_______________________________________________________________

LOAN AGREEMENT

Dated as of June 21, 2006

Between

BEHRINGER HARVARD TERRACE LP
as Borrower

And

LEHMAN BROTHERS BANK, FSB
as Lender

_________________________________________________________________

 

 

 

 

 

 

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TABLE OF CONTENTS

 

 

 

 

 

 

 

Page No.

1.

 

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

1

 

 

 

 

 

 

 

 

 

1.1

 

Specific Definitions

 

1

 

 

1.2

 

Index of Other Definitions

 

11

 

 

1.3

 

Principles of Construction

 

14

 

 

 

 

 

 

 

2.

 

GENERAL LOAN TERMS

 

14

 

 

 

 

 

 

 

2.1

 

The Loan

 

14

 

 

2.2

 

Interest; Monthly Payments.

 

14

 

 

 

 

2.2.1

 

Generally

 

14

 

 

 

 

2.2.2

 

Default Rate

 

15

 

 

 

 

2.2.3

 

Taxes

 

15

 

 

 

 

2.2.4

 

New Payment Date

 

15

 

 

2.3

 

Loan Repayment.

 

16

 

 

 

 

2.3.1

 

Repayment

 

16

 

 

 

 

2.3.2

 

Mandatory Prepayments

 

16

 

 

 

 

2.3.3

 

Defeasance.

 

17

 

 

 

 

2.3.4

 

Optional Prepayments

 

18

 

 

2.4

 

Release of Property.

 

19

 

 

 

 

2.4.1

 

Release on Defeasance

 

19

 

 

 

 

2.4.2

 

Release on Payment in Full

 

19

 

 

2.5

 

Payments and Computations.

 

19

 

 

 

 

2.5.1

 

Making of Payments

 

19

 

 

 

 

2.5.2

 

Computations

 

19

 

 

 

 

2.5.3

 

Late Payment Charge

 

19

 

 

 

 

 

 

 

 

 

3.

 

CASH MANAGEMENT AND RESERVES

 

20

 

 

 

 

 

 

 

3.1

 

Cash Management Arrangements

 

20

 

 

3.2

 

Intentionally Deleted.

 

20

 

 

3.3

 

Tax and Insurance Reserve.

 

20

 

 

 

 

3.3.1

 

Reserve Deposits

 

20

 

 

3.4

 

Capital Expense Reserves.

 

21

 

 

 

 

3.4.1

 

Reserve Deposits

 

21

 

 

 

 

3.4.2

 

Guaranty in Lieu of Reserve.

 

22

 

 

3.5

 

Rollover Reserves.

 

23

 

 

 

 

3.5.1

 

Reserve Deposits

 

23

 

 

 

 

3.5.2

 

Guaranty in Lieu of Reserve

 

23

 

 

3.6

 

Operating Expense Subaccount

 

24

 

 

3.7

 

Casualty/Condemnation Subaccount

 

25

 

 

3.8

 

Security Deposits

 

25

 

 

3.9

 

Cash Collateral Subaccount

 

25

i

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3.10

 

Grant of Security Interest; Application of Funds

 

25

 

 

3.11

 

Property Cash Flow Allocation.

 

26

 

 

3.12

 

Intentionally Omitted.

 

27

 

 

3.13

 

Intentionally Omitted.

 

27

 

 

3.14

 

Initial Deposits into Reserves

 

27

 

 

 

 

 

 

 

4.

 

REPRESENTATIONS AND WARRANTIES

 

27

 

 

 

 

 

 

 

4.1

 

Organization; Special Purpose

 

27

 

 

4.2

 

Proceedings; Enforceability

 

27

 

 

4.3

 

No Conflicts

 

28

 

 

4.4

 

Litigation

 

28

 

 

4.5

 

Agreements

 

28

 

 

4.6

 

Title

 

28

 

 

4.7

 

No Bankruptcy Filing

 

29

 

 

4.8

 

Full and Accurate Disclosure

 

29

 

 

4.9

 

Tax Filings

 

30

 

 

4.10

 

ERISA; No Plan Assets

 

30

 

 

4.11

 

Compliance

 

30

 

 

4.12

 

Contracts

 

31

 

 

4.13

 

Federal Reserve Regulations; Investment Company Act

 

31

 

 

4.14

 

Easements; Utilities and Public Access

 

31

 

 

4.15

 

Physical Condition

 

31

 

 

4.16

 

Leases

 

32

 

 

4.17

 

Fraudulent Transfer

 

32

 

 

4.18

 

Ownership of Borrower

 

33

 

 

4.19

 

Purchase Options

 

33

 

 

4.20

 

Management Agreement

 

33

 

 

4.21

 

Hazardous Substances

 

33

 

 

4.22

 

Name; Principal Place of Business

 

34

 

 

4.23

 

Other Debt

 

34

 

 

 

 

 

 

 

5.

 

COVENANTS

 

34

 

 

 

 

 

 

 

5.1

 

Existence

 

34

 

 

5.2

 

Taxes and Other Charges

 

34

 

 

5.3

 

Access to Property

 

35

 

 

5.4

 

Repairs; Maintenance and Compliance; Alterations.

 

35

 

 

 

 

5.4.1

 

Repairs; Maintenance and Compliance

 

35

 

 

 

 

5.4.2

 

Alterations

 

35

 

 

5.5

 

Performance of Other Agreements

 

36

 

 

5.6

 

Cooperate in Legal Proceedings

 

36

 

 

5.7

 

Further Assurances

 

36

 

 

5.8

 

Environmental Matters.

 

36

 

 

 

 

5.8.1

 

Hazardous Substances

 

36

 

 

 

 

5.8.2

 

Environmental Monitoring.

 

37

 

 

5.9

 

Title to the Property

 

38

ii

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5.10

 

Leases.

 

38

 

 

 

 

5.10.1

 

Generally

 

39

 

 

 

 

5.10.2

 

Material Leases

 

39

 

 

 

 

5.10.3

 

Minor Leases

 

39

 

 

 

 

5.10.4

 

Additional Covenants with respect to Leases

 

40

 

 

5.11

 

Estoppel Statement

 

40

 

 

5.12

 

Property Management.

 

41

 

 

 

 

5.12.1

 

Management Agreement

 

41

 

 

 

 

5.12.2

 

Termination of Manager

 

41

 

 

5.13

 

Special Purpose Bankruptcy Remote Entity

 

43

 

 

5.14

 

Assumption in Non-Consolidation Opinion

 

43

 

 

5.15

 

Change in Business or Operation of Property

 

43

 

 

5.16

 

Debt Cancellation

 

43

 

 

5.17

 

Affiliate Transactions

 

43

 

 

5.18

 

Zoning

 

43

 

 

5.19

 

No Joint Assessment

 

43

 

 

5.20

 

Principal Place of Business

 

44

 

 

5.21

 

Change of Name, Identity or Structure

 

44

 

 

5.22

 

Indebtedness

 

44

 

 

5.23

 

Licenses

 

44

 

 

5.24

 

Compliance with Restrictive Covenants, Etc

 

44

 

 

5.25

 

ERISA.

 

45

 

 

5.26

 

Transfers.

 

45

 

 

 

 

5.26.1

 

Generally

 

45

 

 

 

 

5.26.2

 

Transfer and Assumption.

 

46

 

 

5.27

 

Liens

 

48

 

 

5.28

 

Dissolution

 

48

 

 

5.29

 

Expenses

 

48

 

 

5.30

 

Indemnity

 

49

 

 

5.31

 

Patriot Act Compliance.

 

50

 

 

 

 

 

 

 

6.

 

NOTICES AND REPORTING

 

51

 

 

6.1

 

Notices

 

51

 

 

6.2

 

Borrower Notices and Deliveries

 

51

 

 

6.3

 

Financial Reporting.

 

51

 

 

 

 

6.3.1

 

Bookkeeping

 

51

 

 

 

 

6.3.2

 

Annual Reports

 

52

 

 

 

 

6.3.3

 

Monthly/Quarterly Reports

 

52

 

 

 

 

6.3.4

 

Other Reports

 

53

 

 

 

 

6.3.5

 

Annual Budget

 

53

 

 

 

 

 

 

 

 

 

7.

 

INSURANCE; CASUALTY; AND CONDEMNATION

 

53

 

 

 

 

 

 

 

7.1

 

Insurance.

 

53

 

 

 

 

7.1.1

 

Coverage

 

53

 

 

 

 

7.1.2

 

Policies

 

56

iii

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7.2

 

Casualty.

 

57

 

 

 

 

7.2.1

 

Notice; Restoration

 

57

 

 

 

 

7.2.2

 

Settlement of Proceeds

 

57

 

 

7.3

 

Condemnation.

 

58

 

 

 

 

7.3.1

 

Notice; Restoration

 

58

 

 

 

 

7.3.2

 

Collection of Award

 

58

 

 

7.4

 

Application of Proceeds or Award.

 

59

 

 

 

 

7.4.1

 

Application to Restoration

 

59

 

 

 

 

7.4.2

 

Application to Debt

 

60

 

 

 

 

7.4.3

 

Procedure for Application to Restoration

 

60

 

 

 

 

 

 

 

 

 

8.

 

DEFAULTS

 

61

 

 

 

 

 

 

 

8.1

 

Events of Default

 

61

 

 

8.2

 

Remedies.

 

63

 

 

 

 

8.2.1

 

Acceleration

 

63

 

 

 

 

8.2.2

 

Remedies Cumulative

 

63

 

 

 

 

8.2.3

 

Severance

 

64

 

 

 

 

8.2.4

 

Delay

 

64

 

 

 

 

8.2.5

 

Lender’s Right to Perform

 

64

 

 

 

 

 

 

 

 

 

9.

 

SPECIAL PROVISIONS

 

65

 

 

 

 

 

 

 

9.1

 

Sale of Note and Secondary Market Transaction.

 

65

 

 

 

 

9.1.1

 

General; Borrower Cooperation

 

65

 

 

 

 

9.1.2

 

Use of Information

 

66

 

 

 

 

9.1.3

 

Borrower Obligations Regarding Disclosure Documents

 

66

 

 

 

 

9.1.4

 

Borrower Indemnity Regarding Filings

 

67

 

 

 

 

9.1.5

 

Indemnification Procedure

 

67

 

 

 

 

9.1.6

 

Contribution

 

68

 

 

 

 

9.1.7

 

Severance of Loan

 

68

 

 

 

 

9.1.8

 

Audited Statements

 

69

 

 

9.2

 

Costs and Expenses

 

69

 

 

9.3

 

Mezzanine Loan

 

69

 

 

 

 

 

 

 

10.

 

MISCELLANEOUS

 

70

 

 

 

 

 

 

 

10.1

 

Exculpation

 

70

 

 

10.2

 

Brokers and Financial Advisors

 

72

 

 

10.3

 

Retention of Servicer

 

72

 

 

10.4

 

Survival

 

73

 

 

10.5

 

Lender’s Discretion

 

73

 

 

10.6

 

Governing Law.

 

73

 

 

10.7

 

Modification, Waiver in Writing

 

74

 

 

10.8

 

Trial by Jury

 

75

 

 

10.9

 

Headings/Exhibits

 

75

 

 

10.10

 

Severability

 

75

iv

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10.11

 

Preferences

 

75

 

 

10.12

 

Waiver of Notice

 

75

 

 

10.13

 

Remedies of Borrower

 

75

 

 

10.14

 

Prior Agreements

 

76

 

 

10.15

 

Offsets, Counterclaims and Defenses

 

76

 

 

10.16

 

Publicity

 

76

 

 

10.17

 

No Usury

 

76

 

 

10.18

 

Conflict; Construction of Documents

 

77

 

 

10.19

 

No Third Party Beneficiaries

 

77

 

 

10.20

 

Assignment

 

77

 

 

10.21

 

Set-Off

 

77

 

 

10.22

 

Certain Additional Rights of Lender

 

78

 

 

10.23

 

Counterparts

 

79

 

 

10.24

 

Yield Maintenance Premium

 

79

 

Schedule 1             Form of Tenant Direction Letter
Schedule 2             Exceptions to Representations and Warranties
Schedule 3             Rent Roll
Schedule 4             Organization of Borrower
Schedule 5             Definition of Special Purpose Bankruptcy Remote Entity
Schedule 6             Intentionally Omitted
Schedule 7             Intentionally Omitted
Schedule 8             Intentionally Omitted

 

v

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LOAN AGREEMENT

LOAN AGREEMENT dated as of June 21, 2006 (as the same may be modified,
supplemented, amended or otherwise changed, this “Agreement”) between BEHRINGER
HARVARD TERRACE LP, a Delaware limited partnership, having an office at 15601
Dallas Parkway, Suite 600, Addison, Texas 75001 (together with its permitted
successors and assigns, “Borrower”), and LEHMAN BROTHERS BANK, FSB, a federal
stock savings bank, a Delaware corporation (together with its successors and
assigns, “Lender”).

1.                                       DEFINITIONS; PRINCIPLES OF CONSTRUCTION

1.1          SPECIFIC DEFINITIONS. THE FOLLOWING TERMS HAVE THE MEANINGS SET
FORTH BELOW:

Acceptable Mezzanine Lender:  (i) any Person satisfying the definition of
“Qualified Transferee” (or any successor term) under clause (ii) (or such
corresponding subsection of any successor term) of the definition of “Qualified
Transferee” set forth in the form Intercreditor Agreement attached as Appendix
VI to the Standard & Poor’s U.S. CMBS Legal and Structural Finance Criteria
published May 1, 2003, as the same may have been amended or modified prior to
the date of the Mezzanine Loan, based on the default values for minimum total
assets and capital/statutory surplus or shareholders’ equity included in the
definition of “Eligibility Requirements” in such publication (or any successor
term) or (ii) any other Person that has been approved by Lender acting
reasonably, and provided, however, in the case of each of the foregoing clauses
(i) and (ii), that if the Mezzanine Loan is made after the occurrence of a
Secondary Market Transaction, such Person (1) was identified to the applicable
Rating Agencies as the proposed lender in connection with the request for a
Rating Comfort Letter referred to in Section 9.3(c), or (2) has otherwise been
approved in writing by the applicable Rating Agencies.

Appraisal: shall mean an appraisal prepared in accordance with the requirements
of FIRREA, prepared by an independent third party appraiser holding an MAI
designation, who is State licensed or State certified if required under the laws
of the State where the Property is located, who meets the requirements of FIRREA
and who is otherwise satisfactory to Lender.

Affiliate:  as to any Person, any other Person that, directly or indirectly, is
in Control of, is Controlled by or is under common Control with such Person or
is a director or officer of such Person or of an Affiliate of such Person.

Amortization Commencement Date:  August 11, 2011, as such date may be changed in
accordance with Section 2.2.4.

Approved Capital Expenses:  Capital Expenses incurred by Borrower, provided that
during a Cash Trap Period, such Capital Expenses shall either be (i) included in
the total Approved Capital Budget or (ii) approved by Lender.

Approved Leasing Expenses:  actual out-of-pocket expenses incurred by Borrower
in leasing space at the Property pursuant to Leases entered into in accordance
with the Loan Documents, including brokerage commissions (including those paid
pursuant to the Management Agreement) and tenant improvements, which expenses
(i) are (A) specifically

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

approved by Lender in connection with approving the applicable Lease,
(B) incurred in the ordinary course of business and on market terms and
conditions in connection with Leases which do not require Lender’s approval
under the Loan Documents, or (C) otherwise approved by Lender, which approval
shall not be unreasonably withheld or delayed, and (ii) are substantiated by
executed Lease documents and brokerage agreements.

Approved Operating Expenses:  during a Cash Trap Period, operating expenses
incurred by Borrower which (i) are within one hundred five percent (105%) of the
total amounts included in the Approved Operating Budget for the current calendar
month (or for unpaid operating expenses included in the Approved Operating
Budget for prior calendar months); provided that, for purposes hereof, operating
expenses in such Approved Operating Budget shall be deemed to be increased from
the amounts in the applicable Approved Operating Budget to the extent that such
increased amounts are at least equal to an increase in operating revenues from
the amounts in such Approved Operating Budget or directly relate to variances in
occupancy levels or emergencies or unforeseen circumstances, (ii) are for real
estate taxes, insurance premiums, electric, gas, oil, water, sewer or other
utility service to the Property, (iii) are for property management fees payable
to Manager under the Management Agreement, such amounts not to exceed three
percent (3%) of the monthly Rents (excluding however any asset management fees
payable by Borrower to Manager pursuant to the Management Agreement; provided,
however, the foregoing three percent (3%) limitation shall not be deemed to
preclude Borrower from paying any such asset management fees pursuant to the
terms of the Management Agreement from its own funds) or (iv) have been approved
by Lender, acting in a commercially reasonably manner. Notwithstanding the
foregoing, nothing herein shall be deemed to preclude Borrower from paying any
asset management fee (over and above the amount set forth above) pursuant to the
terms of the Management Agreement from its own funds.

Available Cash:  as of each Payment Date during the continuance of a Cash Trap
Period, the amount of Rents, if any, remaining in the Deposit Account after the
application of all of the payments required under clauses (i) through (v) of
Section 3.11(a) hereof.

Behringer:  Behringer Harvard Holdings, LLC, a Delaware limited liability
company.

Business Day:  any day other than a Saturday, Sunday or any day on which
commercial banks in New York, New York are authorized or required to close.

Calculation Date:  the last day of each calendar quarter during the Term.

Capital Expenses:  expenses that are capital in nature or required under GAAP to
be capitalized.

Cash Trap Period:  shall commence, if, (i) an Event of Default has occurred and
is continuing, and shall end if such Event of Default has been cured and no
other Event of Default has occurred and is continuing or (ii) as of any
Calculation Date, the Debt Service Coverage Ratio is less than 1.01:1, and shall
end upon Lender’s determination that the Property has achieved a Debt Service
Coverage Ratio of at least 1.01:1 for two (2) consecutive Calculation Dates.

2

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

Control:  with respect to any Person, either (i) ownership directly or
indirectly of forty nine percent (49%) or more of all equity interests in such
Person or (ii) the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, through the
ownership of voting securities, by contract or otherwise.

Debt:  the unpaid Principal, all interest accrued and unpaid thereon, any Yield
Maintenance Premium and all other sums due to Lender in respect of the Loan or
under any Loan Document.

Debt Service:  with respect to any particular period, the scheduled Principal
and interest payments due under the Note in such period.

Debt Service Coverage Ratio:  as of any date, the ratio calculated by Lender of
(i) the Net Operating Income for the twelve (12)-month period ending with the
most recently completed calendar month to (ii) the Debt Service with respect to
such period.

Default:  the occurrence of any event under any Loan Document which, with the
giving of notice or passage of time, or both, would be an Event of Default.

Default Rate:  a rate per annum equal to the lesser of (i) the maximum rate
permitted by applicable law, or (ii) five percent (5%) above the Interest Rate
(as applicable prior to the occurrence of an Event of Default), compounded
monthly.

Defeasance Collateral:  U.S. Obligations, which provide payments (i) on or prior
to, but as close as possible to, all Payment Dates and other scheduled payment
dates, if any, under the Note after the Defeasance Date and up to and including
the Defeasance Maturity Date, and (ii) in amounts equal to or greater than the
Scheduled Defeasance Payments.

Defeasance Maturity Date:  means the Permitted Prepayment Date.

Deposit Bank:  Wachovia Bank, National Association, or such other bank or
depository selected by Lender in its discretion.

Eligible Account:  a separate and identifiable account from all other funds held
by the holding institution that is either (i) an account or accounts
(A) maintained with a federal or state-chartered depository institution or trust
company which complies with the definition of Eligible Institution or (B) as to
which Lender has received a Rating Comfort Letter from each of the applicable
Rating Agencies with respect to holding funds in such account, or (ii) a
segregated trust account or accounts maintained with the corporate trust
department of a federal depository institution or state chartered depository
institution subject to regulations regarding fiduciary funds on deposit similar
to Title 12 of the Code of Federal Regulations §9.10(b), having in either case
corporate trust powers, acting in its fiduciary capacity, and a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
federal and state authorities.

3

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

An Eligible Account will not be evidenced by a certificate of deposit, passbook
or other instrument.

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

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

ERISA Affiliate:  all members of a controlled group of corporations and all
trades and business (whether or not incorporated) under common control and all
other entities which, together with Borrower, are treated as a single employer
under any or all of Section 414(b), (c), (m) or (o) of the Code.

FIRREA: means the Financial Institutions Reform, Recovery and Enforcement Act of
1989, as the same may be amended from time to time.

GAAP:  generally accepted accounting principles in the United States of America
as of the date of the applicable financial report.

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

Guarantor:  Behringer Harvard REIT I, Inc., a Maryland corporation.

Guaranty Limit Amount: as of any date of determination thereof, the sum, as of
such date after giving effect to any adjustments thereto pursuant to this
Agreement and the Guaranty, of (i) the Rollover Reserve Offset Amount plus
(ii) the Capital Reserve Offset Amount.

Harvard Fund I:  individually or collectively, Behringer Harvard Short-Term
Opportunity Funds I, L.P., a Texas limited partnership and/or Behringer Harvard
Mid-Term Value Enhancement Fund I, L.P. a Texas limited partnership and/or
Behringer Harvard Strategic Opportunity Fund LLP, a Texas limited partnership
and/or any other fund for which Behringer Harvard Holdings, LLC, or an Affiliate
of it under its Control, serves as general partner, manager or advisor.

Harvard REIT:  individually or collectively, the Behringer Harvard Operating
Partnership I LP, a Texas limited partnership (the “Harvard REIT Operating
Partnership”) and/or Behringer Harvard REIT I, Inc., a Maryland corporation
(“Behringer Harvard REIT”) and/or Behringer Harvard Opportunity REIT I, Inc., a
Maryland corporation (“Behringer

4

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

Harvard Opportunity REIT”) and/or any other fund for which Behringer Harvard
Holdings, LLC, or an Affiliate of it under its Control, serves as general
partner, manager or advisor.

Interest Period:  (i) the period from the date hereof through the first (1st)
day thereafter that is the tenth (10th) day of a calendar month and (ii) each
period thereafter from the eleventh (11th) day of each calendar month through
the tenth (10th) day of the following calendar month; except that the Interest
Period, if any, that would otherwise commence before and end after the Maturity
Date shall end on the Maturity Date. Notwithstanding the foregoing, if Lender
exercises its right to change the Payment Date to a New Payment Date in
accordance with Section 2.2.4 hereof, then from and after such election, each
Interest Period shall be the period from the New Payment Date in each calendar
month through the day in the next succeeding calendar month immediately
preceding the New Payment Date in such calendar month.

Interest Rate:  a rate of interest equal to (i) for the period from and
including the date hereof through and including the last day of the Interest
Period ending in the calendar month of July, 2008, 5.75% per annum, and (ii) for
all periods thereafter, 6.22302% per annum (or, in either such case, when
applicable pursuant to this Agreement or any other Loan Document, the Default
Rate).

Leases:  all leases and other agreements or arrangements heretofore or hereafter
entered into providing for the use, enjoyment or occupancy of, or the conduct of
any activity upon or in, the Property or the Improvements, including any
guarantees, extensions, renewals, modifications or amendments thereof and all
additional remainders, reversions and other rights and estates appurtenant
thereunder.

Lease Termination Payments:  (i) all fees, penalties, commissions or other
payments made to Borrower in connection with or relating to the rejection,
buy-out, termination, surrender or cancellation of any Lease (including in
connection with any Bankruptcy Proceeding), (ii) any security deposits, or
proceeds of letters of credit held by Borrower in lieu of cash security
deposits, which Borrower is permitted to retain pursuant to the applicable
provisions of any Lease and (iii) any payments made to Borrower relating to
unamortized tenant improvements and leasing commissions under any Lease.

Legal Requirements: statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of Governmental Authorities affecting
Borrower, any Loan Document or all or part of the Property or the construction,
ownership, use, alteration or operation thereof, whether now or hereafter
enacted and in force, and all permits, licenses and authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instrument, either of record or known to Borrower,
at any time in force affecting all or part of the Property.

Lien: any mortgage, deed of trust, lien (statutory or otherwise), pledge,
hypothecation, easement, restrictive covenant, preference, assignment (intended
as security), security interest or any other encumbrance, charge or transfer
(intended as security) of, or any agreement to enter into or create any of the
foregoing, on or affecting all or any part of the Property or any interest
therein, or any direct or indirect interest in Borrower, including any

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conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, the filing of
any financing statement, and mechanic’s, materialmen’s and other similar liens
and encumbrances.

Loan Documents:  this Agreement and all other documents, agreements and
instruments now or hereafter evidencing or securing the Loan, or pursuant to
which any Person incurs, has incurred or assumes any obligation to or for the
benefit of Lender, or makes any certification, representation or warranty to
Lender in connection with the Loan, including, without limitation, the
following, each of which is dated as of the date hereof:  (i) the Promissory
Note or Promissory Notes made by Borrower to Lender in the aggregate principal
amount equal to the Loan (the “Note”), (ii) the Deed of Trust and Security
Agreement made by Borrower in favor of Lender which covers the Property (the
“Security Instrument”), (iii) Assignment of Leases and Rents from Borrower to
Lender (the “Assignment of Leases”), (iv) Assignment of Agreements, Licenses,
Permits and Contracts from Borrower to Lender, (v) the Clearing Account
Agreement (the “Clearing Account Agreement”) among Borrower, Lender, Manager and
Clearing Bank, (vi) the Deposit Account Agreement (the “Deposit Account
Agreement”) among Borrower, Lender, Manager and the Deposit Bank and (vii) the
Guaranty made by Guarantor (the “Guaranty”); as each of the foregoing may be
(and each of the foregoing defined terms shall refer to such documents as they
may be) amended, restated, replaced, severed, split, supplemented or otherwise
modified from time to time (including pursuant to Section 9.1.7 hereof).

Management Agreement:  the management agreement between Borrower and Manager,
pursuant to which Manager is to manage the Property, as same may be amended,
restated, replaced, supplemented or otherwise modified from time to time in
accordance with Section 5.12 hereof.

Manager:  HPT Management Services LP, a Texas limited partnership, or any
successor, assignee or replacement manager appointed by Borrower in accordance
with Section 5.12 hereof.

Material Alteration: any alteration affecting structural elements of the
Property the cost of which exceeds $250,000; provided, however, that in no event
shall (i) any tenant improvement work performed pursuant to any Lease existing
on the date hereof or entered into hereafter in accordance with the provisions
of this Agreement, or (ii) alterations performed as part of a Restoration,
constitute a Material Alteration.

Material Lease:  all Leases which individually or in the aggregate with respect
to the same tenant and its Affiliates (i) cover more than 35,000 square feet of
the Improvements or (ii)  have a gross annual rent of more than five percent
(5%) of the total annual Rents or (iii) demise at least one (1) full floor of
the Improvements.

Maturity Date:  the Stated Maturity Date or any earlier date on which the final
payment of principal of the Note (or any replacement promissory note issued in
connection with a Defeasance Event, if applicable) shall become due and payable
as provided herein or in any other Loan Documents, whether by declaration of
acceleration, or otherwise.

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Minor Lease: any Lease that is not a Material Lease.

Net Operating Income:  for any period, the underwritten net cash flow of the
Property determined by Lender in its sole discretion exercised in good faith
(uniformly and consistently applied in the same manner as Lender exercises
similar discretion in other loans of this type and nature for comparable
properties) in accordance with Lender’s then current underwriting standards for
loans of this type and the then current underwriting standards of the Rating
Agencies (including adjustments for a management fee equal to the greater of the
combined management fees and asset management fees paid under the Management
Agreement during such period or three percent (3%) of gross revenues, market
vacancy, bankrupt tenants which are not in full occupancy of their respective
leased premises or which have rejected their respective leases or which are not
paying rent on a current basis, leasing costs (i.e, tenant improvements and
leasing commissions) and capital items). For the purposes of calculating Net
Operating Income, leasing costs shall be deemed to be $.75 per square foot of
the Improvements per annum, and capital items shall be deemed to be $.15 per
square foot of the Improvements per annum.

Officer’s Certificate:  a certificate delivered to Lender by Borrower, which is
signed by the manager or a senior executive officer of Borrower.

Other Charges:  all ground rents, maintenance charges, impositions other than
Taxes, and any other charges, including vault charges and license fees for the
use of vaults, chutes and similar areas adjoining the Property, now or hereafter
levied or assessed or imposed against the Property or any part thereof.

Payment Date:  the eleventh (11th) day of each calendar month or, upon Lender’s
exercise of its right to change the Payment Date in accordance with
Section 2.2.4 hereof, the New Payment Date (in either case, if such day is not a
Business Day, the Payment Date shall be the first Business Day thereafter). The
first Payment Date hereunder shall be August 11, 2006.

Permitted Encumbrances: (i) the Liens created by the Loan Documents, (ii) all
Liens and other matters disclosed in the Title Insurance Policy, (iii) Liens, if
any, for Taxes or Other Charges not yet due and payable and not delinquent,
(iv) any workers’, mechanics’ or other similar Liens on the Property provided
that any such Lien is bonded or discharged within thirty (30) days after
Borrower first receives notice of such Lien, (v) such other title and survey
exceptions as Lender approves in writing in Lender’s discretion, and (vi) Liens
securing a Mezzanine Loan in accordance with Section 9.3.

Permitted Transfers:

(i)            a Lease entered into in accordance with the Loan Documents;

(ii)           a Permitted Encumbrance;

(iii)          a Transfer and Assumption pursuant to Section 5.26.2;

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(iv)          provided that no Event of Default shall then exist, a Transfer of
a direct or indirect interest in Borrower to any Person (including the Transfer
or issuance of publicly traded shares or of operating partnership units in the
Behringer Harvard REIT, Behringer Harvard Opportunity REIT, Harvard Fund I or
the Harvard REIT Operating Partnership, which shall be permitted whether or not
an Event of Default shall exist) provided that (A) the Harvard REIT Operating
Partnership shall at all times continue to own, directly or indirectly, not less
than fifty-one percent (51%) of Borrower, (B) such Transfer shall not (x) cause
the transferee (other than Behringer Harvard REIT), together with its
Affiliates, to acquire Control of Borrower or to increase its direct or indirect
interest in Borrower to an amount which equals or exceeds forty nine percent
(49%) or (y) result in Borrower no longer being Controlled by Behringer Harvard
REIT, (C) Borrower shall give Lender notice of such Transfer together with
copies of all instruments effecting such Transfer not less than 10 days prior to
the date of such Transfer (other than with respect to Transfers or issuances of
shares or “unit interests” in Harvard Fund I or the Harvard REIT), and (D) the
legal and financial structure of Borrower and its members and the single purpose
nature and bankruptcy remoteness of Borrower and its members after such
Transfer, shall satisfy Lender’s then current applicable underwriting criteria
and requirements;

(v)           provided that no Event of Default shall then exist, a Transfer of
a direct or indirect interest in Borrower related to or in connection with the
estate planning of such transferor to (1) the spouse, children or grandchildren
of such transferor (and/or any spouse of a child or grandchild), or any other
immediate family member of such transferor, or (2) a trust established for the
benefit of any such parties, provided that (A) such Transfer shall not cause a
change in the Control of Borrower, (B) such Transfer shall not result in a
change of the day to day management and operations of the Property, (C) Borrower
shall give Lender notice of such Transfer together with copies of all
instruments effecting such Transfer not less than 10 days after the date of such
Transfer and (D) the legal and financial structure of Borrower, and the single
purpose nature and bankruptcy remoteness of Borrower after such Transfer, shall
satisfy Lender’s then current applicable underwriting criteria and requirements;
or

(vi)          a Transfer of a direct or indirect interest in Borrower that
occurs by devise or bequest or by operation of law upon the death of a natural
person that was the holder of such interest to a member of the immediate family
of such interest holder or a trust established for the benefit of such immediate
family member, provided that (A) no such Transfer shall result in a change of
the day to day operations of the Property, (B) Borrower shall give Lender notice
of such Transfer together with copies of all instruments effecting such Transfer
not less than 30 days after the date of such Transfer, (C) Borrower shall
continue to be a Special Purpose Bankruptcy Remote Entity, (D) if any such
Transfer would result in a change of Control of Borrower and occurs prior to the
occurrence of a Secondary Market Transaction, such Transfer is approved by
Lender in writing within 30 days after any such Transfer, and (E) if any such
Transfer would result in a change of Control of Borrower and occurs after the
occurrence of a Secondary Market Transaction, Borrower, at Borrower’s sole cost
and expense, shall, within 30 days after any such Transfer, (a) deliver (or
cause to be delivered) (x) a Rating Comfort Letter to Lender, and (y) a
substantive non-consolidation opinion to Lender and the Rating Agencies with
respect to Borrower and such transferee in form and substance satisfactory to
Lender and the Rating Agencies, (b) obtain the prior written consent of Lender
which shall not be unreasonably

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withheld and (c) reimburse Lender for all reasonable expenses incurred by Lender
in connection with such Transfer.

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

Plan:  (i) an employee benefit or other plan established or maintained by
Borrower or any ERISA Affiliate or to which Borrower or any ERISA Affiliate
makes or is obligated to make contributions and (ii) which is covered by Title
IV of ERISA or Section 302 of ERISA or Section 412 of the Code.

Property: the parcel of real property and Improvements thereon owned by Borrower
and encumbered by the Security Instrument; together with all rights pertaining
to such real property and Improvements, and all other collateral for the Loan as
more particularly described in the granting clauses of the Security Instrument
and referred to therein as the Property. The Property is located at 2600, 2700,
2801 and 2901 Via Fortuna Drive, Austin, Texas.

