilated,
Borrowers agree to execute and deliver replacement Loan Documents in the same
form of such Loan Document(s) that were lost or mutilated.

(k)      Publicity.    With the prior written approval of Guarantor, which shall
not be unreasonably withheld, delayed or denied, Lender may publicize the making
of the Loan and, in such publicity, may include a brief description of the
Projects and the Loan, including the amounts and the identities of the parties
involved.

(l)      Indemnification.    Borrowers shall indemnify Lender, including each
party owning an interest in the Loan and their respective successors, assigns,
officers, directors, employees and consultants (each, an “Indemnified Party”)
and defend and hold each Indemnified Party harmless from and against all claims,
suits, actions, losses, injuries, damages, liabilities, criminal and civil
penalties, excise taxes, costs and Expenses (including attorneys fees and costs)
of any and every kind to any Persons or property by reason of or in any way
related to or arising out of (i) the operation or maintenance of the Projects;
(ii) any claims made by any third party against Lender in any manner relating to
or arising out of any breach of representation or warranty, Default or Event of
Default under any of the Loan Documents; (iii) any Indemnified Party’s response
to a subpoena or involvement in discovery, litigation, or similar matters that
would not have occurred but for the Loan; (iv) any and all claims for brokerage,
leasing, finders or similar fees which may be made relating to the Projects, the
Loan, the Indebtedness or the Loan Documents, or (v) any claims made by any
third party against Lender in any manner relating to or arising out of any other
matter arising in connection with the Loan, any Borrower, Guarantor, any
Environmental Indemnitor, any Lease, any Tenant, any Project or any Person
claiming by or through any of the foregoing which may be asserted against,
imposed on or incurred by an Indemnified Party in connection with the
Indebtedness, the Loan, the Loan Documents, the Projects or any portion of any
of the foregoing or the exercise by an Indemnified Party of rights or

 

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remedies granted to it under the Loan Documents or applicable Law.
Notwithstanding the immediately preceding sentence, no Indemnified Party shall
be entitled to be indemnified against the gross negligence or willful misconduct
of any Indemnified Party. Upon written request by an Indemnified Party,
Borrowers will undertake, at their own costs and expense, on behalf of such
Indemnified Party, using counsel reasonably satisfactory to the Indemnified
Party, the defense of any legal action or proceeding whether or not such
Indemnified Party shall be a party and for which such Indemnified Party is
entitled to be indemnified pursuant to this Section 4.2(l). At Lender’s option,
Lender may, at Borrowers’ expense, prosecute or defend any action involving the
priority, validity or enforceability of any of the Loan Documents.

If any Indemnified Party is made a party defendant to any litigation or any
claim is threatened or brought against any Indemnified Party concerning the
Indebtedness, the Loan Documents, the Projects or any part thereof, or any
interest therein, or the construction, maintenance, operation or occupancy or
use thereof, then Borrowers shall indemnify, defend and hold the Indemnified
Parties harmless from and against all liability by reason of said litigation or
claims, including attorneys’ fees and expenses incurred by the Indemnified
Parties in any such litigation or claim, whether or not any such litigation or
claim is prosecuted to judgment. If Lender commences an action against Borrowers
to enforce any of the terms hereof or to prosecute any breach by Borrowers of
any of the terms hereof or to recover any sum secured hereby, Borrowers shall
pay to Lender its reasonable attorneys’ fees and expenses. The right to such
attorneys’ fees and expenses shall be deemed to have accrued on the commencement
of such action, and shall be enforceable whether or not such action is
prosecuted to judgment. If Borrowers breach any term of the Loan Documents,
Lender may engage the services of an attorney or attorneys to protect its rights
hereunder, and in the event of such engagement following any breach by
Borrowers, Borrowers shall pay Lender reasonable attorneys’ fees and expenses
incurred by Lender, whether or not an action is actually commenced against
Borrowers by reason of such breach. All references to “attorneys” in this
Subsection and elsewhere in the Loan Documents shall include, without
limitation, any attorney or law firm engaged by Lender and Lender’s in-house
counsel, and all references to “fees and expenses” in this Subsection and
elsewhere in the Loan Documents shall include, without limitation, any fees of
such attorney or law firm, any appellate counsel fees, if applicable, and any
allocation charges and allocation costs of Lender’s in-house counsel.

A waiver of subrogation shall be obtained by Borrowers from its insurance
carrier and, consequently, Borrowers waive any and all right to claim or recover
against Lender, its officers, employees, agents and representatives, for loss of
or damage to Borrowers, the Projects, Borrowers’ property or the property of
others under Borrowers’ control from any cause insured against or required to be
insured against by the provisions of the Loan Documents.

The indemnification obligations hereunder shall survive the repayment of the
Loan and any foreclosure, deed-in-lieu or transfer in lieu of foreclosure or
similar proceeding or any transfer of title to the Projects or any portion
thereof or a transfer of the ownership interest in Borrowers.

 

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(m)     Reserved.

(n)      Reserved.

(o)      Single Purpose Entity.    Each Borrower at all times shall remain a
Single Purpose Entity until after the Indebtedness has been repaid in full.
Specifically, Borrowers represent, warrant and covenant as follows:

(i)      Each Borrower has not and will not:

   (A)      engage in any business or activity other than the ownership,
leasing, operation and maintenance, financing and sale of the Project owned by
each such Borrower, and activities incidental thereto;

   (B)      acquire or own any assets other than (i) the applicable Project
owned by such Borrower, and (ii) such incidental Personal Property as may be
necessary for the operation of the Projects;

   (C)      merge into or consolidate with any Person, or dissolve, terminate,
liquidate in whole or in part, transfer or otherwise dispose of all or
substantially all of its assets (except in accordance with Section 2.10 herein)
or change its legal structure;

   (D)      fail to observe all organizational formalities, or fail to preserve
its existence as an entity duly organized, validly existing and in good standing
(if applicable) under the applicable Laws of the jurisdiction of its
organization or formation, or terminate or fail to comply with the provisions of
its organizational documents or modify or amend any provision of its
organizational documents relating to its status as a Single Purpose Entity
without the prior written consent of Lender;

   (E)      own any subsidiary, or make any investment in, any Person;

   (F)      commingle its assets with the assets of any other Person, or permit
any Affiliate or constituent party independent access to its bank accounts;

   (G)      incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than (i) the Indebtedness,
(ii) trade and operational indebtedness incurred in the ordinary course of
business with trade creditors, provided such indebtedness is (1) unsecured,
(2) not evidenced by a note, (3) on commercially reasonable terms and
conditions, and (4) unless being contested in good faith, not more than sixty
(60) days past due, and/or (iii) financing leases and purchase money
indebtedness incurred in the ordinary course of business relating to Personal
Property on commercially reasonable terms and conditions; provided,

 

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however, the aggregate amount of the indebtedness of the Borrowers, described in
(ii) and (iii) shall not exceed at any time three percent (3%) of the
outstanding principal amount of the Note and, provided, further, that for
purposes of this subsection (G)(x) tenant improvement, construction allowance or
similar obligations of Borrower under Leases shall not be considered “debt” or
“trade and operational indebtedness” and (y) the satisfaction of the
requirements of this subsection (G) shall not require any holder of any direct
or indirect interest in Borrower to make additional capital contributions;

   (H)     fail to maintain its records, books of account, bank accounts,
financial statements, accounting records and other entity documents separate and
apart from those of any other Person; except that Borrower’ financial position,
assets, liabilities, net worth and operating results may be included in the
consolidated financial statements of an Affiliate, provided that such
consolidated financial statements contain a footnote indicating that Borrowers
are a separate legal entity and that it maintains separate books and records;

   (I)      enter into any contract or agreement with any general partner,
member, shareholder, principal, guarantor of the obligations of Borrowers, or
any Affiliate of the foregoing, except upon terms and conditions that are
intrinsically fair, commercially reasonable and substantially similar to those
that would be available on an arms-length basis with unaffiliated third parties;

   (J)      maintain its assets in such a manner that it will be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any other Person;

   (K)     assume or guaranty the debts of any other Person, hold itself out to
be responsible for the debts of any other Person, or otherwise pledge its assets
for the benefit of any other Person or hold out its credit as being available to
satisfy the obligations of any other Person, ; provided, however, in order to
induce certain tenants (the “Induced Tenants”) to enter into Leases at the
Projects, Borrower has assumed and may assume certain obligations of the Induced
Tenants under leases for space at other buildings previously leased by such
Induced Tenants (including, without limitation, the assumptions of such
obligations previously assumed by its predecessor in interest) but all such
obligations shall constitute “indebtedness” under Section 4.2(o)(G)(i) above;

   (L)      make any loans or advances to any Person;

   (M)     fail to file its own tax returns or files a consolidated federal
income tax return with any Person (unless prohibited or required, as

 

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the case may be, by applicable Laws) unless such failure is corrected or
remedied within 30 days;

   (N)     fail either to hold itself out to the public as a legal entity
separate and distinct from any other Person or to conduct its business solely in
its own name or fail to correct any known misunderstanding regarding its
separate identity;

   (O)     fail to maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations as a result of distributions made by
Borrowers to a holder of any direct or indirect interest in Borrowers; provided,
however, that the foregoing shall not require any holder of any direct or
indirect interest in Borrowers to make additional capital contributions;

   (P)     if it is a partnership or limited liability company, without the
unanimous written consent of all of its partners or members, as applicable, and
the written consent of one hundred percent (100%) of the directors or managers,
as applicable, of each Borrower, (a) file or consent to the filing of any
petition, either voluntary or involuntary, to take advantage of any creditors
rights Laws, (b) seek or consent to the appointment of a receiver, liquidator or
any similar official, (c) take any action that might cause such entity to become
insolvent, or (d) make an assignment for the benefit of creditors;

   (Q)     fail to allocate shared expenses (including, without limitation,
shared office space and services performed by an employee of an Affiliate) among
the Persons sharing such expenses and to use separate stationery, invoices and
checks;

   (R)     fail to pay its own liabilities (including, without limitation,
salaries of its own employees) only from its own funds, provided that there are
sufficient funds from the operation of the applicable Projects to do so;
provided, however, that the foregoing shall not require any holder of any direct
or indirect interest in Borrower to make additional capital contributions; or

   (S)     acquire obligations or securities of its partners, members,
shareholders or other affiliates, as applicable;

In the event any Borrower is a single-member Delaware limited liability company,
the limited liability company agreements of Borrower (collectively, the “LLC
Agreement”) shall provide that (i) upon the occurrence of any event that causes
the sole member of any Borrower (“Member”) to cease to be the member of such
Borrower (other than (A) upon an assignment by Member of all of its limited
liability company interest in such Borrower and the admission of the transferee,
or (B) the resignation of Member and the admission of an additional member, in
either case in accordance with the terms of the Loan

 

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Documents and the LLC Agreement), the person executing the LLC Agreement as a
“Special Member” (as such term is defined in the LLC Agreement) (“Special
Member”) shall, without any action of any other Person and simultaneously with
the Member ceasing to be the member of such Borrower , automatically be admitted
to such Borrower and shall continue such Borrower without dissolution and
(ii) Special Member may not resign from such Borrower or transfer its rights as
Special Member unless (A) a successor Special Member has been admitted to such
Borrower as Special Member in accordance with requirements of Delaware Law. The
LLC Agreement shall further provide that (i) Special Member shall automatically
cease to be a member of such Borrower upon the admission to such Borrower of a
substitute Member, (ii) Special Member shall be a member of any Borrower that
has no interest in the profits, losses and capital of such Borrower and has no
right to receive any distributions of any Borrower assets, (iii) pursuant to
Section 18-301 of the Delaware Limited Liability Company Act (the “Act”),
Special Member shall not be required to make any capital contributions to any
Borrower and shall not receive a limited liability company interest in any
Borrower, (iv) Special Member, in its capacity as Special Member, may not bind
any Borrower, and (v) except as required by any mandatory provision of the Act,
Special Member, in its capacity as Special Member, shall have no right to vote
on, approve or otherwise consent to any action by, or matter relating to, any
Borrower, including, without limitation, the merger, consolidation or conversion
of any Borrower.

Upon the occurrence of any event that causes the Member to cease to be a member
of any Borrower, to the fullest extent permitted by Law, the personal
representative of Member shall, within ninety (90) days after the occurrence of
the event that terminated the continued membership of Member in any Borrower,
agree in writing (i) to continue such Borrower and (ii) to the admission of the
personal representative or its nominee or designee, as the case may be, as a
substitute member of such Borrower, effective as of the occurrence of the event
that terminated the continued membership of Member of a Borrower in such
Borrowers. Any action initiated by or brought against Member or Special Member
under any creditors rights Laws shall not cause Member or Special Member to
cease to be a member of any Borrower and upon the occurrence of such an event,
the business of such Borrower shall continue without dissolution. The LLC
Agreement shall provided that each of Member and Special Member waives any right
it might have to agree in writing to dissolve any Borrower upon the occurrence
of any action initiated by or brought against Member or Special Member under any
creditors rights Laws, or the occurrence of an event that causes Member or
Special Member to cease to be a member of any Borrower.

(p)      No Additional Encumbrances.  Borrowers shall not permit there to be any
encumbrances against the Projects except the Permitted Exceptions. Borrowers
shall also not default on the payment of any indebtedness that is not cured
within the time, if any, specified therefor in any agreement governing the same.

(q)      Organizational Documents/Guarantor Organizational Documents/ Manager
Organizational Documents.  Borrowers shall not, without the prior written
consent of Lender (which consent, in the case of clause (i) shall not be
unreasonably withheld, conditioned or delayed), permit or suffer (i) a material
amendment or modification of its Organizational Documents, the Guarantor
Organizational Documents or the Manager

 

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Organizational Documents or the organizational documents of any constituent
entity within Borrowers, (ii) the admission of any new member of any of the
Borrowers, (iii) any dissolution or termination of their existence, or (iv) any
change in their state of formation or incorporation or their name.

(r)      Furnishing Reports.  Upon Lender’s request, Borrowers shall provide
Lender with copies of all inspections, reports, test results and other
information received by Borrowers, which in any way relate to the Projects or
any part thereof.

(s)      Affiliate Transactions.  Prior to entering into any agreement with an
Affiliate pertaining to the Projects, Borrowers shall deliver to Lender a copy
of such agreement, which shall be satisfactory to Lender in its reasonable
discretion. If requested by Lender, such agreement shall provide Lender the
right to terminate it upon Lender (or its designee or an appointed receiver)
taking possession of the Projects or acquisition of the Projects through
receivership, foreclosure, a deed in lieu of foreclosure, UCC sale or otherwise.

(t)      Site Visits, Observation and Testing.    Lender and its agents and
representatives shall have the right upon reasonable notice to Borrowers (except
in the event of an emergency), at any reasonable time, to enter and visit the
Projects for the purpose of performing appraisals and observing the Projects,
and, subject to the express limitations set forth in Section 6.3 herein, taking
and removing soil or groundwater samples, and conducting tests on any part of
the Projects. Lender has no duty, however, to visit or observe the Projects or
to conduct tests, and no site visit, observation or testing by Lender, its
agents or representatives shall impose any liability on any of Lender, its
agents or representatives. Neither Borrowers nor any other party is entitled to
rely on any site visit, observation or testing by any of Lender, its agents or
representatives. Neither Lender, its agents nor representatives owe any duty of
care to protect Borrowers or any other party against, or to inform Borrowers or
any other party of any other adverse condition affecting the Projects. Lender
shall make reasonable efforts to avoid interfering with Borrowers’ use of the
Projects in exercising any rights provided in this Section 4.2(t).

(u)      Compliance With Anti-Terrorism and Anti-Money Laundering Laws.  Each of
Borrowers, Guarantor, and Wells Manager (i) is not, and will not become a
Blocked Person, (ii) is not and will not become owned or controlled by a Blocked
Person, (iii) is not acting and will not act for or on behalf of a Blocked
Person, (iv) is not otherwise associated with and will not become associated
with a Blocked Person, (v) is not providing and will not provide material,
financial or technological support or other services to or in support of the
illegal acts of a Blocked Person, or (vi) is not under investigation by any
governmental authority for any violation of any Anti-Terrorism and Anti-Money
Laundering Laws. Borrowers shall immediately notify Lender if Borrowers have
knowledge of any violation of the foregoing, and any violation of the foregoing
by Guarantor, Borrower and Wells Manager shall be deemed to be an Event of
Default by Borrowers hereunder. Borrowers will not cause or permit the transfer
of any interest in any Borrower to a Blocked Person and will not enter into any
Lease or undertake any activities in violation of any Anti-Terrorism and
Anti-Money Laundering Laws. Borrowers shall provide information as Lender may
require

 

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from time to time to permit Lender to satisfy its obligations under the
Anti-Terrorism and Anti-Money Laundering Laws.

(v)      Notice of Change.  Borrowers shall give Lender prior written notice of
any change in the location of its primary place of business.

(w)      No Use of Lender’s Name.  Without the prior written approval Lender,
Borrowers shall not directly or indirectly publish, disclose or otherwise use in
any advertising or promotional material, or press release or interview, the
name, logo or any trademark of Lender, or any of their Affiliates, other than as
required by Governmental Authority or to Borrower’s or Guarantor’s investors.

(x)      Defense of Title.  If, while the Loan Documents are in force, the title
to the Projects or the interest of Lender therein shall be the subject, directly
or indirectly, of any action at Law or in equity, or be attached directly or
indirectly, or endangered, clouded or adversely affected in any manner,
Borrowers, at Borrowers’ expense, shall take all necessary and proper steps for
the defense of said title or interest, including the employment of counsel
reasonably approved by Lender, the prosecution or defense of litigation, and the
compromise or discharge of claims made against said title or interest, unless
such defense of title and interest has been undertaken by the Title Insurer in a
manner and using counsel reasonably acceptable to Lender. Notwithstanding the
foregoing, in the event that Lender determines that Borrowers are not adequately
performing their obligations under this Section, Lender may, without limiting or
waiving any other rights or remedies of Lender hereunder, take such steps with
respect thereto as Lender shall deem necessary or proper and any and all costs
and expenses incurred by Lender in connection therewith, together with interest
thereon at the Default Rate from the date incurred by Lender until actually paid
by Borrowers, shall be immediately paid by Borrowers on demand and shall be
secured by the Security Instruments and by all of the other Loan Documents
securing all or any part of the Indebtedness evidenced by the Note.

(y)      Payment of Utilities, Assessments, Charges, Etc.  Borrowers shall pay
when due the principal of and the interest on the Indebtedness in accordance
with the terms of the Note. Borrowers shall also pay all charges, fees and other
sums required to be paid by Borrowers as provided in the Loan Documents, in
accordance with the terms of the Loan Documents, and shall observe, perform and
discharge all obligations, covenants and agreements to be observed, performed or
discharged by Borrowers set forth in the Loan Documents in accordance with their
terms. Further, Borrowers shall promptly and strictly perform and comply with
all covenants, conditions, obligations and prohibitions required of Borrowers in
connection with any other document or instrument affecting title to the
Projects, or any part thereof, regardless of whether such document or instrument
is superior or subordinate to the Security Instruments.

(z)      Zoning.  Without the prior written consent of Lender, Borrowers shall
not seek, make, suffer, consent to or acquiesce in any change in the plat of
subdivision, zoning or conditions of use of the Projects or the Improvements.
Borrowers shall comply with and make all payments required under the provisions
of any covenants, conditions or

 

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restrictions affecting the Projects or the Improvements. Borrowers shall comply
with all existing and future requirements of all governmental authorities having
jurisdiction over the Projects. Borrowers shall keep all licenses, permits,
franchises and other approvals necessary for the operation of the Projects in
full force and effect. Borrowers shall operate the Projects as a commercial
office Projects for so long as the Indebtedness is outstanding. If, under
applicable zoning provisions, the use of all or any part of the Projects or the
Improvements is or becomes a nonconforming use, Borrowers shall not cause or
permit such use to be discontinued or abandoned without the prior written
consent of Lender. Further, without Lender’s prior written consent, Borrowers
shall not file or subject any part of the Projects or the Improvements to any
declaration of condominium or co-operative or convert any part of the Projects
or the Improvements to a condominium, co-operative or other form of multiple
ownership and governance.

(aa)      Books, Records, Maintenance of Existence.    Borrowers shall keep
accurate books and records of account of the Projects and its own financial
affairs sufficient to permit the preparation of financial statements therefrom
in accordance with sound accounting principles, consistently applied. Lender and
its duly authorized representatives shall, upon reasonable notice, have the
right to examine, copy and audit Borrowers’ records and books of account at all
reasonable times. Borrowers and any general partner or managing member of
Borrowers shall (i) do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its existence, rights, and franchises,
(ii) continue to engage in the business presently conducted by it, (iii) obtain
and maintain all licenses, and (iv) qualify to do business and remain in good
standing under the Laws of each jurisdiction, in each case as and to the extent
required under applicable Law for the ownership, maintenance, management and/or
operation of the Projects.

(bb)      Further Assurances.  Borrowers shall, on the request of Lender and at
the expense of Borrower: (a) promptly correct any defect, error or omission
which may be discovered in the contents of the Loan Documents; (b) promptly
execute, acknowledge, deliver and record or file such further instruments
(including, without limitation, further mortgages, deeds of trust, security
deeds, security agreements, financing statements, continuation statements and
assignments of rents or leases) and promptly do such further acts as may be
necessary, desirable or proper to carry out more effectively the purposes of the
Security Instruments and the other Loan Documents and to subject to the liens
and security interests hereof and thereof any property intended by the terms
hereof and thereof to be covered hereby and thereby, including specifically, but
without limitation, any renewals, additions, substitutions, replacements or
appurtenances to the Projects; (c) promptly execute, acknowledge, deliver,
procure and record or file any document or instrument (including specifically,
without limitation, any financing statement) reasonably deemed advisable by
Lender to protect, continue or perfect the liens or the security interests
hereunder against the rights or interests of third persons; and (d) promptly
furnish to Lender, upon Lender’s reasonable request, a duly acknowledged written
statement and estoppel certificate addressed to such party or parties as
directed by Lender and in form and substance supplied by Lender, setting forth
all amounts due under the Note, stating to Borrowers’ knowledge whether any
Default or Event of Default has occurred hereunder, stating to Borrowers’
knowledge

 

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whether any offsets or defenses exist against the Indebtedness and containing
such other matters as Lender may reasonably require.

(cc)      Easements and Rights-of-Way.    Borrowers shall not grant any easement
or right-of-way with respect to all or any portion of the Projects or the
Improvements without the prior written consent of Lender, except such easements
or rights of way that do not adversely affect the current or anticipated use of
the Projects. The purchaser at any foreclosure sale hereunder may, at its
discretion, disaffirm any easement or right-of-way granted in violation of any
of the provisions of the Loan Documents and may take immediate possession of the
Projects free from, and despite the terms of, such grant of easement or
right-of-way. If Lender consents to the grant of an easement or right-of-way,
Lender agrees to grant such consent without charge to Borrowers other than
expenses, including, without limitation, reasonable attorneys’ fees, incurred by
Lender in the review of Borrowers’ request and in the preparation of documents
effecting the subordination.

(dd)      Anti-Money Laundering.  At all times throughout the term of the Loan,
including after giving effect to any Transfers permitted pursuant to the Loan
Documents, none of the funds of Borrowers or Guarantor, as applicable, that are
used to repay the Loan shall be derived from any unlawful activity, with the
result that the investment in Borrowers or Guarantor, as applicable (whether
directly or indirectly), is prohibited by Law or the Loan is in violation of
Laws.

(ee)      Lobby Lease/Retail Facility Lease.  Wells VAF-330 Commerce Street, LLC
shall at all times during the term of the Loan comply with all of its
obligations under the Lobby Lease and comply in all material respects with its
obligations under the Retail Facility Lease. Wells VAF-330 Commerce Street, LLC
shall not, without Lender’s prior written consent, materially amend, modify,
terminate or cancel the Lobby Lease or the Retail Facility Lease. Wells VAF-330
Commerce Street, LLC shall promptly notify Lender of any material defaults under
the Lobby Lease and the Retail Facility Lease. Borrower shall promptly deliver
to Lender copies of any default notices or other material correspondence sent to
or delivered by Wells VAF-330 Commerce Street, LLC pursuant to the Lobby Lease
and the Retail Facility Lease.

(ff)       Incorporation.  All covenants, representations and warranties
contained in Section 8 of the Security Instrument encumbering the Commerce
Project are hereby incorporated herein by reference.

(gg)      Non Disturbance.  Borrowers shall, in good faith and with reasonable
diligence, endeavor to obtain and deliver to Lender recordable non-disturbance
agreements in form and substance satisfactory to Lender, from Regions Bank or
such other holder of the security instruments set forth in Schedule V attached
hereto.

4.3      Authorized Representative.

The Authorized Representative has been appointed by Borrowers for purposes of
dealing with Lender on behalf of Borrowers in respect of any and all matters in
connection

 

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with this Agreement, the other Loan Documents, and the Loan. The Authorized
Representative shall have the power, in his or her discretion, to give and
receive all notices, monies, approvals, and other documents and instruments, and
to take any other action on behalf of Borrowers. All actions by the Authorized
Representative shall be final and binding on Borrowers. Borrowers may appoint a
new Authorized Representative with Lender’s prior written consent, which consent
shall not be unreasonably withheld, conditioned or delayed. Lender may rely on
the authority given to the then existing Authorized Representative to appoint a
new Authorized Representative, or a duly authorized resolution from the
Borrowers appointing a new Authorized Representative, whom Lender has approved.
No more than one person shall serve as Authorized Representative at any given
time. Nothing in this Section 4.3 shall be deemed to limit or prohibit Lender
from (i) communicating or dealing with Guarantor, Wells Manager or any of their
members, partners, owners or employees, (ii) accepting the authority of
Guarantor or Wells Manager to act on behalf of such parties, or (iii) accepting
the implied or apparent authority of another representative to act on behalf of
Borrowers when the Authorized Representative is unavailable.

ARTICLE 5

BORROWERS’ REPRESENTATIONS AND WARRANTIES

5.1      Borrowers’ Representations and Warranties.

To induce Lender to execute this Agreement and perform its obligations
hereunder, Borrowers hereby represents and warrants to Lender, on the Closing
Date and until all amounts due under the Loan and Loan Documents are paid in
full and the Loan Documents are terminated, as follows:

(a)      Each Borrower lawfully possesses and holds fee simple title to the
Project that it owns, free and clear of all liens, claims, encumbrances,
covenants, conditions and restrictions, security interest and claims of others,
except only the Permitted Exceptions. Borrowers have full power and lawful
authority to grant, bargain, sell, convey, assign, transfer, encumber and
mortgage its interest in the Projects in the manner and form contemplated by the
Security Instruments. Borrowers will preserve its interest in and title to the
Projects and will forever warrant and defend the same to Lender against any and
all claims whatsoever and will forever warrant and defend the validity and
priority of the lien and security interest created under the Security
Instruments against the claims of all Persons and parties whomsoever, subject to
the Permitted Exceptions. The Security Instruments creates (i) a valid,
perfected lien on the Projects, subject only to Permitted Exceptions and the
liens created by the Loan Documents and (ii) perfected security interests in and
to, and perfected collateral assignments of, all personalty, all in accordance
with the terms thereof, in each case subject only to any applicable Permitted
Exceptions, such other liens as are permitted pursuant to the Loan Documents and
the liens created by the Loan

 

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Documents. There are no security agreements or financing statements affecting
all or any portion of the Projects other than (i) as disclosed in writing by
Borrowers to Lender prior to the date hereof and (ii) the security agreements
and financing statements created in favor of Lender. There are no claims for
payment for work, labor or materials affecting the Projects which are or may
become a lien prior to, or of equal priority with, the liens created by the Loan
Documents. None of the Permitted Exceptions, individually or in the aggregate,
materially interfere with the benefits of the security intended to be provided
by the Security Instruments, materially and adversely affect the value of the
Projects, materially impair the use or operations of the Projects or materially
impair Borrowers’ ability to pay its obligations in a timely manner. The
foregoing warranty of title shall survive the foreclosure of the Security
Instruments and shall inure to the benefit of and be enforceable by Lender in
the event Lender acquires title to the Projects pursuant to any foreclosure.
Each Borrower is a Single Purpose Entity. Each of the Lobby Lease and Retail
Facility Lease is in full force and effect without default.

(b)      As of the date of this Agreement, there is no litigation or proceeding
pending, or to the best of Borrowers’ knowledge threatened, against any Project,
any Borrower, or Guarantor, other than as set forth in Exhibit G. There is no
item set forth in Exhibit G which could, if adversely determined, cause a
Material Adverse Change with respect to any Borrower, Guarantor, or any Project.
As of the date of this Agreement, there are no Environmental Proceedings and
Borrowers have no knowledge of any threatened Environmental Proceedings or any
facts or circumstances which may give rise to any future Environmental
Proceedings.

(c)      Borrowers are duly organized and validly existing limited liability
companies and are in good standing under the Laws of the State of Borrowers’
organization, formation or incorporation set forth in Section 1.1, with its
principal place of business at the address set forth in Section 1.1. Each
Borrower is in good standing under, and is authorized to transact business in,
the Laws of the State in which the Project such Borrower owns is located.
Borrowers have full power and authority to execute, deliver and perform all Loan
Documents to which such Borrower is a party, and such execution, delivery and
performance have been duly authorized by all requisite action on the part of
Borrowers. The Loan Documents have each been duly executed and delivered and
each constitutes the duly authorized, valid and legally binding obligation of
Borrowers and the Guarantor, as the case may be, enforceable against Borrowers
and the Guarantor, as the case may be, in accordance with their respective
terms, except to the extent that the enforcement thereof or the availability of
equitable remedies may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent transfer, fraudulent conveyance or similar
laws now or hereafter in effect relating to or affecting creditors rights
generally or by general principals of equity, or by the discretion of any court
in awarding equitable remedies, regardless of whether such enforcement is
considered in a proceeding of equity or at law. Borrowers’ exact name is the
name set forth in Section 1.1. Borrowers use no trade name(s) other than its
actual name(s) set forth herein. The Loan Documents are not subject to and
Borrowers have not asserted any right of rescission, set-off, counterclaim or
defense.

(d)      Guarantor is duly organized or formed, validly existing and in good
standing under the Laws of the State of Georgia with its principal place of
business at 6200 The Corners Parkway, Norcross, Georgia 30092. Guarantor is the
sole member of each Borrower and owns one hundred percent (100%) of the
ownership interests in each Borrower free and clear of all liens, claims,
encumbrances, and rights of others. Guarantor has full right, power and
authority to execute the Loan Documents on its own behalf and on behalf of

 

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Borrowers. Wells Manager is the manager of Guarantor and owns none of the
membership interests of Guarantor as a member. As of the date of this Agreement,
all direct and indirect ownership interests in Borrowers, Guarantor and Wells
Manager are set forth in the organizational chart attached hereto as Exhibit K.

(e)      A true and complete copy of articles of organization, certificate of
formation and limited liability company operating agreement creating Borrowers,
and all other documents creating and governing Borrowers and any and all
amendments thereto (collectively, the “Organizational Documents”) has been
furnished to Lender. There are no other agreements, oral or written, among any
of the members of Borrowers relating to the formation, organization or
management of Borrowers. The Organizational Documents were duly executed and
delivered, are in full force and effect, and binding upon and enforceable
against each of the respective partners and members, as the case may be, in
accordance with their terms. The Organizational Documents constitute the entire
understanding among the members of each of the Borrowers relating to the
formation, organization or management of Borrowers. No breach exists under the
Organizational Documents and no act has occurred and no condition exists which,
with the giving of notice or the passage of time, would constitute a breach
under the Organizational Documents.

(f)       A true and complete copy of articles of organization, certificate of
formation and limited liability company operating agreement creating Guarantor,
and all other documents creating and governing Guarantor and any and all
amendments thereto (collectively, the “Guarantor Organizational Documents”) has
been furnished to Lender. There are no other agreements, oral or written, among
any of the members of Guarantor relating to the formation, organization or
management of Guarantor. The Guarantor Organizational Documents were duly
executed and delivered, are in full force and effect, and binding upon and
enforceable against each of the respective partners and members, as the case may
be, in accordance with their terms. The Guarantor Organizational Documents
constitute the entire understanding among the partners of Guarantor relating to
the formation, organization or management of Guarantor. No breach exists under
the Guarantor Organizational Documents and no act has occurred and no condition
exists which, with the giving of notice or the passage of time, would constitute
a breach under the Guarantor Organizational Documents.

(g)      A true and complete copy of articles of organization, certificate of
formation and limited liability company operating agreement creating Wells
Manager, and all other documents creating and governing Wells Manager and any
and all amendments thereto (collectively, the “Wells Manager Organizational
Documents”) has been furnished to Lender. There are no other agreements, oral or
written, among any of the members of Wells Manager relating to the formation,
organization or management of Wells Manager. The Wells Manager Organizational
Documents were duly executed and delivered, are in full force and effect, and
binding upon and enforceable against each of the members, in accordance with
their terms. The Wells Manager Organizational Documents constitute the entire
understanding among the members of Wells Manager relating to the formation,
organization or management of Wells Manager. No breach exists under the Wells
Manager Organizational Documents and no act has occurred and no condition exists
which, with the

 

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giving of notice or the passage of time, would constitute a breach under the
Wells Manager Organizational Documents.

(h)      No consent, approval or authorization of or declaration, registration
or filing with any person or entity, including any creditor, partner, Guarantor,
member of Borrower, or Governmental Authority, is required in connection with
the execution, delivery and performance of the Loan Documents, except for the
recordation of the Security Instruments, the filing of UCC Financing Statements,
and such consents, approvals, authorizations, declarations or filings where the
failure to so obtain would not have an adverse effect on Borrowers or Guarantor
or which have been obtained as of any date on which this representation is made
or remade. The Borrowers and Guarantor, taken as a whole, are not insolvent and
at no time has there ever been any: (i) assignment made for the benefit of the
creditors of any of them; (ii) appointment of a receiver for any of them or for
the property of any of them; or (iii) bankruptcy, reorganization, or liquidation
proceeding instituted by or against any of them. No bankruptcy, insolvency
proceedings or liquidation of all or a substantial portion of any Project is
pending or contemplated by any Borrower or Guarantor or, to the best knowledge
of Borrowers, against any Borrower or Guarantor. As of the date of this
Agreement, there is no Default under any of the Loan Documents, nor any
condition which, after notice or the passage of time or both, would constitute a
default or an Event of Default under such documents. In addition, each Borrower
is in compliance in all material respects with each contract, agreement,
instrument or commitment to which it is a party or any obligation or duty under
any Permitted Exceptions or REA or, as of the date of this Agreement, any other
agreement, contract, instrument or commitment to which any Projects are bound.
The execution, delivery and compliance with the terms and provisions of the Loan
Documents will not (i) violate any applicable provisions of Law or any
applicable regulation, order or other decree of any court or governmental
entity, or (ii) conflict or be inconsistent with, or result in any default
under, any of the Borrowers’ Organizational Documents, Guarantor Organizational
Documents, Wells Manager Organizational Documents, or any contract, agreement,
instrument or commitment to which Borrowers are bound. Borrowers have delivered
to Lender copies of any agreements (including Leases) between any Borrower and
any Affiliate related in any way to the Projects and any other agreements or
documents materially affecting the use and operation of the Projects or, as of
the date of this Agreement, the construction of the Capital Improvements or
Tenant Improvements thereon. No Borrower is a party to any contract, agreement
or instrument or subject to any restriction which might materially adversely
affect any Borrower, any Project, the Guarantor, or any business, properties,
operations or condition, financial or otherwise, of the Borrower or Guarantor.
No contract, agreement or instrument provides any party with the right to obtain
a lien or encumbrance upon any Project superior to the lien of the Security
Instruments. All contracts, agreements and instruments affecting the Projects
have been entered into at arms-length in the ordinary course of Borrowers’
business and provide for the payment of fees in amounts and upon terms
comparable to existing market rates.