Rating Agency:  each of Standard & Poor’s Rating Services, a division of The
McGraw-Hill Companies, Inc. (“S&P”), Moody’s Investors Service, Inc.
(“Moody’s”), and Fitch, Inc., a division of Fitch Ratings Ltd. (“Fitch”) or any
other nationally-recognized statistical rating organization to the extent any of
the foregoing have been engaged by Lender or its designee in connection with or
in anticipation of any Secondary Market Transaction.

Rating Comfort Letter:  a letter issued by each of the applicable Rating
Agencies which confirms that the taking of the action referenced to therein will
not result in any qualification, withdrawal or downgrading of any existing
ratings of Securities created in a Secondary Market Transaction.

Release Date: the earlier to occur of (i) the thirty-sixth (36th) Payment Date
of the Term and (ii) the date that is two (2) years from the “startup day”
(within the meaning of Section 860G(a)(9) of the Code) of the REMIC Trust
established in connection with the final Secondary Market Transaction involving
this Loan.

REMIC Trust: a “real estate mortgage investment conduit” within the meaning of
Section 860D of the Code that holds the Note.

Rents:  all rents, rent equivalents, moneys payable as damages (including
payments by reason of the rejection of a Lease in a Bankruptcy Proceeding) or in
lieu of rent or rent equivalents, royalties (including all oil and gas or other
mineral royalties and bonuses), income, fees, receivables, receipts, revenues,
deposits (including security, utility and other deposits), accounts, cash,
issues, profits, charges for services rendered, and other payment and
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Borrower, Manager or any of their agents or employees
(other than fees paid under the Management Agreements and salaries paid to
employees) from any and all sources arising from

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or attributable to the Property and the Improvements, including all receivables,
customer obligations, installment payment obligations and other obligations now
existing or hereafter arising or created out of the sale, lease, sublease,
license, concession or other grant of the right of the use and occupancy of the
Property or rendering of services by Borrower, Manager or any of their agents or
employees and proceeds, if any, from business interruption or other loss of
income insurance.

Scheduled Defeasance Payments:  the Monthly Debt Service Payment Amount and/or
Monthly Interest Payment Amount (as applicable) required under the Note for all
Payment Dates occurring after the Defeasance Date but prior to the Defeasance
Maturity Date and the outstanding Principal balance on the Note as of the
Defeasance Maturity Date and all accrued and unpaid interest as of such date.

Security Agreement: a security agreement in form and substance that would be
satisfactory to Lender (in Lender’s sole but good faith discretion) pursuant to
which Borrower grants Lender a perfected, first priority security interest in
the Defeasance Collateral Account and the Defeasance Collateral.

Servicer:  a servicer selected by Lender to service the Loan, including any
“master servicer” or “special servicer” appointed under the terms of any pooling
and servicing agreement or similar agreement entered into as a result of a
Secondary Market Transaction.

State:  the state in which the Property is located.

Stated Maturity Date:  July 11, 2016, as such date may be changed in accordance
with Section 2.2.4 hereof.

Taxes:  all real estate and personal property taxes, assessments, water rates or
sewer rents, maintenance charges, impositions, vault charges and license fees,
now or hereafter levied or assessed or imposed against all or part of the
Property.

Term:  the entire term of this Agreement, which shall expire upon repayment in
full of the Debt and full performance of each and every obligation to be
performed by Borrower pursuant to the Loan Documents (other than surviving
indemnity obligations with respect to matters as to which no claim for
indemnification is then pending).

Title Insurance Policy:  the ALTA mortgagee title insurance policy in the form
acceptable to Lender issued with respect to the Property and insuring the Lien
of the Security Instrument.

Transfer:  any sale, conveyance, transfer, lease or assignment, or the entry
into any agreement to sell, convey, transfer, lease or assign, whether by law or
otherwise, of, on, in or affecting (i) all or part of the Property (including
any legal or beneficial direct or indirect interest therein), or (ii) any direct
or indirect interest in Borrower (including any profit interest).

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UCC or Uniform Commercial Code:  the Uniform Commercial Code as in effect in the
State or the state in which any of the Cash Management Accounts are located, as
the case may be.

U.S. Obligations:  obligations that are “government securities” within the
meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended,
and, to the extent acceptable to the applicable Rating Agencies, other
non-callable government securities satisfying the REMIC Provisions (hereinafter
defined), in each case to the extent such obligations are not subject to
prepayment, call or early redemption. As used herein, “REMIC Provisions” mean
provisions of the federal income tax law relating to real estate mortgage
investment conduits, which appear at Sections 860A through 860G of Subchapter M
of Chapter 1 of Subtitle A of the Code, and related provisions, and temporary
and final regulations and, to the extent not inconsistent with such temporary
and final regulations, proposed regulations, and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time.

Welfare Plan:  an employee welfare benefit plan, as defined in Section 3(1) of
ERISA.

Yield Maintenance Premium:  an amount which, when added to the outstanding
Principal, would be sufficient to purchase U.S. Obligations which provide
payments (a) on or prior to, but as close as possible to, all successive
scheduled payment dates under this Agreement through the Stated Maturity Date
and (b) in amounts equal to the Monthly Debt Service Payment Amount and/or
Monthly Interest Payment Amount, as the case may be, required under this
Agreement through the Stated Maturity Date together with the outstanding
principal balance of the Note as of the Stated Maturity Date assuming all
payments of the Monthly Debt Service Payment Amount and/or Monthly Interest
Payment Amount, as the case may be, are made (including any servicing costs
associated therewith). In no event shall the Yield Maintenance Premium be less
than zero.

1.2          INDEX OF OTHER DEFINITIONS. THE FOLLOWING TERMS ARE DEFINED IN THE
SECTIONS OR LOAN DOCUMENTS INDICATED BELOW:

“Aggregate Approved Capital Costs” — 3.4.2

“Approved Annual Budget “ — 6.3.5

“Annual Budget “ — 6.3.5

“Approved Capital Budget” — 6.3.5

“Approved Operating Budget” — 6.3.5

“Applicable Taxes” — 2.2.3

“Assignment of Leases” — 1.1 (Definition of Loan Documents)

“Award” — 7.3.2

“Bankruptcy Proceeding” — 4.7

“Borrower GP” — 4.18

“Borrower’s Recourse Liabilities” — 10.1

“Base Capital Amount” — 3.4.2

“Calendar Quarter” — 3.4.2

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“Capital Reserve Offset Amount” — 3.4.2

“Capital Reserve Subaccount” — 3.4

“Cash Collateral Subaccount” — 3.9

“Cash Management Accounts” — 3.10

“Casualty” — 7.2.1

“Casualty/Condemnation Prepayment” — 2.3.2

“Casualty/Condemnation Subaccount” — 3.7

“Clearing Account” — 3.1

“Clearing Account Agreement” — 1.1 (Definition of Loan Documents)

“Clearing Bank” — 3.1

“Condemnation” — 7.3.1

“Defeasance Collateral Account” — 2.3.3

“Defeasance Event” — 2.3.3

“Defeasance Date” — 2.3.3

“Deposit Account” — 3.1

“Deposit Account Agreement” — 1.1 (Definition of Loan Documents)

“Disclosure Document” — 9.1.2

“DSCR Earnout Reserve Subaccount” — 3.16

“Easements” — 4.14

“Endorsement” — 5.26

“Environmental Laws” — 4.21

“Equipment” — Security Instrument

“Event of Default” — 8.1

“Exchange Act” — 9.1.2

“Fitch” — 1.1 (Definition of Rating Agency)

“Government Lists” — 5.31

“Guaranty” — 1.1 (Definition of Loan Documents)

“Harvard REIT Operating Partnership” — 1.1 (Definition of Harvard REIT)

“Hazardous Substances” — 4.21

“Improvements” — Security Instrument

“Incumbent Board” — 5.26.1

“Indemnified Liabilities” — 5.30

“Indemnified Party(ies)” — 5.30

“Independent Director” — Schedule 5

“Insurance Premiums” — 7.1.2

“Insured Casualty” — 7.2.2

“Issuer” — 9.1.3

“Intercreditor Agreement” — 9.3

“Late Payment Charge” — 2.5.3

“LC Security Deposit Cooperation Agreement” — 1.1 (Definition of Loan Documents)

“Lehman Group” — 9.1.3

“Lender’s Consultant” — 5.8.1

“Lender’s Losses” — 10.1

“Letter(s) of Credit” — 9.4

“Liabilities” — 9.1.3

“Licenses” — 4.11

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“Loan” — 2.1

“Mezzanine Borrower” — 9.3

“Mezzanine Lender” — 9.3

“Mezzanine Loan” — 9.3

“Monthly Capital Reserve Deposit Amount” — 3.4.1

“Monthly Debt Service Payment Amount” — 2.2.1

“Monthly Interest Payment Amount” — 2.2.1

“Monthly Tax and Insurance Deposit” — 3.3.2

“Moody’s” — 1.1 (Definition of Rating Agency)

“Security Instrument” — 1.1 (Definition of Loan Documents)

“New Payment Date” — 2.2.4

“Note” — 1.1 (Definition of Loan Documents)

“Notice” — 6.1

“OFAC” — 5.31

“Operating Expense Subaccount” — 3.6

“Patriot Act” — 5.31

“Patriot Act Offense” — 5.31

“Permitted Indebtedness” — 5.22

“Permitted Investments” — Deposit Account Agreement

“Permitted Prepayment Date” — 2.3.4

“Policies” — 7.1.2

“Principal” — 2.1

“Proceeds” — 7.2.2

“Proposed Material Lease” — 5.10.2

“Protective Advance” — 8.2.5

“Provided Information” — 9.1.1

“Qualified Carrier” — 7.1.1

“Registration Statement” — 9.1.3

“Remedial Work” — 5.8.2

“REMIC Provisions” — 1.1 (Definition of U.S. Obligations)

“Rent Roll” — 4.16

“Restoration” — 7.4.1

“Borrower Holding” — 4.18

“Rollover Reserve Offset Amount” — 3.5

“Rollover Reserve Subaccount” — 3.5

“S&P” — 1.1 (Definition of Rating Agency)

“Secondary Market Transaction” — 9.1.1

“Securities” — 9.1.1

“Securities Act” — 9.1.2

“Security Deposit Subaccount” — 3.8

“Significant Casualty” — 7.2.2

“Special Purpose Bankruptcy Remote Entity” — 5.13

“Springing Recourse Event” — 10.1

“Subaccounts” — 3.1

“Successor Borrower” — 2.3.3

“Tax and Insurance Reserve Offset Amount” — 3.3.2

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“Tax and Insurance Subaccount” — 3.3

“Third Party Report” — 9.1.3

“TI/LC Holdback Reserve Subaccount” — 3.13

“TI/LC Holdback Leases” — 3.13

“TI/LC Holdback Tenants” — 3.13

“Toxic Mold” — 4.21

“Transfer and Assumption” — 5.26

“Transferee Borrower” — 5.26

“Underwriter Group” — 9.1.3

“Underwriters” — 9.1.3

 

1.3          PRINCIPLES OF CONSTRUCTION. UNLESS OTHERWISE SPECIFIED, (I) ALL
REFERENCES TO SECTIONS AND SCHEDULES ARE TO THOSE IN THIS AGREEMENT, (II) THE
WORDS “HEREOF,” “HEREIN” AND “HEREUNDER” AND WORDS OF SIMILAR IMPORT REFER TO
THIS AGREEMENT AS A WHOLE AND NOT TO ANY PARTICULAR PROVISION, (III) ALL
DEFINITIONS ARE EQUALLY APPLICABLE TO THE SINGULAR AND PLURAL FORMS OF THE TERMS
DEFINED, (IV) THE WORDS “INCLUDE” AND “INCLUDING” MEAN “INCLUDING BUT NOT
LIMITED TO,” AND (V) ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE
CONSTRUED IN ACCORDANCE WITH GAAP.

2.                                      GENERAL LOAN TERMS

2.1          THE LOAN. LENDER IS MAKING A LOAN (THE “LOAN”) TO BORROWER ON THE
DATE HEREOF, IN THE ORIGINAL PRINCIPAL AMOUNT (THE “PRINCIPAL”) OF $131,000,000,
WHICH SHALL MATURE ON THE STATED MATURITY DATE OR, IF A DEFEASANCE EVENT HAS
OCCURRED IN ACCORDANCE WITH SECTION 2.3.3 HEREOF, ON THE DEFEASANCE MATURITY
DATE. BORROWER ACKNOWLEDGES RECEIPT OF THE LOAN, THE PROCEEDS OF WHICH ARE BEING
AND SHALL BE USED TO (I) ACQUIRE THE PROPERTY, (II) FUND CERTAIN OF THE
SUBACCOUNTS, AND (III) PAY TRANSACTION COSTS. ANY EXCESS PROCEEDS MAY BE USED
FOR ANY LAWFUL PURPOSE. NO AMOUNT REPAID IN RESPECT OF THE LOAN MAY BE
REBORROWED.

2.2          INTEREST; MONTHLY PAYMENTS.

2.2.1       GENERALLY. FROM AND AFTER THE DATE HEREOF, INTEREST ON THE UNPAID
PRINCIPAL SHALL ACCRUE AT THE INTEREST RATE AND BE PAYABLE AS HEREINAFTER
PROVIDED. ON THE DATE HEREOF, BORROWER SHALL PAY INTEREST ON THE UNPAID
PRINCIPAL FROM THE DATE HEREOF THROUGH AND INCLUDING JULY 10, 2006. ON
AUGUST 11, 2006 AND EACH PAYMENT DATE THEREAFTER THROUGH AND INCLUDING THE
PAYMENT DATE IMMEDIATELY PRECEDING THE AMORTIZATION COMMENCEMENT DATE, BORROWER
SHALL PAY INTEREST ONLY ON THE UNPAID PRINCIPAL ACCRUED AT THE INTEREST RATE
DURING THE INTEREST PERIOD IMMEDIATELY PRECEDING SUCH PAYMENT DATE (THE “MONTHLY
INTEREST PAYMENT AMOUNT”). ON THE AMORTIZATION COMMENCEMENT DATE AND EACH
PAYMENT DATE THEREAFTER THROUGH AND INCLUDING JUNE 11, 2016 (AS SUCH DATE MAY BE
CHANGED IN ACCORDANCE WITH SECTION 2.2.4), THE PRINCIPAL AND INTEREST THEREON AT
THE INTEREST RATE SHALL BE PAYABLE IN EQUAL MONTHLY INSTALLMENTS OF $804,291.90 
(THE “MONTHLY DEBT SERVICE PAYMENT AMOUNT”); WHICH IS BASED ON THE INTEREST RATE
AND A 360-MONTH AMORTIZATION SCHEDULE. THE MONTHLY DEBT SERVICE PAYMENT AMOUNT
DUE ON ANY PAYMENT DATE SHALL FIRST BE APPLIED TO THE PAYMENT OF INTEREST
ACCRUED DURING THE PRECEDING INTEREST PERIOD (CALCULATED IN ACCORDANCE WITH
SECTION 2.5.2) AND THE REMAINDER OF SUCH MONTHLY DEBT SERVICE PAYMENT AMOUNT
SHALL BE APPLIED TO THE REDUCTION OF THE UNPAID

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PRINCIPAL. ALL ACCRUED AND UNPAID INTEREST SHALL BE DUE AND PAYABLE ON THE
MATURITY DATE. IF THE LOAN IS REPAID ON ANY DATE OTHER THAN ON A PAYMENT DATE
(WHETHER PRIOR TO OR AFTER THE STATED MATURITY DATE), BORROWER SHALL ALSO PAY
INTEREST THAT WOULD HAVE ACCRUED ON SUCH REPAID PRINCIPAL TO BUT NOT INCLUDING
THE NEXT PAYMENT DATE.

2.2.2       DEFAULT RATE. AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT, THE ENTIRE UNPAID DEBT SHALL BEAR INTEREST AT THE DEFAULT
RATE, AND SHALL BE PAYABLE UPON DEMAND FROM TIME TO TIME, TO THE EXTENT
PERMITTED BY APPLICABLE LAW.

2.2.3       TAXES. ANY AND ALL PAYMENTS BY BORROWER HEREUNDER AND UNDER THE
OTHER LOAN DOCUMENTS SHALL BE MADE FREE AND CLEAR OF AND WITHOUT DEDUCTION FOR
ANY AND ALL PRESENT OR FUTURE TAXES, LEVIES, IMPOSTS, DEDUCTIONS, CHARGES OR
WITHHOLDINGS, AND ALL LIABILITIES WITH RESPECT THERETO, EXCLUDING TAXES IMPOSED
ON LENDER’S INCOME, AND FRANCHISE TAXES IMPOSED ON LENDER BY THE LAW OR
REGULATION OF ANY GOVERNMENTAL AUTHORITY (ALL SUCH NON-EXCLUDED TAXES, LEVIES,
IMPOSTS, DEDUCTIONS, CHARGES, WITHHOLDINGS AND LIABILITIES BEING HEREINAFTER
REFERRED TO IN THIS SECTION 2.2.3 AS “APPLICABLE TAXES”). IF BORROWER SHALL BE
REQUIRED BY LAW TO DEDUCT ANY APPLICABLE TAXES FROM OR IN RESPECT OF ANY SUM
PAYABLE HEREUNDER TO LENDER, THE FOLLOWING SHALL APPLY:  (I) THE SUM PAYABLE
SHALL BE INCREASED AS MAY BE NECESSARY SO THAT AFTER MAKING ALL REQUIRED
DEDUCTIONS (INCLUDING DEDUCTIONS APPLICABLE TO ADDITIONAL SUMS PAYABLE UNDER
THIS SECTION 2.2.3), LENDER RECEIVES AN AMOUNT EQUAL TO THE SUM IT WOULD HAVE
RECEIVED HAD NO SUCH DEDUCTIONS BEEN MADE, (II) BORROWER SHALL MAKE SUCH
DEDUCTIONS AND (III) BORROWER SHALL PAY THE FULL AMOUNT DEDUCTED TO THE RELEVANT
TAXATION AUTHORITY OR OTHER AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW.
PAYMENTS PURSUANT TO THIS SECTION 2.2.3 SHALL BE MADE WITHIN TEN (10) DAYS AFTER
THE DATE LENDER MAKES WRITTEN DEMAND THEREFOR. IF THE AMOUNTS PAYABLE HEREUNDER
RELATE TO APPLICABLE TAXES WHICH ARE NOT OF GENERAL APPLICATION TO LENDING
INSTITUTIONS MAKING SECURED MORTGAGE LOANS AT SUCH TIME, BORROWER SHALL HAVE THE
OPTION TO PREPAY THE LOAN IN FULL WITHOUT ANY YIELD MAINTENANCE PREMIUM UNLESS
LENDER, AT ITS OPTION, ELECTS NOT TO REQUIRE BORROWER TO PAY SUCH APPLICABLE
TAXES PURSUANT TO THIS SECTION 2.2.3. NOTWITHSTANDING THE FOREGOING, IF THE LOAN
IS TRANSFERRED TO A TRANSFEREE WHICH IS ORGANIZED UNDER THE LAWS OF ANY
JURISDICTION OTHER THAN THE UNITED STATES OF AMERICA OR ANY STATE THEREOF, THE
TRANSFEROR SHALL CAUSE SUCH TRANSFEREE, CONCURRENTLY WITH THE EFFECTIVENESS OF
SUCH TRANSFER, TO FURNISH TO THE TRANSFEROR AND BORROWER EITHER A UNITED STATES
INTERNAL REVENUE SERVICE FORM 4224 OR UNITED STATES INTERNAL REVENUE SERVICE
FORM 1001 (WHEREIN SUCH TRANSFEREE CLAIMS ENTITLEMENT TO COMPLETE EXEMPTION FROM
UNITED STATES FEDERAL WITHHOLDING TAX ON ALL INTEREST PAYMENTS HEREUNDER);
PROVIDED, HOWEVER, THAT IN THE EVENT THAT THE TRANSFEROR FAILS TO CAUSE THE
TRANSFEREE TO FURNISH EITHER SUCH FORM, BORROWER SHALL DEDUCT ANY APPLICABLE
TAXES TO THE EXTENT REQUIRED BY LAW AND PAYMENTS SHALL BE MADE NET OF ANY
APPLICABLE TAXES WITHOUT REGARD TO THE PROVISIONS OF CLAUSE (I) OF THE SECOND
SENTENCE OF THIS SECTION 2.2.3.

2.2.4       NEW PAYMENT DATE. LENDER SHALL HAVE THE RIGHT, TO BE EXERCISED NOT
MORE THAN ONCE DURING THE TERM OF THE LOAN, TO CHANGE THE PAYMENT DATE TO A DATE
OTHER THAN THE SIXTH DAY OF EACH MONTH (A “NEW PAYMENT DATE”), ON THIRTY (30)
DAYS’ WRITTEN NOTICE TO BORROWER; PROVIDED, HOWEVER, THAT ANY SUCH CHANGE IN THE
PAYMENT DATE: (I) SHALL NOT MODIFY THE AMOUNT OF REGULARLY SCHEDULED MONTHLY
PRINCIPAL AND INTEREST PAYMENTS, EXCEPT THAT THE FIRST PAYMENT OF PRINCIPAL AND
INTEREST PAYABLE ON THE NEW PAYMENT DATE SHALL BE ACCOMPANIED BY INTEREST AT THE
INTEREST RATE HEREIN PROVIDED FOR THE PERIOD FROM THE PAYMENT DATE IN THE MONTH
IN WHICH THE

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NEW PAYMENT DATE FIRST OCCURS TO THE NEW PAYMENT DATE, (II) SHALL EXTEND THE
AMORTIZATION COMMENCEMENT DATE TO THE NEW PAYMENT DATE OCCURRING IN THE MONTH
SET FORTH IN THE DEFINITION OF AMORTIZATION COMMENCEMENT DATE, AND (III) SHALL
EXTEND THE STATED MATURITY DATE TO THE NEW PAYMENT DATE OCCURRING IN THE MONTH
SET FORTH IN THE DEFINITION OF STATED MATURITY DATE.

2.3          LOAN REPAYMENT.

2.3.1       REPAYMENT. BORROWER SHALL REPAY THE ENTIRE OUTSTANDING PRINCIPAL
BALANCE OF THE NOTE IN FULL ON THE MATURITY DATE, TOGETHER WITH INTEREST THEREON
TO (BUT EXCLUDING) THE DATE OF REPAYMENT AND ANY OTHER AMOUNTS DUE AND OWING
UNDER THE LOAN DOCUMENTS. BORROWER SHALL HAVE NO RIGHT TO PREPAY OR DEFEASE ALL
OR ANY PORTION OF THE PRINCIPAL EXCEPT IN ACCORDANCE WITH SECTION 2.2.3 ABOVE,
SECTION 2.3.2 BELOW, SECTION 2.3.3 BELOW, SECTION 2.3.4 BELOW, SECTION 2.4 BELOW
AND SECTION 7.4.2 BELOW. EXCEPT DURING THE CONTINUANCE OF AN EVENT OF DEFAULT,
ALL PROCEEDS OF ANY REPAYMENT, INCLUDING ANY PREPAYMENTS OF THE LOAN, SHALL BE
APPLIED BY LENDER AS FOLLOWS IN THE FOLLOWING ORDER OF PRIORITY:  FIRST, ACCRUED
AND UNPAID INTEREST AT THE INTEREST RATE; SECOND, TO PRINCIPAL; AND THIRD, TO
AND ANY OTHER AMOUNTS THEN DUE AND OWING UNDER THE LOAN DOCUMENTS. IF PRIOR TO
THE STATED MATURITY DATE THE DEBT IS ACCELERATED BY REASON OF AN EVENT OF
DEFAULT, THEN LENDER SHALL BE ENTITLED TO RECEIVE, IN ADDITION TO THE UNPAID
PRINCIPAL AND ACCRUED INTEREST AND OTHER SUMS DUE UNDER THE LOAN DOCUMENTS, AN
AMOUNT EQUAL TO THE YIELD MAINTENANCE PREMIUM APPLICABLE TO SUCH PRINCIPAL SO
ACCELERATED. DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, ALL PROCEEDS OF
REPAYMENT, INCLUDING ANY PAYMENT OR RECOVERY ON THE PROPERTY (WHETHER THROUGH
FORECLOSURE, DEED-IN-LIEU OF FORECLOSURE, OR OTHERWISE) SHALL, UNLESS OTHERWISE
PROVIDED IN THE LOAN DOCUMENTS, BE APPLIED IN SUCH ORDER AND IN SUCH MANNER AS
LENDER SHALL ELECT IN LENDER’S DISCRETION.

2.3.2       MANDATORY PREPAYMENTS. THE LOAN IS SUBJECT TO MANDATORY PREPAYMENT
IN CERTAIN INSTANCES OF INSURED CASUALTY OR CONDEMNATION (EACH A
“CASUALTY/CONDEMNATION PREPAYMENT”), IN THE MANNER AND TO THE EXTENT SET FORTH
IN SECTION 7.4.2 HEREOF. EACH CASUALTY/CONDEMNATION PREPAYMENT, AFTER DEDUCTING
LENDER’S COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND EXPENSES)
IN CONNECTION WITH THE SETTLEMENT OR COLLECTION OF THE PROCEEDS OR AWARD, SHALL
BE APPLIED IN THE SAME MANNER AS REPAYMENTS UNDER SECTION 2.3.1 ABOVE, AND IF
SUCH CASUALTY/CONDEMNATION PAYMENT IS MADE ON ANY DATE OTHER THAN A PAYMENT
DATE, THEN SUCH CASUALTY/CONDEMNATION PAYMENT SHALL INCLUDE INTEREST THAT WOULD
HAVE ACCRUED ON THE PRINCIPAL PREPAID TO BUT NOT INCLUDING THE NEXT PAYMENT
DATE. PROVIDED THAT NO EVENT OF DEFAULT IS CONTINUING, ANY SUCH MANDATORY
PREPAYMENT UNDER THIS SECTION 2.3.2 SHALL BE WITHOUT THE PAYMENT OF THE YIELD
MAINTENANCE PREMIUM. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN,
EACH CASUALTY/CONDEMNATION PREPAYMENT SHALL BE APPLIED IN INVERSE ORDER OF
MATURITY AND SHALL NOT EXTEND OR POSTPONE THE DUE DATES OF THE MONTHLY
INSTALLMENTS DUE UNDER THE NOTE OR THIS AGREEMENT, OR CHANGE THE AMOUNTS OF SUCH
INSTALLMENTS. IN ADDITION, AND NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN OR IN ANY OTHER LOAN DOCUMENT, PROVIDED NO EVENT OF DEFAULT IS
CONTINUING, NO YIELD MAINTENANCE PREMIUM SHALL BE PAYABLE IN CONNECTION WITH ANY
PREPAYMENT OF THE DEBT REQUIRED BY LENDER UNDER SECTIONS 5 AND 6 OF THE SECURITY
INSTRUMENT.

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2.3.3       DEFEASANCE.

(A)           CONDITIONS TO DEFEASANCE. PROVIDED NO EVENT OF DEFAULT SHALL BE
CONTINUING, BORROWER SHALL HAVE THE RIGHT ON ANY PAYMENT DATE AFTER THE RELEASE
DATE AND PRIOR TO THE PERMITTED PREPAYMENT DATE TO VOLUNTARILY DEFEASE THE
ENTIRE AMOUNT OF THE PRINCIPAL AND OBTAIN A RELEASE OF THE LIEN OF THE SECURITY
INSTRUMENT BY PROVIDING LENDER WITH THE DEFEASANCE COLLATERAL (A “DEFEASANCE
EVENT”), SUBJECT TO THE SATISFACTION OF THE FOLLOWING CONDITIONS PRECEDENT:

(I)            BORROWER SHALL GIVE LENDER NOT LESS THAN THIRTY (30) DAYS PRIOR
WRITTEN NOTICE SPECIFYING A PAYMENT DATE (THE “DEFEASANCE DATE”) ON WHICH THE
DEFEASANCE EVENT IS TO OCCUR.

(II)           BORROWER SHALL PAY TO LENDER (A) ALL PAYMENTS OF PRINCIPAL AND
INTEREST DUE ON THE LOAN TO AND INCLUDING THE DEFEASANCE DATE AND (B) ALL OTHER
SUMS, THEN DUE UNDER THE NOTE, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS;

(III)          BORROWER SHALL DEPOSIT THE DEFEASANCE COLLATERAL INTO THE
DEFEASANCE COLLATERAL ACCOUNT AND OTHERWISE COMPLY WITH THE PROVISIONS OF
SUBSECTIONS (B) AND (C) OF THIS SECTION 2.3.3;

(IV)          BORROWER SHALL EXECUTE AND DELIVER TO LENDER A SECURITY AGREEMENT
IN RESPECT OF THE DEFEASANCE COLLATERAL ACCOUNT AND THE DEFEASANCE COLLATERAL;

(V)           BORROWER SHALL DELIVER TO LENDER AN OPINION OF COUNSEL FOR
BORROWER THAT IS STANDARD IN COMMERCIAL LENDING TRANSACTIONS AND SUBJECT ONLY TO
CUSTOMARY QUALIFICATIONS, ASSUMPTIONS AND EXCEPTIONS OPINING, AMONG OTHER
THINGS, THAT (I) LENDER HAS A LEGAL AND VALID PERFECTED FIRST PRIORITY SECURITY
INTEREST IN THE DEFEASANCE COLLATERAL ACCOUNT AND THE DEFEASANCE COLLATERAL,
(II) IF A SECURITIZATION HAS OCCURRED, THE REMIC TRUST FORMED PURSUANT TO SUCH
SECURITIZATION WILL NOT FAIL TO MAINTAIN ITS STATUS AS A “REAL ESTATE MORTGAGE
INVESTMENT CONDUIT” WITHIN THE MEANING OF SECTION 860D OF THE CODE AS A RESULT
OF A DEFEASANCE EVENT PURSUANT TO THIS SECTION 2.3.3, (III) THE DEFEASANCE EVENT
WILL NOT RESULT IN A SIGNIFICANT MODIFICATION AND WILL NOT BE AN EXCHANGE OF THE
NOTE FOR PURPOSES OF SECTION 1001 OF THE CODE AND THE TREASURY REGULATIONS
THEREUNDER, (IV) DELIVERY OF THE DEFEASANCE COLLATERAL AND THE GRANT OF A
SECURITY INTEREST THEREIN TO LENDER WILL NOT CONSTITUTE AN AVOIDABLE PREFERENCE
UNDER SECTION 547 OF THE BANKRUPTCY CODE OR APPLICABLE STATE LAW AND (V) A
NON-CONSOLIDATION OPINION WITH RESPECT TO THE SUCCESSOR BORROWER;

(VI)          BORROWER SHALL DELIVER TO LENDER A RATING COMFORT LETTER AS TO THE
DEFEASANCE EVENT;

(VII)         BORROWER SHALL DELIVER AN OFFICER’S CERTIFICATE CERTIFYING THAT
THE REQUIREMENTS SET FORTH IN THIS SECTION 2.3.3 HAVE BEEN SATISFIED;

(VIII)        BORROWER SHALL DELIVER A CERTIFICATE OF A “BIG FOUR” OR OTHER
NATIONALLY RECOGNIZED PUBLIC ACCOUNTING FIRM ACCEPTABLE TO LENDER CERTIFYING
THAT (I) THE DEFEASANCE COLLATERAL WILL GENERATE MONTHLY AMOUNTS EQUAL TO OR
GREATER THAN THE SCHEDULED

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DEFEASANCE PAYMENTS, AND (II) THE SECURITIES THAT COMPRISE THE DEFEASANCE
COLLATERAL ARE NOT SUBJECT TO PREPAYMENT, CALL OR EARLY REDEMPTION;

(IX)           BORROWER SHALL DELIVER SUCH OTHER CERTIFICATES, OPINIONS,
DOCUMENTS AND INSTRUMENTS AS LENDER MAY REASONABLY REQUEST; AND

(X)            BORROWER SHALL PAY ALL COSTS AND EXPENSES OF LENDER INCURRED IN
CONNECTION WITH THE DEFEASANCE EVENT, INCLUDING LENDER’S REASONABLE ATTORNEYS’
FEES AND EXPENSES AND RATING AGENCY FEES AND EXPENSES.

(B)           DEFEASANCE COLLATERAL ACCOUNT. ON OR BEFORE THE DATE ON WHICH
BORROWER DELIVERS THE DEFEASANCE COLLATERAL, BORROWER SHALL OPEN AT ANY ELIGIBLE
INSTITUTION THE DEFEASANCE COLLATERAL ACCOUNT (THE “DEFEASANCE COLLATERAL
ACCOUNT”) WHICH SHALL AT ALL TIMES BE AN ELIGIBLE ACCOUNT. THE DEFEASANCE
COLLATERAL ACCOUNT SHALL CONTAIN ONLY (I) DEFEASANCE COLLATERAL, AND (II) CASH
FROM INTEREST AND PRINCIPAL PAID ON THE DEFEASANCE COLLATERAL. ALL CASH FROM
INTEREST AND PRINCIPAL PAYMENTS PAID ON THE DEFEASANCE COLLATERAL SHALL BE PAID
OVER TO LENDER ON EACH PAYMENT DATE AND APPLIED FIRST TO ACCRUED AND UNPAID
INTEREST AND THEN TO PRINCIPAL. ANY CASH FROM INTEREST AND PRINCIPAL PAID ON THE
DEFEASANCE COLLATERAL NOT NEEDED TO PAY ACCRUED AND UNPAID INTEREST OR PRINCIPAL
SHALL BE RETAINED IN THE DEFEASANCE COLLATERAL ACCOUNT AS ADDITIONAL COLLATERAL
FOR THE LOAN. BORROWER SHALL CAUSE THE ELIGIBLE INSTITUTION AT WHICH THE
DEFEASANCE COLLATERAL IS DEPOSITED TO ENTER AN AGREEMENT WITH BORROWER AND
LENDER, SATISFACTORY TO LENDER IN ITS SOLE DISCRETION, PURSUANT TO WHICH SUCH
ELIGIBLE INSTITUTION SHALL AGREE TO HOLD AND DISTRIBUTE THE DEFEASANCE
COLLATERAL IN ACCORDANCE WITH THIS AGREEMENT. THE SUCCESSOR BORROWER SHALL BE
THE OWNER OF THE DEFEASANCE COLLATERAL ACCOUNT AND SHALL REPORT ALL INCOME
ACCRUED ON DEFEASANCE COLLATERAL FOR FEDERAL, STATE AND LOCAL INCOME TAX
PURPOSES IN ITS INCOME TAX RETURN. BORROWER SHALL PREPAY ALL COST AND EXPENSES
ASSOCIATED WITH OPENING AND MAINTAINING THE DEFEASANCE COLLATERAL ACCOUNT.
LENDER SHALL NOT IN ANY WAY BE LIABLE BY REASON OF ANY INSUFFICIENCY IN THE
DEFEASANCE COLLATERAL ACCOUNT.

(C)           SUCCESSOR BORROWER. IN CONNECTION WITH A DEFEASANCE EVENT UNDER
THIS SECTION 2.3.3, BORROWER SHALL, IF REQUIRED BY THE RATING AGENCIES OR IF
BORROWER ELECTS TO DO SO, ESTABLISH OR DESIGNATE A SUCCESSOR ENTITY (THE
“SUCCESSOR BORROWER”) WHICH SHALL BE A SINGLE PURPOSE BANKRUPTCY REMOTE ENTITY
AND WHICH SHALL BE APPROVED BY THE RATING AGENCIES. ANY SUCH SUCCESSOR BORROWER
MAY, AT BORROWER’S OPTION, BE AN AFFILIATE OF BORROWER UNLESS THE RATING
AGENCIES SHALL REQUIRE OTHERWISE. BORROWER SHALL TRANSFER AND ASSIGN ALL
OBLIGATIONS, RIGHTS AND DUTIES UNDER AND TO THE DEFEASED NOTE, TOGETHER WITH THE
DEFEASANCE COLLATERAL TO SUCH SUCCESSOR BORROWER. SUCH SUCCESSOR BORROWER SHALL
ASSUME THE OBLIGATIONS UNDER THE NOTE AND THE SECURITY AGREEMENT AND BORROWER
SHALL BE RELIEVED OF ITS OBLIGATIONS UNDER SUCH DOCUMENTS. BORROWER SHALL PAY A
MINIMUM OF $1,000 TO ANY SUCH SUCCESSOR BORROWER AS CONSIDERATION FOR ASSUMING
THE OBLIGATIONS UNDER THE NOTE AND THE SECURITY AGREEMENT. BORROWER SHALL PAY
ALL COSTS AND EXPENSES INCURRED BY LENDER, INCLUDING LENDER’S ATTORNEY’S FEES
AND EXPENSES, INCURRED IN CONNECTION THEREWITH.

2.3.4       OPTIONAL PREPAYMENTS. ON AND AFTER THE THIRD PAYMENT DATE PRIOR TO
THE STATED MATURITY DATE (THE “PERMITTED PREPAYMENT DATE”), BORROWER SHALL HAVE
THE RIGHT TO PREPAY THE LOAN IN WHOLE (BUT NOT IN PART), PROVIDED THAT BORROWER
GIVES LENDER AT LEAST FIFTEEN

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(15) DAYS’ PRIOR WRITTEN NOTICE THEREOF. IF ANY SUCH PREPAYMENT IS NOT MADE ON A
PAYMENT DATE, BORROWER SHALL ALSO PAY INTEREST THAT WOULD HAVE ACCRUED ON SUCH
PREPAID PRINCIPAL TO, BUT NOT INCLUDING, THE NEXT PAYMENT DATE. ANY SUCH
PREPAYMENT SHALL BE MADE WITHOUT PAYMENT OF THE YIELD MAINTENANCE PREMIUM.

2.4          RELEASE OF PROPERTY.

2.4.1       RELEASE ON DEFEASANCE. IF BORROWER HAS ELECTED TO DEFEASE THE NOTE
AND THE REQUIREMENTS OF SECTION 2.3.3 ABOVE AND THIS SECTION 2.4 HAVE BEEN
SATISFIED, THE PROPERTY SHALL BE RELEASED FROM THE LIEN OF THE SECURITY
INSTRUMENT AND THE DEFEASANCE COLLATERAL PLEDGED PURSUANT TO THE SECURITY
AGREEMENT SHALL BE THE SOLE SOURCE OF COLLATERAL SECURING THE NOTE. IN
CONNECTION WITH THE RELEASE OF THE LIEN, BORROWER SHALL SUBMIT TO LENDER, NOT
LESS THAN THIRTY (30) DAYS PRIOR TO THE DEFEASANCE DATE (OR SUCH SHORTER TIME AS
IS ACCEPTABLE TO LENDER IN ITS SOLE DISCRETION), A RELEASE OF LIEN (AND RELATED
LOAN DOCUMENTS) FOR EXECUTION BY LENDER. SUCH RELEASE SHALL BE IN A FORM
APPROPRIATE IN THE JURISDICTION IN WHICH THE PROPERTY IS LOCATED AND CONTAIN
STANDARD PROVISIONS PROTECTING THE RIGHTS OF THE RELEASING LENDER. IN ADDITION,
BORROWER SHALL PROVIDE ALL OTHER DOCUMENTATION LENDER REASONABLY REQUIRES TO BE
DELIVERED BY BORROWER IN CONNECTION WITH SUCH RELEASE, TOGETHER WITH AN
OFFICER’S CERTIFICATE CERTIFYING THAT SUCH DOCUMENTATION (I) IS IN COMPLIANCE
WITH ALL LEGAL REQUIREMENTS, AND (II) WILL EFFECT SUCH RELEASE IN ACCORDANCE
WITH THE TERMS OF THIS AGREEMENT. BORROWER SHALL PAY ALL COSTS, TAXES AND
EXPENSES ASSOCIATED WITH THE RELEASE OF THE LIEN OF THE SECURITY INSTRUMENT,
INCLUDING LENDER’S REASONABLE ATTORNEYS’ FEES.

2.4.2       RELEASE ON PAYMENT IN FULL. LENDER SHALL, UPON THE WRITTEN REQUEST
AND AT THE EXPENSE OF BORROWER, UPON PAYMENT IN FULL OF THE DEBT IN ACCORDANCE
HEREWITH, RELEASE OR, IF REQUESTED BY BORROWER, ASSIGN TO BORROWER’S DESIGNEE
(WITHOUT ANY REPRESENTATION OR WARRANTY BY AND WITHOUT ANY RECOURSE AGAINST
LENDER WHATSOEVER), THE LIEN OF THE LOAN DOCUMENTS IF NOT THERETOFORE RELEASED.

2.5          PAYMENTS AND COMPUTATIONS.

2.5.1       MAKING OF PAYMENTS. EACH PAYMENT BY BORROWER SHALL BE MADE IN FUNDS
SETTLED THROUGH THE NEW YORK CLEARING HOUSE INTERBANK PAYMENTS SYSTEM OR OTHER
FUNDS IMMEDIATELY AVAILABLE TO LENDER BY 11:00 A.M., NEW YORK CITY TIME, ON THE
DATE SUCH PAYMENT IS DUE, TO LENDER BY DEPOSIT TO SUCH ACCOUNT AS LENDER MAY
DESIGNATE BY WRITTEN NOTICE TO BORROWER. WHENEVER ANY SUCH PAYMENT SHALL BE
STATED TO BE DUE ON A DAY THAT IS NOT A BUSINESS DAY, SUCH PAYMENT SHALL BE MADE
ON THE FIRST BUSINESS DAY THEREAFTER. ALL SUCH PAYMENTS SHALL BE MADE
IRRESPECTIVE OF, AND WITHOUT ANY DEDUCTION, SET-OFF OR COUNTERCLAIM WHATSOEVER
AND ARE PAYABLE WITHOUT RELIEF FROM VALUATION AND APPRAISEMENT LAWS AND WITH ALL
COSTS AND CHARGES INCURRED IN THE COLLECTION OR ENFORCEMENT THEREOF, INCLUDING
ATTORNEYS’ FEES AND COURT COSTS.

2.5.2       COMPUTATIONS. INTEREST PAYABLE UNDER THE LOAN DOCUMENTS SHALL BE
COMPUTED ON THE BASIS OF THE ACTUAL NUMBER OF DAYS ELAPSED OVER A 360-DAY YEAR.

2.5.3       LATE PAYMENT CHARGE. IF ANY REGULARLY SCHEDULED PAYMENT OF
PRINCIPAL, INTEREST OR OTHER MONTHLY PAYMENT OR RESERVE OR ESCROW DEPOSIT DUE
UNDER ANY LOAN DOCUMENT IS NOT PAID BY BORROWER ON THE DATE ON WHICH IT IS DUE
(OTHER THAN THE BALLOON PAYMENT OF PRINCIPAL

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DUE ON THE MATURITY DATE OR ACCELERATION OF THE LOAN), BORROWER SHALL PAY TO
LENDER UPON DEMAND AN AMOUNT EQUAL TO THE LESSER OF FIVE PERCENT (5%) OF SUCH
UNPAID SUM OR THE MAXIMUM AMOUNT PERMITTED BY APPLICABLE LAW (THE “LATE PAYMENT
CHARGE”), IN ORDER TO DEFRAY THE EXPENSE INCURRED BY LENDER IN HANDLING AND
PROCESSING SUCH DELINQUENT PAYMENT AND TO COMPENSATE LENDER FOR THE LOSS OF THE
USE OF SUCH DELINQUENT PAYMENT. SUCH AMOUNT SHALL BE SECURED BY THE LOAN
DOCUMENTS.

3.                                      CASH MANAGEMENT AND RESERVES

3.1          CASH MANAGEMENT ARRANGEMENTS. CONCURRENTLY WITH THE EXECUTION OF
THIS AGREEMENT WITH RESPECT TO ALL EXISTING LESSEES OF THE PROPERTY, AND
CONCURRENTLY WITH THE EXECUTION AND DELIVERY OF EACH NEW LEASE OF THE PROPERTY,
BORROWER SHALL DELIVER A NOTICE IN THE FORM OF ATTACHED HERETO ON SCHEDULE 1 TO
EACH LESSEE OF THE PROPERTY DIRECTING THEM TO PAY THEIR RENT DIRECTLY TO THE
CLEARING BANK. BORROWER SHALL CAUSE ALL RENTS TO BE TRANSMITTED DIRECTLY BY
TENANTS OF THE PROPERTY INTO AN ELIGIBLE ACCOUNT (THE “CLEARING ACCOUNT”)
MAINTAINED BY BORROWER AT A LOCAL BANK SELECTED BY BORROWER, WHICH SHALL AT ALL
TIMES BE AN ELIGIBLE INSTITUTION (THE “CLEARING BANK”) AS MORE FULLY DESCRIBED
IN THE CLEARING ACCOUNT AGREEMENT. WITHOUT IN ANY WAY LIMITING THE FOREGOING,
ALL RENTS RECEIVED BY BORROWER OR MANAGER SHALL BE DEPOSITED INTO THE CLEARING
ACCOUNT WITHIN TWO BUSINESS DAYS OF RECEIPT. FUNDS DEPOSITED INTO THE CLEARING
ACCOUNT SHALL BE SWEPT BY THE CLEARING BANK ON A DAILY BASIS INTO AN ELIGIBLE
ACCOUNT AT THE DEPOSIT BANK CONTROLLED BY LENDER (THE “DEPOSIT ACCOUNT”) AND
APPLIED AND DISBURSED IN ACCORDANCE WITH THIS AGREEMENT. FUNDS IN THE DEPOSIT
ACCOUNT SHALL BE INVESTED AT LENDER’S DISCRETION ONLY IN PERMITTED INVESTMENTS.
LENDER WILL ALSO ESTABLISH SUBACCOUNTS OF THE DEPOSIT ACCOUNT WHICH SHALL AT ALL
TIMES BE ELIGIBLE ACCOUNTS (AND MAY BE LEDGER OR BOOK ENTRY ACCOUNTS AND NOT
ACTUAL ACCOUNTS) (SUCH SUBACCOUNTS ARE COLLECTIVELY REFERRED TO HEREIN AS
“SUBACCOUNTS”). THE DEPOSIT ACCOUNT AND ANY SUBACCOUNT WILL BE UNDER THE SOLE
CONTROL AND DOMINION OF LENDER, AND BORROWER SHALL NOT HAVE ANY RIGHT OF
WITHDRAWAL THEREFROM. BORROWER SHALL PAY FOR ALL EXPENSES OF OPENING AND
MAINTAINING ALL OF THE ABOVE ACCOUNTS. IN THE EVENT THAT THE CLEARING BANK AND
THE DEPOSIT BANK ARE THE SAME, THEN THE CLEARING ACCOUNT AND THE DEPOSIT ACCOUNT
MAY BE THE SAME ACCOUNT.

3.2          INTENTIONALLY DELETED.

3.3          TAX AND INSURANCE RESERVE.

3.3.1       RESERVE DEPOSITS. BORROWER SHALL PAY TO LENDER ON EACH PAYMENT DATE
AN AMOUNT EQUAL TO THE SUM OF (I) ONE-TWELFTH (1/12TH) OF THE TAXES THAT LENDER
ESTIMATES WILL BE PAYABLE DURING THE NEXT TWELVE (12) MONTHS IN ORDER TO
ACCUMULATE WITH LENDER SUFFICIENT FUNDS TO PAY ALL SUCH TAXES AT LEAST THIRTY
(30) DAYS PRIOR TO THEIR RESPECTIVE DELINQUENCY DATES (I.E., THE LAST DATE UPON
WHICH SUCH TAXES MAY BE PAID WITHOUT PENALTY OR LOSS OF AVAILABLE DISCOUNT) AND
(II) ONE-TWELFTH (1/12TH) OF THE INSURANCE PREMIUMS THAT LENDER ESTIMATES WILL
BE PAYABLE FOR THE RENEWAL OF THE COVERAGE AFFORDED BY THE POLICIES UPON THE
EXPIRATION THEREOF IN ORDER TO ACCUMULATE WITH LENDER SUFFICIENT FUNDS TO PAY
ALL SUCH INSURANCE PREMIUMS AT LEAST THIRTY (30) DAYS PRIOR TO THE EXPIRATION OF
THE POLICIES (SUCH MONTHLY REQUIRED DEPOSIT AMOUNT, AS ADJUSTED BY LENDER FROM
TIME TO TIME IN THE EVENT OF INCREASES OR DECREASES IN ANNUAL ESTIMATED TAXES
AND INSURANCE PREMIUMS, THE “MONTHLY TAX AND INSURANCE DEPOSIT”). SUCH AMOUNTS
WILL BE

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TRANSFERRED BY LENDER TO A SUBACCOUNT (THE “TAX AND INSURANCE SUBACCOUNT”). IF
LENDER DETERMINES THAT THE AMOUNT IN THE TAX AND INSURANCE SUBACCOUNTS, TOGETHER
WITH THE MONTHLY DEPOSITS TO BE MADE BY BORROWER PURSUANT TO (I) AND (II) ABOVE,
WILL NOT BE SUFFICIENT TO PAY THE ITEMS SET FORTH IN (I) AND (II), THEN BORROWER
SHALL PROMPTLY PAY TO LENDER, UPON DEMAND, AN AMOUNT WHICH LENDER SHALL ESTIMATE
AS SUFFICIENT TO MAKE UP THE DEFICIENCY. NOTWITHSTANDING THE FOREGOING, IF
INSURANCE COVERAGE REQUIRED PURSUANT TO SECTION 7.1 HEREOF IS PROVIDED THROUGH A
BLANKET INSURANCE POLICY, BORROWER SHALL NOT BE OBLIGATED TO MAKE MONTHLY ESCROW
PAYMENTS ON ACCOUNT OF THE APPLICABLE INSURANCE PREMIUMS SO LONG AS BORROWER
MAINTAINS THE INSURANCE COVERAGE REQUIRED BY SECTION 7.1 IN FULL FORCE AND
EFFECT AND BORROWER MAINTAINS ON DEPOSIT IN THE TAX AND INSURANCE SUBACCOUNT, IN
ADDITION TO THE AMOUNTS ESCROWED FOR TAXES, AN AMOUNT EQUAL TO ONE-QUARTER OF
THE ANNUAL INSURANCE PREMIUM ESTIMATED BY LENDER TO BE PAYABLE FOR A REPLACEMENT
POLICY PROVIDING THE COVERAGE REQUIRED BY SECTION 7.1 HEREOF WITH RESPECT TO THE
PROPERTY. PROVIDED THAT NO MONETARY EVENT OF DEFAULT OR MATERIAL NON-MONETARY
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, LENDER WILL (A) APPLY FUNDS IN
THE TAX AND INSURANCE SUBACCOUNT TO PAYMENTS OF TAXES AND (UNLESS THE PROPERTY
IS INSURED UNDER A BLANKET INSURANCE POLICY) INSURANCE PREMIUMS REQUIRED TO BE
MADE BY BORROWER PURSUANT TO SECTION 5.2 HEREOF AND SECTION 7.1 HEREOF, PROVIDED
THAT BORROWER HAS PROMPTLY SUPPLIED LENDER WITH NOTICES OF ALL TAXES AND
INSURANCE PREMIUMS DUE AND PAID ANY DEFICIENCY BETWEEN THE AMOUNTS HELD IN THE
TAX AND INSURANCE SUBACCOUNT AND THE AMOUNTS DUE WITH RESPECT TO SUCH TAXES AND
INSURANCE PREMIUMS, OR (B) REIMBURSE BORROWER FOR SUCH AMOUNTS UPON PRESENTATION
OF EVIDENCE OF PAYMENT; SUBJECT, HOWEVER, TO BORROWER’S RIGHT TO CONTEST TAXES
IN ACCORDANCE WITH SECTION 5.2 HEREOF. IN MAKING ANY PAYMENT RELATING TO TAXES
AND INSURANCE PREMIUMS, LENDER MAY DO SO ACCORDING TO ANY BILL, STATEMENT OR
ESTIMATE PROCURED FROM THE APPROPRIATE PUBLIC OFFICE (WITH RESPECT TO TAXES) OR
INSURER OR AGENT (WITH RESPECT TO INSURANCE PREMIUMS), WITHOUT INQUIRY INTO THE
ACCURACY OF SUCH BILL, STATEMENT OR ESTIMATE OR INTO THE VALIDITY OF ANY TAX,
ASSESSMENT, SALE, FORFEITURE, TAX LIEN OR TITLE OR CLAIM THEREOF.

3.4          CAPITAL EXPENSE RESERVES.

3.4.1       RESERVE DEPOSITS. BORROWER SHALL PAY TO LENDER $7,602.33 (THE
“MONTHLY CAPITAL RESERVE DEPOSIT AMOUNT”) ON EACH PAYMENT DATE (SUCH DEPOSITS,
THE “MONTHLY CAPITAL RESERVE DEPOSITS”). LENDER WILL TRANSFER SUCH AMOUNTS INTO
A SUBACCOUNT (THE “CAPITAL RESERVE SUBACCOUNT”). ADDITIONALLY, UPON THIRTY (30)
DAYS’ PRIOR NOTICE TO BORROWER, LENDER MAY REASSESS THE AMOUNT OF THE MONTHLY
PAYMENT REQUIRED UNDER THIS SECTION 3.4 FROM TIME TO TIME IN ITS REASONABLE
DISCRETION (BASED UPON ITS THEN CURRENT UNDERWRITING STANDARDS). PROVIDED THAT
NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, LENDER SHALL DISBURSE FUNDS
HELD IN THE CAPITAL RESERVE SUBACCOUNT TO BORROWER, WITHIN FIFTEEN (15) DAYS
AFTER THE DELIVERY BY BORROWER TO LENDER OF A REQUEST THEREFOR (BUT NOT MORE
OFTEN THAN ONCE PER MONTH), IN MINIMUM AMOUNTS OF AT LEAST $5,000 PROVIDED THAT
(I) SUCH DISBURSEMENT IS FOR AN APPROVED CAPITAL EXPENSE; (II) LENDER SHALL HAVE
(IF IT DESIRES) VERIFIED (BY AN INSPECTION CONDUCTED AT BORROWER’S EXPENSE (WITH
RESPECT TO ANY DISBURSEMENT IN EXCESS OF $50,000)) PERFORMANCE OF THE WORK
ASSOCIATED WITH SUCH APPROVED CAPITAL EXPENSE; AND (III) THE REQUEST FOR
DISBURSEMENT IS ACCOMPANIED BY (A) AN OFFICER’S CERTIFICATE CERTIFYING (1) THAT
SUCH FUNDS WILL BE USED TO PAY OR REIMBURSE BORROWER FOR APPROVED CAPITAL
EXPENSES AND A DESCRIPTION THEREOF, (2) THAT ALL OUTSTANDING TRADE PAYABLES
(OTHER THAN THOSE NOT YET DUE AND PAYABLE OR THOSE TO BE PAID FROM THE REQUESTED
DISBURSEMENT OR THOSE CONSTITUTING PERMITTED INDEBTEDNESS) HAVE BEEN PAID IN
FULL, (3)

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THAT THE SAME HAS NOT BEEN THE SUBJECT OF A PREVIOUS DISBURSEMENT, AND (4) THAT
ALL PREVIOUS DISBURSEMENTS HAVE BEEN USED TO PAY THE PREVIOUSLY IDENTIFIED
APPROVED CAPITAL EXPENSES, AND (B) LIEN WAIVERS OR OTHER EVIDENCE OF PAYMENT
SATISFACTORY TO LENDER, (C) WITH RESPECT TO ANY DISBURSEMENT THAT EXCEEDS
$50,000, AT LENDER’S OPTION, A TITLE SEARCH FOR THE PROPERTY INDICATING THAT THE
PROPERTY IS FREE FROM ALL LIENS, CLAIMS AND OTHER ENCUMBRANCES NOT PREVIOUSLY
APPROVED BY LENDER AND (D) SUCH OTHER EVIDENCE AS LENDER SHALL REASONABLY
REQUEST THAT THE APPROVED CAPITAL EXPENSES AT THE PROPERTY TO BE FUNDED BY THE
REQUESTED DISBURSEMENT HAVE BEEN COMPLETED AND ARE PAID FOR OR WILL BE PAID UPON
SUCH DISBURSEMENT TO BORROWER. ANY SUCH DISBURSEMENT OF MORE THAN $10,000 TO PAY
(RATHER THAN REIMBURSE) APPROVED CAPITAL EXPENSES MAY, AT LENDER’S OPTION, BE
MADE BY JOINT CHECK PAYABLE TO BORROWER AND THE PAYEE ON SUCH APPROVED CAPITAL
EXPENSES.

3.4.2       GUARANTY IN LIEU OF RESERVE.

(A)          IN LIEU OF A REQUIREMENT FOR MONTHLY DEPOSITS BY BORROWER INTO THE
CAPITAL RESERVE SUBACCOUNT, GUARANTOR, PURSUANT TO THE GUARANTY, HAS (AMONG
OTHER OBLIGATIONS THEREUNDER) GUARANTEED PAYMENT AND PERFORMANCE IN FULL OF ALL
CAPITAL EXPENSES AND WORK RELATING THERETO AND AGREED TO PAY TO LENDER, UPON
LENDER’S DEMAND FOLLOWING THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT
OF DEFAULT, AN AMOUNT EQUAL TO THE GUARANTY LIMIT AMOUNT, DETERMINED AS THE SUM
OF VARIOUS AMOUNTS, INCLUDING AN AMOUNT EQUAL TO THE CAPITAL RESERVE OFFSET
AMOUNT (AS HEREAFTER DEFINED). AS USED HEREIN, “CAPITAL RESERVE OFFSET AMOUNT”
SHALL MEAN, ON ANY DATE OF DETERMINATION, AN AMOUNT EQUAL TO THE GREATER OF
(I) THE ZERO AND (II) THE FOLLOWING:

(1)           the product of $91,228 (the “Base Capital Amount”), multiplied by
a fraction, the numerator of which is the number of Calendar Quarters which have
ended (and for which the reports required under Section 6.3.3 hereof have been
delivered or were required to have been delivered) as of the date of
determination (a “Calendar Quarter” shall be the three calendar month period
ending on September 30, 2006 and each three calendar month period ending on each
December 31, March 31, June 30 and September 30, thereafter), and the
denominator of which is four (4); for example, a calculation made October 10,
2007 would be for the 5 Calendar Quarters ending September 30, 2006,
December 31, 2006, March 31, 2007, June 30, 2007 and September 30, 2007, and
thus $ $91,228 X [5/4] = $114,035); minus

(2)           the Aggregate Approved Capital Costs (as hereafter defined) for
such Calendar Quarters.

As used herein, the term  “Aggregate Approved Capital Costs” shall mean amounts
hereafter paid by Borrower for reasonable Approved Capital Expenses (other than
those related to leasing of space at the Property or for which a credit has been
provided against the purchase price under the purchase agreement pursuant to
which the Borrower acquired the Property as of the date hereof), as demonstrated
by Borrower to Lender’s reasonable satisfaction within 120 days of the Calendar
Quarter in which such costs were incurred.

(B)           UPON THE OCCURRENCE OF AN EVENT OF DEFAULT (AND WITHOUT LIMITING
ANY RIGHTS OR REMEDIES AVAILABLE TO LENDER IN CONNECTION THEREWITH), BORROWER
SHALL ON EACH PAYMENT DATE THEREAFTER DEPOSIT WITH LENDER THE MONTHLY CAPITAL
RESERVE DEPOSIT AMOUNT. IF LENDER RECEIVES

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THE CAPITAL RESERVE OFFSET AMOUNT FROM GUARANTOR UNDER THE GUARANTY, LENDER
SHALL TRANSFER THE SAME TO THE CAPITAL RESERVE SUBACCOUNT TO BE APPLIED AS
PROVIDED IN SECTION 3.4.1 ABOVE, SUBJECT TO LENDER’S RIGHT TO APPLY THE SAME
OTHERWISE AS SET FORTH IN SECTION 3.10 BELOW.

3.5          ROLLOVER RESERVES.

3.5.1       RESERVE DEPOSITS. BORROWER SHALL PAY TO LENDER $33,333.33 (THE
“MONTHLY ROLLOVER RESERVE DEPOSIT AMOUNT”) ON EACH PAYMENT DATE (SUCH DEPOSITS,
THE “MONTHLY ROLLOVER RESERVE DEPOSITS”). LENDER WILL TRANSFER SUCH AMOUNT INTO
A SUBACCOUNT (THE “ROLLOVER RESERVE SUBACCOUNT”). NOTWITHSTANDING THE FOREGOING,
NO MONTHLY ROLLOVER RESERVE DEPOSITS SHALL BE REQUIRED TO BE MADE INTO THE
ROLLOVER RESERVE SUBACCOUNT DURING PERIODS THAT THE BALANCE IN THE ROLLOVER
RESERVE SUBACCOUNT EXCEEDS $1,200,000 (EXCLUSIVE OF THE PROCEEDS OF LEASE
TERMINATION PAYMENTS). BORROWER SHALL ALSO PAY TO LENDER FOR TRANSFER INTO THE
ROLLOVER RESERVE SUBACCOUNT ALL LEASE TERMINATION PAYMENTS RECEIVED BY BORROWER.
PROVIDED THAT NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, LENDER SHALL
DISBURSE FUNDS HELD IN THE ROLLOVER RESERVE SUBACCOUNT TO BORROWER, WITHIN TEN
(10) DAYS AFTER THE DELIVERY BY BORROWER TO LENDER OF A REQUEST THEREFOR (BUT
NOT MORE OFTEN THAN ONCE PER MONTH), IN MINIMUM AMOUNTS OF AT LEAST $5,000,
PROVIDED (I) SUCH DISBURSEMENT IS FOR APPROVED LEASING EXPENSES WITH RESPECT TO
LEASES HEREAFTER EXECUTED (IT BEING ACKNOWLEDGED THAT LEASING COSTS WITH RESPECT
TO LEASES EXISTING AS OF THE DATE HEREOF SHALL NOT QUALIFY FOR DISBURSEMENTS
FROM THE ROLLOVER RESERVE SUBACCOUNT); (II) LENDER SHALL HAVE (IF IT DESIRES)
VERIFIED (BY AN INSPECTION CONDUCTED AT BORROWER’S EXPENSE) PERFORMANCE OF ANY
CONSTRUCTION WORK ASSOCIATED WITH SUCH APPROVED LEASING EXPENSES; (III) THE
REQUEST FOR DISBURSEMENT IS ACCOMPANIED BY (A) AN OFFICER’S CERTIFICATE
CERTIFYING (1) THAT SUCH FUNDS WILL BE USED ONLY TO PAY (OR REIMBURSE BORROWER
FOR) APPROVED LEASING EXPENSES AND A DESCRIPTION THEREOF, (2) THAT ALL
OUTSTANDING TRADE PAYABLES (OTHER THAN THOSE NOT YET DUE AND PAYABLE OR THOSE TO
BE PAID FROM THE REQUESTED DISBURSEMENT OR THOSE CONSTITUTING PERMITTED
INDEBTEDNESS) HAVE BEEN PAID IN FULL, (3) THAT THE SAME HAS NOT BEEN THE SUBJECT
OF A PREVIOUS DISBURSEMENT, AND (4) THAT ALL PREVIOUS DISBURSEMENTS HAVE BEEN
USED ONLY TO PAY (OR REIMBURSE BORROWER FOR) THE PREVIOUSLY IDENTIFIED APPROVED
LEASING EXPENSES AND (B) REASONABLY DETAILED SUPPORTING DOCUMENTATION AS TO THE
AMOUNT, NECESSITY AND PURPOSE THEREFOR; AND (IV) ANY SUCH DISBURSEMENT OF MORE
THAN $10,000 TO PAY (RATHER THAN REIMBURSE) APPROVED LEASING EXPENSES MAY, AT
LENDER’S OPTION, BE MADE BY JOINT CHECK PAYABLE TO BORROWER AND THE PAYEE OF
SUCH APPROVED LEASING EXPENSES. IF LENDER RECEIVES THE ROLLOVER RESERVE OFFSET
AMOUNT FROM GUARANTOR UNDER THE GUARANTY, LENDER SHALL TRANSFER THE SAME TO THE
ROLLOVER RESERVE SUBACCOUNT TO BE APPLIED AS PROVIDED IN THIS SECTION 3.5,
SUBJECT TO LENDER’S RIGHT TO APPLY THE SAME OTHERWISE AS SET FORTH IN
SECTION 3.10 BELOW. ALL DISBURSEMENTS FROM THE ROLLOVER RESERVE SUBACCOUNT SHALL
BE DEEMED TO HAVE BEEN MADE FIRST FROM THE PROCEEDS OF ANY LEASE TERMINATIONS
PAYMENTS DEPOSITED INTO THE ROLLOVER RESERVE SUBACCOUNT, UNTIL ALL SUCH LEASE
TERMINATION PAYMENTS HAVE BEEN DISBURSED, AND THEN FROM THE PROCEEDS OF MONTHLY
ROLLOVER RESERVE DEPOSITS.

3.5.2       GUARANTY IN LIEU OF RESERVE. IN LIEU OF A REQUIREMENT HEREUNDER FOR
MONTHLY ROLLOVER RESERVE DEPOSITS TO BE DEPOSITED INTO THE ROLLOVER RESERVE
SUBACCOUNT, GUARANTOR, PURSUANT TO THE GUARANTY, HAS (AMONG OTHER OBLIGATIONS
THEREUNDER) GUARANTEED PAYMENT AND PERFORMANCE IN FULL OF ALL APPROVED LEASING
EXPENSES WITH RESPECT TO LEASES HEREAFTER EXECUTED AND ALL WORK RELATING THERETO
AND AGREED TO PAY TO LENDER , UPON LENDER’S

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DEMAND FOLLOWING THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, AN AMOUNT EQUAL TO THE GUARANTY LIMIT AMOUNT, DETERMINED AS THE SUM OF
VARIOUS AMOUNTS, INCLUDING AN AMOUNT EQUAL TO THE ROLLOVER RESERVE OFFSET
AMOUNT. AS USED HEREIN, “ROLLOVER RESERVE OFFSET AMOUNT” SHALL MEAN, ON ANY DATE
OF DETERMINATION, AN AMOUNT EQUAL TO THE LESSER OF (A) $1,200,000 AND (B) THE
GREATER OF (I) ZERO AND (II) THE FOLLOWING:

(1)           the product of $400,000 (the “Base Rollover Amount”), multiplied
by a fraction, the numerator of which is the number of Calendar Quarters which
have ended (and for which the reports required under Section 6.3.3 hereof have
been delivered or were required to have been delivered) as of the date of
determination, and the denominator of which is four (4); minus

(2)           the Aggregate Approved Leasing Costs (as hereafter defined) for
such Calendar Quarters.