(i)       To the best of Borrowers’ and Guarantor’s knowledge, as of the date of
this Agreement, (i) no condemnation of any portion of any Project, (ii) no
condemnation or relocation of any roadways abutting or provided access to any
Project, and (iii) no

 

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proceeding to deny access to any Project from any point or planned point of
access to any Project, has commenced or is contemplated or threatened by any
Governmental Authority.

(j)       The general purpose and use of the Projects is as set forth in
Section 1.1 and the contemplated accessory uses do not violate (i) any Laws
(including subdivision, zoning, building, environmental protection and wetland
protection Laws), or (ii) any building permits, covenants, conditions and
restrictions of record, any REA or other agreements affecting the Projects or
any part thereof. Neither the zoning authorizations, subdivision approvals or
variances nor any other right to construct or to use the Projects is to any
extent dependent upon or related to any real estate other than the Land, except
for the Lobby Lease and the REA at the Commerce Project. No building or other
improvement encroaches upon any property line, building line, set back line,
side yard line or any recorded or visible easement (or other easement of which
Borrowers are aware or has reason to believe may exist) with respect to the
Projects. No portion of any Project is situated in an area designated as having
special flood hazards as defined by the Flood Disaster Protection Act of 1973,
as amended, or as a wetland by any governmental entity having jurisdiction over
the Projects. All Governmental Approvals required for the operation of the
Projects and construction of the Capital Improvements have been obtained or will
be obtained in due course and in compliance with this Agreement and applicable
Law. All Laws relating to the operation of the Improvements have been complied
with in all material respects and all permits, licenses and intellectual
property rights required for the operation of the Projects have been obtained.
The Projects (other than the Commerce Project, which is accessible through the
Lobby Lease) are accessible through fully improved and dedicated roads, accepted
for maintenance and public use by public authority having jurisdiction. The
Projects have adequate water, gas and electrical supply, storm and sanitary
sewerage facilities, telephone facilities, other required public utilities, fire
and police protection, and means of access between the Projects and public
highways; none of the foregoing will be foreseeably delayed or impeded by virtue
of any requirements under any applicable Laws. The Projects include all property
and rights that may be reasonably necessary or desirable for the present and any
reasonable future beneficial uses and enjoyment thereof. To the best of
Borrowers’ knowledge, there are no, nor are there any alleged or asserted,
violations in any material respect of Law, regulations, ordinances, codes,
permits, licenses, declarations, covenants, conditions or restrictions of
record, or other agreements relating to the Projects, or any part thereof. In
the event that all or any part of the Improvements are destroyed or damaged,
said Improvements can be legally reconstructed to their condition prior to such
damage or destruction, and thereafter exist for the same use without violating
any zoning or other ordinances applicable thereto and without the necessity of
obtaining any variances or special permits. The Projects and Improvements do not
require any rights over, or restrictions against, other property in order to
comply with any Laws, governmental ordinances, orders or requirements, which
have not already been obtained.

(k)      No brokerage fees or commissions are payable by or to any person in
connection with this Agreement or the Loan to be disbursed hereunder other than
to Mortgage Broker.

 

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(l)       All financial statements and other documents and information
previously furnished to Lender by Borrowers, Guarantor or Wells Manager are
true, complete and correct, and such financial statements were prepared in
accordance with sound accounting practices applied on a consistent basis, fairly
present the financial condition as of the date(s) indicated, and do not fail to
state any material fact necessary to make such statements or information not
misleading. No Material Adverse Change with respect to Borrowers, Guarantor, or
the Projects has occurred since the respective dates of such statements and
information. Neither Borrowers nor Guarantor has any material liability,
contingent or otherwise, not disclosed in such financial statements. No
statement of fact made by Borrowers or Guarantor in any Loan Documents contains
any untrue statement of a material fact or omits to state any material fact
necessary to make statements contained therein not misleading. As of the date of
this Agreement, there is no material fact presently known to Borrowers or
Guarantor that has not been disclosed to Lender which adversely affects, or, as
far as Borrowers can foresee, might adversely affect, the Projects or the
business, operations or condition (financial or otherwise) of Borrowers or
Guarantor. Borrowers have no contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments, unrealized or anticipated losses from
any unfavorable commitments or any liabilities or obligations which would result
in a violation of the Loan Agreement or the other Loan Documents. Since the date
of the most recent financial statements delivered to Lender, there has been no
materially adverse change in the financial condition, operations or business of
Borrowers, the Guarantor or the Projects from that set forth in said financial
statements.

(m)     The Projects are taxed separately without regard to any other property
and for all purposes the Projects may be mortgaged, conveyed and otherwise dealt
with as an independent parcel. As of the date of this Agreement ,there are no
unpaid or outstanding real estate or other taxes or assessments on or against
the Projects or any part thereof, except general real estate taxes not yet due
or payable. As of the date of this Agreement, to Borrowers’ and Guarantor’s
knowledge, there is no pending or contemplated action pursuant to which any
special assessment may be levied against any portion of the Projects. Borrowers
and any general partner or managing member of Borrower, if any, has filed all
federal, state and local tax returns required to be filed as of the date hereof
and has paid or made adequate provision for the payment of all federal, state
and local taxes, charges and assessments payable by Borrowers and any general
partner or managing member, if any, as of the date hereof. Borrowers and any
general partner or managing member, if any, believe that their respective tax
returns properly reflect the income and taxes of Borrowers and said general
partner or managing member, if any, for the periods covered thereby, subject
only to reasonable adjustments required by the Internal Revenue Service or other
applicable tax authority upon audit. Borrowers and the Projects are free from
any past due obligations for sales and payroll taxes.

(n)      As of the date of this Agreement, except for Leases which have been
provided to and approved by Lender in writing, Borrowers and the previous owners
of the Land have not entered into any Leases, subleases or other arrangements
for occupancy of space within the Projects that are currently in effect other
than as set forth on the rent roll attached hereto as Exhibit D, which Borrowers
certify is true and correct in all material

 

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respects. True, correct and complete copies of Borrowers’ form lease and all
Leases, as amended, have been delivered to Lender. As of the date of this
Agreement ,all Leases are in full force and effect and each Lease constitutes
the legal, valid and binding obligation of Borrowers and, to the best of
Borrowers’ knowledge and belief, is enforceable against the Tenant thereof. As
of the date of this Agreement, neither Borrowers nor to the knowledge of
Borrowers any Tenant is in default under any Lease, except as set forth in
Exhibit D attached hereto or otherwise disclosed to Lender in writing. Borrowers
have disclosed to Lender in writing any material default by any Tenant under any
Lease and no notice of termination has been issued under any Lease. As of the
date of this Agreement, no Tenant under any Lease has, as of the date hereof,
paid rent more than thirty (30) days in advance, and the rents under such Leases
have not been waived, released, or otherwise discharged or compromised. All
security deposits required under such Leases have been fully funded and are held
by Borrowers in a separate segregated account or as otherwise required by
applicable Law. As of the date of this Agreement, except as set forth in
Exhibit D attached hereto, all work to be performed by Borrowers under the
Leases has been substantially performed, all contributions to be made by
Borrowers to the Tenants thereunder have been made and all other conditions
precedent to each such Tenant’s obligations thereunder have been satisfied. As
of the date of this Agreement, each Tenant under a Lease has entered into
occupancy of the demised premises. As of the date of this Agreement, to the best
of Borrowers’ knowledge and belief, each Tenant is free from bankruptcy,
reorganization or arrangement proceedings or a general assignment for the
benefit of creditors. No Lease provides any party with the right to obtain a
lien or encumbrance upon any Project superior to the lien of the Security
Instruments.

(o)      The proceeds of the Loan shall be used for proper business purposes.
The Loan is not being made for the purpose of purchasing or carrying “margin
stock” within the meaning of Regulation G, T, U or X issued by the Board of
Governors of the Federal Reserve System and no portion of the proceeds of the
Loan shall be used in any manner that would violate such Regulations or
otherwise violate the Securities Act of 1933 or the Securities Exchange Act of
1934 and Borrowers agree to execute all instruments necessary to comply with all
the requirements of Regulation U of the Federal Reserve System. Neither Borrower
nor Guarantor is (i) an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended; (ii) a “holding company” or a “subsidiary company” of a “holding
company” or an “affiliate” of either a “holding company” or a “subsidiary
company” within the meaning of the Public Utility Holding Company Act of 2005,
as amended; or (iii) subject to any other federal or state Law or regulation
which purports to restrict or regulate its ability to borrow money.

(p)      No Borrower is a party in interest to any plan defined or regulated
under ERISA, and the assets of Borrowers are not “plan assets” of any employee
benefit plan covered by ERISA or Section 4975 of the Internal Revenue Code.

(q)      None of Borrowers, Guarantor, nor Wells Manager is or will be, and no
legal or beneficial interest of any of the foregoing entities is or will be
held, directly or indirectly, by a Foreign Person.

 

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(r)      As of the date of this Agreement, Borrowers and Guarantor have
furnished Lender with a true and complete copy of all material documents
relating to construction of the Capital Improvements.

(s)      All statements set forth in the Recitals are true and correct.

(t)      As of the date of this Agreement, there has been no damage or
destruction of any part of the Projects by fire or other casualty that has not
been repaired. As of the date of this Agreement, except as part of the Capital
Improvements or routine maintenance, there are presently no existing defects in
the Projects or any Improvements and no repairs or alterations thereof are
reasonably necessary or appropriate.

(u)      As of the date of this Agreement, to the knowledge of Borrower, all
parties to any REA are in compliance with all of the terms thereof and there are
no defaults thereunder. Borrowers shall not enter into, terminate or modify any
REA without Lender’s prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. Borrowers shall enforce, comply
in all material respects with, and cause each of the parties to the REA to
comply with all of the material economic terms and conditions contained in the
REA.

(v)      The property management agreements relating to the Projects
(collectively, the “Management Agreements”) are in full force and effect and to
the best of Borrowers’ knowledge, as of the date of this Agreement, there is no
default, breach or violation existing thereunder by any party thereto beyond the
expiration of applicable notice and grace periods thereunder and no event has
occurred (other than payments due but not yet delinquent) that, with the passage
of time or the giving of notice, or both, would constitute a default, breach or
violation by any party thereunder. The fee due under the Management Agreements,
and the terms and provisions of the Management Agreements, are subordinate to
the Security Instruments.

(w)     Borrowers have not entered into the Loan or any Loan Document with the
actual intent to hinder, delay, or defraud any creditor, and Borrower has
received reasonably equivalent value in exchange for its obligations under the
Loan Documents. Giving effect to the transactions contemplated by the Loan
Documents, the fair saleable value of each Borrower’s assets, in the aggregate,
exceeds and will, immediately following the execution and delivery of the Loan
Documents, exceed such Borrower’s total liabilities, including subordinated,
unliquidated, disputed or contingent liabilities, including the maximum amount
of its contingent liabilities or its debts as such debts become absolute and
matured. Borrower’s assets do not and, immediately following the execution and
delivery of the Loan Documents will not, constitute unreasonably small capital
to carry out its business as conducted or as proposed to be conducted. Borrowers
do not intend to, and does not believe that they will, incur debts and
liabilities (including contingent liabilities and other commitments) beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts to be payable on or in respect of obligations of Borrowers).

 

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Borrowers agree that all of the representations and warranties set forth above
and elsewhere in this Agreement are true as of the date hereof, will be true at
the Closing Date and, except for matters that have been disclosed by Borrowers
and approved by Lender in writing, at all times thereafter until all amounts due
under the Loan and Loan Documents have been paid in full and the Loan Documents
have been terminated. Each disbursement of Loan proceeds (including any
disbursement from the Holdback and the Interest Reserve, if any) shall be deemed
to be a reaffirmation by Borrowers that each of the representations and
warranties is true and correct as of the date of such disbursement, except to
the extent that such representations and warranties expressly relate solely to
an earlier date (in which case such representations and warranties shall have
been true and accurate on and as of such earlier date), and except for matters
that have been disclosed by Borrowers or Guarantor and approved by Lender in
writing.

ARTICLE 6

ENVIRONMENTAL MATTERS

6.1      Environmental Representations and Warranties.

Each Environmental Indemnitor hereby represents and warrants to Lender that as
of the date of this Agreement, (i) except as specifically disclosed in the
documents listed in Exhibit F attached hereto (the “Environmental Documents”) to
the best of Environmental Indemnitor’s knowledge, (a) the Projects, except for
materials used in de minimus quantities and in the ordinary course of
maintenance and operation (and in compliance with all Laws) of Borrowers’ or any
Tenant’s business at the Projects (“DeMinimus Amounts”), has been and is free of
all Hazardous Material, and (b) no release of any Hazardous Material has
occurred on, onto or about any of the Projects; (ii) none of the Borrowers nor,
to the best of Environmental Indemnitor’s knowledge, any other person or entity,
has ever caused or permitted any Hazardous Material (other than DeMinimus
Amounts) to be placed, held, located or disposed of on, under, at or in a manner
to affect the Projects, or any part thereof, and the Projects have never been
used (whether by any of the Borrowers or, to the best of Environmental
Indemnitor’s knowledge, by any other person or entity) for any activities
involving, directly or indirectly, the use, generation, treatment, storage,
transportation, or disposal of any Hazardous Material (other than DeMinimus
Amounts); (iii) except as specifically disclosed in the Environmental Documents,
the Projects currently comply, and will comply based on its anticipated use,
with all Laws relating to Hazardous Material; (iv) except as specifically
disclosed in the Environmental Documents, to the best of Environmental
Indemnitor’s knowledge, in connection with the ownership, operation, and use of
the Projects, all necessary notices have been filed and all required permits,
licenses and other authorizations have been obtained, including those relating
to the generation, treatment, storage, disposal or use of Hazardous Material;
(v) except as specifically disclosed in the Environmental Documents, to the best
of Environmental Indemnitor’s knowledge, there is no present, past or as of the
date of this Agreement, threatened investigation, inquiry or proceeding relating
to the environmental condition of, or to events on or about, any Project;
(vi) as of the date of this Agreement, none of the Projects nor any Borrower is
subject to any remedial obligations under any Laws relating to Hazardous
Material, health or

 

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the environment; (vii) to the best of Environmental Indemnitor’s knowledge,
there are no underground tanks, vessels, or similar facilities for the storage,
containment or accumulation of Hazardous Material of any sort on, under or
affecting any Project; and (viii) it has not, nor will it, release or waive the
liability of any previous owner, lessee or operator of any Project or any party
who may be potentially responsible for the presence of or removal of Hazardous
Material from the Projects, nor has it made promises of indemnification
regarding Hazardous Material on any Project to any party, except as contained
herein and in the Loan Documents and except in connection with prior loans
encumbering the Projects or to Tenants.

6.2      Environmental Covenants.

Environmental Indemnitors shall:

(a)      comply, and use commercially reasonable efforts to cause all other
persons on or occupying any Project to comply, with all Laws relating to
Hazardous Material;

(b)      not install, use, generate, manufacture, store, treat, release or
dispose of, nor permit the installation, use, generation, storage, treatment,
release or disposal of, Hazardous Material on, under or about any Project except
as specifically disclosed in the Environmental Documents and except for
materials used in the ordinary course of maintenance and operation (and in
compliance with all Laws) of Borrowers’ or any Tenant’s business at the
Projects;

(c)      immediately advise Lender in writing of: (i) any and all Environmental
Proceedings; (ii) except for materials used in the ordinary course of
maintenance and operation (and in compliance with all Laws) of Borrowers’ or any
Tenant’s business at any Project, the presence of any Hazardous Material on,
under or about any Project of which Lender has not previously been advised in
writing; (iii) any remedial action taken by, or on behalf of, any Environmental
Indemnitor in response to any Hazardous Material (other than DeMinimus Amounts)
on, under or about any Project or to any Environmental Proceedings of which
Lender has not previously been advised in writing; (iv) the discovery by any
Environmental Indemnitor of the presence of any Hazardous Material on, under or
about any real property or bodies of water adjoining or in the vicinity of any
Project; and (v) the discovery by any Environmental Indemnitor of any occurrence
or condition on any real property adjoining or in the vicinity of any Project
that could cause such Project or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use of any Project
under any Laws relating to Hazardous Material;

(d)      provide Lender with copies of all reports, analyses, notices, licenses,
approvals, orders, correspondences or other written materials in its possession
or control relating to the environmental condition of any Project or real
property or bodies of water adjoining or in the vicinity of any Project or
Environmental Proceedings immediately upon receipt, completion or delivery of
such materials;

 

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(e)      not install or allow to be installed any tanks for the storage of
Hazardous Material on, at or under any Project;

(f)       not create or permit to continue in existence any lien upon any
Project imposed pursuant to any Laws relating to Hazardous Material; provided,
however, that Borrowers shall have the right to contest in good faith and with
reasonable diligence the validity of any such lien or claim provided that
Borrowers notifies Lender of its desire to do so in writing and within 20 days
of the earlier of written notice by Borrowers to Lender of the existence of such
lien or written notice by Lender to Borrowers of the existence of such lien,
either (i) post a statutory lien bond that removes such lien from title to the
applicable Project, (ii) provide a letter of credit (in a form reasonably
acceptable to Lender) or cash deposit in an amount sufficient to pay one hundred
twenty-five percent (125%) of such lien claim or other security reasonably
satisfactory to Lender to protect Lender’s interest and security should the
contest be unsuccessful or (iii) cause such lien claim to be fully insured to
the reasonable satisfaction of Lender by the Title Company that issued the Title
Policy; and

(g)      not change or alter the present use of the Projects unless
Environmental Indemnitors shall have notified Lender thereof in writing and
Lender shall have determined, in its sole and absolute discretion, that such
change or modification will not result in the presence of Hazardous Material
(other than DeMinimus Amounts) on the Projects in question in such a level that
would increase the potential liability for Environmental Proceedings.

6.3      Right of Entry and Disclosure of Environmental Reports.

Borrowers hereby grant to Lender its agents, employees, consultants and
contractors, an irrevocable license and authorization to enter upon and inspect
the Projects at reasonable times and upon reasonable advance notice, and conduct
such environmental audits and tests, including, without limitation, subsurface
testing, soils and groundwater testing, and other tests which may physically
invade the Projects, which Lender in its reasonable discretion determines are
necessary or desirable. With respect to invasive testing, such as soil borings,
Lender shall consult with Borrowers in advance of such tests. Lender agrees,
however, that it shall not conduct any such audits or tests, unless a Default or
Event of Default exists under the Loan Documents or Lender has reason to believe
that such audit or test may disclose the presence or release of Hazardous
Material or unless an environmental audit deems further testing necessary in
which event such audits and tests shall be limited to the matters giving rise to
such reason to believe or deemed necessary in such environmental audit, as the
case may be. Without limiting the generality of the foregoing, Borrowers agree
that following an Event of Default, Lender shall have the right to appoint a
receiver to enforce this right to enter and inspect the Projects to the extent
such authority is provided under applicable Law. All reasonable out-of-pocket
costs and expenses incurred by Lender in connection with any inspection, audit
or testing conducted in accordance with this Section 6.3 shall be paid by
Borrowers. The results of all investigations and reports prepared by Lender
shall be and at all times remain the property of Lender and under no
circumstances shall Lender have any obligation whatsoever to disclose or
otherwise make available to Environmental Indemnitors or any other party such
results or any other

 

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information obtained by it in connection with such investigations and reports;
provided, however, that if there exists no Event of Default under the Loan
Documents, if requested by Borrowers, Lender shall provide to Borrowers a copy
of the written report with respect to any inspection, audit or testing for which
Borrowers have paid hereunder. Lender hereby reserves the right, and
Environmental Indemnitors hereby expressly authorize Lender to make available to
any party in connection with a sale of the Projects (or any one of them) any and
all environmental reports, whether prepared by Lender or prepared by Borrowers
and provided to Lender (collectively, the “Environmental Reports”), which Lender
may have with respect to the Projects. Borrowers consent to Lender notifying any
party under such circumstances of the availability of any or all of the
Environmental Reports and the information contained therein. Each Environmental
Indemnitor further agrees that Lender may disclose such Environmental Reports to
any governmental agency or authority if they reasonably believe that they are
required to disclose any matter contained therein to such agency or authority;
provided that Lender shall give Borrowers at least 48 hours’ prior written
notice before so doing. Each Environmental Indemnitor acknowledges that Lender
cannot control or otherwise assure the truthfulness or accuracy of the
Environmental Reports, and that the release of the Environmental Reports, or any
information contained therein, to prospective bidders at any foreclosure sale of
the Projects (or any one of them) may have a material and adverse effect upon
the amount, which a party may bid at such sale. Each Environmental Indemnitor
agrees that Lender shall not have any liability whatsoever as a result of
delivering any or all of the Environmental Reports or any information contained
therein to any third party as provided above, and each Environmental Indemnitor
hereby releases and forever discharges Lender from any and all claims, damages,
or causes of action arising out of connected with or incidental to the
Environmental Reports or the delivery thereof.

6.4      Environmental Indemnitor’s Remedial Work.

Environmental Indemnitors shall promptly perform any and all necessary remedial
work (“Remedial Work”) in response to any Environmental Proceedings or the
presence, storage, use, disposal, transportation, discharge or release of any
Hazardous Material on, under or about any of the Projects; provided, however,
that Borrowers shall perform or cause to be performed such Remedial Work so as
to minimize any impairment to Lender’s security under the Loan Documents.

All Remedial Work shall be conducted: (a) in a diligent and timely fashion by
licensed contractors acting under the supervision of a consulting environmental
engineer; (b) pursuant to a detailed written plan for the Remedial Work approved
by any public or private agencies or persons with a legal or contractual right
to such approval; (c) with such general liability insurance coverage pertaining
to liabilities arising out of the Remedial Work as is then customarily
maintained with respect to such activities; and (d) only following receipt of
any required permits, licenses or approvals. The selection of the Remedial Work
contractors and consulting environmental engineer, the contracts entered into
with such parties, any disclosures to or agreements with any public or private
agencies or parties relating to Remedial Work and the written plan for the
Remedial Work (and any changes thereto) shall each be subject to Lender’s prior
written approval, which shall not be

 

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unreasonably withheld or delayed. In addition, Environmental Indemnitors shall
submit to Lender, promptly upon receipt or preparation, copies of any and all
reports, studies, analyses, correspondence, governmental comments or approvals,
proposed removal or other Remedial Work contracts and similar information
prepared or received by Environmental Indemnitors in connection with any
Remedial Work, or Hazardous Material relating to any of the Projects. All costs
and expenses of such Remedial Work shall be paid by Environmental Indemnitors,
including, without limitation, the charges of the Remedial Work contractors and
the consulting environmental engineer, any taxes or penalties assessed in
connection with the Remedial Work and Lender’s reasonable fees and reasonable
out-of-pocket costs incurred in connection with monitoring or review of such
Remedial Work. Lender shall have the right but not the obligation to join and
participate in, as a party if it so elects, any legal proceedings or actions
initiated in connection with any Environmental Proceedings and such costs shall
be paid by Environmental Indemnitors.

6.5      Environmental Indemnity.

Environmental Indemnitors shall protect, indemnify, defend and hold Lender and
any participants, successors or assigns to Lender’s interest in the Loan, and
any other Affiliate of Lender who acquires any portion of the Loan at a
foreclosure sale or otherwise through the exercise of Lender’s rights and
remedies under the Loan Documents, and all directors, officers, employees and
agents of all of the aforementioned indemnified parties, harmless from and
against any and all actual or potential claims, liabilities, damages (direct or
indirect), and Expenses which arise out of or relate in any way to any breach of
any representation, warranty or covenant contained in this Article 6, or any
Environmental Proceedings or any use, handling, production, transportation,
disposal, release or storage of any Hazardous Material in, under or on any of
the Projects, whether by any Environmental Indemnitor or any other person,
including, without limitation:

(a)      all foreseeable and all unforeseeable Expenses (including any loss of
principal and interest due and owing on the Loan) arising out
of:    (i) Environmental Proceedings or the use, generation, storage, discharge
or disposal of Hazardous Material by Environmental Indemnitors, any prior owner
or operator of any of the Projects or any person on or about any of the
Projects; (ii) any residual contamination affecting any natural resource or the
environment; or (iii) any exercise by Lender of any of its rights and remedies
under this Article 6;

(b)      the costs of any required or necessary investigation, assessment,
testing, remediation, repair, cleanup, or detoxification of any of the Projects
and the preparation of any closure or other required plans; and

(c)      all amounts required to be paid by Environmental Indemnitors under this
Article 6 or any separate environmental indemnity in favor of Lender.

In addition, in the event any Hazardous Material is removed, or caused to be
removed from any of the Projects, by Environmental Indemnitors, Lender or any
other person, the number assigned by the U.S. Environmental Protection Agency to
such Environmental Proceedings

 

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or any similar identification shall in no event be in the name of Lender or
identify the Lender as a generator, arranger or other designation. The foregoing
indemnity shall not include Expenses arising solely from Hazardous Materials
which first exist on any of the Projects following the Transfer Date (as
hereinafter defined) if (but only if) the following conditions are fully
satisfied: (a) none of the Environmental Indemnitors, nor any Affiliate of any
of the Environmental Indemnitors nor any agent, employee or contractor of any of
the foregoing (or any of their agents) contributed, by act or omission, to the
cause, existence, or occurrence of such Hazardous Materials; and (b) the events
or state of facts (including without limitation, the presence of Hazardous
Materials) resulting (or with the passage of time eventually proximately
resulting) in any such Hazardous Materials did not exist prior to the Transfer
Date.

Notwithstanding anything in this Agreement and in the other Loan Documents to
the contrary, in no event shall Environmental Indemnitors be responsible or
liable to any Person indemnified under the foregoing indemnification (A) for
indirect, consequential, punitive or exemplary damages (including loss of use or
diminution in value) unless such damages were imposed upon such Person as a
result of any claims made against such Person by a Governmental Authority or
other third party, or (B) for any claims arising solely from the fraud, bad
faith, gross negligence, willful misconduct or criminal acts of such Person so
indemnified or any contractor, agent or any other party engaged by or within the
direct control of any such Person so indemnified.

Notwithstanding anything in this Agreement and in the other Loan Documents to
the contrary, each Person indemnified under the foregoing indemnification shall
give Environmental Indemnitors notice of any Environmental Proceeding which
Environmental Indemnitors are obligated to defend promptly after such Person so
indemnified receives notice of or otherwise becomes aware of such Environmental
Proceeding and Environmental Indemnitors shall thereafter assume the defense of
such Person so indemnified against such claim with attorneys and other
professionals reasonably approved by Lender. Notwithstanding the foregoing, if
the defendants in a claim include Environmental Indemnitors and any person so
indemnified who shall have reasonably concluded that (a) there are legal
defenses available to it that are materially different from those available to
Environmental Indemnitors, or (b) the use of the attorneys engaged by
Environmental Indemnitors would present such attorneys with a conflict of
interest, any person so indemnified may, in its reasonable discretion, engage
its own attorneys and other professionals to assume its legal defenses and to
defend or assist it, and, at the option of such Person so indemnified, its
attorneys shall act as co-counsel in connection with the resolution of any claim
or proceeding; provided, however, that any compromise or settlement of such
claim, shall be at the sole discretion of the indemnified party and may be
entered without Environmental Indemnitors’ consent. Upon demand, Environmental
Indemnitors shall be liable to, and shall pay or reimburse such Person so
indemnified for all such indemnity obligations including without limitation the
payment of reasonable out-of-pocket fees and disbursements for attorneys,
engineers, environmental consultants, laboratories and other professionals in
connection therewith; provided, however, that the fees and disbursements of
attorneys for which Environmental Indemnitors are so obligated under this
Article 6 shall, for

 

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each Environmental Proceeding or related Environmental Proceeding for which the
Persons so indemnified are seeking to be indemnified, be limited to the
reasonable out-of-pocket fees and disbursements of a single outside law firm
representing all of the Persons so indemnified as a group, and provided,
further, that the reasonable out-of-pocket fees and disbursements of engineers,
environmental consultants and other professionals for which Environmental
Indemnitors are obligated under this Article 6 shall, for each Environmental
Proceeding or related Environmental Proceeding for which the persons so
indemnified are seeking to be indemnified, be limited to the reasonable
non-duplicative fees and disbursements of one engineering firm, one
environmental consultant and one of any other type of professional which single
firm shall represent all of the persons so indemnified as a group, and provided,
further, that the reasonable fees and disbursements of laboratories for which
Indemnitor is obligated under this Article 6 shall, for each Environmental
Proceeding or related Environmental Proceeding for which the persons so
indemnified are seeking to be indemnified, be limited to the reasonable fees and
disbursements of the laboratories from which the professionals described above
have requested assessments or evaluations.

6.6      Remedies Upon an Environmental Default.

In addition to any other rights or remedies Lender may have under this
Article 6, at Law or in equity, in the event that Environmental Indemnitors
shall fail to timely comply with any of the provisions of this Article 6, or in
the event that any representation or warranty made in this Article 6 proves to
be false or misleading, then, in such event, after (i) delivering written notice
to Environmental Indemnitors, which notice specifically states that
Environmental Indemnitors have failed to comply with the provisions of this
Article 6; and (ii) the expiration of the earlier to occur of (A) a 30 day
period after receipt of such notice; provided that if such breach is
non-monetary in nature and Borrower diligently commences such cure during such
initial 30 day period then Borrowers shall have an additional 30 day period (for
a total cure period of 60 days) to comply with such provisions, and (B) the cure
period, if any, permitted under any applicable Law, rule, regulation or order
with which Environmental Indemnitors shall have failed to comply, Lender may
declare an Event of Default in this Agreement or any other Loan Documents and
exercise any and all remedies provided for herein and therein, and/or do or
cause to be done whatever is reasonably necessary to cause any of the Projects
to comply with all Laws relating to Hazardous Material and other applicable
Laws, rules, regulations or orders and the cost thereof shall constitute an
Expense hereunder and shall become immediately due and payable without notice
and with interest thereon at the Default Rate until paid. Environmental
Indemnitors shall give to Lender and its agents and employees access to any of
the Projects for the purpose of effecting such compliance and hereby
specifically grant to Lender a license, effective upon expiration of the
applicable cure period as described above, if any, to do whatever is necessary
to cause any of the Projects to so comply, including, without limitation, to
enter any of the Projects and remove therefrom any Hazardous Material or
otherwise comply with any Laws relating to Hazardous Material.

 

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6.7      Unconditional Environmental Obligations.

Notwithstanding any term or provision contained herein or in the other Loan
Documents, the covenants and obligations of the Environmental Indemnitors under
this Article 6 (the “Environmental Obligations”) are unconditional.
Environmental Indemnitors shall be fully, personally, jointly and severally
liable for the Environmental Obligations, and such liability shall not be
limited to the original principal amount of the Loan. The Environmental
Obligations shall be enforceable by Lender, and its successors and assigns to
Lender’s interest in the Loan and/or the Loan Documents. The Environmental
Obligations shall survive the repayment of the Loan and any foreclosure,
deed-in-lieu or transfer in lieu of foreclosure or similar proceedings or any
transfer of title to any of the Projects (or any one of them) or any portion
thereof or any transfer of the ownership interests in Borrowers. Notwithstanding
the foregoing, if through the exercise of Lender’s rights under the Loan
Documents or otherwise, Lender or an Affiliate of Lender, or a third-party
purchaser at a foreclosure sale (or deed in lieu of foreclosure) shall take
title to and possession and control of any of the Projects, the Environmental
Indemnitors shall not be liable to Lender for the Environmental Obligations
hereunder, which Environmental Obligations first arose after the date (the
“Transfer Date”) on which a court appointed receiver is granted exclusive
possession and control of any of the Projects or Lender or an Affiliate of
Lender or a third party purchaser at a foreclosure sale (or deed in lieu of
foreclosure) took title to and possession and control of any of the Projects if
(but only if) the following conditions are fully satisfied: (a) none of the
Environmental Indemnitors, nor any Affiliate of any of the Environmental
Indemnitors nor any agent, employee or contractor of any of the foregoing (or
any of their agents) contributed, by act or omission, to the cause, existence,
or occurrence of such Environmental Obligations; and (b) the events or state of
facts (including without limitation, the presence of Hazardous Materials)
resulting (or with the passage of time eventually proximately resulting) in any
such Environmental Obligations did not exist prior to the Transfer Date.

6.8      Assignment of Environmental Obligations Prohibited.

The Environmental Obligations may not be assigned, transferred or delegated, in
whole or in part, by Environmental Indemnitors and any purported assignment,
transfer or delegation by Environmental Indemnitors of the Environmental
Obligations shall be void ab initio and of no force or effect.

6.9      Indemnification Separate from the Loan.

(a)      The Environmental Indemnitors agree that the Environmental Obligations
are separate, independent of and in addition to the undertakings of the
Environmental Indemnitors, as applicable, pursuant to the Loan, the Note, the
other provisions of this Agreement and the other Loan Documents. A separate
action may be brought to enforce the provisions of this Article 6, which shall
in no way be deemed to be an action on the Note, whether or not the Loan has
been repaid and whether or not Lender would be entitled to a deficiency judgment
following a judicial foreclosure, trustee’s sale or UCC sale. The Environmental
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provisions contained in the Note, this Agreement or any of the other Loan
Documents. All rights and obligations of this Article 6 shall survive
performance and repayment of the obligations evidenced by and arising under the
Loan Documents, surrender of the Note, reconveyance of any of the Security
Instruments, release of other security provided in connection with the Loan,
trustee’s sale or foreclosure under any of the Security Instruments and/or any
of the other Loan Documents (whether by deed or other assignment in lieu of
foreclosure, or otherwise), acquisition of any of the Projects by Lender, any
other transfer of any of the Projects, and transfer of all of Lender’s rights in
the Loan, the Loan Documents, and any of the Projects.

(b)      Environmental Indemnitors waive all rights to require Lender to
(i) proceed against or exhaust any security for the Loan or (ii) pursue any
remedy in Lender’s power whatsoever. Borrowers waive all defenses by reason of
any disability or other defense under the Loan or by reason of the cessation
from any cause whatsoever of its liability under the Loan, or that it may
acquire by reason of Lender’s election of any remedy against it including,
without limitation, Lender’s exercise of its rights to foreclose under any of
the Security Instruments.