As used herein, the term  “Aggregate Approved Leasing Costs” shall mean amounts
hereafter paid by Borrower for reasonable Approved Leasing Expenses (other than
those for which a credit has been provided against the purchase price under the
purchase agreement pursuant to which the of Borrower acquired the Property as of
the date hereof), as demonstrated by Borrower to Lender’s reasonable
satisfaction within 120 days of the Calendar Quarter in which such costs were
incurred.

3.6          OPERATING EXPENSE SUBACCOUNT. ON EACH PAYMENT DATE DURING THE
CONTINUANCE OF A CASH TRAP PERIOD, A PORTION OF THE RENTS THAT HAVE BEEN
DEPOSITED INTO THE DEPOSIT ACCOUNT DURING THE IMMEDIATELY PRECEDING INTEREST
PERIOD IN AN AMOUNT EQUAL TO THE MONTHLY AMOUNT SET FORTH IN THE APPROVED
OPERATING BUDGET FOR THE FOLLOWING MONTH (PLUS ANY OTHER AMOUNTS REQUESTED BY
BORROWER FOR SUCH MONTH FOR PAYMENT OF ITEMS CONSTITUTING APPROVED OPERATING
EXPENSES, WHICH ARE NOT INCLUDED IN THE APPROVED OPERATING BUDGET), SHALL BE
TRANSFERRED INTO A SUBACCOUNT FOR THE PURPOSE OF PAYMENT OF APPROVED OPERATING
EXPENSES FOR THE MONTH IN WHICH SUCH PAYMENT DATE OCCURS (THE “OPERATING EXPENSE
SUBACCOUNT”). PROVIDED NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING,
LENDER SHALL DISBURSE FUNDS HELD IN THE OPERATING EXPENSE SUBACCOUNT TO BORROWER
(OR AT BORROWER’S DIRECTION, TO THE MANAGER), WITHIN FIVE (5) BUSINESS DAYS
AFTER DELIVERY BY BORROWER TO LENDER OF A REQUEST THEREFOR (BUT NOT MORE OFTEN
THAN WEEKLY), IN MINIMUM AMOUNTS OF AT LEAST $1,000, PROVIDED (I) SUCH
DISBURSEMENT IS FOR AN APPROVED OPERATING EXPENSE; AND (II) SUCH DISBURSEMENT IS
ACCOMPANIED BY (A) AN OFFICER’S CERTIFICATE CERTIFYING (1) THAT SUCH FUNDS WILL
BE USED TO PAY APPROVED OPERATING EXPENSES AND A DESCRIPTION THEREOF, (2) THAT
ALL OUTSTANDING TRADE PAYABLES (OTHER THAN THOSE NOT YET DUE AND PAYABLE OR
THOSE TO BE PAID FROM THE REQUESTED DISBURSEMENT OR THOSE CONSTITUTING PERMITTED
INDEBTEDNESS) HAVE BEEN PAID IN FULL, (3) THAT THE SAME HAS NOT BEEN THE SUBJECT
OF A PREVIOUS DISBURSEMENT, AND (4) THAT ALL PREVIOUS DISBURSEMENTS HAVE BEEN OR
WILL BE USED TO PAY THE PREVIOUSLY IDENTIFIED APPROVED OPERATING EXPENSES, AND
(B) REASONABLY DETAILED DOCUMENTATION SATISFACTORY TO LENDER AS TO THE AMOUNT,
NECESSITY AND PURPOSE THEREFOR. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, TO THE EXTENT THAT (I) BORROWER HAS REQUESTED A DISBURSEMENT
OF FUNDS FROM THE OPERATING EXPENSE SUBACCOUNT IN ACCORDANCE WITH THE FOREGOING
PROVISIONS AND (II) AT THE TIME OF SUCH REQUEST, THE FUNDS THAT HAVE BEEN
COLLECTED IN THE OPERATING EXPENSE SUBACCOUNT ARE INSUFFICIENT TO COVER THE
SAME, THEN LENDER SHALL NONETHELESS DISBURSE

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ADDITIONAL FUNDS THAT ARE THEREAFTER DEPOSITED INTO THE OPERATING EXPENSE
SUBACCOUNT TO BORROWER (WITHOUT ANY REQUIREMENT FOR BORROWER TO SUBMIT AN
ADDITIONAL REQUEST THEREFOR); PROVIDED THAT SUFFICIENT FUNDS HAVE BEEN COLLECTED
IN THE DEPOSIT ACCOUNT TO MAKE THE PAYMENTS REQUIRED UNDER CLAUSES (I) - (V) OF
SECTION 3.11(A) ON THE NEXT SUCCEEDING PAYMENT DATE.

3.7          CASUALTY/CONDEMNATION SUBACCOUNT. BORROWER SHALL PAY, OR CAUSE TO
BE PAID, TO LENDER ALL PROCEEDS OR AWARDS DUE TO ANY CASUALTY OR CONDEMNATION TO
BE TRANSFERRED TO A SUBACCOUNT (THE “CASUALTY/CONDEMNATION SUBACCOUNT”) IN
ACCORDANCE WITH THE PROVISIONS OF ARTICLE 7 HEREOF. ALL AMOUNTS IN THE
CASUALTY/CONDEMNATION SUBACCOUNT SHALL DISBURSED IN ACCORDANCE WITH THE
PROVISIONS OF ARTICLE 7 HEREOF.

3.8          SECURITY DEPOSITS. BORROWER SHALL KEEP ALL SECURITY DEPOSITS UNDER
LEASES IN ACCORDANCE WITH APPLICABLE LEGAL REQUIREMENTS. AFTER THE OCCURRENCE
AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, BORROWER SHALL, UPON LENDER’S
REQUEST, IF PERMITTED BY APPLICABLE LEGAL REQUIREMENTS, TURN OVER TO LENDER THE
SECURITY DEPOSITS (AND ANY INTEREST THERETOFORE EARNED THEREON) UNDER LEASES, TO
BE HELD BY LENDER IN A SUBACCOUNT (THE “SECURITY DEPOSIT SUBACCOUNT”) SUBJECT TO
THE TERMS OF THE LEASES. SECURITY DEPOSITS HELD IN THE SECURITY DEPOSIT
SUBACCOUNT WILL BE RELEASED BY LENDER UPON NOTICE FROM BORROWER TOGETHER WITH
SUCH EVIDENCE AS LENDER MAY REASONABLY REQUEST THAT SUCH SECURITY DEPOSIT IS
REQUIRED TO BE RETURNED TO A TENANT PURSUANT TO THE TERMS OF A LEASE OR MAY BE
APPLIED AS RENT PURSUANT TO THE RIGHTS OF BORROWER UNDER THE APPLICABLE LEASE.
ANY LETTER OF CREDIT OR OTHER INSTRUMENT THAT BORROWER RECEIVES IN LIEU OF A
CASH SECURITY DEPOSIT UNDER ANY LEASE SHALL (I) BE MAINTAINED IN FULL FORCE AND
EFFECT IN THE FULL AMOUNT UNLESS REPLACED BY A CASH DEPOSIT AS HEREINABOVE
DESCRIBED AND (II) IF PERMITTED PURSUANT TO ANY LEGAL REQUIREMENTS, NAME LENDER
AS PAYEE OR MORTGAGEE THEREUNDER (OR AT LENDER’S OPTION, BE FULLY ASSIGNABLE TO
LENDER).

3.9          CASH COLLATERAL SUBACCOUNT. IF A CASH TRAP PERIOD SHALL HAVE
COMMENCED THEN ON THE IMMEDIATELY SUCCEEDING PAYMENT DATE AND ON EACH PAYMENT
DATE THEREAFTER DURING THE CONTINUANCE OF SUCH CASH TRAP PERIOD, ALL AVAILABLE
CASH SHALL BE PAID TO LENDER, WHICH AMOUNTS SHALL BE TRANSFERRED BY LENDER INTO
A SUBACCOUNT (THE “CASH COLLATERAL SUBACCOUNT”) AS CASH COLLATERAL FOR THE DEBT.
ANY FUNDS IN THE CASH COLLATERAL SUBACCOUNT AND NOT PREVIOUSLY DISBURSED OR
APPLIED SHALL BE DISBURSED TO BORROWER UPON THE TERMINATION OF SUCH CASH TRAP
PERIOD. LENDER SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, AT ANY TIME DURING
THE CONTINUANCE OF A MONETARY EVENT OF DEFAULT OR MATERIAL NON-MONETARY EVENT OF
DEFAULT, IN ITS SOLE AND ABSOLUTE DISCRETION TO APPLY ALL SUMS THEN ON DEPOSIT
IN THE CASH COLLATERAL SUBACCOUNT TO THE DEBT, IN SUCH ORDER AND IN SUCH MANNER
AS LENDER SHALL ELECT IN ITS SOLE AND ABSOLUTE DISCRETION, INCLUDING (IF THE
LOAN HAS BEEN ACCELERATED) TO MAKE A PREPAYMENT OF PRINCIPAL (TOGETHER WITH THE
APPLICABLE YIELD MAINTENANCE PREMIUM APPLICABLE THERETO). NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED ABOVE, LENDER SHALL HAVE THE RIGHT, BUT NOT
THE OBLIGATION, IN ITS SOLE AND ABSOLUTE DISCRETION FROM TIME TO TIME, TO
DISBURSE FUNDS DEPOSITED INTO THE CASH COLLATERAL SUBACCOUNT TO BORROWER FOR
APPLICATION TO APPROVED LEASING EXPENSES OR CAPITAL EXPENDITURES APPROVED BY
LENDER, SUBJECT TO SUCH TERMS AND CONDITIONS AS LENDER MAY REQUIRE.

3.10        GRANT OF SECURITY INTEREST; APPLICATION OF FUNDS. AS SECURITY FOR
PAYMENT OF THE DEBT AND THE PERFORMANCE BY BORROWER OF ALL OTHER TERMS,
CONDITIONS AND PROVISIONS OF THE LOAN DOCUMENTS, BORROWER HEREBY PLEDGES AND
ASSIGNS TO LENDER, AND GRANTS TO LENDER A

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SECURITY INTEREST IN, ALL BORROWER’S RIGHT, TITLE AND INTEREST IN AND TO ALL
RENTS AND IN AND TO ALL PAYMENTS TO OR MONIES HELD IN THE CLEARING ACCOUNT, THE
DEPOSIT ACCOUNT, ALL SUBACCOUNTS CREATED PURSUANT TO THIS AGREEMENT
(COLLECTIVELY, THE “CASH MANAGEMENT ACCOUNTS”). BORROWER HEREBY GRANTS TO LENDER
A CONTINUING SECURITY INTEREST IN, AND AGREES TO HOLD IN TRUST FOR THE BENEFIT
OF LENDER, ALL RENTS IN ITS POSSESSION PRIOR TO THE (I) PAYMENT OF SUCH RENTS TO
LENDER OR (II) DEPOSIT OF SUCH RENTS INTO THE DEPOSIT ACCOUNT. BORROWER SHALL
NOT, WITHOUT OBTAINING THE PRIOR WRITTEN CONSENT OF LENDER, FURTHER PLEDGE,
ASSIGN OR GRANT ANY SECURITY INTEREST IN ANY CASH MANAGEMENT ACCOUNT, OR PERMIT
ANY LIEN TO ATTACH THERETO, OR ANY LEVY TO BE MADE THEREON, OR ANY UCC FINANCING
STATEMENTS, EXCEPT THOSE NAMING LENDER AS THE SECURED PARTY, TO BE FILED WITH
RESPECT THERETO. THIS AGREEMENT IS, AMONG OTHER THINGS, INTENDED BY THE PARTIES
TO BE A SECURITY AGREEMENT FOR PURPOSES OF THE UCC. UPON THE OCCURRENCE AND
DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, LENDER MAY APPLY ANY SUMS IN ANY
CASH MANAGEMENT ACCOUNT IN ANY ORDER AND IN ANY MANNER AS LENDER SHALL ELECT IN
LENDER’S DISCRETION WITHOUT SEEKING THE APPOINTMENT OF A RECEIVER AND WITHOUT
ADVERSELY AFFECTING THE RIGHTS OF LENDER TO FORECLOSE THE LIEN OF THE SECURITY
INSTRUMENT OR EXERCISE ITS OTHER RIGHTS UNDER THE LOAN DOCUMENTS, PROVIDED THAT
LENDER WILL NOT APPLY ANY SUCH SUMS TO PREPAYMENT OF PRINCIPAL UNLESS IT HAS
ACCELERATED THE LOAN. CASH MANAGEMENT ACCOUNTS SHALL NOT CONSTITUTE TRUST FUNDS
AND MAY BE COMMINGLED WITH OTHER MONIES HELD BY LENDER. ALL INTEREST WHICH
ACCRUES ON THE FUNDS IN ANY CASH MANAGEMENT ACCOUNT (OTHER THAN THE TAX AND
INSURANCE SUBACCOUNT) SHALL ACCRUE FOR THE BENEFIT OF BORROWER AND SHALL BE
TAXABLE TO BORROWER AND SHALL BE ADDED TO AND DISBURSED IN THE SAME MANNER AND
UNDER THE SAME CONDITIONS AS THE PRINCIPAL SUM ON WHICH SAID INTEREST ACCRUED.
UPON REPAYMENT IN FULL OF THE DEBT, ALL REMAINING FUNDS IN THE SUBACCOUNTS, IF
ANY, SHALL BE PROMPTLY DISBURSED TO BORROWER.

3.11        PROPERTY CASH FLOW ALLOCATION.

(A)           ALL RENTS DEPOSITED INTO THE DEPOSIT ACCOUNT DURING THE
IMMEDIATELY PRECEDING INTEREST PERIOD SHALL BE APPLIED ON EACH PAYMENT DATE AS
FOLLOWS IN THE FOLLOWING ORDER OF PRIORITY:

(I)            FIRST, TO MAKE PAYMENTS INTO THE TAX AND INSURANCE SUBACCOUNT IF
AND AS REQUIRED (AND ONLY IF AND AS REQUIRED) UNDER SECTION 3.3 HEREOF;

(II)           SECOND, TO PAY THE MONTHLY PORTION OF THE FEES CHARGED BY THE
DEPOSIT BANK IN ACCORDANCE WITH THE DEPOSIT ACCOUNT AGREEMENT;

(III)          THIRD, TO LENDER TO PAY THE MONTHLY DEBT SERVICE PAYMENT AMOUNT
OR THE MONTHLY INTEREST PAYMENT AMOUNT, AS THE CASE MAY BE, DUE ON SUCH PAYMENT
DATE (PLUS, IF APPLICABLE, INTEREST AT THE DEFAULT RATE AND ALL OTHER AMOUNTS,
OTHER THAN THOSE DESCRIBED UNDER OTHER CLAUSES OF THIS SECTION 3.11(A), THEN DUE
TO LENDER UNDER THE LOAN DOCUMENTS);

(IV)          FOURTH, TO MAKE PAYMENTS INTO THE CAPITAL RESERVE SUBACCOUNT IF
AND AS REQUIRED (AND ONLY IF AND AS REQUIRED) UNDER SECTION 3.4 HEREOF;

(V)           FIFTH, DURING THE CONTINUANCE OF A CASH TRAP PERIOD, TO MAKE
PAYMENTS FOR APPROVED OPERATING EXPENSES AS REQUIRED UNDER SECTION 3.6 HEREOF;

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(VI)          SIXTH, DURING THE CONTINUANCE OF A CASH TRAP PERIOD, TO MAKE
PAYMENTS IN AN AMOUNT EQUAL TO ALL REMAINING AVAILABLE CASH ON SUCH PAYMENT DATE
INTO THE CASH COLLATERAL SUBACCOUNT IN ACCORDANCE WITH SECTION 3.9 HEREOF; AND

(VII)         LASTLY, PROVIDED THAT NO CASH TRAP PERIOD IS THEN CONTINUING,
PAYMENTS TO BORROWER OF ANY REMAINING AMOUNTS.

Notwithstanding the foregoing, except during the continuance of a Cash Trap
Period, provided that in any given Interest Period, all amounts referred to in
the foregoing clauses (i) - (iv) have been paid, then at Borrower’s request, the
payments to Borrower under the foregoing clause (vii) shall be made on a weekly
basis.

(B)           THE FAILURE OF BORROWER TO MAKE ALL OF THE PAYMENTS REQUIRED UNDER
CLAUSES (I) THROUGH (VI) OF SECTION 3.11(A) ABOVE IN FULL ON EACH PAYMENT DATE
SHALL CONSTITUTE AN EVENT OF DEFAULT UNDER THIS AGREEMENT; PROVIDED, HOWEVER, IF
ADEQUATE FUNDS ARE AVAILABLE IN THE DEPOSIT ACCOUNT FOR SUCH PAYMENTS, THE
FAILURE BY THE DEPOSIT BANK TO ALLOCATE SUCH FUNDS INTO THE APPROPRIATE
SUBACCOUNTS SHALL NOT CONSTITUTE AN EVENT OF DEFAULT.

(C)           NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
SECTION 3.11, AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT, LENDER MAY APPLY ALL
RENTS DEPOSITED INTO THE DEPOSIT ACCOUNT AND OTHER PROCEEDS OF REPAYMENT IN SUCH
ORDER AND IN SUCH MANNER AS LENDER SHALL ELECT.

3.12        INTENTIONALLY OMITTED.

3.13        INTENTIONALLY OMITTED.

3.14        INITIAL DEPOSITS INTO RESERVES. THE INITIAL DEPOSITS REQUIRED TO BE
MADE ON THE DATE HEREOF INTO THE RESERVE ACCOUNTS ESTABLISHED UNDER THIS
ARTICLE 3 ARE FUNDED FROM THE PROCEEDS OF THE LOAN DISBURSED AT CLOSING.

4.                                       REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Lender as of the date hereof that, except to
the extent (if any) disclosed on Schedule 2 hereto with reference to a specific
Section of this Article 4:

4.1          ORGANIZATION; SPECIAL PURPOSE. BORROWER HAS BEEN DULY ORGANIZED AND
IS VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF ITS
FORMATION, WITH REQUISITE POWER AND AUTHORITY, AND ALL RIGHTS, LICENSES, PERMITS
AND AUTHORIZATIONS, GOVERNMENTAL OR OTHERWISE, NECESSARY TO OWN ITS PROPERTIES
AND TO TRANSACT THE BUSINESS IN WHICH IT IS NOW ENGAGED. BORROWER IS DULY
QUALIFIED TO DO BUSINESS AND IS IN GOOD STANDING IN EACH JURISDICTION WHERE IT
IS REQUIRED TO BE SO QUALIFIED IN CONNECTION WITH ITS PROPERTIES, BUSINESS AND
OPERATIONS. BORROWER IS A SPECIAL PURPOSE BANKRUPTCY REMOTE ENTITY.

4.2          PROCEEDINGS; ENFORCEABILITY. BORROWER HAS TAKEN ALL NECESSARY
ACTION TO AUTHORIZE THE EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN
DOCUMENTS. THE LOAN DOCUMENTS TO WHICH BORROWER IS A PARTY HAVE BEEN DULY
EXECUTED AND DELIVERED BY BORROWER

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AND CONSTITUTE LEGAL, VALID AND BINDING OBLIGATIONS OF BORROWER ENFORCEABLE
AGAINST BORROWER IN ACCORDANCE WITH THEIR RESPECTIVE TERMS, SUBJECT TO
APPLICABLE BANKRUPTCY, INSOLVENCY AND SIMILAR LAWS AFFECTING RIGHTS OF CREDITORS
GENERALLY, AND GENERAL PRINCIPLES OF EQUITY. THE LOAN DOCUMENTS TO WHICH
BORROWER’S GUARANTOR AND/OR AFFILIATES ARE A PARTY HAVE BEEN DULY EXECUTED AND
DELIVERED BY SUCH GUARANTOR AND/OR AFFILIATES THAT ARE PARTIES THERETO, AND
CONSTITUTE LEGAL, VALID AND BINDING OBLIGATIONS OF SUCH GUARANTOR AND/OR
AFFILIATES THAT ARE PARTIES THERETO, ENFORCEABLE AGAINST SUCH GUARANTOR AND/OR
AFFILIATES THAT ARE PARTIES THERETO IN ACCORDANCE WITH THEIR RESPECTIVE TERMS,
SUBJECT TO APPLICABLE BANKRUPTCY, INSOLVENCY AND SIMILAR LAWS AFFECTING RIGHTS
OF CREDITORS GENERALLY, AND GENERAL PRINCIPLES OF EQUITY. THE LOAN DOCUMENTS ARE
NOT SUBJECT TO, AND BORROWER HAS NOT ASSERTED, ANY RIGHT OF RESCISSION, SET-OFF,
COUNTERCLAIM OR DEFENSE, INCLUDING THE DEFENSE OF USURY. NO EXERCISE OF ANY OF
THE TERMS OF THE LOAN DOCUMENTS, OR ANY RIGHT THEREUNDER, WILL RENDER ANY LOAN
DOCUMENT UNENFORCEABLE.

4.3          NO CONFLICTS. THE EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN
DOCUMENTS BY BORROWER AND THE TRANSACTIONS CONTEMPLATED HEREBY WILL NOT CONFLICT
WITH OR RESULT IN A BREACH OF ANY OF THE TERMS OR PROVISIONS OF, OR CONSTITUTE A
DEFAULT UNDER, OR RESULT IN THE CREATION OR IMPOSITION OF ANY LIEN (OTHER THAN
PURSUANT TO THE LOAN DOCUMENTS) UPON ANY OF THE PROPERTY OF BORROWER PURSUANT TO
THE TERMS OF, ANY AGREEMENT OR INSTRUMENT TO WHICH BORROWER IS A PARTY OR BY
WHICH ITS PROPERTY IS SUBJECT, NOR WILL SUCH ACTION RESULT IN ANY VIOLATION OF
THE PROVISIONS OF ANY STATUTE OR ANY ORDER, RULE OR REGULATION OF ANY
GOVERNMENTAL AUTHORITY HAVING JURISDICTION OVER BORROWER OR THE PROPERTY.
BORROWER’S RIGHTS UNDER THE LICENSES AND THE MANAGEMENT AGREEMENT WILL NOT BE
ADVERSELY AFFECTED BY THE EXECUTION AND DELIVERY OF THE LOAN DOCUMENTS,
BORROWER’S PERFORMANCE THEREUNDER, OR THE RECORDATION OF THE SECURITY
INSTRUMENT. ANY CONSENT, APPROVAL, AUTHORIZATION, ORDER, REGISTRATION OR
QUALIFICATION OF OR WITH ANY GOVERNMENTAL AUTHORITY REQUIRED FOR THE EXECUTION,
DELIVERY AND PERFORMANCE BY BORROWER OF THE LOAN DOCUMENTS HAS BEEN OBTAINED AND
IS IN FULL FORCE AND EFFECT.

4.4          LITIGATION. THERE ARE NO ACTIONS, SUITS OR OTHER PROCEEDINGS AT LAW
OR IN EQUITY BY OR BEFORE ANY GOVERNMENTAL AUTHORITY NOW PENDING OR THREATENED
AGAINST OR AFFECTING BORROWER, THE MANAGER OR THE PROPERTY, WHICH, IF ADVERSELY
DETERMINED, MIGHT MATERIALLY ADVERSELY AFFECT THE CONDITION (FINANCIAL OR
OTHERWISE) OR BUSINESS OF BORROWER, MANAGER OR THE CONDITION OR OWNERSHIP OF THE
PROPERTY.

4.5          AGREEMENTS. BORROWER IS NOT A PARTY TO ANY AGREEMENT OR INSTRUMENT
OR SUBJECT TO ANY RESTRICTION WHICH MIGHT ADVERSELY AFFECT BORROWER OR THE
PROPERTY, OR BORROWER’S BUSINESS, PROPERTIES, OPERATIONS OR CONDITION, FINANCIAL
OR OTHERWISE. BORROWER IS NOT IN DEFAULT IN ANY MATERIAL RESPECT IN THE
PERFORMANCE, OBSERVANCE OR FULFILLMENT OF ANY OF THE OBLIGATIONS, COVENANTS OR
CONDITIONS CONTAINED IN ANY PERMITTED ENCUMBRANCE OR ANY OTHER AGREEMENT OR
INSTRUMENT TO WHICH BORROWER IS A PARTY OR BY WHICH BORROWER OR THE PROPERTY IS
BOUND.

4.6          TITLE. BORROWER HAS GOOD AND INDEFEASIBLE TITLE IN FEE TO THE REAL
PROPERTY AND GOOD TITLE TO THE BALANCE OF THE PROPERTY, FREE AND CLEAR OF ALL
LIENS EXCEPT THE PERMITTED ENCUMBRANCES. ALL TRANSFER TAXES, DEED STAMPS,
INTANGIBLE TAXES OR OTHER AMOUNTS IN THE NATURE OF TRANSFER TAXES REQUIRED TO BE
PAID BY ANY PERSON UNDER APPLICABLE LEGAL REQUIREMENTS IN CONNECTION WITH THE
TRANSFER OF THE PROPERTY TO BORROWER HAVE BEEN PAID. THE SECURITY INSTRUMENT
WHEN PROPERLY RECORDED IN THE APPROPRIATE RECORDS, TOGETHER WITH ANY UCC
FINANCING

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STATEMENTS REQUIRED TO BE FILED IN CONNECTION THEREWITH AND THE OTHER LOAN
DOCUMENTS, WILL CREATE (I) A VALID, PERFECTED FIRST PRIORITY LIEN ON BORROWER’S
INTEREST IN THAT PORTION OF THE PROPERTY, THE LEASES (TO THE EXTENT NOT SUBJECT
TO THE UNIFORM COMMERCIAL CODE) AND THE RENTS CONSTITUTING INTERESTS IN REAL
ESTATE OR REAL PROPERTY INTERESTS (INCLUDING FIXTURES) AND (II) TO THE EXTENT
THAT A SECURITY INTEREST THEREIN MAY BE CREATED UNDER THE UNIFORM COMMERCIAL
CODE, A VALID SECURITY INTEREST IN THAT PORTION OF THE PROPERTY, THE LEASES  (TO
THE EXTENT SUBJECT TO THE UNIFORM COMMERCIAL CODE) AND RENTS AND OTHER
COLLATERAL FOR THE LOAN CONSTITUTING PERSONAL PROPERTY, WHICH SECURITY INTEREST
CONSTITUTES A PERFECTED FIRST PRIORITY SECURITY INTEREST (A) TO THE EXTENT THAT
A SECURITY INTEREST THEREIN MAY BE PERFECTED BY THE FILING OF A UCC FINANCING
STATEMENT AND (B) WITH RESPECT TO THE CASH MANAGEMENT ACCOUNTS, BY VIRTUE OF
LENDER’S CONTROL OF SUCH CASH MANAGEMENT ACCOUNTS, ALL IN ACCORDANCE WITH THE
TERMS OF SUCH LOAN DOCUMENTS, IN EACH CASE SUBJECT ONLY TO ANY APPLICABLE
PERMITTED ENCUMBRANCES. ALL MORTGAGE, RECORDING, STAMP, INTANGIBLE OR OTHER
SIMILAR TAXES REQUIRED TO BE PAID BY ANY PERSON UNDER APPLICABLE LEGAL
REQUIREMENTS IN CONNECTION WITH THE EXECUTION, DELIVERY, RECORDATION, FILING,
REGISTRATION, PERFECTION OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS HAVE BEEN
(OR WILL, CONTEMPORANEOUSLY WITH SUCH RECORDATION OR FILING, BE) PAID BY
BORROWER. THE PERMITTED ENCUMBRANCES DO NOT MATERIALLY ADVERSELY AFFECT THE
VALUE, OPERATION OR USE OF THE PROPERTY, OR BORROWER’S ABILITY TO REPAY THE
LOAN. NO CONDEMNATION OR OTHER PROCEEDING HAS BEEN COMMENCED OR, TO BORROWER’S
BEST KNOWLEDGE, IS CONTEMPLATED WITH RESPECT TO ALL OR PART OF THE PROPERTY OR
FOR THE RELOCATION OF ROADWAYS PROVIDING ACCESS TO THE PROPERTY. THERE ARE NO
CLAIMS FOR PAYMENT FOR WORK, LABOR OR MATERIALS AFFECTING THE PROPERTY WHICH ARE
OR MAY BECOME A LIEN PRIOR TO, OR OF EQUAL PRIORITY WITH, THE LIENS CREATED BY
THE LOAN DOCUMENTS. THERE ARE NO OUTSTANDING OPTIONS TO PURCHASE OR RIGHTS OF
FIRST REFUSAL AFFECTING ALL OR ANY PORTION OF THE PROPERTY. THE SURVEY FOR THE
PROPERTY DELIVERED TO LENDER DOES NOT FAIL TO REFLECT ANY MATERIAL MATTER
AFFECTING THE PROPERTY OR THE TITLE THERETO. EXCEPT AS SHOWN ON THE SURVEY, ALL
OF THE IMPROVEMENTS INCLUDED IN DETERMINING THE APPRAISED VALUE OF THE PROPERTY
LIE WHOLLY WITHIN THE BOUNDARIES AND BUILDING RESTRICTION LINES OF THE PROPERTY,
AND NO IMPROVEMENT ON AN ADJOINING PROPERTY ENCROACHES UPON THE PROPERTY, AND NO
EASEMENT OR OTHER ENCUMBRANCE UPON THE PROPERTY ENCROACHES UPON ANY OF THE
IMPROVEMENTS, EXCEPT THOSE INSURED AGAINST BY THE TITLE INSURANCE POLICY. EACH
PARCEL COMPRISING THE PROPERTY IS A SEPARATE TAX LOT AND IS NOT A PORTION OF ANY
OTHER TAX LOT THAT IS NOT A PART OF THE PROPERTY. TO THE BEST OF BORROWER’S
KNOWLEDGE, THERE ARE NO PENDING OR PROPOSED SPECIAL OR OTHER ASSESSMENTS FOR
PUBLIC IMPROVEMENTS OR OTHERWISE AFFECTING THE PROPERTY, OR ANY CONTEMPLATED
IMPROVEMENTS TO THE PROPERTY THAT MAY RESULT IN SUCH SPECIAL OR OTHER
ASSESSMENTS.

4.7          NO BANKRUPTCY FILING. BORROWER IS NOT CONTEMPLATING EITHER THE
FILING OF A PETITION BY IT UNDER ANY STATE OR FEDERAL BANKRUPTCY OR INSOLVENCY
LAW OR THE LIQUIDATION OF ALL OR A MAJOR PORTION OF ITS PROPERTY (A “BANKRUPTCY
PROCEEDING”), AND BORROWER HAS NO KNOWLEDGE OF ANY PERSON CONTEMPLATING THE
FILING OF ANY SUCH PETITION AGAINST BORROWER. IN ADDITION, NEITHER BORROWER NOR
ANY PRINCIPAL OR AFFILIATE OF BORROWER HAS BEEN A PARTY TO, OR THE SUBJECT OF A
BANKRUPTCY PROCEEDING FOR THE PAST TEN (10) YEARS.

4.8          FULL AND ACCURATE DISCLOSURE. NO STATEMENT OF FACT MADE BY BORROWER
IN ANY OF THE 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. THERE IS NO MATERIAL FACT PRESENTLY KNOWN TO BORROWER THAT HAS
NOT BEEN DISCLOSED TO LENDER WHICH ADVERSELY AFFECTS, OR, AS FAR AS BORROWER CAN
FORESEE, MIGHT ADVERSELY AFFECT, THE PROPERTY OR THE BUSINESS,

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OPERATIONS OR CONDITION (FINANCIAL OR OTHERWISE) OF BORROWER. ALL FINANCIAL
DATA, INCLUDING THE STATEMENTS OF CASH FLOW AND INCOME AND OPERATING EXPENSE,
THAT HAVE BEEN +DELIVERED TO LENDER IN RESPECT OF BORROWER AND, TO BORROWER’S
KNOWLEDGE, THE PROPERTY (I) ARE TRUE, COMPLETE AND CORRECT IN ALL MATERIAL
RESPECTS, (II) ACCURATELY REPRESENT THE FINANCIAL CONDITION OF  BORROWER AND THE
PROPERTY AS OF THE DATE OF SUCH REPORTS, AND (III) TO THE EXTENT PREPARED BY AN
INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM, HAVE BEEN PREPARED IN ACCORDANCE
WITH GAAP CONSISTENTLY APPLIED THROUGHOUT THE PERIODS COVERED, EXCEPT AS
DISCLOSED THEREIN. BORROWER DOES NOT HAVE ANY CONTINGENT LIABILITIES,
LIABILITIES FOR TAXES, UNUSUAL FORWARD OR LONG-TERM COMMITMENTS, UNREALIZED OR
ANTICIPATED LOSSES FROM ANY UNFAVORABLE COMMITMENTS OR ANY LIABILITIES OR
OBLIGATIONS NOT EXPRESSLY PERMITTED BY THIS AGREEMENT. SINCE THE DATE OF SUCH
FINANCIAL STATEMENTS, THERE HAS BEEN NO MATERIALLY ADVERSE CHANGE IN THE
FINANCIAL CONDITION, OPERATIONS OR BUSINESS OF BORROWER OR THE PROPERTY FROM
THAT SET FORTH IN SAID FINANCIAL STATEMENTS.

4.9          TAX FILINGS. TO THE EXTENT REQUIRED, BORROWER HAS FILED (OR HAS
OBTAINED EFFECTIVE EXTENSIONS FOR FILING) ALL FEDERAL, STATE AND LOCAL TAX
RETURNS REQUIRED TO BE FILED AND HAVE PAID OR MADE ADEQUATE PROVISION FOR THE
PAYMENT OF ALL FEDERAL, STATE AND LOCAL TAXES, CHARGES AND ASSESSMENTS PAYABLE
BY BORROWER. BORROWER BELIEVES THAT ITS TAX RETURNS (IF ANY) PROPERLY REFLECT
THE INCOME AND TAXES OF BORROWER FOR THE PERIODS COVERED THEREBY, SUBJECT ONLY
TO REASONABLE ADJUSTMENTS REQUIRED BY THE INTERNAL REVENUE SERVICE OR OTHER
APPLICABLE TAX AUTHORITY UPON AUDIT.

4.10        ERISA; NO PLAN ASSETS. AS OF THE DATE HEREOF AND THROUGHOUT THE TERM
(I) BORROWER IS NOT AND WILL NOT BE AN “EMPLOYEE BENEFIT PLAN,” AS DEFINED IN
SECTION 3(3) OF ERISA, SUBJECT TO TITLE I OF ERISA, (II) NONE OF THE ASSETS OF
BORROWER CONSTITUTES OR WILL CONSTITUTE “PLAN ASSETS” OF ONE OR MORE SUCH PLANS
WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3-101, (III) BORROWER IS NOT AND
WILL NOT BE A “GOVERNMENTAL PLAN” WITHIN THE MEANING OF SECTION 3(32) OF ERISA,
AND (IV) TRANSACTIONS BY OR WITH BORROWER ARE NOT AND WILL NOT BE SUBJECT TO
STATE STATUTES REGULATING INVESTMENT OF, AND FIDUCIARY OBLIGATIONS WITH RESPECT
TO, GOVERNMENTAL PLANS. AS OF THE DATE HEREOF, NEITHER BORROWER, NOR ANY MEMBER
OF A “CONTROLLED GROUP OF CORPORATIONS” (WITHIN THE MEANING OF SECTION 414 OF
THE CODE) MAINTAINS, SPONSORS OR CONTRIBUTES TO A “DEFINED BENEFIT PLAN” (WITHIN
THE MEANING OF SECTION 3(35) OF ERISA) OR A “MULTIEMPLOYER PENSION PLAN” (WITHIN
THE MEANING OF SECTION 3(37)(A) OF ERISA).

4.11        COMPLIANCE. BORROWER AND, TO BORROWER’S BEST KNOWLEDGE, THE PROPERTY
AND THE USE THEREOF COMPLY IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE LEGAL
REQUIREMENTS (INCLUDING WITH RESPECT TO PARKING AND APPLICABLE ZONING AND LAND
USE LAWS, REGULATIONS AND ORDINANCES). BORROWER IS NOT IN DEFAULT OR VIOLATION
OF ANY ORDER, WRIT, INJUNCTION, DECREE OR DEMAND OF ANY GOVERNMENTAL AUTHORITY,
THE VIOLATION OF WHICH MIGHT MATERIALLY ADVERSELY AFFECT THE CONDITION
(FINANCIAL OR OTHERWISE) OR BUSINESS OF BORROWER. THE PROPERTY IS USED
EXCLUSIVELY AS AN OFFICE BUILDING PROPERTY AND OTHER APPURTENANT AND RELATED
USES. IN THE EVENT THAT ALL OR ANY PART OF THE IMPROVEMENTS ARE DESTROYED OR
DAMAGED, SAID IMPROVEMENTS CAN BE LEGALLY RECONSTRUCTED TO THEIR CONDITION PRIOR
TO SUCH DAMAGE OR DESTRUCTION, AND THEREAFTER EXIST FOR THE SAME USE WITHOUT
VIOLATING ANY ZONING OR OTHER ORDINANCES APPLICABLE THERETO AND WITHOUT THE
NECESSITY OF OBTAINING ANY VARIANCES OR SPECIAL PERMITS. NO LEGAL PROCEEDINGS
ARE PENDING OR, TO THE KNOWLEDGE OF BORROWER, THREATENED WITH RESPECT TO THE
ZONING OF THE PROPERTY. NEITHER THE ZONING NOR ANY OTHER RIGHT TO CONSTRUCT, USE
OR OPERATE THE PROPERTY IS IN ANY WAY DEPENDENT UPON

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OR RELATED TO ANY PROPERTY OTHER THAN THE PROPERTY. ALL CERTIFICATIONS, PERMITS,
LICENSES AND APPROVALS, INCLUDING CERTIFICATES OF COMPLETION AND OCCUPANCY
PERMITS REQUIRED FOR THE LEGAL USE, OCCUPANCY AND OPERATION OF THE PROPERTY
(COLLECTIVELY, THE “LICENSES”), HAVE BEEN OBTAINED AND ARE IN FULL FORCE AND
EFFECT. THE USE BEING MADE OF THE PROPERTY IS IN CONFORMITY WITH THE CERTIFICATE
OF OCCUPANCY ISSUED FOR THE PROPERTY AND ALL OTHER RESTRICTIONS, COVENANTS AND
CONDITIONS AFFECTING THE PROPERTY.

4.12        CONTRACTS. THERE ARE NO SERVICE, MAINTENANCE OR REPAIR CONTRACTS
AFFECTING THE PROPERTY THAT ARE NOT TERMINABLE ON ONE (1) MONTH’S NOTICE OR LESS
WITHOUT CAUSE AND WITHOUT PENALTY OR PREMIUM. ALL SERVICE, MAINTENANCE OR REPAIR
CONTRACTS AFFECTING THE PROPERTY HAVE BEEN ENTERED INTO AT ARMS-LENGTH IN THE
ORDINARY COURSE OF BORROWER’S BUSINESS (OR THAT OF ITS PREDECESSOR IN INTEREST)
AND PROVIDE FOR THE PAYMENT OF FEES IN AMOUNTS AND UPON TERMS COMPARABLE TO
EXISTING MARKET RATES.

4.13        FEDERAL RESERVE REGULATIONS; INVESTMENT COMPANY ACT. NO PART OF THE
PROCEEDS OF THE LOAN WILL BE USED FOR THE PURPOSE OF PURCHASING OR ACQUIRING ANY
“MARGIN STOCK” WITHIN THE MEANING OF REGULATION U OF THE BOARD OF GOVERNORS OF
THE FEDERAL RESERVE SYSTEM OR FOR ANY OTHER PURPOSE THAT WOULD BE INCONSISTENT
WITH SUCH REGULATION U OR ANY OTHER REGULATION OF SUCH BOARD OF GOVERNORS, OR
FOR ANY PURPOSE PROHIBITED BY LEGAL REQUIREMENTS OR ANY LOAN DOCUMENT. BORROWER
IS NOT (I) AN “INVESTMENT COMPANY” OR A COMPANY “CONTROLLED” BY AN “INVESTMENT
COMPANY,” WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED;
(II) A “HOLDING COMPANY” OR A “SUBSIDIARY COMPANY” OF A “HOLDING COMPANY” OR AN
“AFFILIATE” OF EITHER A “HOLDING COMPANY” OR A “SUBSIDIARY COMPANY” WITHIN THE
MEANING OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935, AS AMENDED; OR
(III) SUBJECT TO ANY OTHER FEDERAL OR STATE LAW OR REGULATION WHICH PURPORTS TO
RESTRICT OR REGULATE ITS ABILITY TO BORROW MONEY.

4.14        EASEMENTS; UTILITIES AND PUBLIC ACCESS. TO BORROWER’S BEST
KNOWLEDGE, ALL EASEMENTS, CROSS EASEMENTS, LICENSES, AIR RIGHTS AND
RIGHTS-OF-WAY OR OTHER SIMILAR PROPERTY INTERESTS (COLLECTIVELY, “EASEMENTS”),
IF ANY, NECESSARY FOR THE FULL UTILIZATION OF THE IMPROVEMENTS FOR THEIR
INTENDED PURPOSES HAVE BEEN OBTAINED, ARE DESCRIBED IN THE TITLE INSURANCE
POLICY AND ARE IN FULL FORCE AND EFFECT WITHOUT DEFAULT THEREUNDER. TO
BORROWER’S BEST KNOWLEDGE, THE PROPERTY HAS RIGHTS OF ACCESS TO PUBLIC WAYS AND
IS SERVED BY WATER, SEWER, SANITARY SEWER AND STORM DRAIN FACILITIES ADEQUATE TO
SERVICE IT FOR ITS INTENDED USES. TO BORROWER’S BEST KNOWLEDGE, ALL PUBLIC
UTILITIES NECESSARY OR CONVENIENT TO THE FULL USE AND ENJOYMENT OF THE PROPERTY
ARE LOCATED IN THE PUBLIC RIGHT-OF-WAY ABUTTING THE PROPERTY, AND ALL SUCH
UTILITIES ARE CONNECTED SO AS TO SERVE THE PROPERTY WITHOUT PASSING OVER OTHER
PROPERTY ABSENT A VALID EASEMENT. TO BORROWER’S BEST KNOWLEDGE, ALL ROADS
NECESSARY FOR THE USE OF THE PROPERTY FOR ITS CURRENT PURPOSE HAVE BEEN
COMPLETED AND DEDICATED TO PUBLIC USE AND ACCEPTED BY ALL GOVERNMENTAL
AUTHORITIES.

4.15        PHYSICAL CONDITION. TO BORROWER’S BEST KNOWLEDGE, THE PROPERTY,
INCLUDING ALL IMPROVEMENTS, PARKING FACILITIES, SYSTEMS, EQUIPMENT AND
LANDSCAPING, ARE IN GOOD CONDITION, ORDER AND REPAIR IN ALL MATERIAL RESPECTS;
TO BORROWER’S KNOWLEDGE, THERE EXISTS NO STRUCTURAL OR OTHER MATERIAL DEFECT OR
DAMAGES TO THE PROPERTY, WHETHER LATENT OR OTHERWISE. BORROWER HAS NOT RECEIVED
NOTICE FROM ANY INSURANCE COMPANY OR BONDING COMPANY OF ANY DEFECT OR INADEQUACY
IN THE PROPERTY, OR ANY PART THEREOF, WHICH WOULD ADVERSELY AFFECT ITS
INSURABILITY OR CAUSE THE

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IMPOSITION OF EXTRAORDINARY PREMIUMS OR CHARGES THEREON OR ANY TERMINATION OF
ANY POLICY OF INSURANCE OR BOND. NO PORTION OF THE PROPERTY IS LOCATED IN AN
AREA AS IDENTIFIED BY THE FEDERAL EMERGENCY MANAGEMENT AGENCY AS AN AREA HAVING
SPECIAL FLOOD HAZARDS. TO BORROWER’S BEST KNOWLEDGE, THE IMPROVEMENTS HAVE
SUFFERED NO MATERIAL CASUALTY OR DAMAGE WHICH HAS NOT BEEN FULLY REPAIRED AND
THE COST THEREOF FULLY PAID.

4.16        LEASES. TO BORROWER’S BEST KNOWLEDGE, THE RENT ROLL ATTACHED HERETO
AS SCHEDULE 3 (THE “RENT ROLL”) IS TRUE, COMPLETE AND CORRECT AND THE PROPERTY
IS NOT SUBJECT TO ANY LEASES OTHER THAN THE LEASES DESCRIBED IN THE RENT ROLL.
TO BORROWER’S BEST KNOWLEDGE, EXCEPT AS SET FORTH ON THE RENT ROLL OR TENANT
ESTOPPEL CERTIFICATES DELIVERED TO LENDER PRIOR TO THE DATE HEREOF: (I) EACH
LEASE IS IN FULL FORCE AND EFFECT; (II) THE TENANTS UNDER THE LEASES HAVE
ACCEPTED POSSESSION OF AND ARE IN OCCUPANCY OF ALL OF THEIR RESPECTIVE DEMISED
PREMISES, HAVE COMMENCED THE PAYMENT OF RENT UNDER THE LEASES, AND THERE ARE NO
OFFSETS, CLAIMS OR DEFENSES TO THE ENFORCEMENT THEREOF; (III) ALL RENTS DUE AND
PAYABLE UNDER THE LEASES HAVE BEEN PAID AND NO PORTION THEREOF HAS BEEN PAID FOR
ANY PERIOD MORE THAN THIRTY (30) DAYS IN ADVANCE; (IV) THE RENT PAYABLE UNDER
EACH LEASE IS THE AMOUNT OF FIXED RENT SET FORTH IN THE RENT ROLL, AND THERE IS
NO CLAIM OR BASIS FOR A CLAIM BY THE TENANT THEREUNDER FOR AN ADJUSTMENT TO THE
RENT; (V) NO TENANT HAS MADE ANY CLAIM AGAINST THE LANDLORD UNDER ANY LEASE
WHICH REMAINS OUTSTANDING, THERE ARE NO DEFAULTS ON THE PART OF THE LANDLORD
UNDER ANY LEASE, AND NO EVENT HAS OCCURRED WHICH, WITH THE GIVING OF NOTICE OR
PASSAGE OF TIME, OR BOTH, WOULD CONSTITUTE SUCH A DEFAULT; (VI) THERE IS NO
PRESENT MATERIAL DEFAULT BY THE TENANT UNDER ANY LEASE; (VII) ALL SECURITY
DEPOSITS UNDER LEASES ARE AS SET FORTH ON THE RENT ROLL AND ARE HELD CONSISTENT
WITH SECTION 3.8 HEREOF; (VIII) BORROWER IS THE SOLE OWNER OF THE ENTIRE
LESSOR’S INTEREST IN EACH LEASE; (IX) EACH LEASE IS THE VALID, BINDING AND
ENFORCEABLE OBLIGATION OF THE BORROWER AND THE APPLICABLE TENANT THEREUNDER;
(X) NO PERSON HAS ANY POSSESSORY INTEREST IN, OR RIGHT TO OCCUPY, THE PROPERTY
EXCEPT UNDER THE TERMS OF THE LEASE; AND (XI) EACH LEASE IS SUBORDINATE TO THE
LOAN DOCUMENTS, EITHER PURSUANT TO ITS TERMS OR PURSUANT TO A SUBORDINATION AND
ATTORNMENT AGREEMENT. NONE OF THE LEASES CONTAINS ANY OPTION TO PURCHASE OR
RIGHT OF FIRST REFUSAL TO PURCHASE THE PROPERTY OR ANY PART THEREOF. NEITHER THE
LEASES NOR THE RENTS HAVE BEEN ASSIGNED OR PLEDGED EXCEPT TO LENDER, AND NO
OTHER PERSON HAS ANY INTEREST THEREIN EXCEPT THE TENANTS THEREUNDER.

4.17        FRAUDULENT TRANSFER. BORROWER HAS 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 BORROWER’S ASSETS
EXCEEDS AND WILL, IMMEDIATELY FOLLOWING THE EXECUTION AND DELIVERY OF THE LOAN
DOCUMENTS, EXCEED BORROWER’S TOTAL PROBABLE 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. BORROWER
DOES NOT INTEND TO, AND DOES NOT BELIEVE THAT IT 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 BORROWER).

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4.18        OWNERSHIP OF BORROWER. THE SOLE GENERAL PARTNER OF BORROWER IS
BEHRINGER HARVARD TERRACE GP, LLC, A DELAWARE LIMITED LIABILITY COMPANY
(“BORROWER GP”). THE SOLE MEMBER OF BORROWER GP, AND THE SOLE LIMITED PARTNER OF
BORROWER, IS BEHRINGER HARVARD OPERATING PARTNERSHIP I LP (“BORROWER HOLDING”).
THE SOLE OWNER OF 100% OF THE EQUITY INTERESTS IN BORROWER HOLDING IS THE
HARVARD REIT OPERATING PARTNERSHIP. THE ONLY PARTNERS OF THE HARVARD REIT
OPERATING PARTNERSHIP ARE (I) THE BEHRINGER HARVARD REIT (0.1% GENERAL PARTNER),
(II) BHR PARTNERS, LLC, A DELAWARE LIMITED LIABILITY COMPANY (IN EXCESS OF 99%
LIMITED PARTNER), WHICH IS 100% OWNED BY THE BEHRINGER HARVARD REIT, AND
(III) CERTAIN OTHER INDIVIDUAL HOLDERS OF EQUITY INTERESTS (LESS THAN 1% LIMITED
PARTNERS IN THE AGGREGATE). THE FOREGOING PARTNERSHIP AND MEMBERSHIP INTERESTS
IN BORROWER AND BORROWER GP, RESPECTIVELY THE EQUITY INTERESTS IN BORROWER
HOLDING, THE GENERAL PARTNERSHIP INTERESTS IN HARVARD REIT OPERATING
PARTNERSHIP, AND THE LIMITED PARTNERSHIP INTERESTS OF BHR PARTNERS, LLC IN
HARVARD REIT OPERATING PARTNERSHIP, ARE ALL OWNED FREE AND CLEAR OF ALL LIENS,
WARRANTS, OPTIONS AND RIGHTS TO PURCHASE. BORROWER HAS NO OBLIGATION TO ANY
PERSON TO PURCHASE, REPURCHASE OR ISSUE ANY OWNERSHIP INTEREST IN IT. THE
ORGANIZATIONAL CHART ATTACHED HERETO AS SCHEDULE 4 IS COMPLETE AND ACCURATE AND
ILLUSTRATES ALL PERSONS WHO HAVE A DIRECT OR INDIRECT OWNERSHIP INTEREST IN
BORROWER.

4.19        PURCHASE OPTIONS. NEITHER THE PROPERTY NOR ANY PART THEREOF IS
SUBJECT TO ANY PURCHASE OPTIONS OR OTHER SIMILAR RIGHTS IN FAVOR OF THIRD
PARTIES.

4.20        MANAGEMENT AGREEMENT. THE MANAGEMENT AGREEMENT IS IN FULL FORCE AND
EFFECT. THERE IS NO DEFAULT, BREACH OR VIOLATION EXISTING 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 THEREUNDER, BY EITHER PARTY THERETO. PURSUANT TO
THE MANAGEMENT AGREEMENT, BORROWER HAS APPOINTED THE MANAGER AS ITS AGENT FOR
(I) HIRING, TERMINATING (SUBJECT TO THE PROVISIONS THEREOF), OVERSEEING AND
OTHERWISE DEALING WITH ANY SUB-PROPERTY MANAGER FOR THE PROPERTY, (II) OTHERWISE
OVERSEEING THE OPERATION AND MANAGEMENT OF THE PROPERTY, AND (III) MAKING
DECISIONS AND OTHERWISE INTERACTING AND DEALING WITH LENDER WITH RESPECT TO THE
LOAN, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE PROPERTY. ADDITIONALLY,
SUBJECT TO THE PROVISIONS OF SECTION 3.1 HEREOF, THE CLEARING ACCOUNT AGREEMENT
AND THE DEPOSIT ACCOUNT AGREEMENT, THE MANAGER HAS CONTROL OF ALL OPERATING AND
OTHER BANK ACCOUNTS WITH RESPECT TO THE PROPERTY.

4.21        HAZARDOUS SUBSTANCES. EXCEPT AS DISCLOSED IN THE ENVIRONMENTAL
ASSESSMENT REPORT DELIVERED TO LENDER IN CONNECTION WITH THE LOAN, (I) TO THE
BEST OF BORROWER’S KNOWLEDGE, AFTER DUE INQUIRY, THE PROPERTY IS NOT IN
VIOLATION OF ANY LEGAL REQUIREMENT PERTAINING TO OR IMPOSING LIABILITY OR
STANDARDS OF CONDUCT CONCERNING ENVIRONMENTAL REGULATION, CONTAMINATION OR
CLEAN-UP, INCLUDING THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND
LIABILITY ACT, THE RESOURCE CONSERVATION AND RECOVERY ACT, THE EMERGENCY
PLANNING AND COMMUNITY RIGHT-TO-KNOW ACT OF 1986, THE HAZARDOUS SUBSTANCES
TRANSPORTATION ACT, THE SOLID WASTE DISPOSAL ACT, THE CLEAN WATER ACT, THE CLEAN
AIR ACT, THE TOXIC SUBSTANCE CONTROL ACT, THE SAFE DRINKING WATER ACT, THE
OCCUPATIONAL SAFETY AND HEALTH ACT, ANY STATE SUPER-LIEN AND ENVIRONMENTAL
CLEAN-UP STATUTES (INCLUDING WITH RESPECT TO TOXIC MOLD), ANY LOCAL LAW
REQUIRING RELATED PERMITS AND LICENSES AND ALL AMENDMENTS TO AND REGULATIONS IN
RESPECT OF THE FOREGOING LAWS (COLLECTIVELY, “ENVIRONMENTAL LAWS”); (II) TO THE
BEST OF BORROWER’S KNOWLEDGE, AFTER DUE INQUIRY, THE PROPERTY IS NOT SUBJECT TO
ANY PRIVATE OR GOVERNMENTAL LIEN OR JUDICIAL OR

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ADMINISTRATIVE NOTICE OR ACTION OR INQUIRY, INVESTIGATION OR CLAIM RELATING TO
HAZARDOUS, TOXIC AND/OR DANGEROUS SUBSTANCES, TOXIC MOLD OR FUNGUS OF A TYPE
THAT MAY POSE A RISK TO HUMAN HEALTH OR THE ENVIRONMENT OR WOULD NEGATIVELY
IMPACT THE VALUE OF THE PROPERTY (“TOXIC MOLD”) OR ANY OTHER SUBSTANCES OR
MATERIALS WHICH ARE INCLUDED UNDER OR REGULATED BY ENVIRONMENTAL LAWS
(COLLECTIVELY, “HAZARDOUS SUBSTANCES”); (III) TO THE BEST OF BORROWER’S
KNOWLEDGE, AFTER DUE INQUIRY, NO HAZARDOUS SUBSTANCES ARE OR HAVE BEEN
(INCLUDING THE PERIOD PRIOR TO BORROWER’S ACQUISITION OF THE PROPERTY),
DISCHARGED, GENERATED, TREATED, DISPOSED OF OR STORED ON, INCORPORATED IN, OR
REMOVED OR TRANSPORTED FROM THE PROPERTY OTHER THAN IN COMPLIANCE WITH ALL
ENVIRONMENTAL LAWS; (IV) TO THE BEST OF BORROWER’S KNOWLEDGE, AFTER DUE INQUIRY,
NO HAZARDOUS SUBSTANCES ARE PRESENT IN, ON OR UNDER ANY NEARBY REAL PROPERTY
WHICH COULD MIGRATE TO OR OTHERWISE AFFECT THE PROPERTY; (V) TO THE BEST OF
BORROWER’S KNOWLEDGE, AFTER DUE INQUIRY, NO TOXIC MOLD IS ON OR ABOUT THE
PROPERTY WHICH REQUIRES REMEDIATION; AND (VI) TO THE BEST OF BORROWER’S
KNOWLEDGE, AFTER DUE INQUIRY, NO UNDERGROUND STORAGE TANKS EXIST ON THE PROPERTY
AND THE PROPERTY HAS NEVER BEEN USED AS A LANDFILL. TO THE BEST OF BORROWER’S
KNOWLEDGE, AFTER DUE INQUIRY, THERE HAVE BEEN NO ENVIRONMENTAL INVESTIGATIONS,
STUDIES, AUDITS, REVIEWS OR OTHER ANALYSES CONDUCTED BY OR ON BEHALF OF BORROWER
WHICH HAVE NOT BEEN PROVIDED TO LENDER.

4.22        NAME; PRINCIPAL PLACE OF BUSINESS. BORROWER HAS NOT USED, DOES NOT
USE AND WILL NOT USE ANY TRADE NAME, NOR HAS BORROWER DONE, OR WILL IN THE
FUTURE DO, BUSINESS UNDER ANY NAME, OTHER THAN ITS ACTUAL NAME SET FORTH HEREIN
AND THE TRADE NAME OF THE PROPERTY. THE PRINCIPAL PLACE OF BUSINESS OF BORROWER
IS ITS PRIMARY ADDRESS FOR NOTICES AS SET FORTH IN SECTION 6.1 HEREOF, AND
BORROWER HAS NO OTHER PLACE OF BUSINESS.

4.23        OTHER DEBT. THERE IS NO INDEBTEDNESS WITH RESPECT TO THE PROPERTY OR
ANY EXCESS CASH FLOW OR ANY RESIDUAL INTEREST THEREIN, WHETHER SECURED OR
UNSECURED, OTHER THAN PERMITTED ENCUMBRANCES AND PERMITTED INDEBTEDNESS.

5.                                      COVENANTS

Until the end of the Term, Borrower hereby covenants and agrees with Lender
that:

5.1          EXISTENCE. BORROWER SHALL (I) DO OR CAUSE TO BE DONE ALL THINGS
NECESSARY TO PRESERVE, RENEW AND KEEP IN FULL FORCE AND EFFECT ITS EXISTENCE,
RIGHTS, AND FRANCHISES, (II) CONTINUE TO ENGAGE IN THE BUSINESS PRESENTLY
CONDUCTED BY IT, (III) OBTAIN AND MAINTAIN ALL LICENSES, AND (IV) QUALIFY TO DO
BUSINESS AND REMAIN IN GOOD STANDING UNDER THE LAWS OF EACH JURISDICTION, IN
EACH CASE AS AND TO THE EXTENT REQUIRED FOR THE OWNERSHIP, MAINTENANCE,
MANAGEMENT AND OPERATION OF THE PROPERTY.

5.2          TAXES AND OTHER CHARGES. BORROWER SHALL PAY ALL TAXES AND OTHER
CHARGES PRIOR TO DELINQUENCY, AND DELIVER TO LENDER RECEIPTS FOR PAYMENT OR
OTHER EVIDENCE SATISFACTORY TO LENDER THAT THE TAXES AND OTHER CHARGES HAVE BEEN
SO PAID PRIOR TO DELINQUENCY (PROVIDED, HOWEVER, THAT BORROWER NEED NOT PAY SUCH
TAXES NOR FURNISH SUCH RECEIPTS FOR PAYMENT OF TAXES PAID BY LENDER PURSUANT TO
SECTION 3.3 HEREOF). BORROWER SHALL NOT SUFFER AND SHALL PROMPTLY CAUSE TO BE
PAID AND DISCHARGED ANY LIEN AGAINST THE PROPERTY, AND SHALL PROMPTLY PAY FOR
ALL UTILITY SERVICES PROVIDED TO THE PROPERTY. AFTER PRIOR NOTICE TO LENDER,
BORROWER, AT ITS OWN EXPENSE, MAY CONTEST BY APPROPRIATE LEGAL PROCEEDING,
PROMPTLY INITIATED AND CONDUCTED IN GOOD FAITH AND WITH DUE DILIGENCE, THE
AMOUNT OR VALIDITY OR APPLICATION OF ANY TAXES OR OTHER

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CHARGES, PROVIDED THAT (I) NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING,
(II) SUCH PROCEEDING SHALL SUSPEND THE COLLECTION OF THE TAXES OR SUCH OTHER
CHARGES, (III) SUCH PROCEEDING SHALL BE PERMITTED UNDER AND BE CONDUCTED IN
ACCORDANCE WITH THE PROVISIONS OF ANY OTHER INSTRUMENT TO WHICH BORROWER IS
SUBJECT AND SHALL NOT CONSTITUTE A DEFAULT THEREUNDER, (IV) NO PART OF OR
INTEREST IN THE PROPERTY WILL BE IN IMMINENT DANGER OF BEING SOLD, FORFEITED,
TERMINATED, CANCELED OR LOST, (V) BORROWER SHALL HAVE FURNISHED SUCH SECURITY AS
MAY BE REQUIRED IN THE PROCEEDING, OR AS MAY BE REQUESTED BY LENDER, TO INSURE
THE PAYMENT OF ANY SUCH TAXES OR OTHER CHARGES, TOGETHER WITH ALL INTEREST AND
PENALTIES THEREON, WHICH SHALL NOT BE LESS THAN ONE HUNDRED TWENTY FIVE PERCENT
(125%) OF THE TAXES AND OTHER CHARGES BEING CONTESTED (LESS AMOUNTS THEN BEING
RETAINED IN THE TAXES AND INSURANCE SUBACCOUNT TO PAY SUCH TAXES SO CONTESTED),
AND (VI) BORROWER SHALL PROMPTLY UPON FINAL DETERMINATION THEREOF PAY THE AMOUNT
OF SUCH TAXES OR OTHER CHARGES, TOGETHER WITH ALL COSTS, INTEREST AND PENALTIES.
LENDER MAY, WITH THE PRIOR APPROVAL OF BORROWER (NOT TO BE UNREASONABLY
WITHHELD), PAY OVER ANY SUCH SECURITY OR PART THEREOF HELD BY LENDER TO THE
CLAIMANT ENTITLED THERETO AT ANY TIME WHEN, IN THE JUDGMENT OF LENDER, THE
ENTITLEMENT OF SUCH CLAIMANT IS ESTABLISHED.

5.3          ACCESS TO PROPERTY. BORROWER SHALL PERMIT AGENTS, REPRESENTATIVES,
CONSULTANTS AND EMPLOYEES OF LENDER TO INSPECT THE PROPERTY OR ANY PART THEREOF
AT REASONABLE HOURS UPON REASONABLE ADVANCE NOTICE, SUBJECT TO THE RIGHTS OF
TENANTS OF THE PROPERTY UNDER THEIR RESPECTIVE LEASES.

5.4          REPAIRS; MAINTENANCE AND COMPLIANCE; ALTERATIONS.

5.4.1       REPAIRS; MAINTENANCE AND COMPLIANCE. BORROWER SHALL AT ALL TIMES
MAINTAIN, PRESERVE AND PROTECT ALL FRANCHISES AND TRADE NAMES, AND BORROWER
SHALL CAUSE THE PROPERTY TO BE MAINTAINED IN A GOOD AND SAFE CONDITION AND
REPAIR AND SHALL NOT REMOVE, DEMOLISH OR ALTER THE IMPROVEMENTS OR EQUIPMENT
(EXCEPT FOR ALTERATIONS PERFORMED IN ACCORDANCE WITH SECTION 5.4.2 BELOW AND
NORMAL REPLACEMENT OF EQUIPMENT WITH EQUIPMENT OF EQUIVALENT VALUE AND
FUNCTIONALITY OR REMOVAL OF EQUIPMENT THAT IS NOT MATERIAL TO THE OPERATION OR
VALUE OF THE PROPERTY AS AN OFFICE BUILDING). BORROWER SHALL PROMPTLY COMPLY
WITH ALL LEGAL REQUIREMENTS AND IMMEDIATELY CURE PROPERLY ANY VIOLATION OF A
LEGAL REQUIREMENT. BORROWER SHALL NOTIFY LENDER IN WRITING WITHIN THREE
(3) BUSINESS DAYS AFTER BORROWER FIRST RECEIVES NOTICE OF ANY SUCH
NON-COMPLIANCE. BORROWER SHALL PROMPTLY REPAIR, REPLACE OR REBUILD ANY PART OF
THE PROPERTY THAT BECOMES DAMAGED, WORN OR DILAPIDATED AND SHALL COMPLETE AND
PAY FOR ANY IMPROVEMENTS AT ANY TIME IN THE PROCESS OF CONSTRUCTION OR REPAIR.

5.4.2       ALTERATIONS. BORROWER MAY, WITHOUT LENDER’S CONSENT, PERFORM
ALTERATIONS TO THE IMPROVEMENTS AND EQUIPMENT WHICH (I) DO NOT CONSTITUTE A
MATERIAL ALTERATION, (II) DO NOT ADVERSELY AFFECT BORROWER’S FINANCIAL CONDITION
OR THE VALUE OR NET OPERATING INCOME OF THE PROPERTY AND (III) ARE IN THE
ORDINARY COURSE OF BORROWER’S BUSINESS. BORROWER SHALL NOT PERFORM ANY MATERIAL
ALTERATION WITHOUT LENDER’S PRIOR WRITTEN CONSENT, WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD OR DELAYED. LENDER MAY, AS A CONDITION TO GIVING ITS
CONSENT TO A MATERIAL ALTERATION, REQUIRE THAT BORROWER DELIVER TO LENDER
SECURITY FOR PAYMENT OF THE COST OF SUCH MATERIAL ALTERATION IN AN AMOUNT EQUAL
TO ONE HUNDRED TWENTY FIVE PERCENT (125%) OF THE COST OF THE MATERIAL ALTERATION
AS ESTIMATED BY LENDER. UPON SUBSTANTIAL COMPLETION OF THE MATERIAL ALTERATION,
BORROWER SHALL PROVIDE EVIDENCE SATISFACTORY TO LENDER THAT (I) THE MATERIAL

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ALTERATION WAS CONSTRUCTED IN ACCORDANCE WITH APPLICABLE LEGAL REQUIREMENTS AND
SUBSTANTIALLY IN ACCORDANCE WITH PLANS AND SPECIFICATIONS APPROVED BY LENDER
(WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED), (II) ALL
CONTRACTORS, SUBCONTRACTORS, MATERIALMEN AND PROFESSIONALS WHO PROVIDED WORK,
MATERIALS OR SERVICES IN CONNECTION WITH THE MATERIAL ALTERATION HAVE BEEN PAID
IN FULL AND HAVE DELIVERED UNCONDITIONAL RELEASES OF LIEN AND (III) ALL MATERIAL
LICENSES NECESSARY FOR THE USE, OPERATION AND OCCUPANCY OF THE MATERIAL
ALTERATION (OTHER THAN THOSE WHICH DEPEND ON THE PERFORMANCE OF TENANT
IMPROVEMENT WORK) HAVE BEEN ISSUED. BORROWER SHALL REIMBURSE LENDER UPON DEMAND
FOR ALL OUT-OF-POCKET COSTS AND EXPENSES (INCLUDING THE REASONABLE FEES OF ANY
ARCHITECT, ENGINEER OR OTHER PROFESSIONAL ENGAGED BY LENDER) INCURRED BY LENDER
IN REVIEWING PLANS AND SPECIFICATIONS OR IN MAKING ANY DETERMINATIONS NECESSARY
TO IMPLEMENT THE PROVISIONS OF THIS SECTION 5.4.2.