ARTICLE 7

CASUALTIES AND CONDEMNATION

7.1      Lender’s Election to Apply Insurance Proceeds on Indebtedness.

(a)      Borrowers shall give Lender prompt written notice of (i) the occurrence
of any casualty affecting any of the Projects or any portion thereof, (ii) the
institution of any proceedings for eminent domain or for the condemnation of any
of the Projects or any portion thereof or (iii) any written notification
threatening the institution of any proceedings for eminent domain or for the
condemnation of any of the Projects or any portion thereof or any written
request to execute a deed in lieu of condemnation affecting any of the Projects
or any portion thereof. All insurance proceeds on any of the Projects, and all
causes of action, claims, compensation, awards and recoveries for any damage,
condemnation or taking, or any deed in lieu of condemnation, affecting all or
any part of any of the Projects or for any damage or injury to it for any loss
or diminution in value of any of the Projects, are hereby assigned to and shall
be paid to Lender. Lender may participate in any suits or proceedings relating
to any such proceeds, causes of action, claims, compensation, awards or
recoveries, and Lender is hereby authorized, in its own name or in Borrowers’
name, to adjust any loss covered by insurance or any condemnation claim or cause
of action, and to settle or compromise any claim or cause of action in
connection therewith, and Borrowers shall from time to time deliver to Lender
any instruments required to permit such participation; provided, however, that,
so long as no Default or Event of Default has occurred, Lender shall not have
the right to participate in the adjustment of any loss. Borrower shall, in good
faith and in a commercially reasonable manner, file and prosecute the
adjustment, compromise or settlement of any claim for Insurance Proceeds (as
defined below) or Condemnation Proceeds (as defined below) and, subject to
Borrower’s right to receive the direct payment of any Net Proceeds (as defined
below) as herein provided, will cause the same to be paid directly to Lender to
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Agreement. Except upon the occurrence and during the continuance of an Event of
Default, Borrower may settle any insurance claim with respect to Net Proceeds
which does not exceed the amount of $1,000,000 for each of the Parkway Project
and Nathan Project and $500,000 for the Commerce Project (each, a “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, conditioned or delayed, any settlement which might result
in any Net 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. “Net Proceeds” for the purposes of this Section
shall mean: (i) the net amount of all insurance proceeds received by Lender as a
result of such damage or destruction, after payment of such reasonable
verifiable out-of-pocket costs and expenses in collecting same (“Insurance
Proceeds”) or (ii) the net amount of the awards or other compensation received
as a result of such condemnation or other taking of any of the Projects or
portion thereof, after payment of such reasonable verifiable out-of-pocket costs
and expenses in collecting same (“Condemnation Proceeds”), whichever the case
may be. If the Net Proceeds shall be less than the Casualty Amount, then the Net
Proceeds will be disbursed by Lender to Borrowers upon receipt, provided that no
Event of Default has occurred and is continuing, and Borrowers delivers to
Lender a written undertaking to expeditiously commence and to complete with due
diligence the restoration in accordance with the terms of this Agreement.

(b)      Subject to the provisions of Section 7.1(c) below and Section 7.1(a)
above, Lender may elect to collect, retain and apply upon the Indebtedness of
Borrowers under this Agreement or any of the other Loan Documents all Net
Proceeds. Any Net Proceeds remaining after repayment of the Indebtedness shall
be paid by Lender to Borrowers. In case Lender elects to apply the Net Proceeds
to prepay the Indebtedness, then thereafter Borrower shall have the right to
prepay the balance of the Loan at par without the payment of any prepayment
premium or fee of any kind (including Exit Fee or Minimum Interest Recovery).

(c)      Notwithstanding anything in Section 7.1(b) to the contrary, if the Net
Proceeds are greater than the Casualty Amount, in the event of any casualty to
the Improvements or any condemnation of part of any of the Projects, Lender
agrees to make available the Net Proceeds to restoration of the Improvements if
(i) no Default or Event of Default exists, (ii) all Net Proceeds are deposited
with Lender, (iii) in Lender’s reasonable judgment, the amount of Net Proceeds
available for restoration of the Improvements is sufficient to pay the full and
complete costs of such restoration, or if not sufficient, Borrowers have
deposited with Lender an amount, which together with the amount of the Net
Proceeds available for restoration of the Improvements, in Lender’s reasonable
judgment, will be sufficient to pay the full and complete costs of such
restoration, (iv) no material Leases (which for this purpose shall mean Leases
demising in the aggregate more than fifteen percent (15%) of the rentable square
feet of space at any of the Projects) in effect at the time of such casualty or
condemnation are or will be terminated as a result of such casualty or
condemnation, (v) the income from any of the Projects (including any business
interruption insurance proceeds) will not decrease more than five percent
(5%) as a result of such casualty or condemnation, (vi) the cost of restoration
will not exceed thirty percent

 

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(30%) of the Loan Amount allocated to such Project, which allocation is
reflected in the insurance amounts of the Title Policies issued to Lender at the
Closing, (vii) the Loan Amount allocated by Lender to such Project, which
allocation is reflected in the insurance amounts of the Title Policies issued to
Lender at the Closing, will not exceed fifty-one percent (51%) of the then fair
market value of any such Project, assuming completion of restoration, (viii) in
Lender’s reasonable determination, such Project can be restored to an
architecturally and economically viable project in compliance with applicable
Laws, (ix) Guarantor reaffirms in writing their obligations under the Limited
Joinder and under any other guaranty to Lender, and (x) in Lender’s reasonable
determination, such restoration is likely to be completed not later than six
(6) months prior to the Maturity Date.

7.2      Borrowers’ Obligation to Rebuild and Use of Insurance Proceeds
Therefor.

In case Lender does not elect to apply or does not have the right to apply the
Insurance Proceeds to the Indebtedness, as provided in Section 7.1 above,
Borrowers shall:

(a)      Proceed with diligence to make settlement with insurers or the
appropriate governmental authorities and cause the Insurance Proceeds to be
deposited with Lender;

(b)      In the event the Net Proceeds and the available proceeds of the Loan
are insufficient to assure Lender that all contemplated repairs or construction
will be completed, promptly deposit with Lender any amount necessary to assure
that such contemplated repairs or construction will be completed; and

(c)      Promptly proceed with the assumption of construction of the
Improvements, including the repair of all damage resulting from any casualty,
condemnation or other cause and restoration to its former condition.

Any request by Borrowers for a disbursement by Lender of Net Proceeds and funds
deposited by Borrowers shall be treated by Lender as if such request were for a
disbursement of the Loan hereunder, and the disbursement thereof shall be
conditioned upon Borrowers’ compliance with and satisfaction of the same
conditions precedent as would be applicable under this Agreement for a
disbursement of the Loan pursuant to Section 2.2(c).

ARTICLE 8

EVENTS OF DEFAULT AND REMEDIES

8.1      Events of Default.

The occurrence of any one or more of the following shall constitute an “Event of
Default” as said term is used herein:

(a)      Failure of any Borrowers to pay the Indebtedness on or before the
Maturity Date or the failure to pay, within five (5) days after the due date (or
in the case of any payment obligation other than principal or interest, five
(5) days after receipt of written

 

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notice from Lender of such failure to pay), any portion of the Indebtedness or
any other payment obligation of Borrowers to Lender;

(b)      Failure of any Borrower to strictly comply with the provisions of
Section 2.9(b) (blocked accounts), Section 4.1(o) (replacement reserve),
Section 4.2(b) (transfers and change of control),
Section 4.2(d)-(e) (insurance), Section 4.2(o) (single purpose entity),
Section 4.2(p) (no additional debt or encumbrances), Section 4.2(q)
(organizational documents), Section 4.2(u) (anti-terrorism and anti-money
laundering Laws), Section 4.2(gg) (non-disturbance) and Article 6 (environmental
matters) (following the expiration of any applicable notice and cure periods
expressly provided in Section 6.6);

(c)      Failure of any Borrower for a period of 30 days after the earlier of
(i) any Borrower’s knowledge thereof and (ii) written notice from Lender, to
observe or perform any non-monetary covenant or condition contained in this
Agreement or any other Loan Documents not set forth in any of the other
subsections of this Section 8.1; provided that if Lender determines any such
failure concerning a non-monetary covenant or condition is susceptible to cure
and cannot reasonably be cured within said 30 day period, then Borrowers shall
have an additional 45 day period to cure such failure and no Event of Default
shall be deemed to exist hereunder so long as (i) Borrowers commences such cure
within the initial 30 day period and diligently and in good faith pursues such
cure to completion within such resulting 75 day period from the date of Lender’s
notice, and (ii) the existence of such default will not result in any Tenant
having the right to terminate a Material Lease due to such default; and provided
further that if a different notice or grace period is specified under any other
subsection of this Section 8.1 with respect to a particular breach, or if
another subsection of this Section 8.1 applies to a particular breach and does
not expressly provide for a notice or grace period, the specific provision shall
control;

(d)      Any material default by any Borrower, as lessor, under the terms of any
Material Lease following the expiration of any applicable notice and cure period
which default would result in the Tenant under such Lease having the right to
terminate such Lease or withhold rent, provided that if the Lease does not
provide a notice and cure period, then the notice and cure period provided in
Subsection 8.1(a) will apply to any such monetary default, and the notice and
cure period provided in Subsection 8.1(c) will apply to any such non-monetary
default (which respective periods shall commence upon written notice of default
from Lender or the applicable Tenant, whichever occurs first);

(e)      If any warranty, representation, statement, report or certificate made
now or hereafter by Borrowers or Guarantor is untrue or incorrect in any
material respect at the time made or delivered, provided that if such breach is
reasonably susceptible of cure, then no Event of Default shall exist so long as
the applicable party cures said breach (i) by the due date provided in
Subsection 8.1(a) for a breach that can be cured by the payment of money or
(ii) within the cure period provided in Subsection 8.1(c) for any other breach;

(f)       A petition under any Chapter of Title 11 of the United States Code or
any similar law or regulation is filed by or against any Borrower or Guarantor
(and in the case of an involuntary petition in bankruptcy, such petition is not
discharged within 60 days

 

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of its filing), or a custodian, receiver or trustee for any of the Projects is
appointed, or any Borrower or Guarantor makes an assignment for the benefit of
creditors, or any of them are adjudged insolvent by any state or federal court
of competent jurisdiction, or any of them admit their insolvency or inability to
pay their debts as they become due or an attachment or execution is levied
against any of the Projects;

(g)      except as otherwise expressly provided in the Loan Documents, if any of
the taxes are not paid when the same are due and payable, unless there is
sufficient money in the Property Tax Escrow for payment of amounts then due and
payable and Lender’s access to such money has not been constrained or restricted
in any manner;

(h)      If any Borrower shall be in default beyond applicable notice and grace
periods under any other mortgage, deed of trust, deed to secure debt, other
security agreement, whether it be superior or junior in lien to the Security
Instruments;

(i)       If any of the Projects become subject to any mechanic’s, materialman’s
or other Lien other than a Lien for any Taxes or Other Charges not then due and
payable (subject to Borrowers’ right to contest under Section 4.2(c)), and the
Lien shall remain undischarged of record (by payment, bonding or otherwise) for
a period of thirty (30) days or any of the Projects or any part thereof is taken
on execution or other process of Law in any action against Borrower;

(j)       If any federal tax lien is filed against any Borrower or any of the
Projects and same is not discharged of record within thirty (30) days after same
is filed;

(k)      If an uninsured judgment is filed against any Borrower in excess of
$50,000 which is not paid, stayed, vacated or discharged within thirty
(30) days;

(l)       If any Borrower abandons all or any portion of any of the Projects;

(m)     Any of the Projects or any portion thereof is subject to physical waste
or, other than as a result or in connection with a casualty or condemnation, to
removal, demolition or material alterations such that the value of any of the
Projects is materially diminished thereby and Lender determines in its
reasonable discretion that it is not adequately protected from any loss, damage
or risk associated therewith;

(n)      if any default occurs under any guaranty, indemnity or the other Loan
Documents and such default continues after the expiration of applicable grace or
cure periods, if any;

(o)      Any dissolution, termination, partial or complete liquidation, merger
or consolidation of any Borrower or Guarantor.

(p)      if any Borrower shall permit any event within its control to occur that
would cause any reciprocal easement agreement to terminate without notice or
action by any party thereto or would entitle any party to terminate any
reciprocal easement agreement and the term thereof by giving notice to any
Borrower; or any reciprocal easement agreement

 

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shall be surrendered, terminated or canceled for any circumstance whatsoever
except as provided for in such reciprocal easement agreement; or any term of any
reciprocal easement agreement shall be modified or supplemented without Lender’s
consent (which consent shall not be unreasonably withheld, conditioned or
delayed); or any Borrower shall fail, within ten (10) Business Days after
reasonable demand by Lender, to exercise its option to renew or extend the term
of any reciprocal easement agreement or shall fail or neglect to pursue
diligently all actions necessary to exercise such renewal rights pursuant to
such reciprocal easement agreement except as provided for in such reciprocal
easement agreement;

(q)      The occurrence of any other event or circumstance denominated as an
Event of Default herein or under any of the other Loan Documents and the
expiration of any applicable grace or cure periods, if any, specified for such
Event of Default herein or therein, as the case may be;

(r)      Any breach or default (and the expiration of any applicable notice and
cure period) under either of the Lobby Lease or the Retail Facility Lease or any
attempted or purported surrender, termination, modification or amendment of
either of the Lobby Lease or the Retail Facility Lease; or

(s)      Failure of Borrowers to cause to be delivered to Lender each of the
fully executed IDB Recognition Agreements on or before August 15, 2011.

(t)      Failure of Borrowers to (i) cause to be delivered to Lender each of the
fully executed Ground Lease Estoppels and the Retail Facility Memorandum of
Lease on or before January 20, 2011 and (ii) cause Title Insurer (at Borrowers’
sole cost and expense, which cost and expense shall include, without
limitation, the payment by Borrowers of additional mortgage recording tax on the
re-recording of the Security Instrument for the Commerce Project, if required by
the Title Insurer) to issue to Lender a new Title Policy in the form attached
hereto as Schedule VI and subject only to those exceptions and encumbrances as
expressly set forth in Schedule VI attached hereto on or before January 20,
2011.

8.2      Remedies Conferred Upon Lender.

Lender’s rights, remedies and powers, as provided herein and the other Loan
Documents, are cumulative and concurrent, and may be pursued singly,
successively or together against any or all of the Borrowers, Guarantor, the
security described in the Loan Documents, and any other security given at any
time to secure the payment hereof, all at the sole and absolute discretion of
Lender, it being the intent hereof that none of such rights, remedies or powers
shall be to the exclusion of any other. Additionally, Lender may resort to every
other right or remedy available at Law or in equity without first exhausting the
rights and remedies contained herein, all in Lender’s sole and absolute
discretion. Failure of Lender, for any period of time or on more than one
occasion, to exercise its option to accelerate the Maturity Date shall not
constitute a waiver of the right to exercise the same at any time during the
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Default. At any time after the occurrence of any Event of Default, Lender may
pursue any one or more of the following remedies:

(a)      Take possession of any of the Projects and do anything that is
necessary or appropriate in its sole judgment to fulfill the obligations of
Borrowers under this Agreement and the other Loan Documents. Without restricting
the generality of the foregoing and for the purposes aforesaid, Borrowers hereby
appoint and constitute Lender its lawful attorney-in-fact with full power of
substitution in any of the Projects to Complete any unfinished Capital
Improvements and Tenant Improvements, to use any undisbursed portion of the
Holdback or portion of the Loan which may be reserved, escrowed or set aside for
any purposes hereunder at any time, or to advance funds in excess of the face
amount of the Note, to pay, settle or compromise all existing and future bills
and claims, which may be liens or security interests, or to avoid such bills and
claims becoming liens against any of the Projects; to execute all applications
and certificates in the name of Borrowers to prosecute and defend all actions or
proceedings in connection with the Improvements or Projects; and to do any and
every act which the Borrowers might do in its own behalf; it being understood
and agreed that this power of attorney shall be a power coupled with an interest
and cannot be revoked;

(b)      Declare the Note or the Indebtedness to be immediately due and payable,
and further provided that upon the occurrence of any Event of Default under
Section 8.1(f) all amounts evidenced by the Note shall automatically become due
and payable, without any presentment, demand, protest or notice of any kind to
Borrower;

(c)      Use and apply any monies or letters of credit deposited by Borrowers
with Lender, regardless of the purposes for which the same was deposited, to
cure any such default or to apply on account of any Indebtedness under this
Agreement which is due and owing to Lender; and

(d)      Exercise or pursue any other remedy or cause of action permitted under
this Agreement or any other Loan Documents, or conferred upon Lender by
operation of Law.

ARTICLE 9

LOAN EXPENSE, COSTS AND ADVANCES

9.1      Loan and Administration Expenses.

Borrowers unconditionally agree to pay all reasonable out-of-pocket costs and
expenses of the Loan, and any and all fees owing to or incurred by Lender
pursuant to the Loan Documents, and also including (a) all documentation,
modification, or workout costs relating to the Loan, (b) all recording, filing
and registration fees and charges, mortgage or documentary taxes, UCC searches,
title and survey charges, and all fees and disbursements of Lender’s
consultants, (c) any costs involved in the disbursement and administration of
the Loan, (d) any repair or maintenance costs or payments made to remove or
protect against liens not expressly permitted hereunder, (e) all expenses of
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Insurance Proceeds, including adjusters’ fees and charges, (f) all costs and
expenses incurred by Lender in connection with the determination of whether or
not Borrowers have performed the obligations undertaken by Borrowers hereunder
or has satisfied any conditions precedent to the obligations of Lender
hereunder, (g) if any Event of Default occurs hereunder or under any of the Loan
Documents or if the Loan or Note or any portion thereof is not paid in full when
and as due, all costs, expenses and advances of Lender incurred in attempting to
enforce or collect payment of the Loan or enforce any rights of Lender or
Borrowers’ obligations hereunder and expenses of Lender incurred (including
expenses relating to documentary and expert evidence, publication costs) in
attempting to realize, while an Event of Default exists, on or protect, preserve
or maintain any security or incurred in connection with the sale, disposition
(or preparation for sale or disposition) or liquidation of any security for the
Loan (including any foreclosure sale, deed in lieu transaction or costs incurred
in connection with any litigation or bankruptcy or administrative hearing and
any appeals therefrom and any post-judgment enforcement action including,
without limitation, supplementary proceedings in connection with the enforcement
of this Agreement), and (h) all court costs, legal fees and disbursements
relating to any of the foregoing (collectively, “Expenses”). All Expenses
incurred or advances or payments made by Lender shall be included as additional
Indebtedness evidenced by the Note and secured by the Security Instruments and
the other Loan Documents bearing interest at the Interest Rate (or Default Rate
following an Event of Default) until paid. Lender may require the payment of
Expenses as a condition to any disbursement of the Loan. Lender is hereby
authorized, without any specific request or direction by Borrowers, to make
disbursements from time to time in payment of (or to reimburse Lender for) any
Expenses, including disbursements from any Holdback regardless of the purpose of
such Holdback. Borrowers agree to pay all brokerage, finder or similar fees or
commissions payable in connection with the transactions contemplated hereby and
shall indemnify, defend and hold Lender harmless against all claims,
liabilities, and Expenses arising in relation to any claim by a broker, finder
or similar person.

9.2      Right of Lender to Make Advances to Cure Borrowers’ Defaults.

In the event that Borrowers fail to perform any of Borrowers’ covenants,
agreements or obligations contained in this Agreement or any of the other Loan
Documents (after the expiration of applicable grace periods, except in the event
of an emergency or other exigent circumstances), Lender may (but shall not be
required to) perform any of such covenants, agreements and obligations, and any
amounts expended by Lender in so doing and shall constitute additional
Indebtedness evidenced by the Note and secured by the Security Instruments and
the other Loan Documents and shall bear interest at a rate per annum equal to
the Interest Rate (or Default Rate following an Event of Default).

9.3      Increased Costs.

Borrowers agree to pay Lender additional amounts to compensate Lender for any
increase in its actual costs incurred in maintaining the Loan or any portion
thereof outstanding or for the reduction of any amounts received or receivable
from Borrowers as a result of any change after the date hereof in any applicable
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the interpretation or administration thereof, or by any domestic or foreign
court, changing the basis of taxation of payments under this Agreement to Lender
(other than taxes imposed on or measured by the net income or receipts of Lender
or any franchise tax imposed on Lender) (collectively, “Regulatory Changes”) to
the extent Lender generally imposes such additional costs on other borrowers of
Lender in similar circumstances. Any amount payable by Borrowers under this
Article 9 shall be paid within five (5) Business Days of receipt by Borrowers of
a notice by Lender setting forth the amount due and the basis for the
determination of such amount, which statement shall be conclusive and binding
upon Borrowers, absent manifest error. Failure on the part of Lender to demand
payment from Borrowers for any such amount attributable to any particular period
shall not constitute a waiver of Lender’s right to demand payment of such amount
for any subsequent or prior period; provided, however, that, if Lender shall
fail to notify Borrowers of any Regulatory Change within 180 days following the
end of the month during which such Regulatory Change occurred, then Borrowers’
liability for any amounts described in this Section as a result of such
Regulatory Change shall be limited to those attributable to the period occurring
subsequent to the one hundred eightieth (180th) day prior to the date upon which
Lender actually notified Borrowers of the occurrence of such Regulatory Change.
In the event of the enactment after the date hereof of any Law of the state in
which any of the Projects are located or of any other governmental entity
deducting from the value of any of the Projects for the purpose of taxing any
lien or security interest thereon, or imposing upon Lender the payment of the
whole or any part of the taxes or assessments or charges or liens herein
required to be paid by Borrowers, or changing in any way the Laws relating to
the taxation of deeds of trust, mortgages or security agreements or debts
secured by deeds of trust, mortgages or security agreements or the interest of
the beneficiary, mortgagee or secured party in the property covered thereby, or
the manner of collection of such taxes, so as to adversely affect the Security
Instruments or the Indebtedness or Lender, then, and in any such event,
Borrowers, upon demand by Lender, shall pay such taxes, assessments, charges or
liens, or reimburse Lender therefor; provided, however, that if in the opinion
of counsel for Lender (a) it might be unlawful to require Borrowers to make such
payment, or (b) the making of such payment might result in the imposition of
interest beyond the maximum amount permitted by Law, then and in either such
event, Lender may elect, by notice in writing given to Borrowers, to declare all
of the Indebtedness to be and become due and payable in full 90 days from the
giving of such notice, and, in connection with the payment of such Indebtedness,
no prepayment premium or fee (including without limitation any Exit Fee or
Minimum Interest Recovery) shall be due unless, at the time of such payment, an
Event of Default or a Default shall have occurred, which Default or Event of
Default is unrelated to the provisions of this Section 9.3, in which event any
applicable prepayment premium or fee (including without limitation any Exit Fee
or Minimum Interest Recovery) in accordance with the terms of the Note shall be
due and payable.

9.4      Borrower Withholding.

If by reason of a change in any applicable Laws occurring after the date hereof,
Borrowers are required by Law to make any deduction or withholding in respect of
any taxes (other than taxes imposed on or measured by the net income of or
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Lender or any franchise tax imposed on Lender), duties or other charges from any
payment due under the Note, the sum due from Borrowers in respect of such
payment shall be increased to the extent necessary to ensure that, after the
making of such deduction or withholding, Lender receives and retains a net sum
equal to the sum which it would have received had no such deduction or
withholding been required to be made. Upon reasonable demand by Borrowers,
absent an Event of Default, Lender shall deliver to the Borrower or to such
government or taxing authority as Borrowers may reasonably direct such form or
document as may be required by such government or taxing authority in order to
allow Borrower to make a payment for the account of Lender pursuant to this
Section 9.4 without such deduction or withholding or with such deduction or
withholding at a reduced rate (so long as the completion or submission of such
form or document would not in any way prejudice the legal or commercial position
of the party in receipt of such demand), with any such form or document to be
accurate and completed in a manner reasonably satisfactory to the Borrowers and
to be executed and to be delivered with any reasonably required certification.

9.5      Document and Recording Tax Indemnification.

Borrowers agree to indemnify, defend and hold harmless Lender from and against
any claim that any documentary or mortgage tax is due and payable in connection
with the Loan or the execution, delivery or recording of the Loan Documents and
to pay such taxes and Expenses incurred by Lender in connection therewith.
Borrowers may contest any determination that any such taxes are due, but shall
pay any such taxes (including penalties and interest) when legally required.
This paragraph shall survive repayment of the Loan.

ARTICLE 10

ASSIGNMENTS BY LENDER AND DISCLOSURE

10.1    Assignments and Participations.

(a)      Lender may from time to time, and at no cost or expense to Borrowers,
without the consent of Borrowers or Guarantor, sell, transfer, pledge, assign,
convey or syndicate the Note (or if there is more than one note, add some of the
Notes), the Loan and the Loan Documents (or any interest therein), and any and
all servicing rights with respect thereto to any Qualified Transferee, and may
grant participations in the Loan, delegate its duties and obligations under the
Loan and the Loan Documents, split the Loan into multiple parts, or the Note
into multiple component notes or tranches. In connection with any such sale,
transfer, assignment, conveyance, participation, delegation, syndication or
splitting, Lender may, acting for this purpose as an agent of Borrowers,
maintain at its offices a register for the recordation of the names and
addresses of Lender’s participants or assignees, and the amount and terms of
Lender’s sales, transfers, assignments, conveyances and participations including
specifying any such participant’s or assignee’s entitlement to payments of
principal and interest, and any payments made, with respect to each such sale,
transfer, assignment, conveyance or participation.

 

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(b)      Without limiting the generality of the foregoing or Lender’s other
rights under this Agreement or other Loan Documents, Lender in its sole and
absolute discretion, shall have the right at any time to require Borrowers to
execute and deliver “component” notes (including senior and junior notes), which
notes may (i) require the holder of each or any of such notes (“Holder”) to make
its pro rata or other share of disbursements of the Holdback pursuant to
Section 2.2, (ii) be paid in such order of priority as may be designated by
Lender, (iii) bear interest at rates different than the Interest Rate, provided
that (A) the aggregate principal amount of such “component” notes shall equal
the outstanding principal balance of the Loan immediately prior to the creation
of such “component” notes, (B) the weighted average interest rate of all such
“component” notes shall on the date created equal the Interest Rate which was
applicable to the Loan immediately prior to the creation of such “component”
notes, (C) the debt service payments on all such “component” notes shall on the
date created equal the debt service payments which were required under this
Agreement immediately prior to the creation of such component notes and (D) the
other terms and provisions of each of the “component” notes shall be otherwise
identical in substance and substantially similar in form to the Loan Documents.
Borrowers, at Lender’s expense, shall cooperate with all reasonable requests of
Lender in order to establish the “component” notes and shall execute and deliver
such documents in addition to the component notes as shall reasonably be
required by Lender, including amendments to the Security Instruments necessary
to reflect that such Security Instruments secure such component notes, any
financing statements or other security documents necessary to evidence the
component notes and the appointment of any agent for the Holders under the
Co-Lender Agreement (defined below in subsection Section 10.1(d)) in connection
therewith, all in form and substance reasonably satisfactory to Lender
including, without limitation, immaterial amendments to the Loan Documents
(which amendments shall not increase Borrowers’ or Guarantor’s liabilities under
the Loan Documents). In the event Borrowers fail to execute and deliver such
documents to Lender within ten (10) Business Days following such request by
Lender, Borrowers hereby absolutely and irrevocably appoint Lender as its true
and lawful attorney, coupled with an interest, in its name and stead to make and
execute all documents necessary or desirable to effect such transactions,
Borrowers ratifying all that such attorney shall do by virtue thereof; provided
that no such power of attorney shall entitle Lender to increase the interest
rate, change the term of the Loan or make any changes to or add any additional
payment, reserves, charges, covenants, indemnities, or representations or
warranties.

(c)      If at any time the Loan is evidenced by more than one Note, Borrowers
acknowledge that the obligations of any Holder to make advances or disbursements
under any Note or perform any other obligations under this Agreement or the
other Loan Documents shall be several and not joint, and the obligations of
Borrowers to any Holder shall not be reduced, discharged or released as a result
of the failure of any other Holder to perform its obligations under this
Agreement or the other Loan Documents. Borrowers hereby waive any existing or
future right of offset, claim or defense against any Holder arising out of the
failure of any other Holder to make any disbursements hereunder or perform any
other obligations of such Holder under this Agreement or the other Loan
Documents.

 

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(d)      If at any time the Loan is evidenced by more than one Note, the Loan
shall be serviced by Lender or a servicer selected by Lender or the holders of
such Notes (“Servicer”) in which event Lender may delegate all of its
administrative responsibilities under this Agreement and the other Loan
Documents to the Servicer pursuant to a co-lender and servicing agreement (the
“Co-Lender Agreement”) among the Holders and Servicer. Lender will notify
Borrowers of the appointment of a Servicer. Servicer shall be entitled to
reimbursement of costs and expenses as and to the same extent (but without
duplication) as Lender is entitled thereto under the applicable provisions of
this Agreement and the other Loan Documents. The Servicer shall have the right
to exercise all rights of Lender and enforce all obligations of Borrowers
pursuant to the provisions of this Agreement, the Note and the other Loan
Documents. The rights and obligations of Holders inter se shall be governed by
the Co-Lender Agreement, including the priority of payments. The Co-Lender
Agreement shall provide that Lender, Servicer or any Holder or custodian
appointed by the Holders shall be the agent of the Holders for purposes of
holding the collateral for the Loan and enforcing the liens created by the Loan
Documents and Borrowers will, at no cost or expense to Borrowers, execute such
amendments to the Loan Documents as may be necessary or desirable to effectuate
and acknowledge the appointment of such agent (which amendment shall not
increase the liability of Borrowers or Guarantor under the Loan Documents).
Neither Borrowers, Guarantor, any Environmental Indemnitor nor any Person
claiming by or through any of the foregoing shall be a third party beneficiary
of any agreement referred to in this Section 10.1(d) or have any rights thereof.

10.2    Disclosure of Information and Confidentiality.

Lender shall have the right (but shall be under no obligation) to make available
to (a) agents, employees, Affiliates, attorneys, advisors of Lender and any
regulator, governmental agency or authority and (b) prospective transferees,
participants or purchasers of any interest in the Loan (including any
prospective bidder at any foreclosure sale of any of the Projects), any and all
information that Lender may have with respect to any of the Projects, Borrowers,
and Guarantor, whether provided by such person or any third party. Lender shall
also have the right to disclose any information that Lender may have (i) as
required by Law, regulation, rule, request or order, subpoena, judicial order or
similar order, and in connection with any litigation, and (ii) as may be
required in connection with an examination, audit or similar investigation
provided that Lender exercises the same degree of care that it exercises with
respect to its own proprietary information to maintain the confidentiality of
any confidential information received with respect to the Projects, the
Borrowers, and Guarantor. Confidential information shall include all information
provided by or on behalf of Borrowers, Guarantor or Wells Manager to Lender at
any time but shall not include information that is Publicly Available or is
disclosed to Lender by a third party (including information obtained as a result
of any environmental assessments) provided Lender does not have actual knowledge
that such third party is prohibited from disclosing such information. Borrowers,
and Guarantor agree that Lender shall have no liability whatsoever as a result
of delivering any such information to any third party as described above, and
Borrowers, and Guarantor, on behalf of themselves and their successors and
assigns, hereby release and discharge Lender from any and all liability, claims,
damages, or

 

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causes of action, arising out of, connected with or incidental to the delivery
of any such information to any third party. This provision supersedes any prior
confidentiality agreements entered into by Lender with the Borrowers and
Guarantor.

10.3    Dissemination of Information.

Lender may forward to each purchaser, transferee, assignee, or servicer of, and
each participant, or investor in, the Loan, or any participations and/or
securities or any of their respective successors (collectively, the “Investor”)
or any Rating Agency rating the Loan, or any participations and/or securities,
each prospective Investor, and any organization maintaining databases on the
underwriting and performance of commercial mortgage loans, all documents and
information which Lender now has or may hereafter acquire relating to the
Indebtedness and to Borrowers, any managing member or general partner thereof,
Guarantor, and any of the Projects, including financial statements, whether
furnished by Borrowers or otherwise, as Lender determines necessary or
desirable. Borrowers irrevocably waive any and all rights it may have under
applicable Law to prohibit such disclosure, including but not limited to any
right of privacy.

ARTICLE 11

GENERAL PROVISIONS

11.1    Captions.

The captions and headings of various articles, sections and subsections of this
Agreement and the other Loan Documents and the Exhibits and Schedules pertaining
thereto are for convenience only and are not to be considered as defining or
limiting in any way the scope or intent of such provisions.

11.2    Waiver of Jury Trial; Waiver of Counterclaims.

TO THE GREATEST EXTENT PERMITTED BY LAW, BORROWERS, LENDER AND GUARANTOR EACH
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN
ANY CLAIM, CONTROVERSY DISPUTE, ACTION OR PROCEEDING ARISING OUT OF OR RELATED
TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (INCLUDING WITHOUT LIMITATION ANY
ACTIONS OR PROCEEDINGS FOR ENFORCEMENT OF THE LOAN DOCUMENTS) AND AGREE THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
BORROWERS, LENDER AND GUARANTOR EACH ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH OF THEM HAS RELIED
ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND
THAT EACH OF THEM WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE
DEALINGS. BORROWERS, LENDER AND GUARANTOR EACH WARRANT AND REPRESENT THAT EACH
HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL,

 

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AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS. BORROWERS
AND GUARANTOR WAIVE ANY RIGHT TO ASSERT A COUNTERCLAIM AGAINST LENDER OR ANY
INDEMNIFIED PARTY IN ANY ACTION BROUGHT BY LENDER OR AN INDEMNIFIED PARTY OTHER
THAN A COMPULSORY COUNTERCLAIM.

11.3    Jurisdiction.

TO THE GREATEST EXTENT PERMITTED BY LAW, BORROWERS AND GUARANTOR HEREBY WAIVES
ANY AND ALL RIGHTS TO REQUIRE MARSHALLING OF ASSETS BY LENDER. WITH RESPECT TO
ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS AGREEMENT (EACH, A
“PROCEEDING”), BORROWERS AND GUARANTOR IRREVOCABLY (A) SUBMIT TO THE
NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING JURISDICTION
IN THE CITY OF CHICAGO, COUNTY OF COOK AND STATE OF ILLINOIS, AND (B) WAIVE ANY
OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING
BROUGHT IN ANY SUCH COURT, WAIVE ANY CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM AND FURTHER WAIVE THE RIGHT TO OBJECT, WITH RESPECT TO
SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY.
NOTHING IN THIS AGREEMENT SHALL PRECLUDE LENDER FROM BRINGING A PROCEEDING IN
ANY OTHER JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE
JURISDICTIONS PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION.
BORROWERS AND GUARANTOR HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS AND
FURTHER AGREE AND CONSENT THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS
PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY PROCEEDING IN
ANY ILLINOIS STATE OR UNITED STATES COURT SITTING IN THE CITY OF CHICAGO AND
COUNTY OF COOK MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO BORROWERS OR, AS APPLICABLE, TO GUARANTOR, AT THE ADDRESS
INDICATED BELOW OR AT THE ADDRESS ON THE ATTACHED LIMITED JOINDER (AS
APPLICABLE), AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF
BORROWERS OR SUCH GUARANTOR SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE
DEEMED COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.

11.4    Governing Law.

Irrespective of the place of execution and/or delivery, this Agreement and the
other Loan Documents shall be governed by, and shall be construed in accordance
with, the internal Laws of the State of Illinois, without regard to conflicts of
Law principles except as provided in the Security Instruments and except in such
cases where the parties have expressly chosen the law of another jurisdiction.

 

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11.5    Lawful Rate of Interest.

In no event whatsoever shall the amount of interest paid or agreed to be paid to
Lender pursuant to this Loan Agreement, the Note or any of the Loan Documents
exceed the highest lawful rate of interest permissible under applicable Law. If,
from any circumstances whatsoever, fulfillment of any provision of this Loan
Agreement, the Note and the other Loan Documents shall involve exceeding the
lawful rate of interest which a court of competent jurisdiction may deem
applicable hereto (“Excess Interest”), then ipso facto, the obligation to be
fulfilled shall be reduced to the highest lawful rate of interest permissible
under such Law and if, for any reason whatsoever, Lender shall receive, as
interest, an amount which would be deemed unlawful under such applicable Law,
such interest shall be applied to the Loan (whether or not due and payable), and
not to the payment of interest, or refunded to Borrowers if such Loan has been
paid in full. Neither Borrowers, nor Guarantor, endorser or surety nor their
heirs, legal representatives, successors or assigns shall have any action
against Lender for any damages whatsoever arising out of the payment or
collection of any such Excess Interest.