5.5          PERFORMANCE OF OTHER AGREEMENTS. BORROWER SHALL OBSERVE AND PERFORM
EACH AND EVERY TERM TO BE OBSERVED OR PERFORMED BY BORROWER PURSUANT TO THE
TERMS OF ANY AGREEMENT OR INSTRUMENT AFFECTING OR PERTAINING TO THE PROPERTY,
INCLUDING THE LOAN DOCUMENTS.

5.6          COOPERATE IN LEGAL PROCEEDINGS. BORROWER SHALL COOPERATE FULLY WITH
LENDER WITH RESPECT TO, AND PERMIT LENDER, AT ITS OPTION, TO PARTICIPATE IN, ANY
PROCEEDINGS BEFORE ANY GOVERNMENTAL AUTHORITY WHICH MAY IN ANY WAY AFFECT THE
RIGHTS OF LENDER UNDER ANY LOAN DOCUMENT.

5.7          FURTHER ASSURANCES. BORROWER SHALL, AT BORROWER’S SOLE COST AND
EXPENSE, (I) EXECUTE AND DELIVER TO LENDER SUCH DOCUMENTS, INSTRUMENTS,
CERTIFICATES, ASSIGNMENTS AND OTHER WRITINGS, AND DO SUCH OTHER ACTS NECESSARY
OR DESIRABLE, TO EVIDENCE, PRESERVE AND/OR PROTECT THE COLLATERAL AT ANY TIME
SECURING OR INTENDED TO SECURE THE DEBT AND/OR FOR THE BETTER AND MORE EFFECTIVE
CARRYING OUT OF THE INTENTS AND PURPOSES OF THE LOAN DOCUMENTS, AS LENDER MAY
REASONABLY REQUIRE FROM TIME TO TIME; AND (II) UPON LENDER’S REQUEST THEREFOR
GIVEN FROM TIME TO TIME AFTER THE OCCURRENCE OF ANY DEFAULT OR EVENT OF DEFAULT
PAY FOR (A) REPORTS OF UCC, FEDERAL TAX LIEN, STATE TAX LIEN, JUDGMENT AND
PENDING LITIGATION SEARCHES WITH RESPECT TO BORROWER AND GUARANTOR AND
(B) SEARCHES OF TITLE TO THE PROPERTY, EACH SUCH SEARCH TO BE CONDUCTED BY
SEARCH FIRMS REASONABLY DESIGNATED BY LENDER IN EACH OF THE LOCATIONS REASONABLY
DESIGNATED BY LENDER.

5.8          ENVIRONMENTAL MATTERS.

5.8.1       HAZARDOUS SUBSTANCES. SO LONG AS BORROWER OWNS OR IS IN POSSESSION
OF THE PROPERTY, BORROWER SHALL (I) KEEP THE PROPERTY FREE FROM HAZARDOUS
SUBSTANCES AND IN COMPLIANCE WITH ALL ENVIRONMENTAL LAWS, (II) PROMPTLY NOTIFY
LENDER IF BORROWER SHALL BECOME AWARE THAT (A) ANY HAZARDOUS SUBSTANCE IS ON OR
NEAR THE PROPERTY, (B) THE PROPERTY IS IN VIOLATION OF ANY ENVIRONMENTAL LAWS OR
(C) ANY CONDITION ON OR NEAR THE PROPERTY SHALL POSE A THREAT TO THE HEALTH,
SAFETY OR WELFARE OF HUMANS AND (III) REMOVE SUCH HAZARDOUS SUBSTANCES AND/OR
CURE SUCH VIOLATIONS AND/OR REMOVE SUCH THREATS, AS APPLICABLE, AS REQUIRED BY
LAW (OR AS SHALL BE REQUIRED BY LENDER IN THE CASE OF REMOVAL WHICH IS NOT
REQUIRED BY LAW, BUT IN RESPONSE TO THE OPINION OF A LICENSED HYDROGEOLOGIST,
LICENSED ENVIRONMENTAL ENGINEER OR OTHER QUALIFIED ENVIRONMENTAL CONSULTING FIRM
ENGAGED BY LENDER (“LENDER’S CONSULTANT”)), PROMPTLY AFTER BORROWER BECOMES
AWARE OF SAME, AT BORROWER’S SOLE EXPENSE. NOTHING HEREIN SHALL PREVENT

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BORROWER FROM RECOVERING SUCH EXPENSES FROM ANY OTHER PARTY THAT MAY BE LIABLE
FOR SUCH REMOVAL OR CURE.

5.8.2       ENVIRONMENTAL MONITORING.

(A)           BORROWER SHALL GIVE PROMPT WRITTEN NOTICE TO LENDER OF (I) ANY
PROCEEDING OR INQUIRY BY ANY PARTY (INCLUDING ANY GOVERNMENTAL AUTHORITY) WITH
RESPECT TO THE PRESENCE OF ANY HAZARDOUS SUBSTANCE ON, UNDER, FROM OR ABOUT THE
PROPERTY, (II) ALL CLAIMS MADE OR THREATENED BY ANY THIRD PARTY (INCLUDING ANY
GOVERNMENTAL AUTHORITY) AGAINST BORROWER OR THE PROPERTY OR ANY PARTY OCCUPYING
THE PROPERTY RELATING TO ANY LOSS OR INJURY RESULTING FROM ANY HAZARDOUS
SUBSTANCE, AND (III) BORROWER’S DISCOVERY OF ANY OCCURRENCE OR CONDITION ON ANY
REAL PROPERTY ADJOINING OR IN THE VICINITY OF THE PROPERTY THAT COULD CAUSE THE
PROPERTY TO BE SUBJECT TO ANY INVESTIGATION OR CLEANUP PURSUANT TO ANY
ENVIRONMENTAL LAW. UPON BECOMING AWARE OF THE PRESENCE OF MOLD OR FUNGUS AT THE
PROPERTY, BORROWER SHALL (I) UNDERTAKE AN INVESTIGATION TO IDENTIFY THE
SOURCE(S) OF SUCH MOLD OR FUNGUS AND SHALL DEVELOP AND IMPLEMENT AN APPROPRIATE
REMEDIATION PLAN TO ELIMINATE THE PRESENCE OF ANY TOXIC MOLD, (II) PERFORM OR
CAUSE TO BE PERFORMED ALL ACTS REASONABLY NECESSARY FOR THE REMEDIATION OF ANY
TOXIC MOLD (INCLUDING TAKING ANY ACTION NECESSARY TO CLEAN AND DISINFECT ANY
PORTIONS OF THE PROPERTY AFFECTED BY TOXIC MOLD, INCLUDING PROVIDING ANY
NECESSARY MOISTURE CONTROL SYSTEMS AT THE PROPERTY), AND (III) PROVIDE EVIDENCE
REASONABLY SATISFACTORY TO LENDER OF THE FOREGOING. BORROWER SHALL PERMIT LENDER
TO JOIN AND PARTICIPATE IN, AS A PARTY IF IT SO ELECTS, ANY LEGAL OR
ADMINISTRATIVE PROCEEDINGS OR OTHER ACTIONS INITIATED WITH RESPECT TO THE
PROPERTY IN CONNECTION WITH ANY ENVIRONMENTAL LAW OR HAZARDOUS SUBSTANCE, AND
BORROWER SHALL PAY ALL REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS INCURRED BY
LENDER IN CONNECTION THEREWITH.

(B)           UPON LENDER’S REQUEST, AT ANY TIME AND FROM TIME TO TIME, BORROWER
SHALL PROVIDE AN INSPECTION OR AUDIT OF THE PROPERTY PREPARED BY A LICENSED
HYDROGEOLOGIST, LICENSED ENVIRONMENTAL ENGINEER OR QUALIFIED ENVIRONMENTAL
CONSULTING FIRM APPROVED BY LENDER ASSESSING THE PRESENCE OR ABSENCE OF
HAZARDOUS SUBSTANCES ON, IN OR NEAR THE PROPERTY, AND IF LENDER IN ITS GOOD
FAITH JUDGMENT DETERMINES THAT REASONABLE CAUSE EXISTS FOR THE PERFORMANCE OF
SUCH ENVIRONMENTAL INSPECTION OR AUDIT, THEN THE COST AND EXPENSE OF SUCH AUDIT
OR INSPECTION SHALL BE PAID BY BORROWER. SUCH INSPECTIONS AND AUDIT MAY INCLUDE
SOIL BORINGS AND GROUND WATER MONITORING. IF BORROWER FAILS TO PROVIDE ANY SUCH
INSPECTION OR AUDIT WITHIN THIRTY (30) DAYS AFTER SUCH REQUEST, LENDER MAY ORDER
SAME, AND BORROWER HEREBY GRANTS TO LENDER AND ITS EMPLOYEES AND AGENTS ACCESS
TO THE PROPERTY AND A LICENSE TO UNDERTAKE SUCH INSPECTION OR AUDIT.

(C)           IF ANY ENVIRONMENTAL SITE ASSESSMENT REPORT PREPARED IN CONNECTION
WITH SUCH INSPECTION OR AUDIT RECOMMENDS THAT AN OPERATIONS AND MAINTENANCE PLAN
BE IMPLEMENTED FOR ANY HAZARDOUS SUBSTANCE, WHETHER SUCH HAZARDOUS SUBSTANCE
EXISTED PRIOR TO THE OWNERSHIP OF THE PROPERTY BY BORROWER, OR PRESENTLY EXISTS
OR IS REASONABLY SUSPECTED OF EXISTING, BORROWER SHALL CAUSE SUCH OPERATIONS AND
MAINTENANCE PLAN TO BE PREPARED AND IMPLEMENTED AT ITS EXPENSE UPON REQUEST OF
LENDER, AND WITH RESPECT TO ANY TOXIC MOLD, BORROWER SHALL TAKE ALL ACTION
NECESSARY TO CLEAN AND DISINFECT ANY PORTIONS OF THE IMPROVEMENTS AFFECTED BY
TOXIC MOLD IN OR ABOUT THE IMPROVEMENTS, INCLUDING PROVIDING ANY NECESSARY
MOISTURE CONTROL SYSTEMS AT THE PROPERTY. IF ANY INVESTIGATION, SITE MONITORING,
CONTAINMENT, CLEANUP, REMOVAL, RESTORATION OR OTHER WORK OF ANY KIND IS
REASONABLY NECESSARY UNDER AN APPLICABLE ENVIRONMENTAL LAW

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(“REMEDIAL WORK”), BORROWER SHALL COMMENCE ALL SUCH REMEDIAL WORK WITHIN THIRTY
(30) DAYS AFTER WRITTEN DEMAND BY LENDER AND THEREAFTER DILIGENTLY PROSECUTE TO
COMPLETION ALL SUCH REMEDIAL WORK WITHIN SUCH PERIOD OF TIME AS MAY BE REQUIRED
UNDER APPLICABLE LAW. ALL REMEDIAL WORK SHALL BE PERFORMED BY LICENSED
CONTRACTORS APPROVED IN ADVANCE BY LENDER AND UNDER THE SUPERVISION OF A
CONSULTING ENGINEER APPROVED BY LENDER. ALL COSTS OF SUCH REMEDIAL WORK SHALL BE
PAID BY BORROWER, INCLUDING LENDER’S REASONABLE ATTORNEYS’ FEES AND
DISBURSEMENTS INCURRED IN CONNECTION WITH THE MONITORING OR REVIEW OF SUCH
REMEDIAL WORK. IF BORROWER DOES NOT TIMELY COMMENCE AND DILIGENTLY PROSECUTE TO
COMPLETION THE REMEDIAL WORK, LENDER MAY (BUT SHALL NOT BE OBLIGATED TO) CAUSE
SUCH REMEDIAL WORK TO BE PERFORMED AT BORROWER’S EXPENSE. NOTWITHSTANDING THE
FOREGOING, BORROWER SHALL NOT BE REQUIRED TO COMMENCE SUCH REMEDIAL WORK WITHIN
THE ABOVE SPECIFIED TIME PERIOD: (X) IF PREVENTED FROM DOING SO BY ANY
GOVERNMENTAL AUTHORITY, (Y) IF COMMENCING SUCH REMEDIAL WORK WITHIN SUCH TIME
PERIOD WOULD RESULT IN BORROWER OR SUCH REMEDIAL WORK VIOLATING ANY
ENVIRONMENTAL LAW, OR (Z) IF BORROWER, AT ITS EXPENSE AND AFTER PRIOR WRITTEN
NOTICE TO LENDER, IS CONTESTING BY APPROPRIATE LEGAL, ADMINISTRATIVE OR OTHER
PROCEEDINGS, CONDUCTED IN GOOD FAITH AND WITH DUE DILIGENCE, THE NEED TO PERFORM
REMEDIAL WORK. BORROWER SHALL HAVE THE RIGHT TO CONTEST THE NEED TO PERFORM SUCH
REMEDIAL WORK, PROVIDED THAT, (1) BORROWER IS PERMITTED BY THE APPLICABLE
ENVIRONMENTAL LAWS TO DELAY PERFORMANCE OF THE REMEDIAL WORK PENDING SUCH
PROCEEDINGS, (2) NEITHER THE PROPERTY NOR ANY PART THEREOF OR INTEREST THEREIN
WILL BE SOLD, FORFEITED OR LOST IF BORROWER FAILS TO PROMPTLY PERFORM THE
REMEDIAL WORK BEING CONTESTED, AND IF BORROWER FAILS TO PREVAIL IN CONTEST,
BORROWER WOULD THEREAFTER HAVE THE OPPORTUNITY TO PERFORM SUCH REMEDIAL WORK,
(3) LENDER WOULD NOT, BY VIRTUE OF SUCH PERMITTED CONTEST, BE EXPOSED TO ANY
RISK OF ANY CIVIL LIABILITY FOR WHICH BORROWER HAS NOT FURNISHED ADDITIONAL
SECURITY AS PROVIDED IN CLAUSE (4) BELOW, OR TO ANY RISK OF CRIMINAL LIABILITY,
AND NEITHER THE PROPERTY NOR ANY INTEREST THEREIN WOULD BE SUBJECT TO THE
IMPOSITION OF ANY LIEN FOR WHICH BORROWER HAS NOT FURNISHED ADDITIONAL SECURITY
AS PROVIDED IN CLAUSE (4) BELOW, AS A RESULT OF THE FAILURE TO PERFORM SUCH
REMEDIAL WORK AND (4) BORROWER SHALL HAVE FURNISHED TO LENDER ADDITIONAL
SECURITY IN RESPECT OF THE REMEDIAL WORK BEING CONTESTED AND THE LOSS OR DAMAGE
THAT MAY RESULT FROM BORROWER’S FAILURE TO PREVAIL IN SUCH CONTEST IN SUCH
AMOUNT AS MAY BE REASONABLY REQUESTED BY LENDER BUT IN NO EVENT LESS THAN ONE
HUNDRED TWENTY FIVE PERCENT (125%) OF THE COST OF SUCH REMEDIAL WORK AS
ESTIMATED BY LENDER OR LENDER’S CONSULTANT AND ANY LOSS OR DAMAGE THAT MAY
RESULT FROM BORROWER’S FAILURE TO PREVAIL IN SUCH CONTEST, WHICH AMOUNT SHALL
PERIODICALLY BE DISBURSED TO BORROWER DURING THE COURSE OF SUCH REMEDIAL WORK IN
ACCORDANCE WITH THOSE PROCEDURES AND REQUIREMENTS THAT LENDER MAY DETERMINE ARE
REASONABLY NECESSARY IN CONNECTION THEREWITH. UPON COMPLETION OF THE REMEDIAL
WORK, ANY UNUSED PORTION OF ANY SECURITY DEPOSITED WITH LENDER PURSUANT TO THIS
SECTION 5.8.2 SHALL PROMPTLY BE RELEASED TO BORROWER.

(D)           BORROWER SHALL NOT INSTALL OR PERMIT TO BE INSTALLED ON THE
PROPERTY ANY UNDERGROUND STORAGE TANK.

5.9          TITLE TO THE PROPERTY. BORROWER WILL WARRANT AND DEFEND THE TITLE
TO THE PROPERTY, AND THE VALIDITY AND PRIORITY OF ALL LIENS GRANTED OR OTHERWISE
GIVEN TO LENDER UNDER THE LOAN DOCUMENTS, SUBJECT ONLY TO PERMITTED
ENCUMBRANCES, AGAINST THE CLAIMS OF ALL PERSONS.

5.10        LEASES.

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5.10.1     GENERALLY. UPON REQUEST, BORROWER SHALL FURNISH LENDER WITH EXECUTED
COPIES OF ALL LEASES THEN IN EFFECT (OTHER THAN LEASES THAT HAVE PREVIOUSLY BEEN
FURNISHED TO LENDER). ALL RENEWALS OF LEASES AND ALL PROPOSED LEASES SHALL
PROVIDE FOR RENTAL RATES AND TERMS COMPARABLE TO EXISTING LOCAL MARKET RATES AND
SHALL BE ARM’S LENGTH TRANSACTIONS WITH BONA FIDE, INDEPENDENT THIRD-PARTY
TENANTS.

5.10.2     MATERIAL LEASES. BORROWER SHALL NOT ENTER INTO A PROPOSED LEASE OR A
PROPOSED RENEWAL, EXTENSION (OTHER THAN A RENEWAL OR EXTENSION THAT IS BEING
UNILATERALLY EXERCISED BY A TENANT PURSUANT TO THE TERMS OF AN EXISTING LEASE,
WITH RESPECT TO WHICH LENDER SHALL NOT HAVE ANY CONSENT RIGHTS) OR MODIFICATION
OF AN EXISTING LEASE WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER, WHICH CONSENT
SHALL NOT, SO LONG AS NO EVENT OF DEFAULT IS CONTINUING, BE  UNREASONABLY
WITHHELD OR DELAYED. PRIOR TO SEEKING LENDER’S CONSENT TO ANY MATERIAL LEASE,
BORROWER SHALL DELIVER TO LENDER A COPY OF SUCH PROPOSED LEASE (A “PROPOSED
MATERIAL LEASE”) AND, IF SUCH PROPOSED MATERIAL LEASE IS BASED ON THE STANDARD
FORM OF LEASE APPROVED BY LENDER, BLACKLINED TO SHOW CHANGES FROM THE STANDARD
FORM OF LEASE APPROVED BY LENDER AND THEN BEING USED BY BORROWER. LENDER SHALL
APPROVE OR DISAPPROVE EACH PROPOSED MATERIAL LEASE OR PROPOSED RENEWAL,
EXTENSION OR MODIFICATION OF AN EXISTING MATERIAL LEASE FOR WHICH LENDER’S
APPROVAL IS REQUIRED UNDER THIS AGREEMENT WITHIN FIFTEEN (15) BUSINESS DAYS OF
THE SUBMISSION BY BORROWER TO LENDER OF A WRITTEN REQUEST FOR SUCH APPROVAL,
ACCOMPANIED BY A FINAL COPY OF THE PROPOSED MATERIAL LEASE OR PROPOSED RENEWAL,
EXTENSION OR MODIFICATION OF AN EXISTING MATERIAL LEASE. IF REQUESTED BY
BORROWER, LENDER WILL GRANT CONDITIONAL APPROVALS OF PROPOSED MATERIAL LEASES OR
PROPOSED RENEWALS, EXTENSIONS OR MODIFICATIONS OF EXISTING MATERIAL LEASES AT
ANY STAGE OF THE LEASING PROCESS, FROM INITIAL “TERM SHEET” THROUGH NEGOTIATED
LEASE DRAFTS, PROVIDED THAT LENDER SHALL RETAIN THE RIGHT TO DISAPPROVE ANY SUCH
PROPOSED MATERIAL LEASE OR PROPOSED RENEWAL, EXTENSION OR MODIFICATION OF AN
EXISTING MATERIAL LEASE, IF SUBSEQUENT TO ANY PRELIMINARY APPROVAL MATERIAL
CHANGES ARE MADE TO THE TERMS PREVIOUSLY APPROVED BY LENDER, OR ADDITIONAL
MATERIAL TERMS ARE ADDED THAT HAD NOT PREVIOUSLY BEEN CONSIDERED AND APPROVED BY
LENDER IN CONNECTION WITH SUCH PROPOSED MATERIAL LEASE OR PROPOSED RENEWAL,
EXTENSION OR MODIFICATION OF AN EXISTING MATERIAL LEASE. PROVIDED THAT NO EVENT
OF DEFAULT IS CONTINUING, IF BORROWER PROVIDES LENDER WITH A WRITTEN REQUEST FOR
APPROVAL (WHICH WRITTEN REQUEST SHALL SPECIFICALLY REFER TO THIS SECTION 5.10.2
AND SHALL EXPLICITLY STATE THAT FAILURE BY LENDER TO APPROVE OR DISAPPROVE
WITHIN FIFTEEN (15) BUSINESS DAYS WILL CONSTITUTE A DEEMED APPROVAL) AND LENDER
FAILS TO REJECT THE REQUEST IN WRITING DELIVERED TO BORROWER WITHIN FIFTEEN (15)
BUSINESS DAYS AFTER RECEIPT BY LENDER OF THE REQUEST, THE PROPOSED MATERIAL
LEASE OR PROPOSED RENEWAL, EXTENSION OR MODIFICATION OF AN EXISTING MATERIAL
LEASE SHALL BE DEEMED APPROVED BY LENDER, AND BORROWER SHALL BE ENTITLED TO
ENTER INTO SUCH PROPOSED MATERIAL LEASE OR PROPOSED RENEWAL, EXTENSION OR
MODIFICATION OF AN EXISTING MATERIAL LEASE. NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THIS SECTION 5.10, UNLESS EXPRESSLY AGREED TO IN WRITING BY LENDER,
ANY APPROVAL OR DEEMED APPROVAL BY LENDER OF A PROPOSED LEASE OR PROPOSED
RENEWAL, EXTENSION OR MODIFICATION OF AN EXISTING LEASE PURSUANT TO THIS
SECTION 5.10 SHALL NOT BE DEEMED TO CONSTITUTE (IN AND OF ITSELF) AN APPROVAL OR
DEEMED APPROVAL BY LENDER OF ANY APPROVED LEASING EXPENSES IN CONNECTION
THEREWITH.

5.10.3     MINOR LEASES. NOTWITHSTANDING THE PROVISIONS OF SECTION 5.10.2 ABOVE,
PROVIDED THAT NO EVENT OF DEFAULT IS CONTINUING, RENEWALS, AMENDMENTS AND
MODIFICATIONS OF EXISTING LEASES AND PROPOSED LEASES, SHALL NOT BE SUBJECT TO
THE PRIOR APPROVAL OF LENDER

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PROVIDED (I) THE PROPOSED LEASE WOULD BE A MINOR LEASE OR THE EXISTING LEASE AS
AMENDED OR MODIFIED OR THE RENEWAL LEASE IS A MINOR LEASE, (II) THE PROPOSED
LEASE SHALL BE WRITTEN SUBSTANTIALLY IN ACCORDANCE WITH THE STANDARD FORM OF
LEASE WHICH SHALL HAVE BEEN APPROVED BY LENDER, (III) THE LEASE AS AMENDED OR
MODIFIED OR THE RENEWAL LEASE OR SERIES OF LEASES OR PROPOSED LEASE OR SERIES OF
LEASES: (A) SHALL PROVIDE FOR NET EFFECTIVE RENTAL RATES COMPARABLE TO EXISTING
LOCAL MARKET RATES FOR SIMILARLY SITUATED PROPERTIES, (B) WITH RESPECT TO ANY
NEW LEASE WITH A NEW TENANT (OTHER THAN KIOSKS AND VENDING MACHINES), SHALL HAVE
AN INITIAL TERM (TOGETHER WITH ALL RENEWAL OPTIONS) OF NOT LESS THAN THREE
(3) YEARS OR GREATER THAN TEN (10) YEARS, (C) SHALL PROVIDE FOR AUTOMATIC
SELF-OPERATIVE SUBORDINATION TO THE SECURITY INSTRUMENT AND, AT LENDER’S OPTION,
(X) ATTORNMENT TO LENDER AND (Y) THE UNILATERAL RIGHT BY LENDER, AT THE OPTION
OF LENDER, TO SUBORDINATE THE LIEN OF THE SECURITY INSTRUMENT TO THE LEASE, AND
(D) SHALL NOT CONTAIN ANY OPTION TO PURCHASE, ANY RIGHT OF FIRST REFUSAL TO
PURCHASE, ANY RIGHT TO TERMINATE (EXCEPT IN THE EVENT OF THE DESTRUCTION OR
CONDEMNATION OF SUBSTANTIALLY ALL OF THE PROPERTY), ANY REQUIREMENT FOR A
NON-DISTURBANCE OR RECOGNITION AGREEMENT, OR ANY OTHER PROVISION WHICH MIGHT
ADVERSELY AFFECT THE RIGHTS OF LENDER UNDER THE LOAN DOCUMENTS IN ANY MATERIAL
RESPECT. BORROWER SHALL DELIVER TO LENDER COPIES OF ALL LEASES WHICH ARE ENTERED
INTO PURSUANT TO THE PRECEDING SENTENCE TOGETHER WITH BORROWER’S CERTIFICATION
THAT IT HAS SATISFIED ALL OF THE CONDITIONS OF THE PRECEDING SENTENCE WITHIN TEN
(10) DAYS AFTER THE EXECUTION OF THE LEASE. NOTWITHSTANDING ANYTHING IN THIS
SECTION 5.10 TO THE CONTRARY, AT BORROWER’S REQUEST AND AT BORROWER’S SOLE COST
AND EXPENSE, LENDER SHALL ENTER INTO A SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT ON LENDER’S THEN CURRENT FORM WITH ANY TENANT UNDER A LEASE
OF AT LEAST 2,500 RENTABLE SQUARE FEET.

5.10.4     ADDITIONAL COVENANTS WITH RESPECT TO LEASES. BORROWER (I) SHALL
OBSERVE AND PERFORM THE MATERIAL OBLIGATIONS IMPOSED UPON THE LESSOR UNDER THE
LEASES AND SHALL NOT DO OR PERMIT ANYTHING TO IMPAIR THE VALUE OF THE LEASES AS
SECURITY FOR THE DEBT;  (II) SHALL PROMPTLY SEND COPIES TO LENDER OF ALL NOTICES
OF DEFAULT THAT BORROWER SHALL SEND OR RECEIVE UNDER ANY LEASE; (III) SHALL
ENFORCE, IN ACCORDANCE WITH COMMERCIALLY REASONABLE PRACTICES FOR PROPERTIES
SIMILAR TO THE PROPERTY, THE TERMS, COVENANTS AND CONDITIONS IN THE LEASES TO BE
OBSERVED OR PERFORMED BY THE LESSEES, SHORT OF TERMINATION THEREOF; (IV)  SHALL
NOT COLLECT ANY OF THE RENTS MORE THAN ONE (1) MONTH IN ADVANCE (OTHER THAN
SECURITY DEPOSITS); (V) SHALL NOT EXECUTE ANY OTHER ASSIGNMENT OF LESSOR’S
INTEREST IN THE LEASES OR THE RENTS (EXCEPT AS CONTEMPLATED BY THE LOAN
DOCUMENTS); (VI) SHALL NOT MODIFY ANY LEASE IN A MANNER INCONSISTENT WITH THE
LOAN DOCUMENTS; (VII) SHALL NOT CONVEY OR TRANSFER OR SUFFER OR PERMIT A
CONVEYANCE OR TRANSFER OF THE PROPERTY SO AS TO EFFECT A MERGER OF THE ESTATES
AND RIGHTS OF, OR A TERMINATION OR DIMINUTION OF THE OBLIGATIONS OF, LESSEES
UNDER LEASES; (VIII) SHALL NOT CONSENT TO ANY ASSIGNMENT OF OR SUBLETTING UNDER
ANY MATERIAL LEASE UNLESS REQUIRED IN ACCORDANCE WITH ITS TERMS WITHOUT THE
PRIOR WRITTEN CONSENT OF LENDER, WHICH, WITH RESPECT TO A SUBLETTING, MAY NOT,
SO LONG AS NO EVENT OF DEFAULT IS CONTINUING,  BE UNREASONABLY WITHHELD OR
DELAYED; AND  (IX) SHALL NOT CANCEL OR TERMINATE ANY LEASE OR ACCEPT A SURRENDER
THEREOF (EXCEPT IN THE EXERCISE OF BORROWER’S COMMERCIALLY REASONABLE JUDGMENT
IN CONNECTION WITH A TENANT DEFAULT UNDER A MINOR LEASE OR AS EXPRESSLY
PERMITTED UNDER THE TERMS OF SUCH LEASE IN ACCORDANCE WITH SECTION 5.10.3(D))
WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER, WHICH CONSENT SHALL NOT, SO LONG AS
NO EVENT OF DEFAULT IS CONTINUING, BE UNREASONABLY WITHHELD OR DELAYED.

5.11        ESTOPPEL STATEMENT. AFTER REQUEST BY LENDER, BORROWER SHALL WITHIN
TEN (10) DAYS FURNISH LENDER WITH A STATEMENT ADDRESSED TO LENDER, ITS
SUCCESSORS AND ASSIGNS, DULY

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ACKNOWLEDGED AND CERTIFIED, SETTING FORTH (I) THE UNPAID PRINCIPAL, (II) THE
INTEREST RATE, (III) THE DATE INSTALLMENTS OF INTEREST AND/OR PRINCIPAL WERE
LAST PAID, (IV) ANY OFFSETS OR DEFENSES TO THE PAYMENT OF THE DEBT, AND (V) THAT
THE LOAN DOCUMENTS ARE VALID, LEGAL AND BINDING OBLIGATIONS AND HAVE NOT BEEN
MODIFIED OR IF MODIFIED, GIVING PARTICULARS OF SUCH MODIFICATION.

5.12        PROPERTY MANAGEMENT.

5.12.1     MANAGEMENT AGREEMENT. BORROWER SHALL (I) CAUSE THE PROPERTY TO BE
MANAGED PURSUANT TO THE MANAGEMENT AGREEMENT; (II) PROMPTLY PERFORM AND OBSERVE
ALL OF THE COVENANTS REQUIRED TO BE PERFORMED AND OBSERVED BY IT UNDER THE
MANAGEMENT AGREEMENT AND DO ALL THINGS NECESSARY TO PRESERVE AND TO KEEP
UNIMPAIRED ITS RIGHTS THEREUNDER; (III) PROMPTLY NOTIFY LENDER OF ANY DEFAULT
UNDER THE MANAGEMENT AGREEMENT OF WHICH IT IS AWARE; (IV) PROMPTLY DELIVER TO
LENDER A COPY OF EACH FINANCIAL STATEMENT, BUSINESS PLAN, CAPITAL EXPENDITURE
PLAN, AND PROPERTY IMPROVEMENT PLAN AND ANY OTHER NOTICE, REPORT AND ESTIMATE
RECEIVED BY BORROWER UNDER THE MANAGEMENT AGREEMENT; AND (V) PROMPTLY ENFORCE
THE PERFORMANCE AND OBSERVANCE OF ALL OF THE COVENANTS REQUIRED TO BE PERFORMED
AND OBSERVED BY MANAGER UNDER THE MANAGEMENT AGREEMENT. WITHOUT LENDER’S PRIOR
WRITTEN CONSENT, BORROWER SHALL NOT (A) SURRENDER, TERMINATE, CANCEL, EXTEND OR
RENEW THE MANAGEMENT AGREEMENT (OTHER THAN EXTENSIONS OR RENEWALS PURSUANT TO
THE EXPRESS RENEWAL/EXTENSION PROVISIONS SET FORTH IN THE MANAGEMENT AGREEMENT
ON THE SAME TERMS AND CONDITIONS SET FORTH THEREIN (AS IN EFFECT ON THE DATE
HEREOF, OR AS HEREAFTER AMENDED OR MODIFIED IN ACCORDANCE WITH THE TERMS AND
CONDITIONS SET FORTH IN THIS AGREEMENT)) OR OTHERWISE REPLACE THE MANAGER OR
ENTER INTO ANY OTHER MANAGEMENT AGREEMENT (EXCEPT PURSUANT TO SECTION 5.12.2
BELOW); (B) REDUCE OR CONSENT TO THE REDUCTION OF THE TERM OF THE MANAGEMENT
AGREEMENT; (C) INCREASE OR CONSENT TO THE INCREASE OF THE AMOUNT OF ANY CHARGES
UNDER THE MANAGEMENT AGREEMENT; (D) OTHERWISE MODIFY, CHANGE, SUPPLEMENT, ALTER
OR AMEND IN ANY MATERIAL RESPECT, OR WAIVE OR RELEASE ANY OF ITS RIGHTS AND
REMEDIES UNDER, THE MANAGEMENT AGREEMENT; (E) SUFFER OR PERMIT THE OCCURRENCE
AND CONTINUANCE OF A DEFAULT BEYOND ANY APPLICABLE CURE PERIOD UNDER THE
MANAGEMENT AGREEMENT (OR ANY SUCCESSOR MANAGEMENT AGREEMENT) IF SUCH DEFAULT
PERMITS THE MANAGER TO TERMINATE THE MANAGEMENT AGREEMENT (OR SUCH SUCCESSOR
MANAGEMENT AGREEMENT); (F) SUFFER OR PERMIT THE OWNERSHIP, MANAGEMENT OR CONTROL
OF THE MANAGER TO BE TRANSFERRED TO A PERSON OTHER THAN AN AFFILIATE OF
BEHRINGER; OR (G) ENGAGE (OR PERMIT ANY MANAGER TO ENGAGE) ANY SUBMANAGING AGENT
OR ENTER INTO (OR PERMIT ANY MANAGER TO ENTER INTO) ANY SUBMANAGEMENT AGREEMENT
(OTHER THAN THE SUBCONTRACT FOR MANAGEMENT SERVICES DATED AS OF THE DATE HEREOF
BETWEEN THE CURRENT MANAGER AND CLAYDESTA, L.P., OR AS OTHERWISE PERMITTED UNDER
SECTION 5.12.2 BELOW), IT BEING ACKNOWLEDGED THAT ANY NEW SUBMANAGING AGENT MUST
BE ACCEPTABLE TO LENDER (IN LENDER’S REASONABLE DISCRETION) AND THE TERMS AND
CONDITIONS OF ANY NEW SUBMANAGEMENT AGREEMENT MUST BE REASONABLY SATISFACTORY TO
LENDER AND MAY, IF REQUIRED BY LENDER, BE CONDITIONED ON BORROWER DELIVERING A
RATING COMFORT LETTER AS TO SUCH NEW SUBMANAGING AGENT AND NEW SUBMANAGEMENT
AGREEMENT AND A SUBORDINATION AND CONSENT EXECUTED BY THE SUBMANAGING AGENT IN
THE FORM OF THAT DELIVERED BY THE CURRENT SUBMANAGING AGENT ON OR ABOUT THE DATE
HEREOF OR SUCH OTHER FORM AS SHALL BE REASONABLY ACCEPTABLE TO LENDER.