11.6    Modification; Consent.

No modification, waiver, amendment or discharge of this Agreement or any other
Loan Document shall be valid unless the same is in writing and signed by the
party against which the enforcement of such modification, waiver, amendment or
discharge is sought. Consent by Lender to any act or omission by Borrowers shall
not be construed as a consent to any other or subsequent act or omission or to
waive the requirement for Lender’s consent to be obtained in any future or other
instance.

11.7    Waivers; Acquiescence or Forbearance Not to Constitute Waiver of
Lender’s Requirements.

(a)      Borrowers for themselves and all endorsers, guarantors and sureties and
their respective heirs, legal representatives, successors and assigns, (i) waive
presentment for payment, demand, notice of nonpayment or dishonor, protest of
any dishonor, protest and notice of protest and all other notices in connection
with the delivery, acceptance, performance, default or enforcement of the
payment of the Loan; (ii) waive and renounces all rights to the benefits of any
statute of limitations and any moratorium, reinstatement, marshalling,
forbearance, valuation, stay, extension, redemption, appraisement, or exemption
and homestead Laws now provided, or which may hereafter be provided, by the Laws
of the United States and of any state thereof against the enforcement and
collection of the obligations evidenced by the Note or this Loan Agreement or as
a bar to the enforcement of the lien created by any of the Loan Documents.

(b)      Borrowers for themselves and all endorsers, guarantors and sureties and
their respective heirs, legal representatives, successors and assigns,
(i) agrees that its liability shall not be in any manner affected by any
indulgence, extension of time, renewal, waiver, or modification granted or
consented to by Lender; (ii) consent to any indulgences and all extensions of
time, renewals, waivers, or modifications that may be granted by Lender with

 

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respect to the payment or other provisions of this Loan Agreement, the Note, or
any of the other Loan Documents, and to any substitution, exchange or release of
the collateral, or any part thereof, with or without substitution, and agrees to
the addition or release of any Borrower, endorsers, guarantors, or sureties,
whether primarily or secondarily liable, without notice to Borrowers and without
affecting its liability hereunder; (iii) agrees that its liability shall be
unconditional and without regard to the liability of any other person or entity;
and (iv) expressly waives the benefit of any statute or rule of Law or equity
now provided, or which may hereafter be provided, which would produce a result
contrary to or in conflict with the foregoing.

(c)      Each and every covenant and condition for the benefit of Lender
contained in this Agreement and the other Loan Documents may be waived by
Lender, provided, however, that to the extent that Lender may have acquiesced in
any noncompliance with any requirements or conditions precedent to the closing
of the Loan or to any subsequent disbursement of Loan proceeds, such
acquiescence shall not be deemed to constitute a waiver by Lender of such
requirements with respect to any future disbursements of Loan proceeds and
Lender may at any time after such acquiescence require Borrowers to comply with
all such future requirements. Any forbearance by Lender in exercising any right
or remedy under any of the Loan Documents, or otherwise afforded by applicable
Law, including any failure to accelerate the Maturity Date shall not be a waiver
of or preclude the exercise of any right or remedy nor shall it serve as a
novation of the Note or as a reinstatement of the Loan or a waiver of such right
of acceleration or the right to insist upon strict compliance of the terms of
the Loan Documents. Lender’s acceptance of payment of any sum secured by any of
the Loan Documents after the due date of such payment shall not be a waiver of
Lender’s right to either require prompt payment when due of all other sums so
secured or to declare a default for failure to make prompt payment. The
procurement of insurance or the payment of taxes or other liens or charges by
Lender shall not be a waiver of Lender’s right to accelerate the maturity of the
Loan, nor shall Lender’s receipt of any awards, proceeds, or damages under
Article 7 of this Agreement operate to cure or waive Borrowers’ or Guarantor’s
default in payment of sums secured by any of the Loan Documents.

11.8    Disclaimer by Lender; No Third Party Beneficiaries.

This Agreement and the other Loan Documents are made for the sole benefit of
Borrowers and Lender, and no other Person or Persons (including any direct or
indirect owner in Borrower) shall have any benefits, rights or remedies under or
by reason of this Agreement or the other Loan Documents, or by reason of any
inaction or actions taken by Lender pursuant to this Agreement or the other Loan
Documents. Lender shall not be liable to any contractor, subcontractor,
supplier, architect, engineer, Tenant or other party for labor or services
performed or materials supplied in connection with any of the Projects. Lender
shall not be liable for any debts or claims accruing in favor of any such
parties against Borrowers or others or against any of the Projects. Lender
neither undertakes nor assumes any responsibility or duty to any Borrower or any
other party (including any investors of Borrower) to select, review, inspect,
supervise, pass judgment upon or inform any Borrower of any matter in connection
with any of the Projects. Borrowers shall rely entirely upon its

 

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own judgment with respect to such matters, and any review, inspection,
supervision, exercise of judgment or supply of information to Borrowers by
Lender in connection with such matters is for the protection of Lender only, and
neither Borrowers nor any third party is entitled to rely thereon.

11.9    Partial Invalidity; Severability.

If any of the provisions of this Agreement or the other Loan Documents, or the
application thereof to any person, party or circumstances, shall, to any extent,
be invalid or unenforceable, the remainder of this Agreement or the other Loan
Documents, or the application of such provision or provisions to persons,
parties or circumstances other than those as to whom or which it is held invalid
or unenforceable, shall not be affected thereby, and every provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by Law
and to this end, the provisions of this Agreement and all the other Loan
Documents are declared to be severable. All covenants and agreements of
Borrowers and Guarantor shall be joint and several.

11.10  Definitions Include Amendments.

Definitions contained in this Agreement which identify documents, including, but
not limited to, the Loan Documents, shall be deemed to include all amendments
and supplements to such documents from the date hereof, and all future
amendments, modifications, and supplements thereto entered into from time to
time to satisfy the requirements of this Agreement or otherwise with the consent
of Lender. Reference to this Agreement contained in any of the foregoing
documents shall be deemed to include all amendments and supplements to this
Agreement.

11.11  Execution in Counterparts.

This Agreement and the other Loan Documents may be executed in any number of
counterparts and by different parties hereto or thereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

11.12  Entire Agreement.

This Agreement, taken together with all of the other Loan Documents and all
certificates and other documents delivered by Borrowers or Guarantor to Lender,
embody the entire agreement between Lender and such party and supersede all
prior commitments, agreements, representations, and understandings, written or
oral, relating to the subject matter hereof or thereof, and may not be
contradicted or varied by evidence of prior, contemporaneous, or subsequent oral
agreements or discussions of the parties hereto.

11.13  Waiver of Damages.

In no event shall Lender be liable to Borrowers for punitive, exemplary,
special, indirect, incidental or consequential damages, including, without
limitation, lost

 

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profits, whatever the nature of a breach by Lender of its obligations under this
Agreement or any of the Loan Documents, and Borrowers and Guarantor waive all
claims for such punitive, exemplary, special, indirect, incidental or
consequential damages.

11.14  Claims Against Lender.

Lender shall not be in Default under this Agreement, or under any other Loan
Documents, unless a written notice specifically setting forth the claim of
Borrowers shall have been given to Lender within three (3) months after any
Borrower first had knowledge of the occurrence of the event which such Borrower
alleges gave rise to such claim and Lender does not remedy or cure the Default,
if any there be, promptly thereafter. Borrowers waive any claim, set-off or
defense against Lender arising by reason of any alleged default by Lender as to
which Borrower does not give such notice timely as aforesaid. All payments
required to be made by Borrowers, Guarantor and Environmental Indemnitors under
the Loan Documents shall be made without set-off, counterclaim or defense.
Borrowers acknowledge that such waiver is or may be essential to Lender’s
ability to enforce its remedies without delay and that such waiver therefore
constitutes a substantial part of the bargain between Lender and Borrowers with
regard to the Loan. No Guarantor or Tenant is intended to have any rights as a
third-party beneficiary of the provisions of this Section 11.14.

11.15  Set-Offs.

After the occurrence and during the continuance of an Event of Default,
Borrowers hereby irrevocably authorize and direct Lender from time to time to
charge Borrowers’ accounts and deposits with Lender, and to pay over to Lender
an amount equal to any amounts from time to time due and payable to Lender
hereunder, under the Note or under any other Loan Document.

11.16  Relationship.

The relationship between Lender and Borrowers shall be that of creditor-debtor
only. No term in this Agreement or in the other Loan Documents and no course of
dealing between the parties shall be deemed to create any relationship of
agency, partnership or joint venture or any fiduciary duty by Lender to
Borrowers or any other party.

11.17  Agents.

In exercising any rights under the Loan Documents or taking any actions provided
for therein, Lender may act through its employees, agents or independent
contractors as authorized by Lender.

11.18  Interpretation.

With respect to all Loan Documents, whenever the context requires, all words
used in the singular will be construed to have been used in the plural, and vice
versa, and each gender will include any other gender. The word “obligations” is
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and most comprehensive sense, and includes all primary, secondary, direct,
indirect, fixed and contingent obligations and duties. It further includes all
principal, interest, prepayment charges, late charges, loan fees and any other
fees and charges accruing or assessed at any time, as well as all obligations to
perform acts or satisfy conditions. No listing of specific instances, items or
matters in any way limits the scope or generality of any language in the Loan
Documents. This Agreement and all of the other Loan Documents shall not be
construed more strictly against one party than against the other, merely by
virtue of the fact that it may have been prepared primarily by counsel for one
of the parties. The term “Lender” shall mean Lender and its successors and
assigns, and subject to the applicable Co-Lender Agreement, each Holder.

11.19  Successors and Assigns.

Subject to the restrictions on transfer and assignment contained in
Section 4.2(b) of this Agreement, this Agreement and the other Loan Documents
shall inure to the benefit of and shall be binding on Lender, Borrowers and
Guarantor(s) and their respective heirs, successors and permitted assigns.

11.20  Time is of the Essence.

Borrowers agree that time is of the essence under this Agreement and the other
Loan Documents and the performance of each of the covenants and agreements
contained herein and therein.

11.21  Notices.

Any notice, demand, request or other communication which any party hereto may be
required or may desire to give hereunder shall be in writing and shall be deemed
to have been properly given (a) if hand delivered, when delivered; (b) if mailed
by United States Certified Mail (postage prepaid, return receipt requested),
three (3) Business Days after mailing; (c) if by any reliable overnight courier
service, on the next Business Day after delivered to such courier service; or
(d) if by telecopier on the day of transmission if before 3:00 p.m. (Chicago
time) on a Business Day so long as copy is sent on the same day by overnight
courier in each case to the address set forth below:

If to Borrower:

c/o Wells Mid-Horizon Value-Added Fund I, LLC

6200 The Corners Parkway

Norcross, Georgia 30092-3365

Attention: Kevin A. Hoover

Telephone: (770) 243-8594

Facsimile: (770) 243-8594

 

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With a copy to:

c/o Wells Mid-Horizon Value-Added Fund I, LLC

6200 The Corners Parkway

Norcross, Georgia 30092-3365

Attention: Christopher D. Daniels

Telephone: (770) 243-8594

Facsimile: (770) 243-8594

With a copy to:

DLA Piper LLP (US)

203 N. LaSalle Street, Suite 1900,

Chicago, IL 60601

Attention: James M. Phipps

Telephone: (312) 368-4088

Facsimile: (312) 251-5735

If to Lender:

NXT Capital, LLC,

a Delaware limited liability company

191 North Wacker Drive, Suite 1200

Chicago, Illinois 60606-1615

Attention: Timothy R. Verrilli, Managing Director

Telephone: 312-450-8050

Facsimile: 312-450-8100

With a copy to:

NXT Capital, LLC,

a Delaware limited liability company

191 North Wacker Drive, Suite 1200

Chicago, Illinois 60606-1615

Attention: Bruce Frank, General Counsel

Telephone: 312-450-8181

Facsimile: 312-450-8100

or at such other address as the party to be served with notice may have
furnished in writing to the party seeking or desiring to serve notice as a place
for the service of notice. Any notice or demand delivered to the person or
entity named above to accept notices and demands for such party shall constitute
notice or demand duly delivered to such party, even if delivery is refused.

 

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11.22  Advertisement.

Borrowers and Guarantor hereby authorize Lender, after first obtaining
Guarantor’s written approval, to publish the names of such Borrowers and
Guarantor, the existence of the financing arrangements referenced under this
Agreement, the primary purpose and/or structure of those arrangements, the
amount of credit extended under the Loan, and the total amount of the
Indebtedness evidenced hereby in any “tombstone”, comparable advertisement or
press release which Lender elects to submit for publication. In addition,
Borrowers and Guarantor agree that Lender may provide lending industry trade
organizations with information necessary and customary for inclusion in league
table measurements after the Closing Date.

11.23  Joint and Several Liability/Contribution.

  (a)      The Indebtedness and all other obligations of Borrowers under the
Loan Documents (collectively, the “Obligations”) shall be the joint and several
obligations and liabilities of Borrowers. Hence, each of the Borrowers shall be
primarily and directly liable for repayment of the Indebtedness and all other
Obligations.

  (b)      Notwithstanding any provisions of this Agreement to the contrary, it
is intended that the joint and several nature of the liability of each of the
Borrowers for the Obligations and the liens and security interests granted by
Borrowers to secure the Obligations, not constitute a “Fraudulent Conveyance”
(as defined below). Consequently, Lender and each Borrower agree that if the
liability of a Borrower for the Obligations, or any liens or security interests
granted by such Borrower securing the Obligations would, but for the application
of this sentence, constitute a Fraudulent Conveyance, the liability of such
Borrower and the liens and security interests securing such liability shall be
valid and enforceable only to the maximum extent that would not cause such
liability or such lien or security interest to constitute a Fraudulent
Conveyance, and the liability of such Borrower and this Agreement shall
automatically be deemed to have been amended accordingly. For purposes hereof,
“Fraudulent Conveyance” means a fraudulent conveyance under Section 548 of
Chapter 11 of Title II of the United States Code (11 U.S.C. § 101, et seq.), as
amended (the “Bankruptcy Code”) or a fraudulent conveyance or fraudulent
transfer under the applicable provisions of any fraudulent conveyance or
fraudulent transfer law or similar law of any state, nation or other
governmental unit, as in effect from time to time.

  (c)      Lender is hereby authorized, without notice or demand and without
affecting the liability of the Borrowers hereunder, to, at any time and from
time to time, (i) renew, extend or otherwise increase the time for payment of
the Obligations; (ii) with the written agreement of any of the Borrowers change
the terms relating to the Obligations or otherwise modify, amend or change the
terms of any promissory Notes or other agreement, document or instrument now or
hereafter executed by any of the Borrowers and delivered to Lender; (iii) accept
partial payments of the Obligations; (iv) take and hold security or collateral
for the payment of the Obligations or for the payment of any guaranties of the
Obligations and exchange, enforce, waive and release any such security or
collateral; (v) after an Event of Default, apply such security or collateral and
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Lender’s sole discretion, as Lender may determine; and (vi) settle, release,
compromise, collect or otherwise liquidate the Obligations and any security or
collateral therefor in any manner, without affecting or impairing the
obligations of any of the Borrowers. Except as specifically provided in this
Agreement or any of the other Loan Documents, Lender shall have the exclusive
right to determine the time and manner of application of any payments or
credits, whether received from any Borrower or any other source, and such
determination shall be binding on the Borrowers. All such payments and credits
may be applied, reversed and reapplied, in whole or in part, to any of the
Obligations Lender shall determine in its sole discretion without affecting the
validity or enforceability of the Obligations of the other Borrower.

  (d)      Each of the Borrowers hereby agrees that, except as hereinafter
provided, its obligations hereunder shall be unconditional, irrespective of
(i) the absence of any attempt to collect the Obligations from any obligor or
other action to enforce the same; (ii) the waiver or consent by Lender with
respect to any provision of any instrument evidencing the Obligations, or any
part thereof, or any other agreement heretofore, now or hereafter executed by
any of the Borrowers and delivered to Lender; (iii) failure by Lender to take
any steps to perfect and maintain its security interest in, or to preserve its
rights to, any security or collateral for the Obligations; (iv) the institution
of any proceeding under the Bankruptcy Code, or any similar proceeding, by or
against any of the Borrowers or Lender’s election in any such proceeding of the
application of Section 1111(b)(2) of the Bankruptcy Code; (v) any borrowing or
grant of a security interest by any of the Borrowers as debtor-in-possession,
under Section 364 of the Bankruptcy Code; (vi) the disallowance, under
Section 502 of the Bankruptcy Code, of all or any portion of Lender’s
claim(s) for repayment of any of the Obligations; or (vii) any other
circumstance other than payment in full of the Obligations which might otherwise
constitute a legal or equitable discharge or defense of a guarantor.

  (e)      In order to provide for just and equitable contribution among the
Borrowers, any Borrower that makes any payment to Lender under this Agreement or
any of the other Loan Documents (a “Paying Borrower”) shall be entitled to
contribution from all other Borrowers for all payments, damages, and expenses
(including any legal or other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit, or proceeding or other claims
asserted, but after deducting any contribution received by such Paying Borrower,
by persons other than the other Borrowers) incurred by such Paying Borrower in
discharging, in whole or in part, such Borrower’s obligations to Lender.

  (f)      Each of the Borrowers who is not a Paying Borrower shall be liable to
each Paying Borrower in an aggregate amount equal to its proportionate share of
the payment made by the Paying Borrower. The obligation of a Borrower to
reimburse a Paying Borrower shall arise immediately upon receipt of notice, in
accordance with the provisions hereof, that such obligation is due. Failure to
give notice of a payment by a Paying Borrower will not result in forfeiture of
any rights with respect to such payment.

  (g)      Nothing contained in this Agreement shall impair, as between the
Borrowers and the Lender, the obligations of the Borrowers, which are absolute,
unconditional, joint

 

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and several to make payment of any amount as and when the same shall become due
and payable in accordance with the terms of this Agreement and the other Loan
Documents.

  (h)      Until the Indebtedness has been indefeasibly paid in full and all
obligations under the Loan Documents have been paid satisfied in full, no
payment made by or for the account of a Borrower including, without limitation,
(i) a payment made by such Borrower on behalf of the liabilities of the other
Borrower or (ii) a payment made by any other person under any guaranty, shall
entitle such Borrower, by subrogation, setoff, contribution or otherwise, to any
payment from such other Borrower or from or out of such other Borrower’s
property and such Borrower shall not exercise any right or remedy against such
other Borrower or any property of such other Borrower by reason of any
performance of such Borrower of its joint and several obligations hereunder.

  (i)      No Borrower shall exercise any rights or remedies as to any other
Borrower (including any right to setoff, contribution or reimbursement) until
the Indebtedness has been indefeasibly repaid in full and all obligations under
the Loan Documents have been satisfied in full.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE TO FOLLOW]

 

-70-

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IN WITNESS WHEREOF, the parties hereto caused this Loan Agreement to be executed
as of the date first set forth above.

 

BORROWERS:

  WELLS VAF – 330 COMMERCE STREET, LLC, a Delaware limited liability company  

By:

 

WELLS MID-HORIZON VALUE-ADDED

FUND I, LLC, a Georgia limited liability

company, its sole member

   

By:

 

Wells Investment Management Company,

LLC, its Manager

     

By: /s/ Kevin A. Hoover

     

Name: Kevin A. Hoover

     

Title: President

     

Borrower’s Tax ID No. 20-3192853

  WELLS VAF – PARKWAY AT OAK HILL, LLC, a Delaware limited liability company  

By:

 

WELLS MID-HORIZON VALUE-ADDED

FUND I, LLC, a Georgia limited liability

company, its sole member

   

By:

 

Wells Investment Management Company,

LLC, its Manager

     

By: /s/ Kevin A. Hoover

     

Name: Kevin A. Hoover

     

Title: President

     

Borrower’s Tax ID No. 20-3192853

 

WELLS VAF – 6000 NATHAN LANE, LLC, a

Delaware limited liability company

 

By:

  Wells Mid-Horizon Value-Added Fund I, LLC, a Georgia limited liability
company, its sole member    

By:

 

Wells Investment Management Company,

LLC, its Manager

     

By: /s/ Kevin A. Hoover

     

Name: Kevin A. Hoover

     

Title: President

     

Borrower’s Tax ID No. 20-3192853

 

Signature Page to Loan Agreement

--------------------------------------------------------------------------------

LENDER:

 

NXT CAPITAL, LLC, a Delaware limited

liability company

 

By: /s/ Timothy R. Verrilli

 

Name: Timothy R. Verrilli

 

Title: Managing Director

 

Signature Page to Loan Agreement

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LIMITED JOINDER

In order to induce Lender to make the Loan, the undersigned Guarantor has agreed
to enter into this Limited Joinder in connection with that certain Loan
Agreement (as amended, modified, restated, extended, waived, supplemented or
replaced from time to time, the “Loan Agreement”) dated December 17, 2010
between WELLS VAF-6000 NATHAN LAND, LLC, WELLS VAF-330 COMMERCE STREET, LLC, and
WELLS VAF-PARKWAY AT OAK HILL, LLC, (together with its successors and permitted
assigns, collectively, “Borrowers”), and NXT CAPITAL, LLC, a Delaware limited
liability company (collectively, with its successors and assigns, “Lender”).
(All capitalized terms not otherwise defined herein shall have the meanings set
forth in the Loan Agreement.) Guarantor (together with its successors and
assigns, “Guarantor”) acknowledges that without this Limited Joinder, Lender
would be unwilling to make the Loan. NOW, THEREFORE, in consideration of the
foregoing and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned hereby agrees and
covenants as follows:

1.      Retained Liabilities.    Except for the Retained Liabilities (defined
below) and the obligations, if any, of Guarantor under any separate guaranty
provided to Lender in connection with the Loan, no Guarantor shall be personally
liable to pay the Loan, or any other amount due, or to perform any obligation,
under the Loan Documents, and Lender agrees to look solely to all revenue and
assets of Borrowers, the Projects and any other collateral heretofore, now, or
hereafter pledged by any party to secure the Loan. The obligations of Guarantor
hereunder are separate and independent obligations and are not secured by the
grant or pledge by Borrowers pursuant to the Security Instruments. This Limited
Joinder is a guaranty of full and complete payment and performance and not of
collectability. Guarantor shall be personally liable for the following (the
“Retained Liabilities”):

 

  (a)

All losses, damages, causes of actions, suits and Expenses incurred by Lender as
a result of (i) misapplication, misappropriation or conversion of any revenues,
rents, proceeds or funds deriving from (A) any of the Projects, (B) any
insurance proceeds paid by reason of any loss, damage or destruction to any of
the Projects and not used by Borrowers for restoration or repair of such
Projects; and/or (C) any awards or amounts received in connection with
condemnation of all or a portion of any of the Projects and not used by
Borrowers for restoration or repair of such Projects, (ii) material
misrepresentation, (iii) fraud, (iv) any material physical waste or physical
abandonment of any of the Projects, (v) failure to keep the Projects insured in
accordance with the terms of the Loan Documents, but only if there is sufficient
revenue from the Projects (after payment of amounts due on the Loan and for real
estate taxes) to pay insurance premiums, (vi) any fees paid to a Guarantor or
any Affiliate after any monetary Default or Event of Default under the Loan
Documents, (vii) any breach of the Environmental Obligations or any
representation or warranty contained in Article 6 of the Loan Agreement
(Environmental Matters), (viii) any failure of Borrowers to strictly

--------------------------------------------------------------------------------

 

comply with the terms of Section 2.9(b)(ii) of the Loan Agreement, and (ix) any
breach of Section 8.1(t) of the Loan Agreement; and

 

  (b)

Repayment of all Indebtedness in the event of (i) any breach of any of the
following covenants of the Loan Agreement in (A) Section 4.2(b) (transfers and
change of control), (B) Section 4.2(o) (single purpose entity); (provided,
however, that Guarantor shall have no liability for failure of the Borrowers to
comply with Section 4.2(o)(G) for trade and operational indebtedness and
financing leases and purchase money indebtedness, if (and only if) such failure
arises solely from insufficient Gross Revenue from the Projects (after payment
by Borrowers of taxes, insurance and debt service (including required reserves)
under the Loan), (C) Section 4.2(p) (no additional debt or encumbrances), or
(D) Section 4.2(q) (organizational documents), or (ii) the filing by any of the
Borrowers, or the filing against any of the Borrowers by Guarantor or any
Affiliate of any Borrower or Guarantor, of any proceeding for relief under any
federal or state bankruptcy, insolvency or receivership Laws, or any Borrower,
Guarantor or any Affiliate of any Borrower or Guarantor shall aid, solicit,
support or otherwise act, cooperate or collude to cause the filing of a petition
for such proceeding or any assignment for the benefit of creditors made by any
Borrower.

The liability of Guarantor shall be direct and immediate as a primary and not a
secondary obligation or liability, and is not conditional or contingent upon the
pursuit of any remedies against Borrowers, or any other person, or against any
collateral or liens held by Lender. The foregoing shall in no way limit or
impair the enforcement against the Borrowers, Projects or any other collateral
security granted by the Loan Documents of any of the Lender’s rights and
remedies pursuant to the Loan Documents.

2.      Waivers.    To the fullest extent permitted by applicable Law, Guarantor
waives all rights and defenses of sureties, guarantors, accommodation parties
and/or co-makers and agrees that its obligations under this Joinder shall be
direct, primary, absolute and unconditional and that its obligations under this
Joinder shall be unaffected by any of such rights or defenses, including:

 

  (a)

Any rights which it may have to require that (i) Lender first proceed against
Borrowers, or any other person or entity with respect to the Retained
Liabilities; or (ii) Lender first proceed against any collateral held by Lender;
or (iii) any party to be joined in any proceeding to enforce the Retained
Liabilities;

 

  (b)

The incapacity, lack of authority, death or disability of Borrowers, Guarantor
or any other person or entity;

 

  (c)

The failure of Lender to commence an action against Borrowers or any other
person or entity or to proceed against or exhaust any security held by Lender at
any time or to pursue any other remedy whatsoever at any time;

 

J-2

--------------------------------------------------------------------------------

  (d)

Any duty on the part of Lender to disclose to Guarantor any facts it may now or
hereafter know regarding Borrowers regardless of whether Lender has reason to
believe that any such facts materially increase the risk beyond that which
Guarantor intends to assume or has reason to believe that such facts are unknown
to Guarantor, each Guarantor acknowledging that it is fully responsible for
being and keeping informed of the financial condition and affairs of Borrower;

 

  (e)

Lack of notice of default, demand of performance or notice of acceleration to
Borrowers, any other person or entity with respect to the Loan or the Retained
Liabilities;

 

  (f)

The consideration for this Limited Joinder;

 

  (g)

Any acts or omissions of Lender which vary, increase or decrease the risk on
Guarantor;

 

  (h)

Any statute of limitations affecting the liability of Guarantor hereunder, the
liability of Borrowers or Guarantor, or the enforcement hereof, to the extent
permitted by Law;

 

  (i)

The application by Borrowers of the proceeds of the Loan for purposes other than
the purposes represented by Borrowers to Lender or intended or understood by
Lender or Guarantor;

 

  (j)

An election of remedies by Lender, including any election to proceed against any
collateral by judicial or non-judicial foreclosure, whether real property or
personal property, or by deed in lieu thereof, and whether or not every aspect
of any foreclosure sale is commercially reasonable, and whether or not any such
election of remedies destroys or otherwise impairs the subrogation rights of
Guarantor or the rights of Guarantor to proceed against Borrowers for
reimbursement, or both;

 

  (k)

Any statute or rule of Law which provides that the obligation of a surety must
be neither larger in amount nor in any other aspects more burdensome than that
of a principal;

 

  (l)

Any rights to enforce any remedy which Lender may have against Borrowers, any
rights to participate in any security for the Loan and any rights of indemnity,
reimbursement, contribution or subrogation which Guarantor may have against
Borrowers or any other Guarantor or person;

 

  (m)

Lender’s election, in any proceeding instituted under the Federal Bankruptcy
Code, of the application of Section 1111(b)(2) of the Federal Bankruptcy Code or
any successor statute; and

 

  (n)

Any borrowing or any grant of a security interest under Section 364 of the

 

J-3

--------------------------------------------------------------------------------

Federal Bankruptcy Code.

Without limiting the generality, scope or meaning of any of the foregoing or any
other provision of this Limited Joinder, to the extent it is determined that
Texas Law is applicable to this Limited Joinder, Guarantor also waives, to the
extent applicable, (i) any rights pursuant to Rule 31 of the Texas Rules of
Civil Procedure, Section 17.001 of the Texas Civil Practice and Remedies Code
and Chapter 43 of the Texas Civil Practices and Remedies Code and (ii) to the
fullest extent not prohibited by Law, all benefits and rights that may accrue to
Guarantor by any present or future Law (including, without limitation, Sections
51.003, 51.004 or 5.1005 of the Texas Property Code) which would permit
Guarantor and other persons against whom recovery of deficiencies is sought, or
any Guarantor independently (even absent the initiation of deficiency
proceedings against him) to present competent evidence of the fair market value
of the Projects as of the date of foreclosure and offset against any deficiency
the amount by which the foreclosure sale price is determined to be less than
such fair market value. Guarantor further recognizes and agrees that this waiver
creates an irrefutable presumption that foreclosure sales price is equal to the
fair amount of the Commerce Project for purposes of calculating deficiencies
owed by Borrowers, Guarantor and others against whom recovery of a deficiency is
sought.

Without limiting the generality, scope or meaning of any of the foregoing or any
other provision of this Limited Joinder, to the extent it is determined that
Tennessee Law is applicable to this Limited Joinder, Guarantor also waives, to
the extent applicable, any right of Guarantor to require that an action be
brought against the Borrower pursuant to the provisions of Title 47, Chapter 12,
Tennessee Code Annotated, or any similar statute, as the same may be amended
from time to time

(A)      Consents and Releases.  Guarantor hereby consents and agrees that
Lender may at any time, and from time to time, without notice to or further
consent from Guarantor and either with or without consideration do any one or
more of the following, all without affecting the agreements contained herein or
the liability of Guarantor for the Retained Liabilities: (a) surrender without
substitution any property or other collateral of any kind or nature whatsoever
held by it, or by any person, firm or corporation on its behalf or for its
account, securing the Loan or the Retained Liabilities; (b) modify the terms of
any document evidencing, securing or setting forth the terms of the Loan;
(c) grant releases, compromises and indulgences with respect to the Loan or the
Retained Liabilities or any persons or entities now or hereafter liable thereon;
or (d) take or fail to take any action of any type whatsoever with respect to
the Loan or the Retained Liabilities. To the maximum extent permitted by Law,
Guarantor knowingly, voluntarily and intentionally agrees to be bound, just as
Borrowers are bound, by the provisions of Article 3 of the Loan Agreement
(solely with respect to providing financial information with respect to itself),
and Article 11 of the Loan Agreement, including the waiver of the right to a
trial by jury in Section 11.2, and the consents to jurisdiction and the
governing law of Illinois set forth

 

J-4

--------------------------------------------------------------------------------

in Sections 11.3, and 11.4, respectively and any other term or provision of the
Loan Documents expressly requiring Guarantor’s compliance therewith.

(B)      Security Agreement. Guarantor hereby grants to Lender a continuing lien
on and security interest in the Guarantor Level Blocked Account and all amounts
(including without limitation any funds, items, instruments, investments,
securities and other things of value) from time to time paid, deposited,
credited or held in or in transit to such Guarantor Level Blocked Account
(whether for collection provisionally or otherwise) or on deposit therein.

 

J-5

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                 Executed as of December 17, 2010. GUARANTOR:

WELLS MID-HORIZON VALUE-ADDED FUND I, LLC, a Georgia limited liability company

By:   WELLS INVESTMENT MANAGEMENT COMPANY, LLC, its Manager              /s/
Kevin A. Hoover   Name: Kevin A. Hoover  

Address: 6200 The Corners Parkway

               Norcross, GA 30092

  Tax I.D.#: 20-3192853

 

Signature Page to Limited Joinder

--------------------------------------------------------------------------------

EXHIBIT A-1

Legal Description of Land

 

Property Name:  

Commerce Project

Address:  

330 Commerce Street, Nashville, Tennessee

Borrower:  

Wells VAF-330 Commerce Street, LLC

See the attached.

--------------------------------------------------------------------------------

Exhibit A-1

Land in Davidson County, Tennessee, being more particularly described as
follows:

TRACT I:

Being a volume of air containing 3,210,453 cubic feet, more or less, with its
lower level boundary beginning at Elevation 529.69 which is the upper ceiling of
the seventh floor of the structure below and with its upper level boundary being
at Elevation 634.0 [said Elevations refer to mean sea level as established from
State of Tennessee Project No. M-3243 (S) Bench Mark being a tag bolt fire
hydrant 270.00 feet south of Commerce Street as relocated on Second Avenue,
Elevation 429.43 (Sea Level Datum)], together with all structures, buildings and
improvements contained within said volume of air space and all real property
contained therein above a parcel of land in Nashville, Davidson County,
Tennessee, and being more particularly described as follows:

Beginning at the point of intersection of the westerly margin of Third Avenue,
North, and the northerly margin of Commerce Street; thence, with said northerly
margin, S 62° 30’ 03" W, 174.45 feet to the easterly margin of Printer’s Alley;
thence with said easterly margin, N 27° 40’ 45" W, 122.48 feet; thence N 62° 20’
37" E 1.00 feet; thence,

continuing with the easterly margin of Printer’s Alley, N 27° 32’ 23" W, 53.40
feet; thence, N 62° 08’ 37" E, 174.00 feet to a point in the westerly margin of
Third Avenue, North; thence with said westerly margin, S 27° 29’ 23" E, 54.00
feet; thence continuing with said westerly margin of Third Avenue, North, S27°
25’ 00" E, 122.96 feet to the point of beginning, containing 30,778 square feet
or .71 acres, more or less.

Being part of the same property conveyed to Wells VAF - 330 Commerce Street,
LLC, a Delaware limited liability company by Special Warranty Deed dated
December 14, 2007 from Ferrari Partners, L.P., a Georgia limited partnership, of
record in Instrument No. 20071217-0144579, as corrected by Affidavit of
Scrivener’s Error of record in Instrument No. 20100224-0014217, Register’s
Office for Davidson County, Tennessee.

TRACT II:

A leasehold estate pursuant to a lease dated as of December 1, 1985, by and
between Commerce Street Venture (Lessor) and Linville Properties Co., a
memorandum of said lease is recorded in Book 6739, Page 374, and re-recorded in
Book 6740, Page 822, and further re-recorded in Book 7075, Page 517, in the
Register’s Office for Davidson County, Tennessee, and subsequently assigned to
J.C. Bradford & Co. by Assignment of Lease recorded in Book 7902, Page 220, and
further assigned to K&M Enterprises by Assignment of Lease recorded at
Instrument No. 20001018-0103460, in said Register’s Office, and further assigned
to Ferrari Partners, L.P. by Assignment of Lease recorded at Instrument
No. 20020523-0062998, in said Register’s Office, and further assigned to Wells
VAF - 330 Commerce Street, LLC, (Lessee) by Assignment of Lease recorded at
Instrument No. 20071217-0144581, Instrument No. 20071217-0144582 and Instrument
No. 20071217-0144583, in said Register’s Office; amended by Affidavits of
Scrivener’s Error, of record as Instrument Nos.             ,             ,
            , Register’s Office of Davidson County, Tennessee, as such lease was
amended by that certain First Amendment to Lease Agreement dated as of
December 14, 2007 by and between Lessor and Lessee.