5.12.2     TERMINATION OF MANAGER. IF (I) AN EVENT OF DEFAULT SHALL BE
CONTINUING, OR (II) MANAGER IS IN DEFAULT UNDER THE MANAGEMENT AGREEMENT, OR
(III) UPON THE GROSS NEGLIGENCE, MALFEASANCE OR WILLFUL MISCONDUCT OF THE
MANAGER, BORROWER SHALL, AT THE REQUEST OF LENDER, TERMINATE THE MANAGEMENT
AGREEMENT AND REPLACE MANAGER WITH A REPLACEMENT

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MANAGER ACCEPTABLE TO LENDER (IN LENDER’S DISCRETION), ON TERMS AND CONDITIONS
SATISFACTORY TO LENDER, WHICH ACCEPTANCE MAY, IF REQUIRED BY LENDER, BE
CONDITIONED UPON BORROWER DELIVERING A RATING COMFORT LETTER AS TO SUCH
SUCCESSOR MANAGER AND THE SUCCESSOR MANAGEMENT AGREEMENT. ADDITIONALLY, AND
WITHOUT LIMITATION OF ANY OF THE FOREGOING, IF, AS OF ANY TWO (2) CONSECUTIVE
CALCULATION DATES, BORROWER FAILS TO MAINTAIN A DEBT SERVICE COVERAGE RATIO OF
AT LEAST 1.01:1.00, THEN BORROWER SHALL, IF REQUESTED BY LENDER, TERMINATE (OR
CAUSE THE TERMINATION OF) ANY SUBMANAGEMENT AGREEMENT AND, IN SUCH EVENT, SHALL
EITHER (A) CAUSE THE PROPERTY TO BE MANAGED DIRECTLY BY THE THEN-EXISTING PRIME
MANAGER UNDER THE THEN-EXISTING PRIME MANAGEMENT AGREEMENT THEN IN PLACE BETWEEN
SUCH MANAGER AND BORROWER IN ACCORDANCE WITH THIS AGREEMENT (WITHOUT ANY
REPLACEMENT SUBMANAGING AGENT BEING UTILIZED TO MANAGE THE PROPERTY), OR
(B) REPLACE (OR CAUSE THE REPLACEMENT OF) THE SUBMANAGING AGENT THEREUNDER WITH
A REPLACEMENT SUBMANAGING AGENT ACCEPTABLE TO LENDER (IN LENDER’S REASONABLE
DISCRETION), ON TERMS AND CONDITIONS SATISFACTORY TO LENDER, WHICH ACCEPTANCE
MAY, IF REQUIRED BY LENDER, BE CONDITIONED UPON BORROWER DELIVERING A RATING
COMFORT LETTER AS TO SUCH SUCCESSOR SUBMANAGING AGENT AND THE SUCCESSOR
SUBMANAGEMENT AGREEMENT (IT BEING ACKNOWLEDGED THAT IN SUCH EVENT BORROWER SHALL
BE REQUIRED TO TAKE ONE OF THE ACTIONS DESCRIBED IN THE FOREGOING CLAUSES (A) OR
(B) BUT THAT IT SHALL BE BORROWER’S OPTION WHICH OF SUCH ACTIONS BORROWER SHALL
TAKE). IF, AT ANY TIME, BORROWER ELECTS, PURSUANT TO CLAUSE (A) OF THE
IMMEDIATELY PRECEDING SENTENCE, TO CAUSE THE PROPERTY TO BE MANAGED DIRECTLY BY
THE THEN-EXISTING PRIME MANAGER WITHOUT ANY REPLACEMENT SUBMANAGING AGENT, THEN,
IF BORROWER CONTINUES TO FAIL TO MAINTAIN A DEBT SERVICE COVERAGE RATIO OF AT
LEAST 1.01:1.00 AS OF THE NEXT CALCULATION DATE (OR IF BORROWER DOES ACHIEVE A
DEBT SERVICE COVERAGE RATIO OF AT LEAST 1.01:1.00 AS OF THE NEXT CALCULATION
DATE BUT THEREAFTER, AS OF ANY TWO (2) CONSECUTIVE CALCULATION DATES, BORROWER
FAILS TO MAINTAIN A DEBT SERVICE COVERAGE RATIO OF AT LEAST 1.01:1.00), THEN
BORROWER SHALL, IF REQUESTED BY LENDER, TAKE ONE OF THE FOLLOWING TWO ACTIONS:
(I) TERMINATE THE MANAGEMENT AGREEMENT AND REPLACE MANAGER WITH A REPLACEMENT
MANAGER ACCEPTABLE TO LENDER (IN LENDER’S DISCRETION), ON TERMS AND CONDITIONS
SATISFACTORY TO LENDER, WHICH ACCEPTANCE MAY, IF REQUIRED BY LENDER, BE
CONDITIONED UPON BORROWER DELIVERING A RATING COMFORT LETTER AS TO SUCH
SUCCESSOR MANAGER AND THE SUCCESSOR MANAGEMENT AGREEMENT, OR (II) ENGAGE (OR
CAUSE THE ENGAGEMENT OF) A NEW SUBMANAGING AGENT ACCEPTABLE TO LENDER (IN
LENDER’S REASONABLE DISCRETION), ON TERMS AND CONDITIONS SATISFACTORY TO LENDER,
WHICH ACCEPTANCE MAY, IF REQUIRED BY LENDER, BE CONDITIONED UPON BORROWER
DELIVERING A RATING COMFORT LETTER AS TO SUCH NEW SUBMANAGING AGENT AND THE NEW
SUBMANAGEMENT AGREEMENT (IT BEING ACKNOWLEDGED THAT IN SUCH EVENT BORROWER SHALL
BE REQUIRED TO TAKE ONE OF THE ACTIONS DESCRIBED IN THE FOREGOING CLAUSES (I) OR
(II) BUT THAT IT SHALL BE BORROWER’S OPTION WHICH OF SUCH ACTIONS BORROWER SHALL
TAKE). ALL CALCULATIONS OF THE DEBT SERVICE COVERAGE RATIO FOR PURPOSES OF THIS
SECTION 5.12.2 SHALL (A) BE SUBJECT TO VERIFICATION BY LENDER, AND (B) USE, AS
THE ADJUSTMENT FOR MANAGEMENT FEES MADE IN CALCULATING NET OPERATING INCOME IN
CONNECTION THEREWITH, THE GREATER OF ACTUAL COMBINED MANAGEMENT FEES AND ASSET
MANAGEMENT FEES PAID UNDER THE MANAGEMENT AGREEMENT (INCLUDING ANY SUBMANAGEMENT
AGREEMENT) OR TWO PERCENT (2%) OF GROSS REVENUES (INSTEAD OF THREE PERCENT (3%)
AS OTHERWISE PROVIDED IN THE DEFINITION OF NET OPERATING INCOME HEREUNDER). IN
ANY SUCH EVENT DESCRIBED IN THIS SECTION 5.12.2, BORROWER’S FAILURE TO APPOINT
AN ACCEPTABLE REPLACEMENT MANAGER (OR, AS THE CASE MAY BE, SUBMANAGING AGENT)
WITHIN THIRTY (30) DAYS AFTER LENDER’S REQUEST OF BORROWER TO TERMINATE THE
MANAGEMENT AGREEMENT (OR, AS THE CASE MAY BE, SUBMANAGEMENT AGREEMENT) SHALL
CONSTITUTE AN IMMEDIATE EVENT OF DEFAULT. BORROWER MAY FROM TIME TO TIME APPOINT
A SUCCESSOR MANAGER TO MANAGE THE PROPERTY, PROVIDED THAT SUCH SUCCESSOR MANAGER
AND CORRESPONDING

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REPLACEMENT MANAGEMENT AGREEMENT SHALL BE APPROVED IN WRITING BY LENDER (IN
LENDER’S DISCRETION), WHICH APPROVAL MAY, IF REQUIRED BY LENDER, BE CONDITIONED
UPON BORROWER DELIVERING A RATING COMFORT LETTER AS TO SUCH SUCCESSOR MANAGER
AND MANAGEMENT AGREEMENT.

5.13        SPECIAL PURPOSE BANKRUPTCY REMOTE ENTITY. BORROWER SHALL AT ALL
TIMES BE A SPECIAL PURPOSE BANKRUPTCY REMOTE ENTITY. BORROWER SHALL NOT DIRECTLY
OR INDIRECTLY MAKE ANY CHANGE, AMENDMENT OR MODIFICATION TO ITS ORGANIZATIONAL
DOCUMENTS, OR OTHERWISE TAKE ANY ACTION WHICH COULD RESULT IN BORROWER NOT BEING
A SPECIAL PURPOSE BANKRUPTCY REMOTE ENTITY. A “SPECIAL PURPOSE BANKRUPTCY REMOTE
ENTITY” SHALL HAVE THE MEANING SET FORTH ON SCHEDULE 5 HERETO.

5.14        ASSUMPTION IN NON-CONSOLIDATION OPINION. BORROWER SHALL CONDUCT ITS
BUSINESS SO THAT THE ASSUMPTIONS (WITH RESPECT TO EACH PERSON) MADE IN THAT
CERTAIN SUBSTANTIVE NON-CONSOLIDATION OPINION LETTER DATED THE DATE HEREOF
DELIVERED BY BORROWER’S COUNSEL IN CONNECTION WITH THE LOAN, SHALL BE TRUE AND
CORRECT IN ALL RESPECTS.

5.15        CHANGE IN BUSINESS OR OPERATION OF PROPERTY. BORROWER SHALL NOT
PURCHASE OR OWN ANY REAL PROPERTY OTHER THAN THE PROPERTY AND SHALL NOT ENTER
INTO ANY LINE OF BUSINESS OTHER THAN THE OWNERSHIP AND OPERATION OF THE
PROPERTY, OR MAKE ANY MATERIAL CHANGE IN THE SCOPE OR NATURE OF ITS BUSINESS
OBJECTIVES, PURPOSES OR OPERATIONS, OR UNDERTAKE OR PARTICIPATE IN ACTIVITIES
OTHER THAN THE CONTINUANCE OF ITS PRESENT BUSINESS OR OTHERWISE CEASE TO OPERATE
THE PROPERTY AS AN OFFICE BUILDING PROPERTY OR TERMINATE SUCH BUSINESS FOR ANY
REASON WHATSOEVER (OTHER THAN TEMPORARY CESSATION IN CONNECTION WITH RENOVATIONS
TO THE PROPERTY).

5.16        DEBT CANCELLATION. BORROWER SHALL NOT CANCEL OR OTHERWISE FORGIVE OR
RELEASE ANY CLAIM OR DEBT (OTHER THAN TERMINATION OF LEASES IN ACCORDANCE
HEREWITH) OWED TO BORROWER BY ANY PERSON, EXCEPT FOR ADEQUATE CONSIDERATION AND
IN THE ORDINARY COURSE OF BORROWER’S BUSINESS.

5.17        AFFILIATE TRANSACTIONS. OTHER THAN THE MANAGEMENT AGREEMENT,
BORROWER SHALL NOT ENTER INTO, OR BE A PARTY TO, ANY TRANSACTION WITH AN
AFFILIATE OF BORROWER OR ANY OF THE MEMBERS OF BORROWER EXCEPT IN THE ORDINARY
COURSE OF BUSINESS AND ON TERMS WHICH ARE FULLY DISCLOSED TO LENDER IN ADVANCE
AND ARE NO LESS FAVORABLE TO BORROWER OR SUCH AFFILIATE THAN WOULD BE OBTAINED
IN A COMPARABLE ARM’S-LENGTH TRANSACTION WITH AN UNRELATED THIRD PARTY. WITH
RESPECT TO THE FOREGOING, LENDER HEREBY ACKNOWLEDGES THAT IT HAS APPROVED THE
MANAGEMENT AGREEMENT IN THE FORM DELIVERED TO LENDER BY BORROWER ON OR BEFORE
THE DATE HEREOF.

5.18        ZONING. BORROWER SHALL NOT INITIATE OR CONSENT TO ANY ZONING
RECLASSIFICATION OF ANY PORTION OF THE PROPERTY OR SEEK ANY VARIANCE UNDER ANY
EXISTING ZONING ORDINANCE OR USE OR PERMIT THE USE OF ANY PORTION OF THE
PROPERTY IN ANY MANNER THAT COULD RESULT IN SUCH USE BECOMING A NON-CONFORMING
USE UNDER ANY ZONING ORDINANCE OR ANY OTHER APPLICABLE LAND USE LAW, RULE OR
REGULATION, WITHOUT THE PRIOR CONSENT OF LENDER.

5.19        NO JOINT ASSESSMENT. BORROWER SHALL NOT SUFFER, PERMIT OR INITIATE
THE JOINT ASSESSMENT OF THE PROPERTY (I) WITH ANY OTHER REAL PROPERTY
CONSTITUTING A TAX LOT SEPARATE FROM THE PROPERTY, AND (II) WITH ANY PORTION OF
THE PROPERTY WHICH MAY BE DEEMED TO CONSTITUTE PERSONAL PROPERTY, OR ANY OTHER
PROCEDURE WHEREBY THE LIEN OF ANY TAXES WHICH MAY BE LEVIED AGAINST SUCH
PERSONAL PROPERTY SHALL BE ASSESSED OR LEVIED OR CHARGED TO THE PROPERTY.

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5.20        PRINCIPAL PLACE OF BUSINESS. BORROWER SHALL NOT CHANGE ITS PRINCIPAL
PLACE OF BUSINESS OR CHIEF EXECUTIVE OFFICE WITHOUT FIRST GIVING LENDER THIRTY
(30) DAYS’ PRIOR NOTICE.

5.21        CHANGE OF NAME, IDENTITY OR STRUCTURE. BORROWER SHALL NOT CHANGE ITS
NAME, IDENTITY (INCLUDING ITS TRADE NAME OR NAMES) OR BORROWER’S CORPORATE,
PARTNERSHIP OR OTHER STRUCTURE WITHOUT NOTIFYING LENDER OF SUCH CHANGE IN
WRITING AT LEAST THIRTY (30) DAYS PRIOR TO THE EFFECTIVE DATE OF SUCH CHANGE
AND, IN THE CASE OF A CHANGE IN BORROWER’S STRUCTURE, WITHOUT FIRST OBTAINING
THE PRIOR WRITTEN CONSENT OF LENDER. BORROWER SHALL EXECUTE AND DELIVER TO
LENDER, PRIOR TO OR CONTEMPORANEOUSLY WITH THE EFFECTIVE DATE OF ANY SUCH
CHANGE, ANY FINANCING STATEMENT OR FINANCING STATEMENT CHANGE REQUIRED BY LENDER
TO ESTABLISH OR MAINTAIN THE VALIDITY, PERFECTION AND PRIORITY OF THE SECURITY
INTEREST GRANTED HEREIN. AT THE REQUEST OF LENDER, BORROWER SHALL EXECUTE A
CERTIFICATE IN FORM SATISFACTORY TO LENDER LISTING THE TRADE NAMES UNDER WHICH
BORROWER INTENDS TO OPERATE THE PROPERTY, AND REPRESENTING AND WARRANTING THAT
BORROWER DOES BUSINESS UNDER NO OTHER TRADE NAME WITH RESPECT TO THE PROPERTY.

5.22        INDEBTEDNESS. BORROWER SHALL NOT DIRECTLY OR INDIRECTLY CREATE,
INCUR OR ASSUME ANY INDEBTEDNESS OTHER THAN THE DEBT AND UNSECURED TRADE
PAYABLES INCURRED IN THE ORDINARY COURSE OF BUSINESS RELATING TO THE OWNERSHIP
AND OPERATION OF THE PROPERTY WHICH DO NOT EXCEED, AT ANY TIME, A MAXIMUM AMOUNT
OF TWO PERCENT (2%) OF THE ORIGINAL AMOUNT OF THE PRINCIPAL AND ARE PAID WITHIN
SIXTY (60) DAYS OF THE DATE INCURRED OR INVOICED (COLLECTIVELY, “PERMITTED
INDEBTEDNESS”); PROVIDED, HOWEVER, SUCH TWO PERCENT (2%) LIMITATION SHALL NOT
APPLY TO (I) ANY ASSET MANAGEMENT OR PROPERTY MANAGEMENT FEE PAYABLE PURSUANT TO
THE TERMS OF THE MANAGEMENT AGREEMENT OR (II) ANY AMOUNTS THAT ARE PAYABLE OUT
OF THE CAPITAL RESERVE SUBACCOUNT, THE ROLLOVER RESERVE SUBACCOUNT OR ANY OTHER
RESERVES ESTABLISHED UNDER THIS AGREEMENT. NOTWITHSTANDING THE FOREGOING, WITH
RESPECT TO THE 60-DAY PERIOD SET FORTH ABOVE, BORROWER MAY, AFTER PRIOR NOTICE
TO LENDER, AT ITS OWN EXPENSE, CONTEST BY APPROPRIATE LEGAL PROCEEDING, PROMPTLY
INITIATED AND CONDUCTED IN GOOD FAITH AND WITH DUE DILIGENCE, THE AMOUNT OR
VALIDITY OF ANY SUCH PERMITTED INDEBTEDNESS (DURING WHICH TIME SUCH 60-DAY
PERIOD SHALL BE TOLLED), PROVIDED THAT IF BORROWER DESIRES TO WITHHOLD PAYMENT
OF SUCH PERMITTED INDEBTEDNESS DURING THE PENDENCY OF THE CONTEST, (I) NO EVENT
OF DEFAULT HAS OCCURRED AND IS CONTINUING, (II) NO PART OF OR INTEREST IN THE
PROPERTY WILL BE IN DANGER OF BEING SOLD, FORFEITED, TERMINATED, CANCELED OR
LOST, (III) BORROWER SHALL HAVE FURNISHED SUCH SECURITY AS MAY BE REQUIRED IN
THE PROCEEDING, OR AS MAY BE REASONABLY REQUESTED BY LENDER, TO INSURE THE
PAYMENT OF ANY SUCH PERMITTED INDEBTEDNESS, TOGETHER WITH ALL INTEREST AND
PENALTIES THEREON, WHICH SECURITY SHALL NOT BE LESS THAN ONE HUNDRED TWENTY FIVE
PERCENT (125%) OF THE PERMITTED INDEBTEDNESS BEING CONTESTED, AND (IV) BORROWER
SHALL PROMPTLY UPON FINAL DETERMINATION THEREOF PAY THE AMOUNT OF SUCH PERMITTED
INDEBTEDNESS, TOGETHER WITH ALL COSTS, INTEREST AND PENALTIES AND BORROWER SHALL
BE PERMITTED TO USE SUCH SECURITY TO MAKE SUCH PAYMENT.

5.23        LICENSES. BORROWER SHALL NOT TRANSFER ANY LICENSE REQUIRED FOR THE
OPERATION OF THE PROPERTY (OTHER THAN IN CONNECTION WITH A LENDER-APPROVED
TRANSFER AND ASSUMPTION PURSUANT TO SECTION 5.26.2 BELOW).

5.24        COMPLIANCE WITH RESTRICTIVE COVENANTS, ETC. BORROWER WILL NOT ENTER
INTO, MODIFY, WAIVE IN ANY MATERIAL RESPECT OR RELEASE ANY EASEMENTS,
RESTRICTIVE COVENANTS OR OTHER

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PERMITTED ENCUMBRANCES, OR SUFFER, CONSENT TO OR PERMIT THE FOREGOING, WITHOUT
LENDER’S PRIOR WRITTEN CONSENT, WHICH CONSENT MAY BE GRANTED OR DENIED IN
LENDER’S SOLE DISCRETION.

5.25        ERISA.

5.25.1      Borrower shall not engage in any transaction which would cause any
obligation, or action taken or to be taken, hereunder (or the exercise by Lender
of any of its rights under the Note, this Agreement or the other Loan Documents)
to be a non-exempt (under a statutory or administrative class exemption)
prohibited transaction under ERISA.

5.25.2      Borrower shall not maintain, sponsor, contribute to or become
obligated to contribute to, or suffer or permit any ERISA Affiliate of Borrower
to, maintain, sponsor, contribute to or become obligated to contribute to, any
Plan or any Welfare Plan or permit the assets of Borrower to become “plan
assets,” whether by operation of law or under regulations promulgated under
ERISA.

5.25.3      Borrower shall deliver to Lender such certifications or other
evidence from time to time throughout the Term, as requested by Lender in its
sole discretion, that (A) Borrower is not and does not maintain 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(3) of ERISA;
(B) Borrower is not subject to state statutes regulating investments and
fiduciary obligations with respect to governmental plans; and (C) one or more of
the following circumstances is true:

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

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

(3)           Borrower qualifies as an “operating company” or a “real estate
operating company” within the meaning of 29 C.F.R. §2510.3-101(c) or (e).

5.26        TRANSFERS.

5.26.1     GENERALLY. BORROWER SHALL NOT DIRECTLY OR INDIRECTLY MAKE, SUFFER OR
PERMIT THE OCCURRENCE OF (A) ANY TRANSFER OTHER THAN A PERMITTED TRANSFER, OR
(B) ANY EVENT, OR SERIES OF EVENTS, THAT RESULTS IN THE INDIVIDUALS WHO, AS OF
THE DATE OF THIS AGREEMENT, ARE MEMBERS OF THE BOARD OF DIRECTORS OF THE
BEHRINGER HARVARD REIT (THE “INCUMBENT BOARD”) CEASING FOR ANY REASON TO
CONSTITUTE AT LEAST A MAJORITY OF SUCH BOARD OF DIRECTORS, PROVIDED, HOWEVER,
THAT IF THE ELECTION, OR NOMINATION FOR ELECTION BY THE BEHRINGER HARVARD REIT’S
SHAREHOLDERS, OF ANY NEW DIRECTOR WAS APPROVED BY A VOTE OF AT LEAST A MAJORITY
OF THE INCUMBENT BOARD, SUCH NEW DIRECTOR SHALL, FOR PURPOSES OF THIS AGREEMENT,
BE CONSIDERED AS A MEMBER OF THE INCUMBENT BOARD; PROVIDED FURTHER, HOWEVER,
THAT NO INDIVIDUAL SHALL BE CONSIDERED A MEMBER OF THE INCUMBENT BOARD IF SUCH
INDIVIDUAL INITIALLY ASSUMED OFFICE AS A RESULT OF EITHER AN ACTUAL OR
THREATENED “ELECTION CONTEST” (AS DESCRIBED IN RULE 14A-11 PROMULGATED UNDER THE

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SECURITIES EXCHANGE ACT OF 1934) OR OTHER ACTUAL OR THREATENED SOLICITATION OF
PROXIES OR CONSENTS BY OR ON BEHALF OF A PERSON OTHER THAN THE BOARD (A “PROXY
CONTEST”) INCLUDING BY REASON OF ANY AGREEMENT INTENDED TO AVOID OR SETTLE ANY
ELECTION CONTECT OR PROXY CONTEST.

5.26.2     TRANSFER AND ASSUMPTION.

(A)           SUBJECT TO OBTAINING LENDER’S PRIOR WRITTEN CONSENT, WHICH MAY BE
WITHHELD IN LENDER’S REASONABLE AND ABSOLUTE DISCRETION, AND SUBJECT TO THE
TERMS AND SATISFACTION OF ALL OF THE CONDITIONS PRECEDENT SET FORTH IN THIS
SECTION 5.26.2, BORROWER SHALL HAVE THE RIGHT TO TRANSFER THE PROPERTY TO
ANOTHER PARTY (THE “TRANSFEREE BORROWER”) AND HAVE THE TRANSFEREE BORROWER
ASSUME ALL OF BORROWER’S OBLIGATIONS UNDER THE LOAN DOCUMENTS, AND HAVE
REPLACEMENT GUARANTORS AND INDEMNITORS ASSUME ALL OF THE OBLIGATIONS OF THE
INDEMNITORS AND GUARANTORS OF THE LOAN DOCUMENTS (COLLECTIVELY, A “TRANSFER AND
ASSUMPTION”). BORROWER MAY MAKE A WRITTEN APPLICATION TO LENDER FOR LENDER’S
CONSENT TO THE TRANSFER AND ASSUMPTION, SUBJECT TO THE CONDITIONS SET FORTH IN
PARAGRAPHS (B) AND (C) OF THIS SECTION 5.26.2. TOGETHER WITH SUCH WRITTEN
APPLICATION, BORROWER WILL PAY TO LENDER THE REASONABLE REVIEW FEE THEN REQUIRED
BY LENDER. BORROWER ALSO SHALL PAY ON DEMAND ALL OF THE REASONABLE COSTS AND
EXPENSES INCURRED BY LENDER, INCLUDING REASONABLE ATTORNEYS’ FEES AND EXPENSES,
AND INCLUDING THE FEES AND EXPENSES OF RATING AGENCIES AND OTHER OUTSIDE
ENTITIES, IN CONNECTION WITH CONSIDERING ANY PROPOSED TRANSFER AND ASSUMPTION,
WHETHER OR NOT THE SAME IS PERMITTED OR OCCURS.

(B)           LENDER’S CONSENT, WHICH MAY BE WITHHELD IN LENDER’S REASONABLE
DISCRETION, TO A TRANSFER AND ASSUMPTION SHALL BE SUBJECT TO THE FOLLOWING
CONDITIONS:

(1)           No Event of Default has occurred and is continuing;

(2)           Borrower has submitted to Lender true, correct and complete copies
of any and all information and documents of any kind requested by Lender
concerning the Property, Transferee Borrower, replacement guarantors and
indemnitors and Borrower;

(3)           Evidence satisfactory to Lender has been provided showing that the
Transferee Borrower and such of its Affiliates as shall be designated by Lender
comply and will comply with Section 5.13 hereof, as those provisions may be
modified by Lender taking into account the ownership structure of Transferee
Borrower and its Affiliates;

(4)           If the Loan, by itself or together with other loans, has been the
subject of a Secondary Market Transaction, then Lender shall have received a
Rating Comfort Letter from the applicable Rating Agencies;

(5)           If the Loan has not been the subject of a Secondary Market
Transaction, then Lender shall have determined that no rating for any securities
that would be issued in connection with such securitization will be diminished,
qualified, or withheld by reason of the Transfer and Assumption;

(6)           Borrower shall have paid all of Lender’s reasonable costs and
expenses in connection with considering the Transfer and Assumption, and shall
have paid the amount

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requested by Lender as a deposit against Lender’s costs and expenses in
connection with the effecting the Transfer and Assumption;

(7)           Borrower, the Transferee Borrower, and the replacement guarantors
and indemnitors shall have indicated in writing in form and substance reasonably
satisfactory to Lender their readiness and ability to satisfy the conditions set
forth in subsection (c) below;

(8)           The identity, experience, and financial condition of the
Transferee Borrower and the replacement guarantors and indemnitors shall be
satisfactory to Lender; and

(9)           The proposed property manager and proposed Management Agreement
shall be satisfactory to Lender and the applicable Rating Agencies.

(C)           IF LENDER CONSENTS TO THE TRANSFER AND ASSUMPTION, THE TRANSFEREE
BORROWER AND/OR BORROWER AS THE CASE MAY BE, SHALL IMMEDIATELY DELIVER THE
FOLLOWING TO LENDER:

(1)           Borrower shall deliver to Lender an assumption fee in the amount
of either (i) in the case of the first such Transfer and Assumption, one quarter
of one percent (0.25%) of the then unpaid Principal, or (ii) in the case of any
subsequent Transfer and Assumption, one half of one percent (0.50%) of the then
unpaid Principal;

(2)           Borrower, Transferee Borrower and the original and replacement
guarantors and indemnitors shall execute and deliver to Lender any and all
documents required by Lender, in form and substance required by Lender, in
Lender’s sole discretion;

(3)           Counsel to the Transferee Borrower and replacement guarantors and
indemnitors shall deliver to Lender opinions in form and substance satisfactory
to Lender as to such matters as Lender shall require, which may include opinions
as to substantially the same matters and were required in connection with the
origination of the Loan (including a new substantive non-consolidation opinion
with respect to the Transferee Borrower);

(4)           Borrower shall cause to be delivered to Lender, an endorsement
(relating to the change in the identity of the vestee and execution and delivery
of the Transfer and Assumption documents) to the Title Insurance Policy in form
and substance acceptable to Lender, in Lender’s reasonable discretion (the
“Endorsement”); and

(5)           Borrower shall deliver to Lender a payment in the amount of all
remaining unpaid costs incurred by Lender in connection with the Transfer and
Assumption, including but not limited to, Lender’s reasonable attorneys fees and
expenses, all recording fees, and all fees payable to the title company for the
delivery to Lender of the Endorsement.

(D)           UPON THE CLOSING OF A TRANSFER AND ASSUMPTION, LENDER SHALL
RELEASE BORROWER AND GUARANTOR FROM ALL OBLIGATIONS UNDER THE LOAN DOCUMENTS
ARISING PRIOR TO AND AFTER THE DATE OF THE TRANSFER AND ASSUMPTION (BUT ONLY TO
THE EXTENT THAT SUCH OBLIGATIONS OF BORROWER AND GUARANTOR ARE EXPRESSLY ASSUMED
BY THE TRANSFEREE BORROWER OR REPLACEMENT GUARANTOR, AS THE CASE MAY BE, IN
CONNECTION WITH THE TRANSFER AND ASSUMPTION).

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5.27        LIENS. WITHOUT LENDER’S PRIOR WRITTEN CONSENT, BORROWER SHALL NOT
CREATE, INCUR, ASSUME, PERMIT OR SUFFER TO EXIST ANY LIEN ON ALL OR ANY PORTION
OF THE PROPERTY OR ANY DIRECT OR INDIRECT LEGAL OR BENEFICIAL OWNERSHIP INTEREST
IN BORROWER, EXCEPT LIENS IN FAVOR OF LENDER AND PERMITTED ENCUMBRANCES, UNLESS
SUCH LIEN IS BONDED OR DISCHARGED WITHIN THIRTY (30) DAYS AFTER BORROWER FIRST
RECEIVES NOTICE OF SUCH LIEN (OR SUCH LONGER PERIOD AS IS PERMITTED UNDER THIS
AGREEMENT IN THE EVENT AND TO THE EXTENT THE LIEN IS OF A NATURE WHICH MAY BE
CONTESTED BY BORROWER UNDER THE PROVISIONS OF THIS AGREEMENT AND BORROWER IS IN
FACT CONTESTING SUCH LIEN IN ACCORDANCE WITH THE EXPRESS PROVISIONS AND
CONDITIONS SET FORTH IN THIS AGREEMENT). NOTWITHSTANDING THE FOREGOING, PLEDGES
OF ANY NON-CONTROLLING DIRECT OR INDIRECT LEGAL OR BENEFICIAL OWNERSHIP INTEREST
IN HARVARD REIT OPERATING PARTNERSHIP SHALL NOT CONSTITUTE LIENS PROHIBITED
HEREUNDER IF THE FORECLOSURE THEREON WOULD CONSTITUTE A “PERMITTED TRANSFER”
(SUBJECT TO ANY APPLICABLE NOTICE AND OTHER REQUIREMENTS SET FORTH IN THE
DEFINED TERM “PERMITTED TRANSFER” (IF APPLICABLE)).

5.28        DISSOLUTION. BORROWER SHALL NOT (I) ENGAGE IN ANY DISSOLUTION,
LIQUIDATION OR CONSOLIDATION OR MERGER WITH OR INTO ANY OTHER BUSINESS ENTITY,
(II) ENGAGE IN ANY BUSINESS ACTIVITY NOT RELATED TO THE OWNERSHIP AND OPERATION
OF THE PROPERTY OR (III) TRANSFER, LEASE OR SELL, IN ONE TRANSACTION OR ANY
COMBINATION OF TRANSACTIONS, ALL OR SUBSTANTIALLY ALL OF THE PROPERTY OR ASSETS
OF BORROWER EXCEPT TO THE EXTENT EXPRESSLY PERMITTED BY THE LOAN DOCUMENTS.