Being a portion of a parcel of land in Nashville, First Civil District,
Eighteenth Council District, Davidson County, Tennessee, and being more
particularly described as follows:

Beginning at the point of intersection of the westerly margin of Third Avenue,
North, and the northerly margin of Commerce Street; thence, with said northerly
margin, S62° 30’ 03" W, 174.45 feet to the easterly margin of Printer’s Alley
thence with said easterly margin, N 27° 40’ 45" W, 122.48 feet, thence N 62° 20’
37" E 1.00 feet; thence, continuing with the easterly margin of Printer’s Alley,
N 27° 32’ 23" W, 53.40 feet; thence, N 62° 08’ 37" E, 174.00 feet to a point in
the westerly margin of Third Avenue, North; thence with said westerly margin, S
27° 29’ 23" E, 54,00 feet; thence continuing with said westerly margin of Third
Avenue, North, S 27° 25’ 00" E, 122.96 feet to the point of beginning,
containing 30,778 square feet or .71 acres, more or less.

[CONTINUED ON NEXT PAGE]

--------------------------------------------------------------------------------

TRACT III:

A reciprocal easement for ingress and egress, parking utilities, elevators,
utilities, construction and maintenance set form in the instrument of record in
Book 6739, Page 331, and re-recorded in Book 6740, Page 775, in the Register’s
Office for Davidson County, Tennessee; said instrument having been amended by
First Amendment to Reciprocal Easement Agreement recorded December 17, 2007 at
Instrument No. 20071217-0144580, Register’s Office for Davidson County,
Tennessee, described as follows:

Beginning at the point of intersection of the westerly margin of Third Avenue,
North, and the northerly margin of

Commerce Street; thence, with said northerly margin, S 62° 30’ 03" W, 174.45
feet to the easterly margin of Printer’s Alley; thence with said easterly
margin, N 27° 40’ 45" W, 122.48 feet; thence N 62° 20’ 37" E 1.00 feet; thence,
continuing with the easterly margin of Printer’s Alley, N 27° 32’ 23" W, 53.40
feet; thence, N 62° 08’ 37" E, 174.00 feet to a point in the westerly margin of
Third Avenue, North; thence with said westerly margin, S 27° 29’ 23" E, 54.00
feet; thence continuing with said westerly margin of Third Avenue, North, S27°
25’ 00" E, 122.96 feet to the point of beginning, containing 30,778 square feet
or .71 acres, more or less.

Tract IV:

Demised premises contained in Commerce Street Parking and Retail Facility Lease,
dated March 10, 1992, by and between Commerce Street Venture, as landlord and
J.C. Bradford, as lessee, a Memorandum of Lease to be recorded in the Register’s
Office of Davidson County, Tennessee, consisting of 2,195 square feet within the
building located on the following described tract of land:

Beginning at the point of intersection of the westerly margin of Third Avenue,
North, and the northerly margin of Commerce Street; thence, with said northerly
margin, S 62° 30’ 03" W, 174.45 feet to the easterly margin of Printer’s Alley;
thence with said easterly margin, N 27° 40’ 45" W, 122.48 feet; thence N 62° 20’
37" E 1.00 feet; thence, continuing with the easterly margin of Printer’s Alley,
N 27° 32’ 23" W, 53.40 feet; thence, N 62° 08’ 37" E, 174.00 feet to a point in
the westerly margin of Third Avenue, North; thence with said westerly margin, S
27° 29’ 23" E, 54.00 feet; thence continuing with said westerly margin of Third
Avenue, North, S27° 25’ 00" E, 122.96 feet to the point of beginning, containing
30,778 square feet or .71 acres, more or less.

Tract V:

Together with the easement rights set forth in the instrument of record in Book
7849, Page 627, in the Register’s Office for Davidson County, Tennessee.

Being part of the same property conveyed to Wells VAF - 330 Commerce Street,
LLC, a Delaware limited liability company by Special Warranty Deed dated
December 14, 2007 from Ferrari Partners, L.P., a Georgia limited partnership, of
record in Instrument No. 20071217-0144579, as corrected by Affidavit of
Scrivener’s Error of record in Instrument No. 20100224-0014217, Register’s
Office for Davidson County, Tennessee.

--------------------------------------------------------------------------------

EXHIBIT A-2

Legal Description of Land

 

Property Name:  

Parkway Project

Address:  

801 Southwest Parkway, Austin, Texas

Borrower:  

Wells VAF-Parkway at Oak Hill, LLC

See the attached.

--------------------------------------------------------------------------------

Exhibit A-2

Tract 1 (Fee Simple):

Lot 1, Block A, OAK HILL TECHNOLOGY PARK SUBDIVISION SECTION IV, a subdivision
in Travis County, Texas, according to the map or plat recorded in Document
No. 200300035 of the Official Public Records of Travis County, Texas.

Also known as:

Of a 17.676 acre tract of land out of the Thomas Anderson Survey No. 17,
situated in Travis County, Texas, being all of Lot 1, Block “A”, OAK HILL
TECHNOLOGY PARK SUBDIVISION SECTION IV, a subdivision of record in Document
No. 200300035 of the Official Public Records of Travis County, Texas; said
17.676 acre tract being more particularly described by metes and bounds as
follows:

COMMENCING at a  1/2 inch iron rod found in the Northerly right-of-way line of
U.S. Highway 290 for the Southwesterly corner of Lot 1, Block “A” Oak Hill
Technology Park Subdivision of record in Document No. 200000208 of said Official
Public Records, being the Southeasterly corner of resubdivision of Lot 1-A,
Block “A” Oak Hill Industrial Park Section Two, a subdivision of record in Book
77, Page 11 of the Plat Records of Travis County, Texas;

THENCE N 29°38’00” E, leaving the Northerly line of U.S. Highway 290, along the
Westerly line of said Lot 1 and Lot 2, Block “A” of said Oak Hill Technology
Park Subdivision, being the Easterly line of said resubdivision of Lot 1-A and a
portion of the Easterly line of Oak Hill Industrial Park Section Two, a
subdivision of record in Book 76, Page 142 of said Plat Records, a distance of
712.97 feet to a  1/2 inch iron rod found for the POINT OF BEGINNING hereof,
being an angle point in the Westerly line of said Lot 1;

THENCE N 29°38’00” E, along a portion of the Westerly line of said Lot 1, being
a portion of the Easterly line of said Oak Hill Industrial Park Section Two, a
distance of 378.82 feet to an iron pipe found, for an angle point in the
Westerly line of said Lot 1, being the most Easterly corner of said Oak Hill
Industrial Park Section Two;

THENCE continuing along the Westerly line of said Lot 1, the following two
(2) courses and distances:

 

1)

N 59°40’29” W, along the Northerly line of said Oak Hill Industrial Park Section
Two, a distance of 301.12 feet to an iron pipe found in the Easterly line of Lot
2, Block “A” Murphey Subdivision, a subdivision of record in Document
No. 200600209 of said Official Public Records for an angle point hereof;

 

2)

N29°34’26” E, along the Easterly line of said Lot 2 and Lot 4, Block “A” of said
Murphey Subdivision, a distance of 622.21 feet to a  1/2 inch iron rod found in
the Southerly right-of-way line of Southwest Parkway (R.O.W. varies), being the
Northeasterly corner of said Lot 4 and the Northwesterly corner of said Lot 1,
for the Northwesterly corner hereof;

THENCE, along the Southerly line of Southwest Parkway and the Northerly line of
said Lot 1, the following two (2) courses and distances:

 

1)

S 59°43’00” E, a distance of 654.69 feet to a  1/2 inch iron rod found for an
angle point;

 

2)

S 59°48’00” E, a distance of 147.39 feet to a  1/2 inch iron rod found for the
Northeasterly corner of said Lot 1 and hereof, being the Northwesterly corner of
said Lot 1, Block “A” Oak Hill Technology Park Subdivision Section III;

 

(legal description continued on next page)

--------------------------------------------------------------------------------

THENCE, S 29°38’00” W, leaving the Southerly line of Southwest Parkway, along
the Easterly line of said Lot 1, Block “A” Oak Hill Technology Park Subdivision
Section IV, passing an iron pipe found for the common Westerly corner of said
Lot 1, Block “A” Oak Hill Technology Park Subdivision Section III and that
certain 5.34 acre tract of land conveyed to South Austin Marine, Inc. by Deed of
record in Volume 7993, Page 207 of said Real Property Records, at a distance of
635.36 feet, and continuing for a total distance of 1185.40 feet to a  1/2 inch
iron rod found for an angle point hereof, being the Northeasterly corner of that
certain 1.102 acre tract conveyed to Joseph J. Hajjar by Deed of record in
Volume 12120, Page 1918 of said Real Property Records;

THENCE N 59°46’29” W, leaving the Westerly line of said 5.34 acres, along a
portion of the Easterly line of said Lot 1, Block “A” Oak Hill Technology Park
Subdivision Section IV and hereof, being the

Northerly line of said 1.102 acres, a distance of 147.39 feet to an iron pipe
found for the Northwesterly comer of said 1.102 acre tract and an angle point
hereof;

THENCE along the Westerly line of said 1.102 acre tract, being a portion of the
Easterly line of said Lot 1, Block “A” Oak Hill Technology Park Subdivision
Section IV and hereof, the following three (3) courses and distances:

 

1)

S 29°39’50” W, a distance of 136.85 feet to a  1/2 inch iron rod found for an
angle point;

 

2)

S 89°58’21” W, a distance of 24.28 feet to a  1/2 inch iron rod found for an
angle point;

 

3)

S 29°59’38” W, a distance of 199.64 feet to a  1/2 inch iron rod found in the
Northerly line of U.S. Highway 290 (R.O.W. varies) for the Southeasterly corner
of said Lot 1, Block “A” Oak Hill Technology Park Subdivision Section IV and
hereof, being the Southwesterly corner of said 1.102 acre tract;

THENCE N 88°09’05” W, along the Northerly line of U.S. Highway 290, being the
Southerly line of said Lot 1, Block “A” Oak Hill Technology Park Subdivision
Section IV and hereof, a distance of 92.12 feet to a  1/2 inch iron rod found
for the Southwesterly corner of said Lot 1, Block “A” Oak Hill Technology Park
Subdivision Section IV and hereof;

THENCE N 24°38’24” E, leaving the Northerly line of U.S. Highway 290, along a
portion of the Westerly line of said Lot 1, Block “A” Oak Hill Technology Park
Subdivision Section IV and hereof, being a portion of the Easterly line of Lot 1
of said Oak Hill Technology Park Subdivision, a distance of 41.61 feet to a  1/2
inch iron rod found for an angle point in the Westerly line of said Lot 1, Block
“A” Oak Hill Technology Park Subdivision Section IV and hereof;

THENCE N 29°38’00” E, continuing along the Westerly line of said Lot 1, Block
“A” Oak Hill Technology Park Subdivision Section IV and hereof, being a portion
of the Easterly line of Lot 1 and a portion of the Easterly line of Lot 2 of
said Oak Hill Technology Park Subdivision, a distance of 538.08 feet to a  1/2
inch iron rod found for an angle point of said Lot 1, Block “A” Oak Hill
Technology Park Subdivision Section IV and hereof, being the Northeasterly
corner of said Lot 2, Oak Hill Technology Park Subdivision;

 

(legal description continued on next page)

--------------------------------------------------------------------------------

THENCE N 60°22’00” W, along a portion of the Westerly line of said Lot 1, Block
“A” Oak Hill Technology Park Subdivision Section IV and hereof, a distance of
245.35 feet to the POINT OF BEGINNING containing an area of 17.676 acres
(769,977 Sq. Ft.) of land, more or less, within these metes and bounds.

Tract 2 (Fee Simple):

Lot 1, Block A, OAK HILL TECHNOLOGY PARK SUBDIVISION SECTION III, a subdivision
in Travis County, Texas, according to the map or plat of recorded in Document No
200300034 of the Official Public Records of Travis County, Texas.

Also known as:

Of a 4.678 acre tract of land out of the Thomas Anderson Survey No. 17, situated
in Travis County, Texas, being all of Lot 1, Block A, OAK HILL TECHNOLOGY PARK
SUBDIVISION SECTION III, a subdivision of record in Document No 200300034 of the
Official Public Records of Travis County, Texas; said 4.678 acres tract being
more particularly described by metes and bounds as follows:

BEGINNING at a  1/2 inch iron rod found in the Southerly right-of-way line of
Southwest Parkway (R.O.W. varies) for the Northwesterly corner of said Lot 1,
Block “A” Oak Hill Technology Park Subdivision Section III, being the
Northeasterly corner of Lot 1, Block “A” Oak Hill Technology Park Subdivision
Section IV, a subdivision of record in Document No. 200300035 of said Official
Public Records;

THENCE S 59°14’26” E, along the Southerly line of Southwest Parkway, being the
Northerly line of said Lot 1, Block “A” Oak Hill Technology Park Subdivision
Section III, a distance of 322.35 feet to a  1/2 inch iron rod with BPI cap
found, being the Northeasterly corner of said Lot 1, Block A Oak Hill Technology
Park Subdivision Section III;

THENCE leaving the Southerly line of Southwest Parkway, along the Easterly line
of said Lot 1, Block “A” Oak Hill Technology Park Subdivision Section III, being
a portion of the Westerly line of Boston 290 Office Park Section Two-A, a
subdivision of record in Volume 100, Pages 58-59 of said Plat Records the
following two (2) courses and distances:

 

(legal description continued on next page)

--------------------------------------------------------------------------------

1)

S 29°38’19” W, a distance of 341.51 feet to an iron pipe found for an angle
point;

 

2)

S 29°33’06” W, a distance of 287.35 feet to a  1/2 inch iron rod found for the
common Easterly corner of said Lot 1, Block “A” Oak Hill Technology Park
Subdivision Section III and that certain 5.34 acre tract of land conveyed to
South Austin Marine, Inc. by Deed of record in Volume 7993, Page 207 of said
Real Property Records, being the Southeasterly corner hereof;

THENCE N 60°23’40” W, leaving the Westerly line of said Boston 290 Office Park
Section Two-A, along the common line of said Lot 1, Block “A” Oak Hill
Technology Park Subdivision Section III and said 5.34 acre tract, being the
Southerly line hereof, a distance of 322.66 feet to an iron pipe found in the
Easterly line of said Lot 1, Block “A” Oak Hill Technology Park Subdivision
Section IV being the Southwesterly corner of said Lot 1, Block “A” Oak Hill
Technology Park Subdivision Section III and the Northwesterly corner of said
5.34 acre tract;

THENCE N 29°38’00” E, along the Westerly line of said Lot 1, Block “A” Oak Hill
Technology Park Subdivision Section III, being a portion of the Easterly line of
said Lot 1, Block “A” Oak Hill Technology Park Subdivision Section IV, a
distance of 635.36 feet to the POINT OF BEGINNING containing an area of 4.678
acres (203,764 Sq. Ft.) of land, more or less, within these metes and bounds.

Tract 3 (Easement Estate):

EASEMENT ESTATE ONLY appurtenant to Tracts 1 and 2 as created and described in
that certain Joint Access and Easement Agreement, dated October 27, 2005, by and
between Champion Partners Group, Ltd and AAW Oak Hill, Ltd, recorded in Document
No, 2005209114, Official Public Records of Travis County, Texas, and being over
and across that 0.336 of one acre portion of Lots 1 and 2, Block A, OAK HILL
TECHNOLOGY PARK SUBDIVISION, a subdivision in Travis County, Texas, according to
the map or plat recorded in Document No. 200000208, of the Official Public
Records of Travis County, Texas, said 0.336 acre access easement tract being
more particularly described by metes and bounds therein.

 

(legal description continued on next page)

--------------------------------------------------------------------------------

Also known as:

Of a 0.336 acre tract of land situated in Travis County, Texas, being a portion
of Lot 1 and Lot 2, Block “A”, Oak Hill Technology Park Subdivision of record in
Document No. 200000208 of the Official Public Records of Travis County. Texas;
said 0.336 acre being more particularly described by metes and bounds as
follows:

BEGINNING at a  1/2 inch iron rod found in the Northerly line of U.S. Highway
290 West (R.O.W. varies), being the Southeasterly corner of said Lot 1, Block
“A”, and the Southwesterly corner of Lot 1, Block “A”, Oak Hill Technology Park
Subdivision Section IV of record in Document No. 200300035 of said Official
Public Records, for the Southeasterly corner hereof, from which a  1/2 inch iron
rod found for the Southeasterly corner of said Lot 1, Block “A”, Oak Hill
Technology Park Subdivision Section IV and the Southwesterly comer of that
certain 1.102 acre tract described in the Deed to Joseph J. Hajjar, by the Deed
of record in Volume 12020, Page 1918 of the Real Property Records of Travis
County, Texas bears S 88°09’05” E, a distance of 92.12 feet;

THENCE N 88°09’05” W, along the Northerly line of U.S. Highway 290 West, being a
portion of the Southerly line of said Lot 1, Block “A” Oak Hill Technology Park
Subdivision, for the Southerly line hereof, a distance of 27.12 feet to a
calculated point for the Southwesterly corner hereof, from which a  1/2 inch
iron rod with cap set for a point of curvature on said Northerly line of U.S.
Highway 290 West bears N 88°09’05” W, a distance of 106.20 feet;

THENCE leaving said Northerly line of U.S. Highway 290 West, over and across Lot
1 and Lot 2, Block “A” of said Oak Hill Technology Park Subdivision, along the
Westerly line hereof, the following two (2) courses and distances:

 

1)

N 24°38’24” E, a distance of 53.20 feet to a calculated point;

N 29°38’00” E, a distance of 539.17 feet to a calculated point for the
Northwesterly corner hereof, being in the line common to the Northerly line of
said Lot 2, Block “A”, Oak Hill Technology Park Subdivision and a Southerly line
of said Lot 1, Block “A”, Oak Hill Technology Park Subdivision Section IV, from
which a  1/2 inch iron rod set for the common Westerly corner of said Lot 2,
Block “A”, Oak Hill Technology Park Subdivision and said Lot 1, Block “A”, Oak
Hill Technology Park Subdivision Section IV bears N 60°22’00” W, a distance of
220.35 feet;

THENCE S 60°22’00” E, along the line common to the Northerly line of said Lot 2,
Block “A”, Oak Hill Technology Park Subdivision and a Southerly line of said Lot
1, Block “A”, Oak Hill Technology Park Subdivision Section IV, a distance of
25.00 feet to a  1/2 inch iron rod set for the Northeasterly corner of said Lot
2, Block “A” and an interior ell corner for said Lot 1, Block “A”, Oak Hill
Technology Park Subdivision Section IV, for the Northeasterly corner hereof;

THENCE along the Easterly line of Lot 1 and Lot 2, Block “A” of said Oak Hill
Technology Park Subdivision, same being a Westerly line of said Lot 1, Block
“A”, Oak Hill Technology Park Subdivision Section IV, for the Easterly line
hereof, the following two (2) courses and distances:

 

1)

S 29°38’00” W, passing at a distance of 373.10 feet a  1/2 inch iron rod found
for the Easterly common corner of Lot 1 and Lot 2, Block “A” of said Oak Hill
Technology Park Subdivision, continuing for a total distance of 538.08 feet to a
 1/2 inch iron rod set for an angle point;

 

2)

S 24°38’24” W, a distance of 41.61 feet to the POINT OF BEGINNING containing an
area of 0.336 acre (14,651 Sq. Ft.) of land, more or less, within these metes
and bounds.

--------------------------------------------------------------------------------

EXHIBIT A-3

Legal Description of Land

 

Property Name:  

Nathan Project

Address:  

6000 Nathan Lane, Plymouth, Minnesota

Borrower:  

Wells VAF-6000 Nathan Lane, LLC

Parcel 1:

Lot 4, Block 1, Bass Creek Business Park 4th Addition, Hennepin County,
Minnesota. Torrens Certificate Number: 1190199

Parcel 2:

Non-exclusive watermain easement contained in the Grant of Easement recorded
November 10, 1999 as Document No. 3224063, Hennepin County, Minnesota.

Parcel 3:

Non-exclusive watermain easement contained in the Grant of Easement recorded
November 10, 1999 as Document No. 3224062, Hennepin County, Minnesota.

Parcel 4:

Non-exclusive appurtenant easements contained in the Declaration of Private
Water Easement recorded October 21, 1998 as Document No. 3078700, Hennepin
County, Minnesota, as amended by Amendment to Declaration of Private Water
Easement recorded November 10, 1999 as Document No. 3224061, Hennepin County,
Minnesota.

--------------------------------------------------------------------------------

EXHIBIT B

Reserved

--------------------------------------------------------------------------------

EXHIBIT C

Reserved

--------------------------------------------------------------------------------

EXHIBIT D

Rent Roll

See Attached.

--------------------------------------------------------------------------------

Database:       WREF40               Rent Roll                      
                Page:     1 Bldg Status:    All         6000 Nathan Lane        
                    Date:     12/13/2010               12/13/2010            
                Time:     04:11 PM                                              
                                                  GLA   Monthly   Annual  
Monthly   Expense   Monthly   --------------------- Future Rent Increases
--------------------- Bldg Id-Suit Id   Occupant Name   Rent Start   Expiration
  Sqft   Base Rent   Rate PSF   Cost Recovery   Stop   Other Income   Cat   Date
  Monthly Amount   PSF Leased and Unoccupied Suites                      
  08102   -DELI   Lutrec Inc   12/1/2009   11/30/2012   0                      
  Stop Bill Date:                       Vacant Suites                        
  08102   -100   Vacant       101,726                   Occupied Suites        
                  08102   -200   Brocade Communications   5/1/2010   7/31/2017  
44,846   52,734.84   14.11   42,810.21       RENTO   5/1/2011   54,333.49  
14.54                       RENTO   5/1/2012   55,965.37   14.98                
      RENTO   5/1/2013   57,663.69   15.43                       RENTO  
5/1/2014   59,395.21   15.89                       RENTO   5/1/2015   61,193.18
  16.37                       RENTO   5/1/2016   63,024.38   16.86              
        RENTO   5/1/2017   64,913.02   17.37   08102   -300   Stanley Convergent
Security So   5/12/2006   5/31/2016   37,427   40,545.92   13.00   36,584.99    
  RENTO   5/1/2013   43,664.83   14.00   08102   -PARK   United Healthcare
Svcs., Inc.   4/30/2010   4/30/2013   0           8,332.50   PKMON   4/30/2011  
8,748.30   0.00                       PKMON   4/30/2012   9,187.20   0.00
    Totals:   Occupied Sqft:   44.71%       2 Units   82,273   93,280.76    
79,395.20     8,332.50             Leased/Unoccupied Sqft:     0 Units   0      
                Vacant Sqft:   55.29%       1 Units   101,726                  
    Total Sqft:     3 Units   183,999   93,280.76                     Total 6000
Nathan Lane:                             Occupied Sqft:   44.71%       2 Units  
82,273   93,280.76     79,395.20     8,332.50             Leased/Unoccupied
Sqft:     0 Units   0                       Vacant Sqft:   55.29%       1 Units
  101,726                       Total Sqft:     3 Units   183,999   93,280.76  
                  Grand Total:                             Occupied Sqft:  
44.71%       2 Units   82,273   93,280.76     79,395.20     8,332.50            
Leased/Unoccupied Sqft:     0 Units   0                       Vacant Sqft:  
55.29%       1 Units   101,726                       Total Sqft:     3 Units  
183,999   93,280.76                

--------------------------------------------------------------------------------

Database:       WREF40           Rent Roll                      
                Page:     1 Bldg Status:    All       330 Commerce Street      
                      Date:     12/13/2010             12/13/2010            
                Time:     04:10 PM                                              
                                                  GLA   Monthly   Annual  
Monthly   Expense   Monthly   --------------------- Future Rent Increases
--------------------- Bldg Id-Suit Id   Occupant Name   Rent Start   Expiration
  Sqft   Base Rent   Rate PSF   Cost Recovery   Stop   Other Income   Cat   Date
  Monthly Amount   PSF Vacant Suites                           08105   -100  
Vacant       28,673                   Occupied Suites                        
  08105   -100R   Country Music Television, Inc   7/1/2008       6/30/2012   0  
4,137.76                   08105   -200   Country Music Television, Inc.  
6/1/2006       5/31/2013   28,672   42,769.07   17.90   2,236.00     11,100.00  
RENTO   6/1/2011   43,724.80   18.30                       RENTO   6/1/2012  
44,680.53   18.70   08105   -300   Country Music Television Inc.   10/1/2002    
5/31/2013   57,345   85,539.63   17.90         RENTO   6/1/2011   87,451.13  
18.30                       RENTO   6/1/2012   89,362.63   18.70   08105  
-Lobby   Elevator Lobby/Loading Dock   12/1/1985    12/31/2083   0              
        Totals:   Occupied Sqft:   75.00%   2 Units   86,017   132,446.46    
2,236.00     11,100.00             Leased/Unoccupied Sqft:     0 Units   0      
                Vacant Sqft:   25.00%   1 Units   28,673                      
Total Sqft:     3 Units   114,690   132,446.46                     Total 330
Commerce Street:                             Occupied Sqft:   75.00%   2 Units  
86,017   132,446.46     2,236.00     11,100.00             Leased/Unoccupied
Sqft:     0 Units   0                       Vacant Sqft:   25.00%   1 Units  
28,673                       Total Sqft:     3 Units   114,690   132,446.46    
                Grand Total:                             Occupied Sqft:   75.00%
  2 Units   86,017   132,446.46     2,236.00     11,100.00            
Leased/Unoccupied Sqft:     0 Units   0                       Vacant Sqft:  
25.00%   1 Units   28,673                       Total Sqft:     3 Units  
114,690   132,446.46                

--------------------------------------------------------------------------------

Database:       WREF40       Rent Roll                                   Page:  
  1 Bldg Status:    All     Parkway at Oak Hill - Bldg I          
                Date:     12/13/2010           12/13/2010          
                Time:     04:12 PM                                              
                                                        GLA   Monthly   Annual  
Monthly   Expense   Monthly   -------------------- Future Rent Increases
-------------------- Bldg Id-Suit Id   Occupant Name   Rent Start   Expiration  
Sqft   Base Rent   Rate PSF   Cost Recovery   Stop   Other Income   Cat   Date  
Monthly Amount   PSF New Leases                             08107   -0106  
Wells Fargo Bank   2/1/2011   8/31/2018   2,169                   Vacant Suites
                            08107   -0101   Vacant       5,105                  
  08107   -0106   Vacant       2,169                   Occupied Suites          
                08107   -0100   The Solomon Group   7/1/2009   8/31/2015   5,714
  8,094.83   17.00   4,706.63       RENTO   9/1/2011   8,451.96   17.75        
              RENTO   9/1/2012   8,809.08   18.50                       RENTO  
9/1/2013   9,166.21   19.25                       RENTO   9/1/2014   9,523.33  
20.00   08107   -0105   Wells Fargo bank, N.A.   5/1/2010   4/30/2020   31,019  
          RENTO   5/1/2011   31,019.00   12.00                       RENTO  
5/1/2012   38,773.75   15.00                       RENTO   5/1/2013   45,236.04
  17.50                       RENTO   5/1/2014   46,528.50   18.00              
        RENTO   5/1/2015   47,820.96   18.50                       RENTO  
5/1/2016   49,113.42   19.00                       RENTO   5/1/2017   50,405.88
  19.50                       RENTO   5/1/2018   51,698.33   20.00              
        RENTO   5/1/2019   52,990.79   20.50   08107   -0145   Communication
Workers of Amer.   6/1/2010   3/31/2018   7,095             RENTO   1/1/2011  
5,912.50   10.00                       RENTO   1/1/2012   10,346.88   17.50    
                  RENTO   1/1/2013   10,642.50   18.00                      
RENTO   1/1/2014   10,938.13   18.50                       RENTO   1/1/2015  
11,233.75   19.00                       RENTO   1/1/2016   11,529.38   19.50    
                  RENTO   1/1/2017   11,825.00   20.00                      
RENTO   1/1/2018   12,120.63   20.50   08107   -115   Sierra Systems Inc.  
1/1/2010   4/30/2015   5,448   3,918.02   8.63   2,243.76       RENTO   2/1/2011
  7,945.00   17.50                       RENTO   2/1/2012   8,285.50   18.25    
                  RENTO   2/1/2013   8,626.00   19.00                      
RENTO   2/1/2014   8,966.50   19.75   08107   -150   QD Solutions   11/25/2009  
5/31/2015   2,826   4,180.13   17.75   2,327.78       RENTO   12/1/2011  
4,356.75   18.50                       RENTO   12/1/2012   4,533.38   19.25    
                  RENTO   12/1/2013   4,710.00   20.00                      
RENTO   12/1/2014   4,886.63   20.75

--------------------------------------------------------------------------------

Database:       WREF40       Rent Roll                                   Page:  
  2 Bldg Status:    All     Parkway at Oak Hill - Bldg I          
                Date:     12/13/2010           12/13/2010          
                Time:     04:12 PM                                              
                                                    GLA   Monthly   Annual  
Monthly   Expense   Monthly   --------------------- Future Rent Increases
--------------------- Bldg Id-Suit Id   Occupant Name   Rent Start   Expiration
  Sqft   Base Rent   Rate PSF   Cost Recovery   Stop   Other Income   Cat   Date
  Monthly Amount   PSF     Totals:   Occupied Sqft:   87.75%       5 Units  
52,102   16,192.98     9,278.17     0.00             Leased/Unoccupied Sqft:    
0 Units   0                       Vacant Sqft:   12.25%       2 Units   7,274  
                    Total Sqft:     7 Units   59,376   16,192.98                
    Total Parkway at Oak Hill - Bldg I:                           Occupied Sqft:
  87.75%       5 Units   52,102   16,192.98     9,278.17     0.00            
Leased/Unoccupied Sqft:     0 Units   0                       Vacant Sqft:  
12.25%       2 Units   7,274                       Total Sqft:     7 Units  
59,376   16,192.98                     Grand Total:                            
Occupied Sqft:   87.75%       5 Units   52,102   16,192.98     9,278.17     0.00
            Leased/Unoccupied Sqft:     0 Units   0                       Vacant
Sqft:   12.25%       2 Units   7,274                       Total Sqft:     7
Units   59,376   16,192.98                

--------------------------------------------------------------------------------

LOGO [g135270ex10_2pg05.jpg]   Parkway at Oak Hill - Build II    Software :
ARGUS Ver. 14.0.2      File : Parkway Building II -2011 Budget      Property
Type : Office/Industrial      Portfolio :      Date : 12/15/10      Time : 3:55
pm      Ref# : BSL      Page : 1

Presentation Rent Roll & Current Term Tenant Summary

As of Jan-2011 for 86,413 Square Feet

 

    Description   Area     Base Rent     Rent Adjustments & Categories  
Abatements     Reimbursement   Leasing Costs     Upon Expiration     Tenant Name
Type & Suite Number
Lease Dates & Term  

Floor

SqFt
 Bldg Share 

   

Rate & Amount
per Year  

per Month  

   

Changes

on  

   

Changes

to  

   

CPI & Current 

Porters’ Wage 
    Miscellaneous 

 

  Months

to

Abate

   

Pcnt
to

 Abate

   

Description of

Operating Expense

Reimbursements

  Imprvmnts
Rate  
Amount     

Commssns

Rate  

Amount 

   

Assumption about

subsequent terms

for this tenant

                                                                         

1

 

Espey Consultants

      $0.00        Jun-2011        $8.38      -         1-20        100%     
Net: Pays a full     -            -          Market   Office, Suite: Build I    
16,383        $0        Dec-2011        $16.75          21-26        50%     
pro-rata share of       See assumption:   Oct-2009 to Aug-2020     18.96%       
$0.00        Sep-2012        $17.25            all reimbursable       .00(Worst
Case)   131 Months       $0        Sep-2013        $17.75            expenses.  
              Sep-2014        $18.25                            Sep-2015       
$17.75                            Sep-2016        $19.25                       
    Sep-2017        $19.75                            Sep-2018        $20.25   
                        Sep-2019        $20.75                 

2

  SAM, Inc.       $17.00        Sep-2012        $17.50      -         1-4       
100%      Net: Pays a full     -            -          Market   Office, Suite:
Build I     20,451        $347,667        Sep-2013        $18.00          5-16
       50%      pro-rata share of       See assumption:   May-2010 to Aug-2017  
  23.67%        $1.42        Sep-2014        $18.50            all reimbursable
      $17.00   88 Months       $28,972        Sep-2015        $19.00           
expenses.                 Sep-2016        $19.50                 

3

  SAM EXPANSION       $17.00        Sep-2012        $17.50      -         1-4   
    100%      Net: Pays a full     -            -          Market   Office,
Suite: Build I     5,017        $85,289        Sep-2013        $18.00         
5-16        50%      pro-rata share of       See assumption:   May-2010 to
Aug-2017     5.81%        $1.42        Sep-2014        $18.50            all
reimbursable       $17.00   88 Months       $7,107        Sep-2015        $19.00
           expenses.                 Sep-2016        $19.50                 

4

  SAM Expansion II       $17.00        Dec-2012        $17.50      -         1-7
       100%      Net: Pays a full     -            -          Market   Office,
Suite: Build I     13,597        $231,149        Dec-2013        $18.00         
8-14        50%      pro-rata share of       See assumption:   Oct-18-2010 to
Aug-201     15.73%        $1.42        Dec-2014        $18.50            all
reimbursable       $17.00   83 Months       $19,262        Dec-2015       
$19.00            expenses.                 Dec-2016        $19.50             
   

5

  Suite 250       $17.00        Apr-2013        $17.50      -         1-6       
100%      Net: Pays a full     $40.00        $8.97      Market   Office, Suite:
Build I     12,413        $211,021        Apr-2014        $18.00           
pro-rata share of       9.97%      See assumption:   Oct-2011 to Mar-2017    
14.36%        $1.42        Apr-2015        $18.50            all reimbursable  
  $496,520        $111,384      $17.00   66 Months       $17,585        Apr-2016
       $19.00            expenses.      

6

  Suite 130       $0.00        -            -          -         -           
-          Net: Pays a full     -            -          Market   Excluded from
analysi     3,552        $0                pro-rata share of       See
assumption:   Jan-2030 to Dec-2034     4.11%        $0.00                all
reimbursable       $17.00   60 Months       $0                expenses.      

7

  Suite 200       $17.00        Mar-2013        $17.50      -         1-9       
100%      Net: Pays a full     $40.00        $12.68      Market   Office, Suite:
Build I     15,000        $255,000        Mar-2014        $18.00           
pro-rata share of       9.79%      See assumption:   Jun-2011 to Feb-2019    
17.36%        $1.42        Mar-2015        $18.50            all reimbursable  
  $600,000        $190,247      $17.00   93 Months       $21,250        Mar-2016
       $19.00            expenses.                 Mar-2017        $19.50       
                    Mar-2018        $20.00                    Total Occupied
SqFt     55,448                          Total Available SqFt     30,965       
               

LOGO [g135270ex_2pg05c.jpg]

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EXHIBIT E

NXT CAPITAL, LLC (NXT)

MINIMUM INSURANCE REQUIREMENTS

PREMIUM

 

1.

Advise Annual or Notice from Agent Premium by Coverage

2.

Provide Invoice or Notice from Agent for All Policies Prior to Closing or at
Renewal

3.

Advise Method of Payment and Provide Copy of PFA if Applicable

4.

Advise Outstanding Premium of Each Policy or in Notice from Agent

PROPERTY INSURANCE (MUST SHOW THE FOLLOWING):

 

  1.

Issued on Evidence of Property Insurance Acord 28 or equivalent, signed by
authorized agent

  2.

Insurance carrier(s) rated A- VII or better (by A.M. Best)

  3.

All risk/special perils coverage form

  4.

Replacement cost coverage

  5.

No Co-Insurance coverage form or attachment of an Agreed Amount Endorsement.

  6.

Building coverage greater than or equal to replacement cost valued by NXT
Capital or its representatives (if blanket limit or loss limit is indicated on
the policy, declared building value must be shown on the evidence of insurance)

  7.

Deductible no more than $100,000 or greater if reasonably acceptable to NXT
Capital or its representative.

  8.

Loss of Rents coverage, if applicable, greater than or equal to 12 months rental
income valued by NXT Capital or its representatives; use of tenant’s business
interruption insurance does not satisfy this requirement unless the property is
leased to a single tenant and the tenant is contractually obligated to continue
rent payments without abatement for the period of restoration. (Copy of lease
agreement and Evidence of Insurance, Acord 28, from Tenant evidencing such
coverage is required.)

  9.

Business Income and Extra Expense for Property and Boiler and Machinery risks in
an amount equal to 12 months projected net profits, and continuing expense
(Contingent Business Interruption may be required)

  10.

Boiler & Machinery coverage written on a “per accident” basis

  11.

Building Law and Ordinance coverage – Demolition at a minimum limit equal to 5%
of the Replacement Cost Value of the insured property, Increased Cost of
Construction at a minimum limit equal to 20% of the insured property, and
Coverage for loss to undamaged portion of building provided at full building
limit.

  12.

Windstorm coverage must not be excluded; if excluded from the property policy
evidence of separate Windstorm or DIC policy must be provided; coverage is
required for the replacement cost value of each covered location with a maximum
deductible of 5% of the replacement value at each location, if commercially
available at commercially reasonable rates.

  13.

Flood coverage for properties in FEMA flood zones A, B, V, and X-Shaded is
required at the maximum amount under FEMA’s flood insurance plans (additional
amounts up to a limit of 100% of the building replacement cost may be required
if commercially available at commercially reasonable rates) with deductibles
consistent with industry standards.

 

(Exhibit E-1)

--------------------------------------------------------------------------------

EXHIBIT E (Continued)

(MINIMUM INSURANCE REQUIREMENTS)

 

  14.

Earthquake coverage for properties located in Seismic Zones 3 and 4, is required
up to a limit of 100% of the building replacement cost (additional amounts may
be required at NXT’s discretion), with maximum deductibles of 5% of the coverage
amount at each location, if commercially available at commercially reasonable
rates.

  15.

Builder’s Risk coverage, to be carried when structural construction, repairs, or
alterations are being made with respect to the property included as part of this
agreement; coverage to be as outlined in this section at an amount equal to the
completed value of the insured building.

  16.

On all property policies NXT Capital is to be named “non-contributory” Mortgagee
and/or Lender Loss Payee (as applicable) which includes 30 days notice of
cancellation (10 days for non-payment) to NXT Capital; a copy of the endorsement
to the policy or striking of the “endeavor to” and “but failure to mail such
notice shall impose no obligation or liability of any kind upon the company, its
agents or representatives” language on the Evidence of Property certificate is
required (if this language is present)

  17.

Waiver of Subrogation Clause favoring NXT Capital or name NXT Capital as an
Additional Insured.

  18.

Terrorism coverage with a limit equal to the full replacement cost of the
building to the extent customarily insured against by persons of similar size
and involved in similar type of business of Borrowers located in the same or
similar area as the Project(s) and in such amounts as are commercially available
at commercially reasonable rates.

GENERAL LIABILITY INSURANCE (MUST SHOW THE FOLLOWING):

 

  1.

Issued on Certificate of Insurance Acord 25, or equivalent, signed by authorized
agent

  2.

Insurance carrier (s) rated A- VII or better (by A.M. Best)

  3.

Occurrence Form (CG0001 or equivalent)

  4.

Minimum Limits of Liability of $1,000,000 Occurrence ($2,000,000 in the case of
hotel properties), $3,000,000 Aggregate (limits can be met with a combination of
the primary and umbrella/excess)

  5.

Deductible no more than $25,000 or greater if reasonably acceptable to NXT
Capital or its representative.

  6.

NXT Capital named as Additional Insured, primary without right of contribution,
of any other insurance carried by or on behalf of NXT Capital

  7.

Waiver of Subrogation endorsement in favor of NXT Capital

  8.

30 days notice of cancellation (10 days for non-payment) to NXT Capital or if
that is not available from the insurer (through separate endorsement or
otherwise), then Borrowers will provide a written commitment to NXT Capital to
provide such notices to NXT Capital, immediately upon receipt of notice of
cancellation from the insurance carrier.

AUTOMOBILE LIABILITY INSURANCE (IF APPLICABLE) (MUST SHOW THE FOLLOWING):

 

  1.

Issued on Certificate of Insurance Acord 25, or equivalent, signed by authorized
agent

  2.

Insurance carrier (s) rated A- VII or better (by A.M. Best)

  3.

Occurrence Form (CA0001 or equivalent)

  4.

Coverage applicable to All Owned (if applicable), Non-Owned, and Hired autos

  5.

Minimum Limit of Liability $1,000,000

  6.

Deductible no more than $25,000 or greater if reasonably acceptable to NXT
Capital or its representative

  7.

Waiver of Subrogation endorsement in favor of NXT Capital

  8.

30 days notice of cancellation

 

(Exhibit E-2)

--------------------------------------------------------------------------------

EXHIBIT E (Continued)

(MINIMUM INSURANCE REQUIREMENTS)

WORKERS’ COMPENSATION AND EMPLOYER’S LIABILITY (IF REQUIRED) (MUST SHOW THE
FOLLOWING):

 

  1.

Issued on Certificate of Insurance Acord 25, or equivalent, signed by authorized
agent

  2.

Insurance carrier (s) rated A- VII or better (by A.M. Best)

  3.

Statutory Benefits in states of operations and Employer’s Liability at minimum
limits of $500,000/ $500,000/$500,000

  4.

Deductible no more than $25,000 or greater if reasonably acceptable to NXT
Capital or its representatives.

  5.

30 days notice of cancellation (10 days for non-payment) to NXT Capital
(Endeavor to wording should be stricken from Certificate of Insurance)

  6.

Waiver of Subrogation endorsement in favor of NXT Capital (see below)

IMPORTANT NOTES:

The Certificate must show the Umbrella and/or Excess policies at the full limit
of liability.

These Minimum Insurance Requirements are effective as of the Closing Date. NXT
reserves the absolute right to supplement these requirements at any time and
from time to time during the term of the Loan with such other insurance on the
Projects or on any replacements or substitutions thereof or additions thereto as
may from time to time be reasonably required by Lender against other insurance
hazards or casualties which at the time are commonly insured against in the case
of property similarly situated and (excluding environmental liability insurance,
additional earthquake coverage or additional terrorism insurance), of the kinds
from time to time as are generally required by institutional lenders for
properties comparable to the Projects, and are customarily insured against by
persons of similar size and engaged in a similar type of business as Borrowers
located in the same or similar area as the Projects and ins such amounts as are
generally available at commercially reasonable rates) and Borrower will be
required to satisfy any such supplemented requirements after commercially
reasonable notice to Borrower from NXT of such modification, amendment or
supplement.

 

Certificate Holder and Additional Interest

NXT Capital, LLC, and its successors and assigns

Attn: Timothy R. Verrilli

191 North Wacker Drive, Suite 1200

Chicago IL 60606

 

INSURANCE CONSULTANT FOR NXT CAPITAL:

Lockton Companies, LLC

5847 San Felipe, Suite 320

Houston, TX 77057

PRIMARY CONTACT:

Carlo Alcala

Analyst

713.458.5200 (Main)

713.458.5277 (Direct)

832.512.7178 (Mobile)

713.430.5277 (Fax)

calcala@lockton.com (E-mail)

 

SECONDARY CONTACT:

Vicki Heidel, CIC, CRM

Senior Analyst

713.458.5200 (Main)

713.458.5246 (Direct)

281-793-4449 (Mobile)

713.430.5246 (Fax)

vheidel@lockton.com (E-mail)

 

(Exhibit E-3)

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EXHIBIT F

Environmental Documents

Phase I Environmental Site Assessment of the Project located in Nashville, TN,
dated October 18, 2010, prepared by CXN Real Estate Services, LLC for Lender
(CXN Project #158)

Phase I Environmental Site Assessment of the Project located in Austin, TX,
dated October 18, 2010, prepared by CXN Real Estate Services, LLC for Lender
(CXN Project #156)

Phase I Environmental Site Assessment of the Project located in Plymouth, MN,
dated October 18, 2010, prepared by CXN Real Estate Services, LLC for Lender
(CXN Project #154)

--------------------------------------------------------------------------------

EXHIBIT G

Litigation

NONE

--------------------------------------------------------------------------------

EXHIBIT H

[RESERVED]

--------------------------------------------------------------------------------

EXHIBIT I

Form of Owner’s Statement

(see attached)

--------------------------------------------------------------------------------

 

Fields in Yellow Highlight pre-calculate totals        

 

SWORN OWNER’S STATEMENT

PROJECT NAME:

PROJECT ADDRESS:

DRAW #

DATE:

 

The affiant,                                         , being first duly sworn,
on oath deposes and says that he is                                          of
                                                             , owner of the
above described premises in                                          County,
State of                                          to wit:  

 

1. That he/she is thoroughly familiar with all facts and circumstances
concerning the premises described above:

    

2. That with respect to improvements on the premises the only work done or
materials furnished to date are as listed below:

3. That the only contracts let for the furnishing of future work or materials
relative to the contemplated improvements are listed below:

4. That this statement is a true and complete statement of all such contracts
and costs, previous payments and balances due if any.

     Figures in this column should represent original approved loan budget:

 

    

PROJECT BUDGET

    DRAW REQUESTS -net of retainage    

REMAINING  

BALANCE  

  DESCRIPTION   ORIGINAL       Prior Rev       Current Rev       REVISED      
PREVIOUS       CURRENT       TOTAL       HARD COSTS                            
                                Incl Retainage   

Land/Acquisition Cost

    -            -            -            -            -            -         
  -            -                      -            -            -           
-            -            -            -       

Land Total  

    -            -            -            -            -            -         
  -            -                           

Construction Contract

    -            -            -            -            -            -         
  -            -              -            -            -            -         
  -            -            -            -       

Tenant Finish

    -            -            -            -            -            -         
  -            -       

FF&E

    -            -            -            -                    -           
-            -       

Hard Cost contingency

    -            -            -            -            -            -         
  -            -       

Total Construction  

    -            -            -            -            -            -         
  -            -        SOFT COSTS                  

Architect/Engineering

    -            -            -            -            -            -         
  -            -       

Other Consultants

    -            -            -            -            -            -         
  -            -       

Loan Fees

    -            -            -            -            -            -         
  -            -       

Appraisal/ESA/Lender Insp

    -            -            -            -            -            -         
  -            -       

Closing/Title

    -            -            -            -            -            -         
  -            -       

Legal

    -            -            -            -            -            -         
  -            -       

Insurance

    -            -            -            -            -            -         
  -            -       

RE Taxes

    -            -            -            -            -            -         
  -            -       

Developer Fees

    -            -            -            -            -            -         
  -            -       

Leasing Commissions

    -            -            -            -            -            -         
  -            -       

Broker Fees

    -            -            -            -                    -           
-            -       

Marketing

    -            -            -            -            -            -         
  -            -       

Permits/Municipal Fees

    -            -            -            -            -            -         
  -            -       

Lender Draw Fees

                                                                      -         
  -            -            -            -            -            -           
-       

Working Capital

    -            -            -            -            -            -         
  -            -       

Interest Reserve

    -            -            -            -            -            -         
  -            -       

Soft Cost Contingency

    -            -            -            -            -            -         
  -            -       

Total Soft Costs  

    -            -            -            -            -            -         
  -            -                       

TOTAL PROJECT COSTS  

    -            -            -            -            -            -         
  -            -                       

SOURCES OF FUNDS

                                                               

Equity  

    -            -            -            -            -            -         
  -            -       

Deferred Equity  

    -            -            -            -            -            -         
  -            -       

Other Funds  

    -            -            -            -            -            -         
  -            -       

Senior Loan Funds  

    -            -            -            -            -            -         
  -            -       

Other Funds  

    -            -            -            -                    -           
-            -       

TOTAL FUNDS  

    -            -            -            -            -            -         
  -            -       

 

THE UNDERSIGNED HEREBY APPROVES THE ABOVE AMOUNTS FOR PAYMENT.  

 

      Authorized Signer Per Loan Documents              

 

(Exhibit I)

--------------------------------------------------------------------------------

EXHIBIT J

Form of Disbursement Requisition

(see attached)

--------------------------------------------------------------------------------

DISBURSEMENT REQUISITION

Pursuant to the Loan Agreement dated                                           ,
20       between                                                          
(“Borrower”) and NXT Capital, LLC, a Delaware limited liability company.
(“Lender”), Borrower hereby requests a disbursement from the Loan in the amount
of:

$                                         .

The Borrowers hereby certifies as true and swears under oath, to the Lender,
each of the following:

 

  (a)

The cost of Tenant Improvements Change Order regarding the applicable Tenant
Improvements is:

Tenant Improvements Change Orders agreed upon with Contractor:
$                    .

Tenant Improvements Change Orders in dispute with Contractor:
$                    .

Tenant Improvements Potential Change Orders under review by Borrower or
Contractor: $                    .

 

  (b)

All Change Orders are reflected above or have been previously submitted to
Lender for approval.

(c)    The amount requested for disbursement herein (i) has been approved by the
Borrowers as payment for work and materials furnished for any of the Projects,
(ii) represents the actual amount payable to the Contractor or subcontractors
who have performed work on the applicable Tenant Improvements, and (iii) will be
used as payment for the work described on the attached documentation and for no
other reason.

 

  (f)

All prior disbursements advanced by Lender to Borrowers have been paid to the
parties entitled to such payment, and all such Loan proceeds have been used for
the purposes set forth in the Loan Agreement.

 

  (g)

With respect to the Loan Agreement: (i) all conditions and obligations precedent
to this disbursement have been satisfied; (ii) all representations and
warranties made by the Borrower to Lender continue to be accurate as of the date
of this Requisition; except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date) and except for matters that have been disclosed by Borrowers
or Guarantor and approved by Lender in writing; and (iii) no Default or Event of
Defaults has occurred or continues to exist.

--------------------------------------------------------------------------------

Capitalized terms set forth above shall have the meanings described in the Loan
Agreement. The Borrower acknowledges that Lender is relying on the accuracy of
the above statements in making any disbursement.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Borrowers have executed this Disbursement Requisition as
of

DATE:                              , 2010.

 

BORROWERS:  

WELLS VAF – 330 COMMERCE STREET, LLC, a

Delaware limited liability company

 

By:

 

WELLS MID-HORIZON VALUE-ADDED

FUND I, LLC, a Georgia limited liability

company, its sole member

   

By:

 

Wells Investment Management Company, LLC,

its Manager

     

By:

 

 

     

Name:

 

 

     

Title:

 

 

     

Borrower’s Tax ID No.

 

 

 

WELLS VAF – PARKWAY AT OAK HILL, LLC, a

Delaware limited liability company

 

By:

 

WELLS MID-HORIZON VALUE-ADDED

FUND I, LLC, a Georgia limited liability

company, its sole member

   

By:

 

Wells Investment Management Company,

LLC, its Manager

     

By:

 

 

     

Name:

 

 

     

Title:

 

 

     

Borrower’s Tax ID No.

 

 

 

WELLS VAF – 6000 NATHAN LANE, LLC, a

Delaware limited liability company

 

By:

 

Wells Mid-Horizon Value-Added Fund I, LLC, a

Georgia limited liability company, its sole member

   

By:

 

Wells Investment Management Company,

LLC, its Manager

     

By:

 

 

     

Name:

 

 

     

Title:

 

 

     

Borrower’s Tax ID No.

 

 

--------------------------------------------------------------------------------

EXHIBIT K

Organizational Chart

LOGO [g135270ex_2pg109.jpg]

--------------------------------------------------------------------------------

EXHIBIT L

Minimum Release Prices

 

             WELLS VAF-330   WELLS VAF-   WELLS VAF-6000      COMMERCE STREET,
LLC     PARKWAY AT OAK   NATHAN LANE, LLC          

HILL, LLC

 

     Name   Commerce Project   Parkway Project   Nathan Project Address  

330 Commerce Street

Nashville, TN

 

Parkway at Oak Hill

Austin, TX

 

6000 Nathan Lane

Plymouth, MN

Minimum Release

Price

  N/A   19,750,000   14,250,000

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SCHEDULE I

DEFINITIONS

Defined Terms.

The following terms as used herein shall have the following meanings:

Accrued Interest: Interest computed on the outstanding principal balance of the
Loan at the Interest Rate monthly in arrears.

Adjusted Actual Rent: The sum of (a) the annualization of all amounts collected
from tenants of any of the Projects for the most current month, excluding
nonrecurring income and non-property related income (as determined by Lender in
its reasonable discretion) and income from tenants (i) that are 30 or more days
delinquent, (ii) that are in bankruptcy (even if current), (iii) whose leases
terminate within six (6) months (as adjusted for space re-leased upon terms
acceptable to Lender in its sole and absolute discretion) or (iv) that have been
30 or more days delinquent four or more times during the immediately prior 12
month period, and (b) other revenue from the Projects not to exceed $200,000 in
the aggregate for vending and parking based upon collections for the immediately
prior 12 month period.

Affiliate: With respect to a specified person or entity, any individual,
partnership, corporation, limited liability company, trust, unincorporated
organization, association or other entity which, directly or indirectly, through
one or more intermediaries, Controls or is Controlled by or is under common
control with such person or entity, including, without limitation, any general
or limited partnership in which such person or entity is a partner, or any such
person’s immediate family members, direct ancestors or descendants.

Agreement: This Loan Agreement.

Anti-Terrorism and Anti-Money Laundering Laws: (a) all applicable Laws,
regulations, executive orders and government guidance on the prevention and
detection of money laundering (including 18 U.S.C. §§ 1956, 1957 and 1960), drug
trafficking, terrorist-related activities, or financial or other fraud, and any
predicate crimes to such Laws; (b) the Bank Secrecy Act (31 U.S.C. §§ 5311 et
seq. and 12 U.S.C. §§1818(s), 1829(b) and 1951-1959) and its implementing
regulations; and (c) all regulations and any other requirements of any
governmental authority (including, without limitation, the United States
Department of the Treasury Office of Foreign Assets Control) addressing,
relating to, or attempting to eliminate drug trafficking, terrorist acts and
acts of war.

Appraisal: An appraisal of any of the Projects performed in accordance with
FIRREA and Lender’s appraisal requirements by an independent appraiser licensed
in the state in which any of the Projects are located and selected and retained
by Lender. Borrowers may provide to Lender a copy of any FIRREA appraisal
prepared for another lender within the past three (3) months. Lender may, in its
sole and absolute discretion: (a)

 

 

Schedule I-1

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accept such appraisal; (b) request an update of such appraisal; and (c) retain a
state licensed appraiser to perform a new appraisal.

Authorized Representative: As such term is defined in Section 1.1.

Base Rate: As such term is defined in Section 1.1.

Blocked Accounts: collectively, the Guarantor Level Blocked Account and the
Property Level Blocked Accounts, each subject to the Deposit Account Control
Agreement.

Blocked Person: Any person or entity (i) listed in the annex to, or otherwise
subject to the provisions of, Executive Order No. 13224; (ii) acting on behalf
of a person or entity subject to Executive Order No. 13224; (iii) with which
Lender is prohibited from dealing or otherwise engaging in any transaction by
any Ant-Terrorism and Anti-Money Laundering Law; (iv) that threatens or
conspires to commit or support “terrorism” as defined in Executive Order
No. 13224; or (v) that is named a “specially designated national” or “blocked
person” on the most current list published by the U.S. Department of Treasury
Office of Foreign Assets Control or other similar list.

Borrowers: As such term is defined in Section 1.1.

Borrowers’ Knowledge: The actual knowledge, after reasonable inquiry, of
Guarantor, Wells Manager and each individual officer, employee or representative
of Borrowers, Guarantor, Wells Manager and Property Manager who exercises
supervisory authority or has supervisory responsibilities with respect to any of
the Projects.

Business Day: A day of the year on which banks are not required or authorized to
close in Chicago, Illinois.

Capital Improvements: The capital improvements to any of the Projects Borrowers
are obligated to make, as shown on Schedule III attached hereto.

Closing Date: The date of the disbursement of the Initial Funding Amount of the
Loan.

Closing Checklist: The list of items prepared, from time to time, by Lender that
includes various pre-closing prerequisites to fund the Loan.

Co-Lender Agreement: As such term is defined in Section 10.1(d).

Collateral Assignment of Management Agreements: Collectively, those certain
Collateral Assignment of Management Agreements and Waiver of Property Management
and Broker’s Liens of even date herewith between a Borrower, Lender and the
applicable Property Manager.

Complete or Completed or Completion: As defined in Section 4.1(m).

Completion Date: As such term is defined in Section 4.1(m).

 

 

Schedule I-2

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Control(s) or Controlled: As such term is used with respect to any person or
entity, including the correlative meanings of the terms “controlled by” and
“under common control with”, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management policies of such
person or entity, whether through ownership of 10% or more of the outstanding
voting securities in such entity, by contract or otherwise.

Debt Service Coverage Ratio: The ratio of (i) Net Operating Income, to
(ii) Total Annual Debt Service.

Default or default: Any event, circumstance or condition, which, if it were to
continue uncured, would, with notice or lapse of time or both, constitute an
Event of Default hereunder.

Default Rate: The rate per annum equal to 5% (500 basis points) in excess of the
Interest Rate otherwise applicable on each outstanding disbursement of the Loan,
but shall not at any time exceed the highest rate permitted by Law.

Deposit Account Control Agreements: Collectively, (i) that certain Deposit
Account Control Agreement of even date herewith between Wells VAF-330 Commerce
Street, LLC, Wells Real Estate Services, LLC, PNC Bank, national association,
and Lender, as amended, modified, restated, extended, supplemented or replaced
from time to time, (ii) that certain Deposit Account Control Agreement of even
date herewith between Wells VAF-Parkway at Oak Hill, LLC, Wells Real Estate
Services, LLC, PNC Bank, national association, and Lender, as amended, modified,
restated, extended, supplemented or replaced from time to time, (iii) that
certain Deposit Account Control Agreement of even date herewith between Wells
VAF-6000 Nathan Lane, LLC, Piedmont Office Management LLC, PNC Bank, national
association, and Lender, as amended, modified, restated, extended, supplemented
or replaced from time to time and (iv) that certain Deposit Account Control
Agreement of such date herewith between Guarantor, PNC Bank, national
association and Lender, as amended, modified, restated, executed, supplemented
or replaced from time to time.

Derivative Obligations: All obligations of Borrowers under any Interest Rate
Agreement.

Disbursement Processing Fee: $500 fee payable to Lender for each disbursement
request from the Holdback.

Effective Rents: The annualized sum of the following quotient for all of the
Leases (as reasonably determined by Lender): (x) total base rent due over the
term of a Lease less any payments or concessions which Lender, in its reasonable
discretion, deems to be a rent concession, divided by (y) the total number of
months in the term of such Lease.

Eligibility Requirements: With respect to any Person, that such Person (i) has
total assets in excess of $100,000,000 and capital/statutory surplus or
shareholder’s equity of $50,000,000 and (ii) is regularly engaged in the
business of making or owning commercial real estate loans or operating
commercial mortgage properties.

 

 

Schedule I-3

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Eligible Expenses: The ordinary and necessary operating expenses of any of the
Projects during the applicable month which are either consistent with the
operating budget approved by Lender or otherwise reasonably incurred in the
ordinary course of Borrowers’ business, excluding any expenses paid to Borrowers
or any Affiliate of Borrowers, unless expressly permitted by Lender.

Environmental Documents: As such term is defined in Section 6.1.

Environmental Indemnitor: Individually, Borrowers and Guarantor, collectively
referred to as Environmental Indemnitors.

Environmental Obligations: As such term is defined in Section 6.7.

Environmental Proceedings: Any environmental proceedings, whether civil
(including actions by private parties), criminal, or administrative proceedings,
relating to any of the Projects.

Environmental Reports: As such term is defined in Section 6.3.

ERISA: The Employee Retirement Income Security Act of 1974, as amended, and the
regulations promulgated thereunder from time to time.

Estoppel Letter: A written statement from Borrowers setting forth the sums then
owing under the Loan Documents according to Borrowers’ books and records and to
Borrowers’ knowledge, any right of set-off, counterclaim or other defense that
exists against such sums, and Borrowers’ obligations under the Loan Documents.

Event of Default: As such term is defined in Section 8.1.

Excess Cash Flow: For any period means the Net Cash Flow for such period less
current principal and interest payments due on the Loan.

Excess Interest: As such term is defined in Section 11.5.

Exit Fee: As such term is defined in Section 1.1.

Expenses: As such term is defined in Section 9.1.

Extension Option: As such term is defined in Section 2.4.

Extension Term: As such term is defined in Section 2.4.

FIRREA: The Financial Institutions Reform, Recovery And Enforcement Act of 1989,
as amended from time to time.

Force Majeure Event: As such term is defined in Section 4.1(m).

Foreign Person: Any “foreign corporation”, “foreign partnership”, “foreign
trust”, “foreign estate”, “foreign person”, “affiliate” of a “foreign person” or
a “United States

 

 

Schedule I-4

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intermediary” of a “foreign person” within the meaning of the Internal Revenue
Code Sections 897, 1445 or 7701, the Foreign Investments in Real Property Tax
Act of 1980, the International Investment and Trade Services Survey Act, the
Agricultural Foreign Investment Disclosure Act of 1978, or the regulations
promulgated pursuant to such Acts or any amendments to such Acts.

Governmental Approvals: Collectively, all consents, licenses, and permits and
all other authorizations or approvals required from any Governmental Authority
to construct, improve, own or operate any of the Projects.

Governmental Authority: Any federal, state, county or municipal government, or
political subdivision thereof, any governmental or quasi-governmental agency,
authority, board, bureau, commission, department, instrumentality, or public
body, or any court, administrative tribunal, or public utility.

Gross Revenues: All rents, revenues and other income, from whatever source,
including, lease termination fees, returns of deposits and any other ordinary or
extraordinary revenues or income generated from or relating to the ownership,
leasing, management, maintenance or operation of any of the Projects.

Ground Lease Estoppels: Collectively, (i) that certain Ground Lease Estoppel
Certificate and Agreement, dated December         , 2010, by Commerce Street
Venture, relating to the Lobby Lease., and acknowledged and agreed to by Wells
VAF – 330 Commerce Street and Lender, LLC, and (ii) that certain Ground Lease
Estoppel Certificate and Agreement, dated December     , 2010, by Commerce
Street Venture, relating to the Retail Facility Lease., and acknowledged and
agreed to by Wells VAF – 330 Commerce Street and Lender, each in the form
previously approved by Lender.

Guarantor: As such term is defined in Section 1.1.

Guarantor Level Blocked Account: Guarantor account number 102 890 2318 at PNC
Bank, national association, subject to the Deposit Account Control Agreement

Guarantor Organizational Documents: As such term is defined in Section 5.1(f.

Hazardous Material: Means and includes gasoline, petroleum, asbestos containing
materials, explosives, radioactive materials, microbial matter, biological
toxins, mycotoxins, mold or mold spores or any hazardous or toxic material,
substance or waste which is defined by those or similar terms or is regulated as
such under any Law of any Governmental Authority having jurisdiction over any of
the Projects or any portion thereof or its use, including: (i) any “hazardous
substance” defined as such in (or for purposes of) the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.A. § 9601(14)
as may be amended from time to time, or any so-called “superfund” or “superlien”
Law, including the judicial interpretation thereof; (ii) any “pollutant or
contaminant” as defined in 42 U.S.C.A. § 9601(33); (iii) any material now
defined as “hazardous waste” pursuant to 40 C.F.R. Part 260; (iv) any petroleum,
including crude oil or any fraction thereof; (v) natural gas, natural gas
liquids, liquefied natural gas, or synthetic

 

 

Schedule I-5

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gas usable for fuel; (vi) any “hazardous chemical” as defined pursuant to
29 C.F.R. Part 1910; and (vii) any other toxic substance or contaminant that is
subject to any other Law or other past or present requirement of any
Governmental Authority. Any reference above to a Law, includes the same as it
may be amended from time to time, including the judicial interpretation thereof.

Holdback: As such term is defined in Section 1.1.

Holder: As such term is defined in Section 10.1(b).

IDB: means the Industrial Development Board of the Metropolitan Government of
Nashville and Davidson County.

IDB Recognition Agreements: means collectively, (i) that certain Recognition and
Attornment Agreement (Retail Facility Lease) executed by the IDB, Commerce
Street Ventures and Wells VAF-330 Commerce Street, LLC, and (ii) that certain
Recognition and Attornment Agreement (Lobby Lease) executed by IDB, Commerce
Street Venture and Wells VAF-330 Commerce Street, LLC, each in the form set
forth in Schedule IV attached hereto with such modifications as Lender shall
approve in its reasonable discretion.

Improvements: As such term is defined in Section 1.1.

Include or including: Including, but not limited to.

Indebtedness: Collectively, as of any date of determination, all indebtedness of
Borrowers to Lender under the Loan Documents, including, the outstanding
principal balance of the Loan, Accrued Interest, unpaid fees (including the Exit
Fee and Minimum Interest Recovery), unpaid Expenses, and any Derivative
Obligations, as each of the same is amended, modified, restated, extended,
waived, supplemented or replace from time to time.

Indemnified Party: As such term is defined in Section 4.2(l).

Individual Managing Principal: As such term is defined in Section 1.1.

Initial Funding Amount: As such term is defined in Section 1.1.

Insurance Escrow: As such term is defined in Section 4.2(e).

Insurance Proceeds: As such term is defined in Section 7.1(a).

Interest Rate: As such term is defined in Section 1.1.

Interest Rate Agreement: Any agreement (including any ISDA Master Agreement)
between Borrowers and Lender or any of its Affiliates (or their assignee)
evidencing any interest rate, swap, cap, collar, floor or other financing
agreement or arrangement the value of which is dependent upon interest rates.

Interest Reserve: As such term is defined in Section 1.1.

 

 

Schedule I-6

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Internal Revenue Code: The Internal Revenue Code of 1986, as amended from time
to time.

Land: As such term is defined in Section 1.1.

Late Charge: As such term is defined in Section 2.8.

Laws: Collectively, all federal, state and local Laws, statutes, codes,
ordinances, orders, rules and regulations, including judicial opinions or
presidential authority in the applicable jurisdiction.

Leases: The collective reference to all leases, subleases and occupancy
agreements affecting any of the Projects or any part thereof now existing or
hereafter executed and all amendments, modifications or supplements thereto
approved in writing by Lender.

Leasing Commissions: Leasing brokerage commissions payable to unrelated
third-parties in arms length transactions in connection with leasing space at
any of the Projects as or to be approved by Lender.

Lender: As such term is defined in Section 1.1, and including any successor
Holder of the Loan from time to time.

Lender’s Consultant: An independent consulting architect, inspector, and/or
engineer designated by Lender in Lender’s sole and absolute discretion.

LIBOR: As such term is defined in Section 1.1.

Loan: The loan made pursuant to this Agreement for refinancing any of the
Projects.

Lobby Lease: As defined in the Security Instrument encumbering the Commerce
Project.

Loan Amount: The maximum amount of the Loan as initially set forth in
Section 1.1.

Loan Application: As such term is defined in Section 1.1.

Loan Documents: The collective reference to this Agreement, the Note, the
Security Instruments, Collateral Assignment of Management Agreements, the Third
Party Lease Documents, Deposit Account Control Agreements, Guaranty, and any
other documents, agreements, certificates or instruments evidencing or securing
or which guaranty the obligations of the Loan or executed in connection
therewith, as each of the foregoing is amended, modified, restated, extended,
supplemented or replaced from time to time.

Loan Fee: As such term is defined in Section 1.1.

Loan Year: The period from the Closing Date through the last day of the same
month in the following year and thereafter each successive 12 month period.

 

Schedule I-7

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Lockbox:    Collectively, the lockboxes established with a depository designated
by Lender in its sole and absolute discretion for deposit and clearance of
collection of checks to be deposited in the Property Level Blocked Accounts.

Management Agreements: As such term is defined in Section 5.1.

Material Adverse Change or material adverse change:  If, in Lender’s reasonable
discretion, the business prospects, operations or financial condition of a
person, entity or property has changed in a manner which could impair the value
of Lender’s security for the Loan, prevent timely repayment of the Loan or
otherwise prevent the applicable person or entity from timely performing any of
its material obligations under the Loan Documents.

Material Lease: One or more Leases which in the aggregate constitute 5% or more
of the Gross Revenue at any Project.

Maturity Date: As such term is defined in Section 1.1.

Minimum Interest Recovery: As such term is defined in Section 1.1(d).

Monthly Net Cash Flow Payment: The Net Cash Flow for the calendar month that is
two months in arrears (for example, on June 1st, a monthly payment equal to the
Net Cash Flow for the calendar month of April shall be due).

Mortgage Broker: As such term is defined in Section 1.1.

Net Cash Flow:  For any period means, all revenues of Borrowers, determined on a
cash basis, derived from the ownership, operation, use, leasing and occupancy of
any of the Projects during such period including rents, lease termination fees,
expense reimbursements, interest income and forfeited security and other
deposits for such period less the actual, customary and reasonable expenses
actually paid in connection with operating any of the Projects paid during such
period (including a management fee not to exceed 3% of effective gross income),
and deposits made into reserves approved by Lender or required by the Loan
Documents (provided, however, that amounts included in such reserves shall not
also be included as an expense upon disbursement from such reserves) excluding:
(A) any loan proceeds, (B) proceeds or payments under insurance policies (but
including proceeds of business interruption insurance); (C) condemnation
proceeds; (D) any security deposits received from tenants in any of the
Projects, unless and until the same are applied to rent or other obligations in
accordance with the tenant’s Lease; and (E) any other extraordinary items
approved by Lender, in its reasonable discretion.

Net Cash Flow Statement: A statement, on a form reasonably approved by Lender
detailing Borrowers’ calculation of Net Cash Flow.

Net Operating Income: Revenue less Operating Expenses for the immediately prior
12 month period.

Net Sale Proceeds:  The current value of all consideration received in
connection with the sale of a Project, including cash, notes, assumed
indebtedness, deferred payments

 

Schedule I-8

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(contingent or otherwise), prepaid expenses and non-customary prorations in
favor of Seller less reasonable, customary and verifiable costs and expenses of
sale.

Operating Expenses:  For any period, the actual and customary expenses incurred
in connection with operating any of the Projects, determined on a stabilized
accrual basis for such period (as reasonably adjusted by Lender), including,
without limitation: (i) recurring expenses (e.g., real estate tax and insurance
deposits, and such others as determined by Lender) which are not paid out of the
replacement reserve, (ii) management fees (whether paid or not) in an amount not
less than 3.0% of effective gross income, and (iii) a replacement reserve
(whether reserved or not) of not less than $0.20 per square foot of net rentable
space, as adjusted by Lender in its reasonable discretion for projected capital
expenditures excluding payments due on the Loan.

Organizational Documents:  As such term is defined in Section 5.1(e).

Other Information:  Any financial information, Project information, or other
information, including (i) any backup documentation (including invoices,
receipts and other evidence of costs incurred or revenues received) relating to
the Borrowers, Guarantor or any of the Projects, (ii) information regarding all
capital or other equity contributions to Borrowers, and (iii) specific
information concerning Borrowers’ and Guarantor’s other real estate holdings,
including property income and expenses, debt service requirements and occupancy.

Payment Commencement Date: As such term is defined in Section 1.1.

Permitted Exceptions:    Those matters listed on Schedule B to the Title
Policies which affect title to the Projects as of the closing and thereafter
such other title exceptions as Lender may reasonably approve in writing and all
Leases at the Projects.

Permitted Fund Manager:   Any Person that on the date of determination is a
nationally-recognized manager of investment funds investing in debt or equity
interests relating to commercial real estate.

Person:    An individual, corporation, limited liability company, business
trust, partnership, trust, unincorporated organization, joint stock company,
sole proprietorship, joint venture, Governmental Authority or any other form of
entity.

Personal Property:  As such term is defined in Section 4.2(h).

Proceeding:  As such term is defined in Section 11.3.

Projects:  The collective reference to (i) the Land, together with all
buildings, structures and improvements located or to be located thereon,
including the Improvements, (ii) all rights, privileges, easements and
hereditaments relating or appertaining thereto, (iii) the Leases, (iv) the
Personal Property and (v) the Retail Facility Lease and the Lobby Lease.

 

Schedule I-9

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Project Yield:   The quotient of (x) Net Operating Income from the Projects as
determined by Lender’s audit, at Borrowers’ expense, at such time, divided by
(y) the sum of the then current outstanding principal balance of the Loan plus
any anticipated future fundings on the Loan plus accrued and unpaid interest
thereon.

Property Level Blocked Accounts: Account numbers 102 887 0686 (Parkway), 102 890
1323 (Nathan), and 102 887 0694 (Commerce) at PNC Bank, national association,
each subject to the Deposit Account Control Agreements.

Property Taxes:  As such term is defined in Section 4.2(f).

Property Tax Escrow:  As such term is defined in Section 4.2(f).

Publicly Available:  Information that is in the public domain, or becomes part
of the public domain, after disclosure to such person through no fault of such
person.

Qualified Transferee:  (i) Lender, or (ii) one or more of the following:

(A)    a real estate investment trust, bank, saving and loan association,
investment bank, insurance company, trust company, commercial credit
corporation, pension plan, pension fund or pension advisory firm, mutual fund,
government entity or plan that satisfies the Eligibility Requirements;

(B)    an investment company, money management firm or “qualified institutional
buyer” within the meaning of Rule 144A under the Securities Act of 1933, as
amended, or an institutional “accredited investor” within the meaning of
Regulation D under the Securities Act of 1933, as amended, provided that any
such Person referred to in this clause (B) satisfies the Eligibility
Requirements;

(C)    an institution substantially similar to any of the foregoing entities
described in clauses (ii)(A) or (ii)(B) that satisfies the Eligibility
Requirements;

(D)    any entity Controlled by any of the entities described in clause (i) or
clauses (ii)(A) or (ii)(C) above and itself satisfies the Eligibility
Requirements; or

(E)    an investment fund, limited liability company, limited partnership or
general partnership which itself meets the Eligibility Requirements where a
Permitted Fund Manager or an entity that is otherwise a Qualified Transferee
under clauses (ii)(A), (B), (C) or (D) of this definition acts as the general
partner, managing member or fund manager and at least 50% of the equity
interests in such investment vehicle are owned, directly or indirectly, by one
or more entities that are otherwise Qualified Transferees under clauses (ii)(A),
(B), (C) or (D) of this definition.

REA:   Any construction, operation and reciprocal easement or similar agreement
(including, but not limited to, any separate or other agreement between any of
the Borrowers and one or more other parties related to an REA) affecting all or
any portion of any of the Projects.

 

Schedule I-10

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Release Price:  With respect to a Project, an amount equal to the greater of
(i) the minimum release price for such Project set forth on Exhibit L attached
hereto and (ii) 70% of the Net Sale Proceeds.

Remedial Work:  As such term is defined in Section 6.4.

Retail Facility Lease:    As defined in the Security Instrument encumbering the
Commerce Project.

Retained Liabilities:  As such term is defined in Paragraph 1 of the Limited
Joinder.

Retail Facility Memorandum of Lease:   Memorandum of Lease by and between
Commerce Street Venture and Wells VAF – 330 Commerce Street, LLC relating to the
Retail Facility Lease, in the form previously approved by Lender.

Revenue:  The lesser of (i) Adjusted Actual Rent, or (ii) Effective Rent, both
based on an occupancy factor of the lesser of (a) actual occupancy (if open for
business and tenants are paying rent), or (b) an assumed 90% occupancy rate.

Security Instruments:     The collective references to (i) that certain
Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing
of even date herewith by Wells VAF – 6000 Nathan Lane, LLC, in favor of Lender,
(ii) that certain Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing of even date herewith, by Wells VAF – 330 Commerce
Street, LLC, in favor of Lender, and (iii) that certain Deed of Trust,
Assignment of Leases and Rents, Security Agreement and Fixture Filing of even
date herewith, by Wells VAF – Parkway at Oak Hill, LLC, in favor of Lender, each
securing Borrowers’ obligations under the Loan and granting Lender a first
priority lien in the Projects.

Servicer: As such term is defined in Section 10.1(d).

Single Purpose Entity:    An entity which satisfies and complies with each
representation, warranty and covenant set forth in Section 4.2(o) herein;

Tenant: Any tenant under any Lease.

Tenant Improvements:   Improvements for tenant spaces to be made or paid for by
Borrowers in connection with Leases as or to be approved (or deemed approved) by
Lender or for which Lender’s approval is not required.

Tenant Improvements Budget:  As such term is defined in Section 2.2(c).

Tenant Improvements Completion Schedule:      As such term is defined in
Section 2.2(c).

Tenant Improvement Construction Documents:      Collectively, the Tenant
Improvements Budget, the Tenant Improvements Completion Schedule, a fixed price

 

Schedule I-11

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contract with a bondable general contractor for construction of the Tenant
Improvements and any and all architects’ and engineers’ agreements relating to a
Tenant Improvement Project.

Tenant Improvements Project:    The construction of Tenant Improvements with
respect to a new Lease or Lease renewal.

Third Party Lease Documents:  Collectively, (i) Ground Lease Estoppel
Certificate and Agreement, dated December         , 2010, by Commerce Street
Venture, relating to the Lobby Lease., and acknowledged and agreed to by Wells
VAF – 330 Commerce Street and Lender, LLC, (ii) Ground Lease Estoppel
Certificate and Agreement, dated December     , 2010, by Commerce Street
Venture, relating to the Retail Facility Lease., and acknowledged and agreed to
by Wells VAF – 330 Commerce Street and Lender, and (iii) the IDB Recognition
Agreements.

Title Insurer: As such term is defined in Section 1.1.

“Title Policies” (collectively) and “Title Policy” (individually), each a 2006
ALTA (or TLTA, in connection with the Title Policy issued in Texas) Mortgagee’s
Loan Title Insurance Policy issued by the Title Insurer insuring the lien of
each Security Instrument as a valid first, prior and paramount lien upon the
Projects and all appurtenant easements, and subject to no other exceptions other
than a Permitted Exceptions and otherwise satisfying the requirements of Lender,
including all endorsements required by Lender (but excluding any creditor’s
rights endorsement or similar coverage).

Total Annual Debt Service:    The annualized debt service payments on then
outstanding principal balance of the Loan plus any anticipated future fundings
on the Loan assuming (i) a per annum interest rate equal to the Interest Rate as
of the close of business on the day preceding the date of calculation and
(ii) monthly payments of principal of $0.

Transfer:    Except as otherwise permitted hereunder or approved by Lender, any:
(i) sale, transfer, lease, conveyance, alienation, pledge, assignment, mortgage,
encumbrance hypothecation or other disposition of (a) all or any portion of any
of the Projects or any portion of any other security for the Loan, (b) all or
any portion of any Borrower’s right, title and interest (legal or equitable) in
and to any of the Projects or any portion of any other security for the Loan, or
(c) any interest in any Borrower or Guarantor or Wells Manager (including any
interest in the profits, losses or cash distributions in any way relating to any
of the Projects, Wells Manager, or the Borrowers) or any interest in any entity
which holds an interest in, or directly or indirectly controls, any Borrower or
Guarantor or Wells Manager or (d) creation of any new ownership interest in any
Borrower or Guarantor or Wells Manager (including any interest in the profits,
losses or cash distributions in any way relating to any of the Projects or
Borrowers or Guarantor).

Wells Fargo Lease:   That certain Office Lease dated February 22, 2010 between
Wells VAF - Parkway at Oak Hill, LLC, a Delaware limited liability company, as
landlord and Wells Fargo Bank, N.A., a national banking association, as tenant.

 

Schedule I-12

--------------------------------------------------------------------------------

Wells Manager Organizational Documents:     As such term is defined in
Section 5.1(g).

 

Schedule I-13

--------------------------------------------------------------------------------

SCHEDULE II

MINIMUM EFFECTIVE RENT

 

 

Project

 

  

 

“Minimum Effective Rent”

 

         

 

Commerce Project

 

  

 

 

 

 

$11.17                

 

 

  

 

        

 

Parkway Project

 

  

 

 

 

 

$8.32                 

 

 

  

 

    

 

Nathan Project (Floors 1-4)

 

  

 

 

 

 

$10.56                

 

 

  

 

        

 

Nathan Project (below grade with window)

 

  

 

 

 

 

$8.81                 

 

 

  

 

    

 

Nathan Project (below grade without window)

 

  

 

 

 

 

$5.94                 

 

 

  

 

        

In the event a Lease at the Parkway Project or Nathan Project is not “NNN”
and/or in the event that a Lease at the Commerce Project is not a modified gross
Lease with a then current base year stop for expenses, the applicable Minimum
Effective Rent set forth in this Schedule II shall be adjusted by Lender in its
sole and absolute discretion.

--------------------------------------------------------------------------------

SCHEDULE III

CAPITAL IMPROVEMENTS

 

Cap Ex

Budget

for

Wells

VAF

                               Year 1      Year 2      Year 3     Total  

Parkway

             

None needed

                   

Nathan

                   

Convenience Store

    47,000                     

Demise Café

    22,000               

Reserve

             -         -                   

Total

    69,000         -         -          69,000         

Commerce

                   

Bathroom Uptrades

    150,000               

Cooling Tower

Replacement

    75,750                     

Lobby Renovation

    89,500               

Reserve

       -         -               

PCA

    -                    250,000           

 

Total

 

 

 

 

 

 

315,250

 

 

  

 

  

 

 

 

 

-

 

 

  

 

  

 

 

 

 

250,000

 

 

  

 

 

 

 

 

 

565,250

 

 

  

 

     

Total

    384,250         -             250,000        634,250   

--------------------------------------------------------------------------------

SCHEDULE IV

IDB RECOGNITION AGREEMENT

 

 

 

This instrument was prepared with

the assistance of an attorney

licensed in Tennessee, and after

recording should be returned to:

 

Adam M. Laser, Esq.

Goldberg Kohn Ltd.

55 East Monroe Street, Suite 3300

Chicago, Illinois 60603

(312) 201-4000

 

    

SPACE ABOVE THIS LINE FOR RECORDER’S USE.

RECOGNITION AND ATTORNMENT AGREEMENT

 

RE:

(A) Third Amended Lease (“Board Lease”) dated June 1, 2002 by and between the
Industrial Development Board of Metropolitan Government of Nashville and
Davidson County, a public nonprofit corporation, as lessor (the “Board”) whose
address is                                                               and
Commerce Street Venture, a Tennessee joint venture, as lessee (“Venture”), whose
address is                                                   recorded in the
Register’s Office (the “Register’s Office”) for Davidson County, Tennessee as
Instrument No. 20020710-0083162 and (B) Commerce Street Parking and Retail
Facility Lease (as amended, the “Sublease”) dated as of March 19, 1992, by and
between Venture, as landlord and J.C. Bradford & Company, as tenant, and
subsequently assigned to K&M Enterprises, and further assigned to Ferrari
Partners, L.P., and further assigned to Wells VAF-330 Commerce Street, LLC, a
Delaware limited liability company (“Subtenant”) whose address is c/o Wells
Mid-Horizon Value Added Fund I, LLC, 6200 The Corners Parkway, Norcross, GA
30092, pursuant to an Assignment and Assumption of Leases dated December 14,
2007, covering certain real property located in Davidson County, Tennessee, and
described in Exhibit A attached thereto and made a part hereof (the “Sublease
Property”).

THIS RECOGNITION AND ATTORNMENT AGREEMENT (this “Agreement”) is entered into by
and between the Board , Venture and Subtenant. The Board, Venture and Subtenant
each hereby certifies, declares and agrees as follows:

 

1.

Board Lease. Pursuant to the terms of the Board Lease, the Board has leased to
Venture and Venture has leased from the Board, the Board Property. The Board

 

Schedule IV

-1-

--------------------------------------------------------------------------------

 

Lease, as defined above, is in full force and effect and other than as set forth
above, has not been modified, supplemented, or amended, orally or in writing. No
default has occurred under the Board Lease and no condition exists which, but
for the passage of time, the giving of notice, or both, would constitute a
default under the terms of the Board Lease. The interests of the Board and
Venture under the Board Lease have not been assigned.

 

2.

Recognition and Attornment.    So long as Subtenant fully and faithfully
performs its obligations in accordance with the terms and provisions of the
Sublease, Subtenant’s rights to remain in possession of the Sublease Property
and to enjoy the Property until the termination or earlier expiration of the
Sublease will remain undisturbed and without interference whatsoever from the
Board. The Board hereby recognizes Subtenant’s rights to use, possess and enjoy
the Sublease Property pursuant to the Sublease as being valid and enforceable
rights. The Board acknowledges that if the Board Lease expires by its terms or
terminates for any reason whatsoever, then the Sublease shall automatically
without any action of the parties hereto become a direct lease between the Board
and Subtenant in accordance with its terms for the then unexpired term of the
Sublease (including any renewal options) and in such event, Subtenant shall
attorn to the Board, and the Board shall be substituted for Venture as
sublandlord under the Sublease and in such event the parties hereto agree to be
bound by any applicable recorded agreements of Commerce and Subtenant related to
the rights of the parties under the Sublease.

 

3.

Notice.    Any notice or consent required to be given by or on behalf of any
party hereto to any other party shall be in writing and mailed by registered or
certified mail, return receipt requested or delivered personally, including by
air courier or expedited mail service, addressed as set forth above.

 

4.

Successors and Assigns.    This Agreement is binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.

 

5.

Recording.    This instrument may be recorded in the applicable recording office
in the County and State in which the Property is located.

 

6.

Governing Law.  This Agreement shall be construed, interpreted, and enforced
under the laws of the State of Tennessee.

 

7.

Counterparts.    This Agreement may be executed in several counterparts, each of
which may be deemed an original, and all of such counterparts together shall
constitute one and the same agreement.

[Signature Pages to Follow]

 

Schedule IV

-2-

--------------------------------------------------------------------------------

Dated as of                     , 2010.

BOARD:

 

THE INDUSTRIAL DEVELOPMENT BOARD OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND
DAVIDSON COUNTY

 

By:

 

 

Name:

 

 

Its:

 

 

LESSOR:

COMMERCE STREET VENTURE

 

By:

 

RCM Interests, joint venturer

 

By:

 

 

Name:

 

 

Its:

 

 

By: Central Parking System, Inc., joint venturer

 

By:

 

 

Name:

 

 

Its:

 

 

SUBTENANT:

 

WELLS VAF – 330 COMMERCE STREET, LLC, a Delaware limited liability company

 

By:

  WELLS MID-HORIZON VALUE-ADDED FUND I, LLC, a Georgia limited liability
company, its sole member  

By:

  Wells Investment Management Company, LLC, its Manager

   

By:

 

 

   

Name:

 

 

   

Title:

 

 

   

Borrower’s Tax ID No.

 

 

 

Signature Page to Recognition and Attornment Agreement

Schedule IV

-3-

--------------------------------------------------------------------------------

ACKNOWLEDGMENT

 

STATE OF                       )

                                          )  SS

COUNTY OF                  )

Before me,                                         , a Notary Public in and for
the State and County aforesaid, personally appeared
                                        , with whom I am personally acquainted
(or proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged himself to be the                                          of THE
INDUSTRIAL DEVELOPMENT BOARD OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND
DAVIDSON COUNTY, being duly authorized so to do, executed the foregoing
instrument for the purposes therein contained.

WITNESS my hand and seal at office, on this the          day of
                            , 2010.

 

 

Notary Public

 

Notary’s Name (printed)

My Commission Expires:

 

 

Acknowledgment Page to Recognition and Attornment Agreement

Schedule IV

-4-

--------------------------------------------------------------------------------

ACKNOWLEDGMENT

 

STATE OF                       )

                                          )  SS

COUNTY OF                  )

Before me,                                         , a Notary Public in and for
the State and County aforesaid, personally appeared
                                        , with whom I am personally acquainted
(or proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged himself to be the                                          of RCM
INTERESTS, a joint venturer in COMMERCE STREET VENTURE, being duly authorized so
to do, executed the foregoing instrument for the purposes therein contained.

WITNESS my hand and seal at office, on this the          day of
                            , 2010.

 

 

Notary Public

 

Notary’s Name (printed)

My Commission Expires:

 

 

Acknowledgment Page to Recognition and Attornment Agreement

Schedule IV

-5-

--------------------------------------------------------------------------------

ACKNOWLEDGMENT

 

STATE OF                       )

                                          )  SS

COUNTY OF                  )

Before me,                                         , a Notary Public in and for
the State and County aforesaid, personally appeared
                                        , with whom I am personally acquainted
(or proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged himself to be the                                          of
CENTRAL PARKING SYSTEM, INC., a joint venturer in COMMERCE STREET VENTURE being
duly authorized so to do, executed the foregoing instrument for the purposes
therein contained.

WITNESS my hand and seal at office, on this the          day of
                            , 2010.

 

 

Notary Public

 

Notary’s Name (printed)

My Commission Expires:

 

 

Acknowledgment Page to Recognition and Attornment Agreement

Schedule IV

-6-

--------------------------------------------------------------------------------

ACKNOWLEDGMENT

 

STATE OF                       )

                                          )  SS

COUNTY OF                  )

Before me,                                         , a Notary Public in and for
the State and County aforesaid, personally appeared
                                        , with whom I am personally acquainted
(or proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged himself to be the                                          of Wells
Investment Management Company, LLC, the Manager of Wells Mid-Horizon Value-Added
Fund I, LLC, the sole member of WELLS VAF – 330 COMMERCE STREET, LLC, a Delaware
limited liability company, being duly authorized so to do, executed the
foregoing instrument for the purposes therein contained.

WITNESS my hand and seal at office, on this the          day of
                            , 2010.

 

 

Notary Public

 

Notary’s Name (printed)

My Commission Expires:

 

 

Acknowledgment Page to Recognition and Attornment Agreement

Schedule IV

-7-

--------------------------------------------------------------------------------

EXHIBIT A

The Sublease Property

[BEGINNING AT THE POINT OF INTERSECTION OF THE WESTERLY MARGIN OF THIRD AVENUE,
NORTH, AND THE NORTHERLY MARGIN OF COMMERCE STREET; THENCE, WITH SAID NORTHERLY
MARGIN, S62°30’03"W, 174.45 FEET TO THE EASTERLY MARGIN OF PRINTER’S ALLEY;
THENCE WITH SAID EASTERLY MARGIN, N27°40’45"W, 122.48 FEET; THENCE N62°20’37"E
1.00 FEET; THENCE, CONTINUING WITH THE EASTERLY MARGIN OF PRINTER’S ALLEY,
N27°40’45"W, 122.48 FEET; THENCE N62°20’37"E 1.00 FEET; THENCE CONTINUING WITH
THE EASTERLY MARGIN OF PRINTER’S ALLEY, N27°32’23"W, 53.40 FEET; THENCE,
N62°08’37"E, 174.00 FEET TO A POINT IN THE WESTERLY MARGIN OF THIRD AVENUE,
NORTH; THENCE WITH SAID WESTERLY MARGIN, S27°29’23"E, 54.00 FEET; THENCE
CONTINUING WITH SAID WESTERLY MARGIN OF THIRD AVENUE, NORTH S27°25’00"E, 122.96
FEET TO THE POINT OF BEGINNING.]

 

Acknowledgment Page to Recognition and Attornment Agreement

Schedule IV

-8-

--------------------------------------------------------------------------------

 

This instrument was prepared with

the assistance of an attorney

licensed in Tennessee, and after

recording should be returned to:

 

Adam M. Laser, Esq.

Goldberg Kohn Ltd.

55 East Monroe Street, Suite 3300

Chicago, Illinois 60603

(312) 201-4000

 

     

SPACE ABOVE THIS LINE FOR RECORDER’S USE.

RECOGNITION AND ATTORNMENT AGREEMENT

 

RE:

(A) Third Amended Lease (“Board Lease”) dated June 1, 2002 by and between the
Industrial Development Board of Metropolitan Government of Nashville and
Davidson County, a public nonprofit corporation, as lessor (the “Board”) whose
address is                                                               and
Commerce Street Venture, a Tennessee joint venture, as lessee (“Venture”), whose
address is                                                              
recorded in the Register’s Office (the “Register’s Office”) for Davidson County,
Tennessee as Instrument No. 20020710-0083162 and (B) Lease Agreement (as
amended, the “Sublease” ) dated as of December 1, 1985, by and between Venture
and Linville Properties Co., as tenant, a Memorandum of said Ground Lease is
recorded in Book 6739, Page 374, and re-recorded in Book 6740, Page 822, and
further re-recorded in Book 7075, Page 517, in the Register’s Office and
subsequently assigned to J.C. Bradford & Co. by Assignment of Lease recorded
with the Register’s Office in Book 7902, Page 220, and further assigned to K&M
Enterprises by Assignment of Lease recorded with the Register’s Office at
Instrument No. 20001018-0103460 and further assigned to Ferrari Partners, L.P.
by Assignment of Lease of Record in Instrument No. 20020523-0062998, in said
Register’s Office, and further assigned to Wells VAF – 330 Commerce Street, LLC,
by Assignment of Lease recorded at Instrument No. 200712170144581,
20071217-0144582 and 20071217-0144583, in said Register’s Office, as further
assigned to Wells VAF-330 Commerce Street, LLC, a Delaware limited liability
company (“Subtenant”), whose address is c/o Wells Mid-Horizon Value Added Fund
I, LLC, 6200 The Corners Parkway, Norcross, GA 30092, as amended by that certain
First Amendment to Lease Agreement dated as of December 14, 2007 by and between
Venture and Tenant, covering certain real property located in Davidson County,
Tennessee, and described in Exhibit A attached thereto and made a part hereof
(the “Sublease Property”).

 

Schedule IV

-9-

--------------------------------------------------------------------------------

THIS RECOGNITION AND ATTORNMENT AGREEMENT (this “Agreement”) is entered into by
and between the Board, Venture and Subtenant. The Board, Venture and Subtenant
each hereby certifies, declares and agrees as follows:

 

1.

Board Lease.  Pursuant to the terms of the Board Lease, the Board has leased to
Venture and Venture has leased from the Board, the Board Property. The Board
Lease, as defined above, is in full force and effect and other than as set forth
above, has not been modified, supplemented, or amended, orally or in writing. No
default has occurred under the Board Lease and no condition exists which, but
for the passage of time, the giving of notice, or both, would constitute a
default under the terms of the Board Lease. The interests of the Board and
Venture under the Board Lease have not been assigned.

 

2.

Recognition and Attornment.  So long as Subtenant fully and faithfully performs
its obligations in accordance with the terms and provisions of the Sublease,
Subtenant’s rights to remain in possession of the Sublease Property and to enjoy
the Property until the termination or earlier expiration of the Sublease will
remain undisturbed and without interference whatsoever from the Board. The Board
hereby recognizes Subtenant’s rights to use, possess and enjoy the Sublease
Property pursuant to the Sublease as being valid and enforceable rights. The
Board acknowledges that if the Board Lease expires by its terms or terminates
for any reason whatsoever, then the Sublease shall automatically without any
action of the parties hereto become a direct lease between the Board and
Subtenant in accordance with its terms for the then unexpired term of the
Sublease (including any renewal options) and in such event, Subtenant shall
attorn to the Board, and the Board shall be substituted for Venture as
sublandlord under the Sublease and in such event the parties hereto agree to be
bound by any applicable recorded agreements of Commerce and Subtenant related to
the rights of the parties under the Sublease.

 

3.

Notice.    Any notice or consent required to be given by or on behalf of any
party hereto to any other party shall be in writing and mailed by registered or
certified mail, return receipt requested or delivered personally, including by
air courier or expedited mail service, addressed as set forth above.

 

4.

Successors and Assigns.    This Agreement is binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.

 

5.

Recording.    This instrument may be recorded in the applicable recording office
in the County and State in which the Property is located.

 

6.

Governing Law.  This Agreement shall be construed, interpreted, and enforced
under the laws of the State of Tennessee.

 

7.

Counterparts.    This Agreement may be executed in several counterparts, each of
which may be deemed an original, and all of such counterparts together shall
constitute one and the same agreement.

 

Schedule IV

-10-

--------------------------------------------------------------------------------

[Signature Pages to Follow]

 

Schedule IV

-11-

--------------------------------------------------------------------------------

Dated as of                     , 2010.

BOARD:

 

THE INDUSTRIAL DEVELOPMENT BOARD OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND
DAVIDSON COUNTY

 

By:

 

 

Name:

 

 

Its:

 

 

LESSOR:

COMMERCE STREET VENTURE

 

By:

 

RCM Interests, joint venturer

 

By:

 

 

Name:

 

 

Its:

 

 

 

By:

  Central Parking System, Inc., joint venturer

 

By:

 

 

Name:

 

 

Its:

 

 

SUBTENANT:

 

WELLS VAF – 330 COMMERCE STREET, LLC, a Delaware limited liability company

By:

  WELLS MID-HORIZON VALUE-ADDED FUND I, LLC, a Georgia limited liability
company, its sole member  

By:

 

Wells Investment Management Company, LLC, its Manager

   

By:

 

 

   

Name:

 

 

   

Title:

 

 

   

      Borrower’s Tax ID No.

 

 

Signature Page to Recognition and Attornment Agreement

--------------------------------------------------------------------------------

ACKNOWLEDGMENT

STATE OF                       )

                                          )  SS

COUNTY OF                  )

Before me,                                         , a Notary Public in and for
the State and County aforesaid, personally appeared
                                        , with whom I am personally acquainted
(or proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged himself to be the                                          of THE
INDUSTRIAL DEVELOPMENT BOARD OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND
DAVIDSON COUNTY, being duly authorized so to do, executed the foregoing
instrument for the purposes therein contained.

WITNESS my hand and seal at office, on this the          day of
                            , 2010.

 

 

Notary Public

 

Notary’s Name (printed)

My Commission Expires:

 

 

Acknowledgment Page to Recognition and Attornment Agreement

Schedule IV

-13-

--------------------------------------------------------------------------------

ACKNOWLEDGMENT

 

STATE OF                       )

                                          )  SS

COUNTY OF                  )

Before me,                                         , a Notary Public in and for
the State and County aforesaid, personally appeared
                                        , with whom I am personally acquainted
(or proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged himself to be the                                          of RCM
INTERESTS, a joint venturer in COMMERCE STREET VENTURE, being duly authorized so
to do, executed the foregoing instrument for the purposes therein contained.

WITNESS my hand and seal at office, on this the          day of
                            , 2010.

 

 

Notary Public

 

Notary’s Name (printed)

My Commission Expires:

 

Acknowledgment Page to Recognition and Attornment Agreement

--------------------------------------------------------------------------------

ACKNOWLEDGMENT

 

STATE OF                       )

                                          )  SS

COUNTY OF                  )

Before me,                                         , a Notary Public in and for
the State and County aforesaid, personally appeared
                                        , with whom I am personally acquainted
(or proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged himself to be the                                          of
CENTRAL PARKING SYSTEM, INC., a joint venturer in COMMERCE STREET VENTURE being
duly authorized so to do, executed the foregoing instrument for the purposes
therein contained.

WITNESS my hand and seal at office, on this the          day of
                            , 2010.

 

 

Notary Public

 

Notary’s Name (printed)

My Commission Expires:

 

 

Acknowledgment Page to Recognition and Attornment Agreement

Schedule IV

-15-

--------------------------------------------------------------------------------

ACKNOWLEDGMENT

STATE OF                        )

                                          )  SS

COUNTY OF                  )

Before me,                                              , a Notary Public in and
for the State and County aforesaid, personally appeared
                                             , with whom I am personally
acquainted (or proved to me on the basis of satisfactory evidence), and who,
upon oath, acknowledged himself to be the
                                              of Wells Investment Management
Company, LLC, the Manager of Wells Mid-Horizon Value-Added Fund I, LLC, the sole
member of WELLS VAF – 330 COMMERCE STREET, LLC, a Delaware limited liability
company, being duly authorized so to do, executed the foregoing instrument for
the purposes therein contained.

WITNESS my hand and seal at office, on this the          day of
                            , 2010.

 

 

Notary Public

 

Notary’s Name (printed)

My Commission Expires:

 

 

Acknowledgment Page to Recognition and Attornment Agreement

Schedule IV

-16-

--------------------------------------------------------------------------------

EXHIBIT A

The Sublease Property

[BEGINNING AT THE POINT OF INTERSECTION OF THE WESTERLY MARGIN OF THIRD AVENUE,
NORTH, AND THE NORTHERLY MARGIN OF COMMERCE STREET; THENCE, WITH SAID NORTHERLY
MARGIN, S62°30’03"W, 174.45 FEET TO THE EASTERLY MARGIN OF PRINTER’S ALLEY;
THENCE WITH SAID EASTERLY MARGIN, N27°40’45"W, 122.48 FEET; THENCE N62°20’37"E
1.00 FEET; THENCE, CONTINUING WITH THE EASTERLY MARGIN OF PRINTER’S ALLEY,
N27°40’45"W, 122.48 FEET; THENCE N62°20’37"E 1.00 FEET; THENCE CONTINUING WITH
THE EASTERLY MARGIN OF PRINTER’S ALLEY, N27°32’23"W, 53.40 FEET; THENCE,
N62°08’37"E, 174.00 FEET TO A POINT IN THE WESTERLY MARGIN OF THIRD AVENUE,
NORTH; THENCE WITH SAID WESTERLY MARGIN, S27°29’23"E, 54.00 FEET; THENCE
CONTINUING WITH SAID WESTERLY MARGIN OF THIRD AVENUE, NORTH S27°25’00"E, 122.96
FEET TO THE POINT OF BEGINNING.]

 

Schedule IV

-17-

--------------------------------------------------------------------------------

SCHEDULE V

Security Instruments

1)        Deed of Trust, Assignment of Lease and Security Agreement executed by
The Industrial Development Board of The Metropolitan Government of Nashville and
Davidson County, a Tennessee public non-profit corporation to C. Douglas Vibert,
Trustee, of record in Book 6456, page 81, Register’s Office for Davidson County,
Tennessee, to secure to First American National Bank of Nashville, dated as of
December 21, 1984, for the sum of $8,600,000.00, payable as therein specified as
amended by Amended Deed of Trust, Assignment of Lease and Security Agreement by
and among The Industrial Development Board of The Metropolitan Government of
Nashville and Davidson County, a Tennessee public non-profit corporation, C.
Douglas Vibert, as Trustee and First American National Bank of Nashville, dated
as of November 1, 1985, of record in Book 6699, page 540 and re-recorded in Book
6700, page 741, said Register’s Office. Deed of Trust, Assignment of Lease and
Security Agreement executed by The Industrial Development Board of The
Metropolitan Government of Nashville and Davidson County, a Tennessee public
non-profit corporation to C. Douglas Vibert, Trustee, of record in Book 6456,
page 81, Register’s Office for Davidson County, Tennessee ,to secure to First
American National Bank of Nashville, dated as of December 21, 1984, for the sum
of $8,600,000.00, payable as therein specified as amended by Amended Deed of
Trust, Assignment of Lease and Security Agreement by and among The Industrial
Development Board of The Metropolitan Government of Nashville and Davidson
County, a Tennessee public non-profit corporation, C. Douglas Vibert, as Trustee
and First American National Bank of Nashville, dated as of November 1, 1985, of
record in Book 6699, page 540 and re-recorded in Book 6700, page 741, said
Registers Office. (Tract IV)

2)        Assignment of Rents and Leases by Commerce Street Venture, a Tennessee
joint venture composed of RCM Interests and Central Parking System, Inc. and
First American National Bank of Nashville, dated December 21, 1984, of record in
Book 5456, page 97, said Registers Office as amended by Amended Assignment of
Rents and Leases by and among Commerce Street Venture, a Tennessee joint venture
composed of RCM Interests and Central Parking System, Inc. and First American
National Bank of Nashville, dated as of November 1, 1985, of record in Book
6699, page 564, and re-recorded in Book 6700, page 726, said Registers Office.
(Tract IV)

3)        Indenture by and among The Industrial Development Board of The
Metropolitan Government of Nashville and Davidson County, a public nonprofit
corporation and First American National Bank of Nashville, dated as of
November 1, 1985 of record in Book 6699, page 579, said Registers Office. (Tract
IV)

 

Schedule V

-1-

--------------------------------------------------------------------------------

4)        Deed of Trust, Assignment of Lease and Security Agreement (including
partial subordination of prior Deed of Trust) of record in Book 8006, Page 223,
in the Registers Office for Davidson County, Tennessee. (Tract IV)

5)        Leasehold Deed of Trust, Assignment of Subleases and Security
Agreement of record at Instrument No. 20020628-0078511, Page, in the Register’s
Office for Davidson County, Tennessee. (Tract IV)

6)        Deed of Trust, Assignment of Leases and Security Agreement of record
in Instrument Number 20020628-0078510, in the Register’s Office for Davidson
County, Tennessee. (Tract IV)

 

Schedule V

-2-

--------------------------------------------------------------------------------

SCHEDULE VI

Form of New Title Policy

SEE ATTACHED

--------------------------------------------------------------------------------

FIDELITY NATIONAL TITLE INSURANCE COMPANY

 

PROFORMA

LOAN POLICY

SCHEDULE A

 

         

AMOUNT

    

CASE NUMBER

  

DATE OF POLICY

  

OF INSURANCE

  

POLICY NUMBER

 

F201011002

  

 

DATE AND TIME

OF RECORDING

  

 

$4,140,000.00

  

 

PRO FORMA REV 12/16

        

This is a Pro Forma Policy. It does not reflect the present state of the Title
and is not a commitment to (i) insure the Title or (ii) issue and of the
attached endorsements. Any such commitment must be an express written
undertaking on appropriate forms of the Company.

 

1.

Name of Insured:

NXT Capital, LLC, a Delaware limited liability company, its successors and/or
assigns as their respective interests may appear.

 

2.

The estate or interest in the land referred to herein is at Date of Policy
vested in:

Wells VAF - 330 Commerce Street, LLC

 

3.

The estate or interest in the land described in this Schedule and which is
encumbered by the insured mortgage is:

Fee Simple Estate, as to Tract I, Leasehold Estate as to Tract II & IV and
Easement Estate, as to Tract III & V

 

4.

The mortgage herein referred to as the insured mortgage, and the assignments
thereof, if any, are described as follows:

Deed of Trust from Wells VAF - 330 Commerce Street, LLC to                     ,
Trustee for the benefit of NXT Capital, LLC, a Delaware limited liability
company, dated                     , filed for record on                      at
            , and recorded at Instrument No.                                 ,
in the Register’s Office of Davidson County, Tennessee, and which secures an
indebtedness in the principal sum of $4,140,000.00.

 

5.

The land referred to in this policy is described as follows:

Land in Davidson County, Tennessee, being more particularly described as
follows:

TRACT I:

Being a volume of air containing 3,210,453 cubic feet, more or less, with its
lower level boundary beginning at Elevation 529.69 which is the upper ceiling of
the seventh floor of the structure below and with its upper level boundary being
at Elevation 634.0 [said Elevations refer to mean sea level as established from
State of Tennessee Project No. M-3243 (S) Bench Mark being a tag bolt fire
hydrant 270.00 feet south of Commerce Street as relocated on Second Avenue,
Elevation 429.43 (Sea Level Datum)], together with all structures, buildings and
improvements contained within said volume of air space and all real property
contained therein above a parcel of land in Nashville, Davidson County,
Tennessee, and being more particularly described as follows:

Beginning at the point of intersection of the westerly margin of Third Avenue,
North, and the northerly margin of Commerce Street; thence, with said northerly
margin, S 62° 30’ 03" W, 174.45 feet to the easterly margin of Printer’s Alley;
thence with said easterly margin, N 27° 40’ 45" W, 122.48 feet; thence N 62° 20’
37" E 1.00 feet; thence,

 

THIS POLICY VALID ONLY IF SCHEDULE B IS ATTACHED

 

ALTA Loan PROFORMA    Schedule A (06/17/06)    (f201011002.pfd/F201011002/91)

--------------------------------------------------------------------------------

LOAN POLICY

SCHEDULE A

(Continued)

 

CASE NUMBER         POLICY NUMBER

 

F201011002

     

 

F201011002

 

continuing with the easterly margin of Printer’s Alley, N 27° 32’ 23" W, 53.40
feet; thence, N 62° 08’ 37" E, 174.00 feet to a point in the westerly margin of
Third Avenue, North; thence with said westerly margin, S 27° 29’ 23" E, 54.00
feet; thence continuing with said westerly margin of Third Avenue, North, S27°
25’ 00" E, 122.96 feet to the point of beginning, containing 30,778 square feet
or .71 acres, more or less.

Being part of the same property conveyed to Wells VAF - 330 Commerce Street,
LLC, a Delaware limited liability company by Special Warranty Deed dated
December 14, 2007 from Ferrari Partners, L.P., a Georgia limited partnership, of
record in Instrument No. 20071217-0144579, as corrected by Affidavit of
Scrivener’s Error of record in Instrument No. 20100224-0014217, Register’s
Office for Davidson County, Tennessee.

TRACT II:

A leasehold estate pursuant to a lease dated as of December 1, 1985, by and
between Commerce Street Venture (Lessor) and Linville Properties Co., a
memorandum of said lease is recorded in Book 6739, Page 374, and re-recorded in
Book 6740, Page 822, and further re-recorded in Book 7075, Page 517, in the
Register’s Office for Davidson County, Tennessee, and subsequently assigned to
J.C. Bradford & Co. by Assignment of Lease recorded in Book 7902, Page 220, and
further assigned to K&M Enterprises by Assignment of Lease recorded at
Instrument No. 20001018-0103460, in said Register’s Office, and further assigned
to Ferrari Partners, L.P. by Assignment of Lease recorded at Instrument
No. 20020523-0062998, in said Register’s Office, and further assigned to Wells
VAF - 330 Commerce Street, LLC, (Lessee) by Assignment of Lease recorded at
Instrument No. 20071217-0144581, Instrument No. 20071217-0144582 and Instrument
No. 20071217-0144583, in said Register’s Office; amended by Affidavits of
Scrivener’s Error, of record as Instrument Nos.             ,             ,
            , Register’s Office of Davidson County, Tennessee, as such lease was
amended by that certain First Amendment to Lease Agreement dated as of
December 14, 2007 by and between Lessor and Lessee.

Being a portion of a parcel of land in Nashville, First Civil District,
Eighteenth Council District, Davidson County, Tennessee, and being more
particularly described as follows:

Beginning at the point of intersection of the westerly margin of Third Avenue,
North, and the northerly margin of Commerce Street; thence, with said northerly
margin, S62° 30’ 03" W, 174.45 feet to the easterly margin of Printer’s Alley;
thence with said easterly margin, N 27° 40’ 45" W, 122.48 feet; thence N 62° 20’
37" E 1.00 feet; thence, continuing with the easterly margin of Printer’s Alley,
N 27° 32’ 23" W, 53.40 feet; thence, N 62° 08’ 37" E, 174.00 feet to a point in
the westerly margin of Third Avenue, North; thence with said westerly margin, S
27° 29’ 23" E, 54.00 feet; thence continuing with said westerly margin of Third
Avenue, North, S 27° 25’ 00" E, 122.96 feet to the point of beginning,
containing 30,778 square feet or .71 acres, more or less.

TRACT III:

A reciprocal easement for ingress and egress, parking utilities, elevators,
utilities, construction and maintenance set forth in the instrument of record in
Book 6739, Page 331, and re-recorded in Book 6740, Page 775, in the Register’s
Office for Davidson County, Tennessee; said instrument having been amended by
First Amendment to Reciprocal Easement Agreement recorded December 17, 2007 at
Instrument No. 20071217-0144580, Register’s Office for Davidson County,
Tennessee, described as follows:

Beginning at the point of intersection of the westerly margin of Third Avenue,
North, and the northerly margin of

 

THIS POLICY VALID ONLY IF SCHEDULE B IS ATTACHED

 

ALTA Loan PROFORMA    Schedule A (06/17/06)    (f201011002.pfd/F201011002/91)

--------------------------------------------------------------------------------

LOAN POLICY

SCHEDULE A

(Continued)

 

CASE NUMBER         POLICY NUMBER

 

F201011002

     

 

F201011002

 

Commerce Street; thence, with said northerly margin, S 62° 30’ 03" W, 174.45
feet to the easterly margin of Printer’s Alley; thence with said easterly
margin, N 27° 40’ 45" W, 122.48 feet; thence N 62° 20’ 37" E 1.00 feet; thence,
continuing with the easterly margin of Printer’s Alley, N 27° 32’ 23" W, 53.40
feet; thence, N 62° 08’ 37" E, 174.00 feet to a point in the westerly margin of
Third Avenue, North; thence with said westerly margin, S 27° 29’ 23" E, 54.00
feet; thence continuing with said westerly margin of Third Avenue, North, S27°
25’ 00" E, 122.96 feet to the point of beginning, containing 30,778 square feet
or .71 acres, more or less.

Tract IV:

Demised premises contained in Commerce Street Parking and Retail Facility Lease,
dated March 10, 1992, by and between Commerce Street Venture, as landlord and
J.C. Bradford, as lessee, a Memorandum of Lease being of record as Instrument
No.             , Register’s Office of Davidson County, Tennessee, consisting of
2,195 square feet within the building located on the following described tract
of land:

Beginning at the point of intersection of the westerly margin of Third Avenue,
North, and the northerly margin of Commerce Street; thence, with said northerly
margin, S 62° 30’ 03" W, 174.45 feet to the easterly margin of Printer’s Alley;
thence with said easterly margin, N 27° 40’ 45" W, 122.48 feet; thence N 62° 20’
37" E 1.00 feet; thence, continuing with the easterly margin of Printer’s Alley,
N 27° 32’ 23" W, 53.40 feet; thence, N 62° 08’ 37" E, 174.00 feet to a point in
the westerly margin of Third Avenue, North; thence with said westerly margin, S
27° 29’ 23" E, 54.00 feet; thence continuing with said westerly margin of Third
Avenue, North, S27° 25’ 00" E, 122.96 feet to the point of beginning, containing
30,778 square feet or .71 acres, more or less.

Tract V:

Together with the easement rights set forth in the instrument of record in Book
7849, Page 627, in the Register’s Office for Davidson County, Tennessee.

Being part of the same property conveyed to Wells VAF - 330 Commerce Street,
LLC, a Delaware limited liability company by Special Warranty Deed dated
December 14, 2007 from Ferrari Partners, L.P., a Georgia limited partnership, of
record in Instrument No. 20071217-0144579, as corrected by Affidavit of
Scrivener’s Error of record in Instrument No. 20100224-0014217, Register’s
Office for Davidson County, Tennessee.

 

 

 

 

THIS POLICY VALID ONLY IF SCHEDULE B IS ATTACHED

 

ALTA Loan PROFORMA    Schedule A (06/17/06)    (f201011002.pfd/F201011002/91)

--------------------------------------------------------------------------------

Fidelity National Title Insurance Company

SCHEDULE B

 

File Number: F201011002    Policy Number: F201011002 Agent Order/File No.:   

EXCEPTIONS FROM COVERAGE

Except as provided in Schedule B - Part II, this policy does not insure against
loss or damage, and the Company will not pay costs, attorneys’ fees or expenses
which arise by reason of:

PART I

 

1. Taxes for the year 2011 a lien not yet due and payable. NOTE: Taxes in the
amount of $199,658.24 for the year 2010 are a lien due and payable, but not yet
delinquent.

 

2. INTENTIONALLY DELETED

 

3. Terms and conditions of that certain Lease dated December 21, 1984, by and
between The Industrial Development Board of the Metropolitan Government of
Nashville and Davidson County, a public nonprofit corporation, Lessor, and
Commerce Street Venture, a Tennessee joint venture composed of RCM Interests and
Central Parking System, Inc., Lessee, recorded December 21, 1984, of record in
Book 6456, Page 37; as amended by Amended Lease of record in Book 6699, Page
486; as re-recorded in Book 6700, Page 764; as amended by Second Amended Lease
of record in Book 9359, Page 204; and as further amended by Third Amended Lease
of record in Instrument No. 20020710- 0083162, in Register’s Office of Davidson
County, Tennessee. (Tract II)

 

4. Terms and conditions of the NonDisturbance and Attornment Agreement and Lease
Amendment by and among First American National Bank of Nashville, a national
banking association, as Trustee, First American National Bank of Nashville,
individually, The Industrial Development Board of the Metropolitan Government of
Nashville and Davidson County, a Tennessee public non-profit corporation,
Commerce Street Venture, a joint venture, Bradford Partners’ Properties, L.P., a
limited partnership and R.C. Mathews Contractor, a limited partnership of record
in Book 6739, Page 378 and re-recorded in Book 6740, Page 827, in Register’s
Office of Davidson County, Tennessee. (Tract II)

 

5. Terms and conditions of that certain Lease as evidenced by Memorandum of
Lease dated December 1, 1985 by and between Commerce Street Venture, Lessor, and
Linville Properties Co., Lessee, recorded December 18, 1985, of record in Book
6739, Page 374, as re-recorded in Book 6740, Page 822 and Book 7075, Page 517,
Register’s Office of Davidson County, Tennessee. Said Lease having been assigned
to J.C. Bradford & Co. by Assignment of Lease of record in Book 7902, Page 220;
further assigned to K&M Enterprises by Assignment of Lease of record in
Instrument No. 20001018-0103460; further assigned to Ferrari Partners, L.P., by
Assignment of Lease of record in Instrument No. 20020523-0062998; and further
assigned to Wells VAF-300 Commerce Street, LLC in Instrument
No. 20071217-0144581; Instrument No. 20071217-0144582; and Instrument
No. 20071217-0144583, said Register’s Office; amended by Affidavits of
Scrivener’s Error, of record as Instrument Nos.             ,             ,
            , Register’s Office of Davidson County, Tennessee. (Tract II)

 

6. INTENTIONALLY DELETED

 

7.

Terms and conditions of the Reciprocal Easement Agreement between Commerce
Street Venture, a partnership, The Industrial Development Board of the
Metropolitan Government of Nashville and Davidson County, a corporation, and
R.C. Mathews Contractor of record in Book 6739, Page 331; as re-recorded in Book
6740, Page 775; and as amended in Instrument No. 20071217-0144580, Register’s
Office of Davidson County, Tennessee; Said easement is located as shown on the
ALTA Survey prepared by Barge, Waggoner Sumner & Cannon, Inc. dated November 11,
2010 and last revised December 16, 2010, designated as File

 

ALTA Loan Policy (6/17/06)

--------------------------------------------------------------------------------

SCHEDULE B - PART I

(Continued)

 

File Number: F201011002    Policy Number: F201011002 Agent Order/File No.:   

 

 

No. 33883-01.

 

8. Easement of record in Book 7849, Page 627, in Register’s Office of Davidson
County, Tennessee; Said easement is located as shown on the ALTA Survey prepared
by Barge, Waggoner Sumner & Cannon, Inc. dated November 11, 2010, last revised
December 16, 2010, designated as File No. 33883-01.

 

9. Metropolitan Ordinance No. BL2008-346 of record in Instrument
No. 20090127-0007035, in Register’s Office of Davidson County, Tennessee; Said
Ordinace is located as shown on the ALTA Survey prepared by Barge, Waggoner
Sumner & Cannon, Inc. dated December 15, 2010, last revised December 16, 2010,
designated as File No. 33883-01.

 

10. INTENTIONALLY DELETED

 

11. INTENTIONALLY DELETED

 

12. INTENTIONALLY DELETED

 

13. Deed of Trust, Assignment of Lease and Security Agreement executed by The
Industrial Development Board of The Metropolitan Government of Nashville and
Davidson County, a Tennessee public non-profit corporation to C. Douglas Vibert,
Trustee, of record in Book 6456, page 81, Register’s Office for Davidson County,
Tennessee ,to secure to First American National Bank of Nashville, dated as of
December 21, 1984, for the sum of $8,600,000.00, payable as therein specified as
amended by Amended Deed of Trust, Assignment of Lease and Security Agreement by
and among The Industrial Development Board of The Metropolitan Government of
Nashville and Davidson County, a Tennessee public non-profit corporation, C.
Douglas Vibert, as Trustee and First American National Bank of Nashville, dated
as of November 1, 1985, of record in Book 6699, page 540 and re-recorded in Book
6700, page 741, said Register’s Office. Deed of Trust, Assignment of Lease and
Security Agreement executed by The Industrial Development Board of The
Metropolitan Government of Nashville and Davidson County, a Tennessee public
non-profit corporation to C. Douglas Vibert, Trustee, of record in Book 6456,
page 81, Register’s Office for Davidson County, Tennessee ,to secure to First
American National Bank of Nashville, dated as of December 21, 1984, for the sum
of $8,600,000.00, payable as therein specified as amended by Amended Deed of
Trust, Assignment of Lease and Security Agreement by and among The Industrial
Development Board of The Metropolitan Government of Nashville and Davidson
County, a Tennessee public non-profit corporation, C. Douglas Vibert, as Trustee
and First American National Bank of Nashville, dated as of November 1, 1985, of
record in Book 6699, page 540 and re-recorded in Book 6700, page 741, said
Register’s Office. (Tract IV)

 

14. Assignment of Rents and Leases by Commerce Street Venture, a Tennessee joint
venture composed of RCM Interests and Central Parking System, Inc. and First
American National Bank of Nashville, dated December 21, 1984, of record in Book
6456, page 97, said Register’s Office as amended by Amended Assignment of Rents
and Leases by and among Commerce Street Venture, a Tennessee joint venture
composed of RCM Interests and Central Parking System, Inc. and First American
National Bank of Nashville, dated as of November 1, 1985, of record in Book
6699, page 564, and re-recorded in Book 6700, page 726, said Register’s Office.
(Tract IV)

 

15. Indenture by and among The Industrial Development Board of The Metropolitan
Government of Nashville and Davidson County, a public nonprofit corporation and
First American National Bank of Nashville, dated as of November 1, 1985 of
record in Book 6699, page 579, said Register’s Office. (Tract IV)

 

ALTA Loan Policy (6/17/06)

--------------------------------------------------------------------------------

SCHEDULE B - PART I

(Continued)

 

File Number: F201011002    Policy Number: F201011002 Agent Order/File No.:   

 

16. Deed of Trust, Assignment of Lease and Security Agreement (including partial
subordination of prior Deed of Trust) of record in Book 8006, Page 223, in the
Register’s Office for Davidson County, Tennessee. (Tract IV)

 

17. Leasehold Deed of Trust, Assignment of Subleases and Security Agreement of
record at Instrument No. 20020628-0078511, Page, in the Register’s Office for
Davidson County, Tennessee. (Tract IV)

 

18. Deed of Trust, Assignment of Leases and Security Agreement of record in
Instrument Number 20020628-0078510, in the Register’s Office for Davidson
County, Tennessee. (Tract IV)

END OF SCHEDULE B - PART I

 

ALTA Loan Policy (6/17/06)

--------------------------------------------------------------------------------

Fidelity National Title Insurance Company

SCHEDULE B

 

File Number: F201011002    Policy Number: F201011002 Agent Order/File No.:   

PART II

In addition to the matters set forth in Part I of this Schedule, the Title is
subject to the following matters, and the Company insures against loss or damage
sustained in the event that they are not subordinate to the lien of the Insured
Mortgage:

1.  Subject to the terms and conditions of an unrecorded Lease dated March 4,
2002 by and between Ferrari Partners, L.P. (“Landlord”) and Country Music
Television, Inc. (“Tenant”), as amended by a First Amendment dated February 12,
2004, Second Amendment dated April 30, 2004, Third Amendment dated November 3,
2004, Fourth Amendment dated May 1, 2005, a Fifth Amendment dated September 16,
2005, and Sixth Amendment dated February 27, 2006.

2.  Subordination, Non-Disturbance and Attornment Agreement by and among Country
Music Television, Inc., NXT Capital, LLC and WELLS VAF – 330 COMMERCE STREET,
LLC, of record as Instrument No.                         , Register’s Office for
Davidson County, Tennessee.

3.  Ground Lessor Estoppel of record as Instrument No.                         ,
Register’s Office for Davidson County, Tennessee.

4.  Ground Lessor Estoppel of record as Instrument No.                         ,
Register’s Office for Davidson County, Tennessee.

5.  INTENTIONALLY DELETED

6.  INTENTIONALLY DELETED

END OF SCHEDULE B - PART II

 

ALTA Loan Policy (6/17/06)

--------------------------------------------------------------------------------

ENDORSEMENT

Attached to Policy No.

Issued by

Fidelity National Title Insurance Company

The Company hereby insures the owner of the indebtedness secured by the mortgage
referred to in paragraph 4 of Schedule A, against loss which the insured shall
sustain as a result of any exercise of the right of use or maintenance of the
easement referred to in paragraph(s) 7 and 8 of Schedule B as shown insured as
Tracts III & V of Schedule A, over or through the land.

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsement, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls. Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

IN WITNESS WHEREOF, the Company has caused its corporate name and seal to be
affixed hereto by its duly authorized officers.

LOGO [g135270ex10_2pg153.jpg]

 

By:  

 

Easement 103.1

--------------------------------------------------------------------------------

ENDORSEMENT

Attached to Policy No.

Issued by

Fidelity National Title Insurance Company

The Company hereby insures the Insured against loss which the insured shall
sustain in the event that the owner of the easement referred to in paragraph(s)
7 and 8 of Schedule B as shown insured as Tracts III & V of Schedule A, shall,
for the purpose of using and maintaining the easement, compel the removal of any
portion of the improvements on the land which encroach upon said easement.

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls, Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

LOGO [g135270ex10_2pg153.jpg]

 

By:  

 

Easement Encroachment 103.3

--------------------------------------------------------------------------------

File No. F201011002

ENDORSEMENT

Attached to Policy No.             

Issued by

Fidelity National Title Insurance Company

The following policies are issued in conjunction with one another:

POLICY NUMBER:    COUNTY:        STATE:            AMOUNT:

See Exhibit A

Notwithstanding the provisions of Section 8(a)(i) of the Conditions of this
policy, the Amount of Insurance available to cover the Company’s liability for
loss or damage under this policy at the time of payment of loss hereunder shall
be the aggregate of the Amount of Insurance under this policy and the other
policies identified above. At no time shall the Amount of Insurance under this
policy and the other policies identified above exceed in the aggregate
$30,000,000.00. Subject to the provisions of Section 10(a) of the Conditions of
the policies, all payments made by the Company under this policy or any of the
other policies identified above, except the payments made for costs, attorney’s
fees, and expenses, shall reduce the aggregate Amount of Insurance by the amount
of the payment.

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls. Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements

LOGO [g135270ex10_2pg153.jpg]

 

By:  

 

ALTA Endorsement 12-06 (Aggregation) (6/17/06)

--------------------------------------------------------------------------------

EXHIBIT A

 

SITE    STATE    COUNTY      POLICY NO.    AMOUNT     

6000 NATHAN LANE

   MN      HENNEPIN          $13,770,000

330 COMMERCE

   TN      DAVIDSON          $ 4,140,000

PARKWAY AT OAKHILL

   TX      TRAVIS          $ 12,090,000             $30,000,000

--------------------------------------------------------------------------------

File No. F201011002

ENDORSEMENT

Attached to Policy No.              

Issued by    

Fidelity National Title Insurance Company

The Company insures against loss or damage sustained by the Insured by reason of
the lack of a right of access to the following utilities or services: [CHECK ALL
THAT APPLY]

 

X   Water service   X   Natural gas service   X     Telephone service X  
Electrical power service   X   Sanitary sewer   X     Storm water drainage [    

 

  [    

 

  [  

 

either over, under or upon rights-of-way or easements for the benefit of the
Land because of:

(1) a gap or gore between the boundaries of the Land and the rights-of-way or
easements;

(2) a gap between the boundaries of the rights-of-way or easements; or

(3) a termination by a grantor, or its successor, of the rights-of-way or
easements.

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls. Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

LOGO [g135270ex10_2pg153.jpg]

 

By:  

 

ALTA Endorsement 17.2-06 (Utility Access) (10/16/08)

--------------------------------------------------------------------------------

File No. F201011002

ENDORSEMENT

Attached to Policy No.                    

Issued by        

Fidelity National Title Insurance Company

The Company insures against loss or damage sustained by the Insured by reason
of:

 

  1. the failure of Tract I, Tract II, Tract III, Tract IV and Tract V to be
contiguous;

 

  2. the presence of any gaps, strips, or gores separating any of the contiguous
boundary lines described above,

 

 

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls, Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

LOGO [g135270ex10_2pg153.jpg]

 

By:  

 

ALTA Endorsement 19-06 (Contiguity – Multiple Parcels) (6/17/06)

--------------------------------------------------------------------------------

File No. F201011002

ENDORSEMENT

Attached to Policy No.                    

Issued by      

Fidelity National Title Insurance Company

The Company insures against loss or damage sustained by the Insured by reason of
the failure of the Land as described in Schedule A to be the same as that
identified on the survey made by Barge, Waggoner Sumner & Cannon, Inc. dated
November 11, 2010, last revised December 16, 2010, designated as File
No. 33883-01.

 

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls. Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

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By:  

 

ALTA Endorsement 25-06 (Same as Survey) (10/16/08)

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File No. F201011002

ENDORSEMENT

Attached to Policy No.                

Issued by    

Fidelity National Title Insurance Company

The Company insures against loss or damage sustained by the Insured by reason of
the Land being taxed as part of a larger parcel of land or failing to constitute
a separate tax parcel for real estate taxes. (Applicable to Tracts Nos. I
through V)

 

 

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls, Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

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By:  

 

ALTA Endorsement 18-06 (Single Tax Parcel) (6/17/06)

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File No. F201011002

ENDORSEMENT

Attached to Policy No.                

Issued by    

Fidelity National Title Insurance Company

The Company insures against loss or damage sustained by the Insured by reason
of:

 

  1.

The invalidity or unenforceability of the lien of the Insured Mortgage resulting
from its provisions that provide for changes in the rate of interest.

 

  2.

Loss of priority of the lien of the Insured Mortgage as security for the unpaid
principal balance of the loan, together with interest as changed in accordance
with the provisions of the Insured Mortgage, which loss of priority is caused by
the changes in the rate of interest.

“Changes in the rate of interest”, as used in this endorsement, shall mean only
those changes in the rate of interest calculated pursuant to the formula
provided in the loan documents secured by the Insured Mortgage at Date of
Policy, including Loan Agreement, or note.

This endorsement does not insure against loss or damage based upon:

 

  1. usury, or

 

  2. any consumer credit protection or truth in lending law.

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls. Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

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By:  

 

ALTA Endorsement 6-06 (Variable Rate Mortgage) (6/17/06 Rev. 10/16/08)

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File No. F201011002

Form A                

ENDORSEMENT

Attached to policy No.                

Issued by    

Fidelity National Title Insurance Company

The Company hereby insures the insured against loss or damage which the insured
shall sustain by reason of

the entry of any court order or judgment which constitutes a final determination
and adjudges that the lien of the mortgage referred to in Schedule A is invalid
or unenforceable on the ground that the loan evidenced by the note or notes
secured thereby is usurious under the statutory laws of the state of Tennessee
(state where the land is located).

 

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls, Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

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By:  

 

Usury Endorsement– Form A (6/17/06)

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ENDORSEMENT

Attached to Policy No.

Issued by

Fidelity National Title Insurance Company

 

1. The Company insures against loss or damage sustained by the Insured in the
event that, at Date of Policy,

 

  a. according to applicable zoning ordinances and amendments, the Land is not
classified Zone: DTC: Downtown Code and Capital Mall Redevelopment District
(MDHA-CM) with an Urban Zoning Overlay (OV-VZO) and Adult Entertainment Overlay
(OV-ADE)

 

  b. the following use or uses are not allowed under that classification:
Office, Radio/TV Studio & Parking Garage

 

  c. There shall be no liability under paragraph I .b. if the use or uses are
not allowed as the result of any lack of compliance with any conditions,
restrictions, or requirements contained in the zoning ordinances and amendments,
including but not limited to the failure to secure necessary consent or
authorizations as a perquisite to the use or uses.

This paragraph 1.c. does not modify or limit the coverage provided in Covered
Risk 5.

 

2. The Company further insures against loss or damage sustained by the Insured
by reason of a final decree of a court of competent jurisdiction

 

  a. prohibiting the use of the Land, with any existing structure, as insured in
paragraph 1.b; or

 

  b. requiring the removal or alteration of the structure on the basis that, at
Date of Policy, the zoning ordinances and amendments have been violated with
respect to any of the following matters:

 

  (i) Area, width or depth of the Land as a building site for the structure

  (ii) Floor space area of the structure

  (iii) Setback of the structure from the property lines of the Land

  (iv) Height of the structure, or

  (v) Number of parking spaces.

There shall be no liability under this endorsement based on

 

  a. the invalidity of the zoning ordinances and amendments until after a final
decree of a court of competent jurisdiction adjudicating the invalidity, the
effect of which is to prohibit prohibit the use or uses;

 

  b. the refusal of any person to purchase, lease or lend money on the estate or
interest covered by this policy.

ALTA Endorsement 3.1-06 (Zoning - Completed Structure) (6/17/06)

--------------------------------------------------------------------------------

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls. Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

 

  Fidelity National Title Insurance Company   By:  

 

ALTA Endorsement 3.1-06 (Zoning - Completed Structure) (6/17/06)

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File No. F201011002

ENDORSEMENT

Attached to Policy No.                  

Issued by      

Fidelity National Title Insurance Company

The Company insures against loss or damage sustained by the insured by reason of
the failure of Office building and parking garage, known as 330 Commerce Street,
Nashville, Tennessee, to be located on the land at Date of Policy.

 

 

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls, Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

 

Fidelity National Title Insurance Company By:  

 

ALTA Endorsement 22-06 (Location) (6/17/06)

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ENDORSEMENT

Attached to Policy No.                  

Issued by        

Fidelity National Title Insurance Company

This endorsement is effective only if the Collateral includes at least two
parcels of real property.

 

1. For the purposes of this endorsement

 

  a. “Collateral” means all property, including the Land, given as security for
the Indebtedness.

  b.

“Material impairment Amount” means the amount by which any matter covered by
this policy for which a claim is made diminishes the value of the Collateral
below the Indebtedness.

 

2.

In the event of a claim resulting from a matter insured against by this policy,
the Company agrees to pay that portion of the Material impairment Amount that
does not exceed the limits of liability imposed by Sections 2 and 8 of the
Conditions without requiring

 

  a. maturity of the indebtedness by acceleration or otherwise,

  b. pursuit by the Insured of its remedies against the Collateral,

  c. pursuit by the Insured of its remedies under any guaranty, bond or other
insurance policy.

 

3.

Nothing in this endorsement shall impair the Company’s right of subrogation.
However, the Company agrees that its right of subrogation shall be subordinate
to the rights and remedies of the Insured. The Company’s right of subrogation
shall include the right to recover the amount paid to the insured pursuant to
paragraph 2 from any debtor or guarantor of the Indebtedness, after payment or
other satisfaction of the remainder of the indebtedness and other obligations
secured by the lien of the Insured Mortgage. The Company shall have the right to
recoup from the insured Claimant any amount received by it in excess of the
Indebtedness up to the amount of the payment under paragraph 2.

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls. Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

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By:  

 

ALTA Endorsement 20-06 (First Loss — Multiple Parcel & Transactions) (6/17/06)

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File No. F201011002

ENDORSEMENT

Attached to Policy No.                    

Issued by        

Fidelity National Title Insurance Company

 

The Company insures the Insured against the loss or damage which the insured
shall sustain if the land does not abut upon and have vehicular and pedestrian
ingress and egress to and from physically open public street of Commerce Street
(the “Street”), (ii) the Street is not physically open and publicly maintained,
or (iii) the Insured has no right to use existing curb cuts or entries along
that portion of the Street abutting the Land.

 

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls, Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

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By:  

 

ALTA Endorsement 17-06 (Access and Entry) (6/17/06)

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File No. F201011002

ENDORSEMENT

Attached to Policy No.                  

Issued by      

Fidelity National Title Insurance Company

The Company insures the owner of the Indebtedness secured by the Insured
Mortgage against loss or damage sustained by reason of:

 

1. The existence, at Date of Policy, of any of the following:

 

  a.

Covenants, conditions, or restrictions under which the lien of the Insured
Mortgage can be divested, subordinated, or extinguished, or its validity,
priority, or enforceability impaired.

 

  b. Unless expressly excepted in Schedule B

 

  (i)

Present violations on the Land of any enforceable covenants, conditions, or
restrictions, and any existing improvements on the land described in Schedule A
that violate any building setback lines shown on a plat of subdivision recorded
or filed in the Public Records.

 

  (ii)

Any instrument referred to in Schedule B as containing covenants, conditions, or
restrictions on the Land that, in addition, (A) establishes an easement on the
Land; (B) provides a lien for liquidated damages; (C) provides for a private
charge or assessment; (D) provides for an option to purchase, a right of first
refusal, or the prior approval of a future purchaser or occupant.

 

  (iii)

Any encroachment of existing improvements located on the Land onto adjoining
land, or any encroachment onto the Land of existing improvements located on
adjoining land.

 

  (iv)

Any encroachment of existing improvements located on the Land onto that portion
of the Land subject to any easement excepted in Schedule B.

 

  (v)

Any notices of violation of covenants, conditions, or restrictions relating to
environmental protection recorded or filed in the Public Records.

 

2.

Any future violation on the Land of any existing covenants, conditions, or
restrictions occurring prior to the acquisition of title to the estate or
interest in the Land by the Insured, provided the violation results in

 

  a.

the invalidity, loss of priority, or unenforceability of the lien of the Insured
Mortgage; or

  b.

the loss of Title if the Insured shall acquire Title in satisfaction of the
Indebtedness secured by the Insured Mortgage.

ALTA Endorsement 9-06 (Restrictions, Encroachments, Minerals) (6/17/06)

--------------------------------------------------------------------------------

3. Damage to existing improvements, including lawns, shrubbery, or trees

 

  a.

that are located on or encroach upon that portion of the Land subject to any
easement excepted in Schedule B, which damage results from the exercise of the
right to maintain the easement for the purpose for which it was granted or
reserved;

 

  b.

resulting from the future exercise of any right to use the surface of the Land
for the extraction or development of minerals excepted from the description of
the Land or excepted in Schedule B.

 

4.

Any final court order or judgment requiring the removal from any land adjoining
the Land of any encroachment excepted in Schedule B.

 

5.

Any final court order or judgment denying the right to maintain any existing
improvements on the Land because of any violation of covenants, conditions, or
restrictions, or building setback lines shown on a plat of subdivision recorded
or filed in the Public Records.

Wherever in this endorsement the words “covenants, conditions, or restrictions”
appear, they shall not be deemed to refer to or include the terms, covenants,
conditions, or limitations contained in an instrument creating a lease.

As used in paragraphs lb(i) and 5, the words “covenants, conditions, or
restrictions” do not include any covenants, conditions, or restrictions
(a) relating to obligations of any type to perform maintenance, repair, or
remediation on the Land, or (b) pertaining to environmental protection of any
kind or nature, including hazardous or toxic matters, conditions, or substances,
except to the extent that a notice of a violation or alleged violation affecting
the Land has been recorded or filed in the Public Records at Date of Policy and
is not excepted in Schedule B.

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorseent is inconsistent with an express provision of this
endorsement, this endorsement controls. Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

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By:  

 

ALTA Endorsement 9-06 (Restrictions, Encroachments, Minerals) (6/17/06)

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File No. F201011002

ENDORSEMENT

Attached to Policy No.                

Issued by    

Fidelity National Title Insurance Company

The Company insures against loss or damage sustained by the Insured by reason of
the failure of the Land to constitute a lawfully created parcel according to the
subdivision statutes and local subdivision ordinances applicable to the Land.

 

 

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls, Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

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By:  

 

ALTA Endorsement 26-06 (Subdivision) (10/16/08)

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File No. F201011002

ENDORSEMENT

Attached to Policy No.                  

Issued by      

Fidelity National Title Insurance Company

The Company insures against loss or damage sustained by the Insured by reason of
lack of priority of the lien of the Insured Mortgage over

 

(a)

any environmental protection lien that, at Date of Policy, is recorded in those
records established under state statutes at Date of Policy for the purpose of
imparting constructive notice of matters relating to real property to purchasers
for value and without knowledge, or is filed in the records of the clerk of the
United States district court for the district in which the Land is located,
except as set forth in Schedule B; or

 

(b) any environmental protection lien provided by any state statute in effect at
Date of Policy, except environmental protection liens provided by the following
state statutes:

NONE                    

 

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls. Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

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By:  

 

ALTA Endorsement 8.1-06 (Environmental Protection Lien) (6/17/06)

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File No. F201011002

ENDORSEMENT

Attached to Policy No.                

Issued by    

Fidelity National Title Insurance Company

 

The Company insures against loss or damage sustained by the Insured by reason of
the invalidity or unenforceability of the lien of the Insured Mortgage on the
ground that making the loan secured by the Insured Mortgage constituted a
violation of the “doing business” laws of the State where the Land is located
because of the failure of the Insured to qualify to do business under those
laws.

 

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls. Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

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By:  

 

ALTA Endorsement 24-06 (Doing Business) (10/16/08)

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ENDORSEMENT

Attached to Policy No.                

Issued by    

Fidelity National Title Insurance Company

 

Provided that the amount of indebtedness secured by the insured deed of trust is
$4,140,000.00, the Company hereby insures the Insured against any actual loss or
damage in the event that the applicable indebtedness tax on said indebtedness is
not $4764.

 

 

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls, Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

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By:  

 

Mortgage Tax Endorsement (6/17/06)

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File No. F201011002

ENDORSEMENT

Attached to Policy No.                

Issued by    

Fidelity National Title Insurance Company

The Company hereby deletes Paragraph 13 (“Arbitration”) from the Conditions of
the attached Policy.

 

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls, Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.

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By:  

 

Arbitration Endorsement – Loan (6/17/06)