5.29        EXPENSES. BORROWER SHALL REIMBURSE LENDER UPON RECEIPT OF NOTICE FOR
ALL REASONABLE OUT-OF-POCKET COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’
FEES AND DISBURSEMENTS) INCURRED BY LENDER OR SERVICER IN CONNECTION WITH THE
LOAN, INCLUDING (I) THE PREPARATION, NEGOTIATION, EXECUTION AND DELIVERY OF THE
LOAN DOCUMENTS AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED THEREBY AND
ALL THE COSTS OF FURNISHING ALL OPINIONS BY COUNSEL FOR BORROWER;
(II) BORROWER’S AND LENDER’S ONGOING PERFORMANCE UNDER AND COMPLIANCE WITH THE
LOAN DOCUMENTS, INCLUDING CONFIRMING COMPLIANCE WITH ENVIRONMENTAL AND INSURANCE
REQUIREMENTS; (III) THE NEGOTIATION, PREPARATION, EXECUTION, DELIVERY AND
ADMINISTRATION OF ANY CONSENTS, AMENDMENTS, WAIVERS OR OTHER MODIFICATIONS OF OR
UNDER ANY LOAN DOCUMENT AND ANY OTHER DOCUMENTS OR MATTERS REQUESTED BY LENDER;
(IV) FILING AND RECORDING OF ANY LOAN DOCUMENTS; (V) TITLE INSURANCE, SURVEYS,
INSPECTIONS AND APPRAISALS; (VI) THE CREATION, PERFECTION OR PROTECTION OF
LENDER’S LIENS IN THE PROPERTY AND THE CASH MANAGEMENT ACCOUNTS (INCLUDING FEES
AND EXPENSES FOR TITLE AND LIEN SEARCHES, INTANGIBLES TAXES, PERSONAL PROPERTY
TAXES, MORTGAGE RECORDING TAXES, DUE DILIGENCE EXPENSES, TRAVEL EXPENSES,
ACCOUNTING FIRM FEES, COSTS OF APPRAISALS, ENVIRONMENTAL REPORTS AND LENDER’S
CONSULTANT, SURVEYS AND ENGINEERING REPORTS); (VII) ENFORCING OR PRESERVING ANY
RIGHTS IN RESPONSE TO THIRD PARTY CLAIMS OR THE PROSECUTING OR DEFENDING OF ANY
ACTION OR PROCEEDING OR OTHER LITIGATION, IN EACH CASE AGAINST, UNDER OR
AFFECTING BORROWER, THE LOAN DOCUMENTS, THE PROPERTY, OR ANY OTHER SECURITY
GIVEN FOR THE LOAN; (VIII) FEES CHARGED BY RATING AGENCIES IN CONNECTION WITH
ANY MODIFICATION OF THE LOAN REQUESTED BY BORROWER AND (IX) ENFORCING ANY
OBLIGATIONS OF OR COLLECTING ANY PAYMENTS DUE FROM BORROWER UNDER ANY LOAN
DOCUMENT OR WITH RESPECT TO THE PROPERTY OR IN CONNECTION WITH ANY REFINANCING
OR RESTRUCTURING OF THE LOAN IN THE NATURE OF A “WORK-OUT”, OR ANY INSOLVENCY OR
BANKRUPTCY PROCEEDINGS. ANY COSTS AND EXPENSES DUE AND PAYABLE BY BORROWER
HEREUNDER WHICH ARE NOT PAID BY BORROWER WITHIN TEN (10) DAYS AFTER DEMAND MAY
BE PAID FROM ANY AMOUNTS IN THE DEPOSIT ACCOUNT, WITH NOTICE THEREOF TO
BORROWER. THE OBLIGATIONS AND LIABILITIES OF BORROWER UNDER THIS SECTION 5.29
SHALL SURVIVE THE TERM AND THE EXERCISE BY LENDER OF ANY OF ITS RIGHTS OR

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REMEDIES UNDER THE LOAN DOCUMENTS, INCLUDING THE ACQUISITION OF THE PROPERTY BY
FORECLOSURE OR A CONVEYANCE IN LIEU OF FORECLOSURE.

5.30        INDEMNITY. BORROWER SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS LENDER
AND EACH OF ITS AFFILIATES AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS,
INCLUDING THE DIRECTORS, OFFICERS, PARTNERS, MEMBERS, SHAREHOLDERS,
PARTICIPANTS, EMPLOYEES, PROFESSIONALS AND AGENTS OF ANY OF THE FOREGOING
(INCLUDING ANY SERVICER) AND EACH OTHER PERSON, IF ANY, WHO CONTROLS LENDER, ITS
AFFILIATES OR ANY OF THE FOREGOING (EACH, AN “INDEMNIFIED PARTY”), FROM AND
AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, CLAIMS, COSTS, EXPENSES AND DISBURSEMENTS OF ANY KIND
OR NATURE WHATSOEVER (INCLUDING THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL
FOR AN INDEMNIFIED PARTY IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR
JUDICIAL PROCEEDING COMMENCED OR THREATENED, WHETHER OR NOT LENDER SHALL BE
DESIGNATED A PARTY THERETO, COURT COSTS AND COSTS OF APPEAL AT ALL APPELLATE
LEVELS, INVESTIGATION AND LABORATORY FEES, CONSULTANT FEES AND LITIGATION
EXPENSES), THAT MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY
INDEMNIFIED PARTY (COLLECTIVELY, THE “INDEMNIFIED LIABILITIES”) IN ANY MANNER,
RELATING TO OR ARISING OUT OF OR BY REASON OF THE LOAN, INCLUDING: (I) ANY
BREACH BY BORROWER OF ITS OBLIGATIONS UNDER, OR ANY MISREPRESENTATION BY
BORROWER CONTAINED IN, ANY LOAN DOCUMENT; (II) THE USE OR INTENDED USE OF THE
PROCEEDS OF THE LOAN; (III) ANY INFORMATION PROVIDED BY BORROWER; (IV) OWNERSHIP
OF THE SECURITY INSTRUMENT, THE PROPERTY OR ANY INTEREST THEREIN, OR RECEIPT OF
ANY RENTS; (V) ANY ACCIDENT, INJURY TO OR DEATH OF PERSONS OR LOSS OF OR DAMAGE
TO PROPERTY OCCURRING IN, ON OR ABOUT THE PROPERTY OR ON THE ADJOINING
SIDEWALKS, CURBS, ADJACENT PROPERTY OR ADJACENT PARKING AREAS, STREETS OR WAYS;
(VI) ANY USE, NONUSE OR CONDITION IN, ON OR ABOUT THE PROPERTY OR ON ADJOINING
SIDEWALKS, CURBS, ADJACENT PROPERTY OR ADJACENT PARKING AREAS, STREETS OR WAYS;
(VII) PERFORMANCE OF ANY LABOR OR SERVICES OR THE FURNISHING OF ANY MATERIALS OR
OTHER PROPERTY IN RESPECT OF THE PROPERTY; (VIII) THE PRESENCE, DISPOSAL,
ESCAPE, SEEPAGE, LEAKAGE, SPILLAGE, DISCHARGE, EMISSION, RELEASE, OR THREATENED
RELEASE OF ANY HAZARDOUS SUBSTANCE ON, FROM OR AFFECTING THE PROPERTY; (IX) ANY
PERSONAL INJURY (INCLUDING WRONGFUL DEATH) OR PROPERTY DAMAGE (REAL OR PERSONAL)
ARISING OUT OF OR RELATED TO SUCH HAZARDOUS SUBSTANCE; (X) ANY LAWSUIT BROUGHT
OR THREATENED, SETTLEMENT REACHED, OR GOVERNMENT ORDER RELATING TO SUCH
HAZARDOUS SUBSTANCE; (XI) ANY VIOLATION OF THE ENVIRONMENTAL LAWS WHICH IS BASED
UPON OR IN ANY WAY RELATED TO SUCH HAZARDOUS SUBSTANCE, INCLUDING THE COSTS AND
EXPENSES OF ANY REMEDIAL WORK; (XII) ANY FAILURE OF THE PROPERTY TO COMPLY WITH
ANY LEGAL REQUIREMENT; (XIII) ANY CLAIM BY BROKERS, FINDERS OR SIMILAR PERSONS
CLAIMING TO BE ENTITLED TO A COMMISSION IN CONNECTION WITH ANY LEASE OR OTHER
TRANSACTION INVOLVING THE PROPERTY OR ANY PART THEREOF, OR ANY LIABILITY
ASSERTED AGAINST LENDER WITH RESPECT THERETO; AND (XIV) THE CLAIMS OF ANY LESSEE
OF ANY PORTION OF THE PROPERTY OR ANY PERSON ACTING THROUGH OR UNDER ANY LESSEE
OR OTHERWISE ARISING UNDER OR AS A CONSEQUENCE OF ANY LEASE; PROVIDED, HOWEVER,
THAT BORROWER SHALL NOT HAVE ANY OBLIGATION TO ANY INDEMNIFIED PARTY HEREUNDER
TO THE EXTENT THAT IT IS FINALLY JUDICIALLY DETERMINED THAT SUCH INDEMNIFIED
LIABILITIES ARISE FROM THE GROSS NEGLIGENCE, ILLEGAL ACTS, FRAUD OR WILLFUL
MISCONDUCT OF SUCH INDEMNIFIED PARTY. ANY AMOUNTS PAYABLE TO ANY INDEMNIFIED
PARTY BY REASON OF THE APPLICATION OF THIS PARAGRAPH SHALL BE PAYABLE WITHIN 10
DAYS AFTER DEMAND AND SHALL BEAR INTEREST AT THE DEFAULT RATE FROM THE DATE DUE
UNTIL PAID. THE OBLIGATIONS AND LIABILITIES OF BORROWER UNDER THIS SECTION 5.30
SHALL SURVIVE THE TERM (WITH RESPECT TO ANY MATTER OCCURRING OR IN EXISTENCE
PRIOR TO THE END OF THE TERM, AND THEREAFTER WITH RESPECT TO THIRD PARTY CLAIMS,
SUITS AND ACTIONS) AND THE EXERCISE BY LENDER OF ANY OF ITS RIGHTS OR REMEDIES
UNDER THE LOAN DOCUMENTS, INCLUDING THE ACQUISITION OF THE PROPERTY BY
FORECLOSURE OR A CONVEYANCE IN LIEU OF FORECLOSURE.

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5.31        PATRIOT ACT COMPLIANCE.

(A)           BORROWER WILL USE ITS GOOD FAITH AND COMMERCIALLY REASONABLE
EFFORTS TO COMPLY WITH THE PATRIOT ACT (AS DEFINED BELOW) AND ALL APPLICABLE
REQUIREMENTS OF GOVERNMENTAL AUTHORITIES HAVING JURISDICTION OVER BORROWER AND
THE PROPERTY, INCLUDING THOSE RELATING TO MONEY LAUNDERING AND TERRORISM. LENDER
SHALL HAVE THE RIGHT TO AUDIT BORROWER’S COMPLIANCE WITH THE PATRIOT ACT AND ALL
APPLICABLE REQUIREMENTS OF GOVERNMENTAL AUTHORITIES HAVING JURISDICTION OVER
BORROWER AND THE PROPERTY, INCLUDING THOSE RELATING TO MONEY LAUNDERING AND
TERRORISM. IN THE EVENT THAT BORROWER FAILS TO COMPLY WITH THE PATRIOT ACT OR
ANY SUCH REQUIREMENTS OF GOVERNMENTAL AUTHORITIES, THEN LENDER MAY, AT ITS
OPTION, CAUSE BORROWER TO COMPLY THEREWITH AND ANY AND ALL REASONABLE COSTS AND
EXPENSES INCURRED BY LENDER IN CONNECTION THEREWITH SHALL BE SECURED BY THE
SECURITY INSTRUMENT AND THE OTHER LOAN DOCUMENTS AND SHALL BE IMMEDIATELY DUE
AND PAYABLE. FOR PURPOSES HEREOF, THE TERM “PATRIOT ACT” MEANS THE UNITING AND
STRENGTHENING AMERICA BY PROVIDING APPROPRIATE TOOLS REQUIRED TO INTERCEPT AND
OBSTRUCT TERRORISM (USA PATRIOT ACT) ACT OF 2001, AS THE SAME MAY BE AMENDED
FROM TIME TO TIME, AND CORRESPONDING PROVISIONS OF FUTURE LAWS.

(B)           NEITHER BORROWER NOR ANY MEMBER OF BORROWER NOR ANY PARTNER OF ANY
SUCH MEMBER NOR ANY OWNER OF A DIRECT OR INDIRECT INTEREST IN BORROWER (I) IS
LISTED ON ANY GOVERNMENT LISTS (AS DEFINED BELOW), (II) IS A PERSON WHO HAS BEEN
DETERMINED BY COMPETENT AUTHORITY TO BE SUBJECT TO THE PROHIBITIONS CONTAINED IN
PRESIDENTIAL EXECUTIVE ORDER NO. 13224 (SEPT. 23, 2001) OR ANY OTHER SIMILAR
PROHIBITIONS CONTAINED IN THE RULES AND REGULATIONS OF OFAC (AS DEFINED BELOW)
OR IN ANY ENABLING LEGISLATION OR OTHER PRESIDENTIAL EXECUTIVE ORDERS IN RESPECT
THEREOF, (III) HAS BEEN PREVIOUSLY INDICTED FOR OR CONVICTED OF ANY FELONY
INVOLVING A CRIME OR CRIMES OF MORAL TURPITUDE OR FOR ANY PATRIOT ACT OFFENSE
(AS DEFINED BELOW), OR (IV) IS CURRENTLY UNDER INVESTIGATION BY ANY GOVERNMENTAL
AUTHORITY FOR ALLEGED CRIMINAL ACTIVITY. FOR PURPOSES HEREOF, THE TERM “PATRIOT
ACT OFFENSE” MEANS ANY VIOLATION OF THE CRIMINAL LAWS OF THE UNITED STATES OF
AMERICA OR OF ANY OF THE SEVERAL STATES, OR THAT WOULD BE A CRIMINAL VIOLATION
IF COMMITTED WITHIN THE JURISDICTION OF THE UNITED STATES OF AMERICA OR ANY OF
THE SEVERAL STATES, RELATING TO TERRORISM OR THE LAUNDERING OF MONETARY
INSTRUMENTS, INCLUDING ANY OFFENSE UNDER (1) THE CRIMINAL LAWS AGAINST
TERRORISM; (2) THE CRIMINAL LAWS AGAINST MONEY LAUNDERING, (3) THE BANK SECRECY
ACT, AS AMENDED, (4) THE MONEY LAUNDERING CONTROL ACT OF 1986, AS AMENDED, OR
THE (5) PATRIOT ACT. “PATRIOT ACT OFFENSE” ALSO INCLUDES THE CRIMES OF
CONSPIRACY TO COMMIT, OR AIDING AND ABETTING ANOTHER TO COMMIT, A PATRIOT ACT
OFFENSE. FOR PURPOSES HEREOF, THE TERM “GOVERNMENT LISTS” MEANS (I) THE
SPECIALLY DESIGNATED NATIONALS AND BLOCKED PERSONS LISTS MAINTAINED BY OFFICE OF
FOREIGN ASSETS CONTROL (“OFAC”), (II) ANY OTHER LIST OF TERRORISTS, TERRORIST
ORGANIZATIONS OR NARCOTICS TRAFFICKERS MAINTAINED PURSUANT TO ANY OF THE
RULES AND REGULATIONS OF OFAC THAT LENDER NOTIFIED BORROWER IN WRITING IS NOW
INCLUDED IN “GOVERNMENTAL LISTS”, OR (III) ANY SIMILAR LISTS MAINTAINED BY THE
UNITED STATES DEPARTMENT OF STATE, THE UNITED STATES DEPARTMENT OF COMMERCE OR
ANY OTHER GOVERNMENT AUTHORITY OR PURSUANT TO ANY EXECUTIVE ORDER OF THE
PRESIDENT OF THE UNITED STATES OF AMERICA THAT LENDER NOTIFIED BORROWER IN
WRITING IS NOW INCLUDED IN “GOVERNMENTAL LISTS”.

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6.                                      NOTICES AND REPORTING

6.1          NOTICES. ALL NOTICES, CONSENTS, APPROVALS AND REQUESTS REQUIRED OR
PERMITTED HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT (A “NOTICE”) SHALL BE GIVEN
IN WRITING AND SHALL BE EFFECTIVE FOR ALL PURPOSES IF EITHER HAND DELIVERED WITH
RECEIPT ACKNOWLEDGED, OR BY A NATIONALLY RECOGNIZED OVERNIGHT DELIVERY SERVICE
(SUCH AS FEDERAL EXPRESS), OR BY CERTIFIED OR REGISTERED UNITED STATES MAIL,
RETURN RECEIPT REQUESTED, POSTAGE PREPAID, IN EACH CASE ADDRESSED AS FOLLOWS (OR
TO SUCH OTHER ADDRESS OR PERSON AS A PARTY SHALL DESIGNATE FROM TIME TO TIME BY
NOTICE TO THE OTHER PARTY):  IF TO LENDER:  LEHMAN BROTHERS BANK, FSB, 399 PARK
AVENUE, 8TH FLOOR, NEW YORK, NEW YORK 10022, ATTENTION:  JOHN HERMAN, WITH A
COPY TO: STROOCK & STROOCK & LAVAN LLP, 180 MAIDEN LANE, NEW YORK, NEW YORK 
10038, ATTENTION:  WILLIAM CAMPBELL, ESQ.; IF TO BORROWER: C/O HPT MANAGEMENT
SERVICES LP, 15601 DALLAS PARKWAY, SUITE 600, ADDISON, TEXAS 75001, ATTENTION:
CHIEF FINANCIAL OFFICER. A NOTICE SHALL BE DEEMED TO HAVE BEEN GIVEN:  IN THE
CASE OF HAND DELIVERY, AT THE TIME OF DELIVERY; OR IN THE CASE OF REGISTERED OR
CERTIFIED MAIL, WHEN DELIVERED OR THE FIRST ATTEMPTED DELIVERY ON A BUSINESS
DAY; OR IN THE CASE OF OVERNIGHT DELIVERY, UPON THE FIRST ATTEMPTED DELIVERY ON
A BUSINESS DAY; OR IN THE CASE OF FACSIMILE, UPON THE CONFIRMATION OF SUCH
FACSIMILE TRANSMISSION.

6.2          BORROWER NOTICES AND DELIVERIES. BORROWER SHALL (A) GIVE PROMPT
WRITTEN NOTICE TO LENDER OF: (I) ANY LITIGATION, GOVERNMENTAL PROCEEDINGS OR
CLAIMS OR INVESTIGATIONS PENDING OR THREATENED AGAINST BORROWER OR THE PROPERTY
WHICH MIGHT MATERIALLY ADVERSELY AFFECT BORROWER’S OR THE PROPERTY’S CONDITION
(FINANCIAL OR OTHERWISE) OR BUSINESS; (II) ANY MATERIAL ADVERSE CHANGE IN
BORROWER’S OR THE PROPERTY’S CONDITION, FINANCIAL OR OTHERWISE, OR OF THE
OCCURRENCE OF ANY DEFAULT OR EVENT OF DEFAULT OF WHICH BORROWER HAS KNOWLEDGE;
AND (B) FURNISH AND PROVIDE TO LENDER ALL INSTRUMENTS, DOCUMENTS, BOUNDARY
SURVEYS, FOOTING OR FOUNDATION SURVEYS, CERTIFICATES, PLANS AND SPECIFICATIONS,
APPRAISALS, TITLE AND OTHER INSURANCE REPORTS AND AGREEMENTS, REASONABLY
REQUESTED, FROM TIME TO TIME, BY LENDER WITHIN THE POSSESSION OR REASONABLE
CONTROL OF BORROWER. IN ADDITION, AFTER REQUEST BY LENDER (BUT NO MORE
FREQUENTLY THAN TWICE IN ANY YEAR), (X) BORROWER SHALL FURNISH TO LENDER WITHIN
TEN DAYS, A CERTIFICATE ADDRESSED TO LENDER, ITS SUCCESSORS AND ASSIGNS
REAFFIRMING (TO THE BEST OF ITS KNOWLEDGE) ALL REPRESENTATIONS AND WARRANTIES OF
BORROWER SET FORTH IN THE LOAN DOCUMENTS AS OF THE DATE REQUESTED BY LENDER OR,
TO THE EXTENT OF ANY CHANGES TO ANY SUCH REPRESENTATIONS AND WARRANTIES, SO
STATING SUCH CHANGES, AND (Y) BORROWER SHALL USE COMMERCIALLY REASONABLE EFFORTS
TO FURNISH TO LENDER WITHIN 30 DAYS, TENANT ESTOPPEL CERTIFICATES ADDRESSED TO
LENDER, ITS SUCCESSORS AND ASSIGNS FROM EACH TENANT AT EACH PROPERTY IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO LENDER.

6.3          FINANCIAL REPORTING.

6.3.1       BOOKKEEPING. BORROWER SHALL KEEP ON A CALENDAR YEAR BASIS, IN
ACCORDANCE WITH GAAP (OR FEDERAL INCOME TAX BASIS OF ACCOUNTING, CONSISTENTLY
APPLIED), PROPER AND ACCURATE BOOKS, RECORDS AND ACCOUNTS REFLECTING ALL OF THE
FINANCIAL AFFAIRS OF BORROWER AND ALL ITEMS OF INCOME AND EXPENSE AND ANY
SERVICES, EQUIPMENT OR FURNISHINGS PROVIDED IN CONNECTION WITH THE OPERATION OF
THE PROPERTY, WHETHER SUCH INCOME OR EXPENSE IS REALIZED BY BORROWER, MANAGER OR
ANY AFFILIATE OF BORROWER. LENDER SHALL HAVE THE RIGHT FROM TIME TO TIME DURING
NORMAL BUSINESS HOURS UPON REASONABLE NOTICE TO EXAMINE SUCH BOOKS, RECORDS AND
ACCOUNTS RELATING TO THE PROPERTY AT THE OFFICE OF MANAGER OR OTHER PERSON
MAINTAINING THEM, AND

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TO MAKE SUCH COPIES OR EXTRACTS THEREOF AS LENDER SHALL DESIRE. AFTER AN EVENT
OF DEFAULT, BORROWER SHALL PAY ANY COSTS INCURRED BY LENDER TO EXAMINE SUCH
BOOKS, RECORDS AND ACCOUNTS, AS LENDER SHALL DETERMINE TO BE NECESSARY OR
APPROPRIATE IN THE PROTECTION OF LENDER’S INTEREST.

6.3.2       ANNUAL REPORTS. BORROWER SHALL FURNISH TO LENDER ANNUALLY, WITHIN
120 DAYS AFTER EACH CALENDAR YEAR, A COMPLETE COPY OF BORROWER’S ANNUAL
FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GAAP (OR FEDERAL INCOME TAX
BASIS OF ACCOUNTING, CONSISTENTLY APPLIED) AND CONTAINING BALANCE SHEETS AND
STATEMENTS OF PROFIT AND LOSS FOR BORROWER AND THE PROPERTY IN SUCH DETAIL AS
LENDER MAY REQUEST. EACH OF SUCH FINANCIAL STATEMENTS (X) SHALL BE IN FORM AND
SUBSTANCE SATISFACTORY TO LENDER, (Y) SHALL SET FORTH THE FINANCIAL CONDITION
AND THE INCOME AND EXPENSES FOR THE PROPERTY FOR THE IMMEDIATELY PRECEDING
CALENDAR YEAR, INCLUDING STATEMENTS OF ANNUAL NET OPERATING INCOME AS WELL AS
(1) A LIST OF TENANTS, IF ANY, OCCUPYING MORE THAN TEN PERCENT (10%) OF THE
RENTABLE SPACE OF THE PROPERTY, (2) A BREAKDOWN SHOWING (A) THE YEAR IN WHICH
EACH LEASE THEN IN EFFECT EXPIRES, (B) THE PERCENTAGE OF RENTABLE SPACE COVERED
BY SUCH LEASE, (C) THE PERCENTAGE OF BASE RENT WITH RESPECT TO WHICH LEASES
SHALL EXPIRE IN EACH SUCH YEAR, EXPRESSED BOTH ON A PER YEAR AND A CUMULATIVE
BASIS AND (Z) SHALL BE ACCOMPANIED BY AN OFFICER’S CERTIFICATE CERTIFYING
(1) THAT SUCH STATEMENT IS TRUE, CORRECT, COMPLETE AND ACCURATE AND PRESENTS
FAIRLY THE FINANCIAL CONDITION OF THE PROPERTY AND HAS BEEN PREPARED IN
ACCORDANCE WITH GAAP (OR FEDERAL INCOME TAX BASIS OF ACCOUNTING, CONSISTENTLY
APPLIED) AND (2) WHETHER THERE EXISTS A DEFAULT OR EVENT OF DEFAULT, AND IF SO,
THE NATURE THEREOF, THE PERIOD OF TIME IT HAS EXISTED AND THE ACTION THEN BEING
TAKEN TO REMEDY IT.

6.3.3       MONTHLY/QUARTERLY REPORTS. BORROWER SHALL FURNISH TO LENDER, WITHIN
THIRTY (30) DAYS AFTER THE END OF EACH CALENDAR MONTH DURING THE PERIOD PRIOR TO
A SECURITIZATION OF THE LOAN AND THEREAFTER WITHIN THIRTY (30) DAYS AFTER THE
END OF EACH CALENDAR QUARTER, THE FOLLOWING ITEMS: (I) MONTHLY OR QUARTERLY (AS
APPLICABLE) AND YEAR-TO-DATE OPERATING STATEMENTS, NOTING NET OPERATING INCOME
AND OTHER INFORMATION NECESSARY AND SUFFICIENT UNDER GAAP (OR FEDERAL INCOME TAX
BASIS OF ACCOUNTING, CONSISTENTLY APPLIED) TO FAIRLY REPRESENT THE FINANCIAL
POSITION AND RESULTS OF OPERATION OF THE PROPERTY DURING SUCH CALENDAR MONTH OR
CALENDAR QUARTER (AS APPLICABLE), ALL IN FORM SATISFACTORY TO LENDER; (II) A
BALANCE SHEET FOR SUCH CALENDAR MONTH OR CALENDAR QUARTER (AS APPLICABLE);
(III) A COMPARISON OF THE BUDGETED INCOME AND EXPENSES AND THE ACTUAL INCOME AND
EXPENSES FOR EACH MONTH OR QUARTER (AS APPLICABLE) AND YEAR-TO-DATE FOR THE
PROPERTY, TOGETHER WITH A DETAILED EXPLANATION OF ANY VARIANCES OF TEN PERCENT
(10%) OR MORE BETWEEN BUDGETED AND ACTUAL AMOUNTS FOR SUCH PERIOD AND
YEAR-TO-DATE; (IV) A STATEMENT OF THE ACTUAL CAPITAL EXPENSES MADE BY BORROWER
DURING EACH CALENDAR QUARTER AS OF THE LAST DAY OF SUCH CALENDAR QUARTER;
(V) INTENTIONALLY OMITTED; (VI) AN AGED RECEIVABLES REPORT AND (VII) RENT ROLLS
IDENTIFYING THE LEASED PREMISES, NAMES OF ALL TENANTS, UNITS LEASED, MONTHLY
RENTAL AND ALL OTHER CHARGES PAYABLE UNDER EACH LEASE, DATE TO WHICH PAID, TERM
OF LEASE, DATE OF OCCUPANCY, DATE OF EXPIRATION, MATERIAL SPECIAL PROVISIONS,
CONCESSIONS OR INDUCEMENTS GRANTED TO TENANTS, AND A YEAR-BY-YEAR SCHEDULE
SHOWING BY PERCENTAGE THE RENTABLE AREA OF THE IMPROVEMENTS AND THE TOTAL BASE
RENT ATTRIBUTABLE TO LEASES EXPIRING EACH YEAR) AND A DELINQUENCY REPORT FOR THE
PROPERTY. EACH SUCH STATEMENT SHALL BE ACCOMPANIED BY AN OFFICER’S CERTIFICATE
CERTIFYING THAT TO THE BEST OF SUCH OFFICER’S KNOWLEDGE, (1) THAT SUCH ITEMS ARE
TRUE, CORRECT, ACCURATE, AND COMPLETE AND FAIRLY PRESENT THE FINANCIAL CONDITION
AND RESULTS OF THE OPERATIONS OF BORROWER AND THE PROPERTY IN ACCORDANCE WITH
GAAP (OR FEDERAL INCOME TAX BASIS OF ACCOUNTING, CONSISTENTLY APPLIED) (SUBJECT
TO NORMAL YEAR-END ADJUSTMENTS) AND (2) WHETHER THERE EXISTS A DEFAULT OR EVENT

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OF DEFAULT, AND IF SO, THE NATURE THEREOF, THE PERIOD OF TIME IT HAS EXISTED AND
THE ACTION THEN BEING TAKEN TO REMEDY IT.

6.3.4       OTHER REPORTS. BORROWER SHALL FURNISH TO LENDER, WITHIN TEN
(10) BUSINESS DAYS AFTER REQUEST, SUCH FURTHER DETAILED INFORMATION WITH RESPECT
TO THE OPERATION OF THE PROPERTY AND THE FINANCIAL AFFAIRS OF BORROWER OR
MANAGER AS MAY BE REASONABLY REQUESTED BY LENDER OR ANY APPLICABLE RATING
AGENCY.

6.3.5       ANNUAL BUDGET. BORROWER SHALL PREPARE AND SUBMIT (OR SHALL CAUSE
MANAGER TO PREPARE AND SUBMIT) TO LENDER WITHIN THIRTY (30) DAYS AFTER A CASH
TRAP PERIOD COMMENCES AND BY DECEMBER 15TH OF EACH YEAR THEREAFTER DURING THE
TERM UNTIL SUCH CASH TRAP PERIOD HAS ENDED, FOR APPROVAL BY LENDER, WHICH
APPROVAL SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED, A PROPOSED PRO FORMA
BUDGET FOR THE PROPERTY FOR THE SUCCEEDING CALENDAR YEAR (THE “ANNUAL BUDGET”,
AND EACH ANNUAL BUDGET APPROVED BY LENDER IS REFERRED TO HEREIN AS THE “APPROVED
ANNUAL BUDGET”)), AND, PROMPTLY AFTER PREPARATION THEREOF, ANY REVISIONS TO SUCH
ANNUAL BUDGET. THE ANNUAL BUDGET SHALL CONSIST OF (I) AN OPERATING EXPENSE
BUDGET SHOWING, ON A MONTH-BY-MONTH BASIS, IN REASONABLE DETAIL, EACH LINE ITEM
OF THE BORROWER’S ANTICIPATED OPERATING INCOME AND OPERATING EXPENSES (ON A CASH
AND ACCRUAL BASIS), INCLUDING AMOUNTS REQUIRED TO ESTABLISH, MAINTAIN AND/OR
INCREASE ANY MONTHLY PAYMENTS REQUIRED HEREUNDER (AND ONCE SUCH ANNUAL BUDGET
HAS BEEN APPROVED BY LENDER, SUCH OPERATING EXPENSE BUDGET SHALL BE REFERRED TO
HEREIN AS THE “APPROVED OPERATING BUDGET”), AND (II) A CAPITAL EXPENSE BUDGET
SHOWING, ON A MONTH-BY-MONTH BASIS, IN REASONABLE DETAIL, EACH LINE ITEM OF
ANTICIPATED CAPITAL EXPENSES (AND ONCE SUCH ANNUAL BUDGET HAS BEEN APPROVED BY
LENDER, SUCH CAPITAL EXPENSE BUDGET SHALL BE REFERRED TO HEREIN AS THE “APPROVED
CAPITAL BUDGET”). UNTIL SUCH TIME THAT ANY ANNUAL BUDGET HAS BEEN APPROVED BY
LENDER, THE PRIOR APPROVED ANNUAL BUDGET SHALL APPLY FOR ALL PURPOSES HEREUNDER
(WITH SUCH ADJUSTMENTS AS REASONABLY DETERMINED BY LENDER (INCLUDING INCREASES
FOR ANY NON-DISCRETIONARY EXPENSES)).

7.                                      INSURANCE; CASUALTY; AND CONDEMNATION

7.1          INSURANCE.

7.1.1       COVERAGE. BORROWER, AT ITS SOLE COST, FOR THE MUTUAL BENEFIT OF
BORROWER AND LENDER, SHALL OBTAIN AND MAINTAIN DURING THE TERM THE FOLLOWING
POLICIES OF INSURANCE:

(A)           PROPERTY INSURANCE INSURING AGAINST LOSS OR DAMAGE CUSTOMARILY
INCLUDED UNDER SO CALLED “ALL RISK” OR “SPECIAL FORM” POLICIES INCLUDING FIRE,
LIGHTNING, VANDALISM, AND MALICIOUS MISCHIEF, BOILER AND MACHINERY AND, IF
REQUIRED BY LENDER IN ACCORDANCE WITH SUBSECTIONS (B) OR (I) BELOW, FLOOD AND/OR
EARTHQUAKE COVERAGE, AND SUBJECT TO SUBSECTION (J) BELOW, COVERAGE FOR DAMAGE OR
DESTRUCTION CAUSED BY THE ACTS OF “TERRORISTS” (OR SUCH POLICIES SHALL HAVE NO
EXCLUSION FROM COVERAGE WITH RESPECT THERETO) AND SUCH OTHER INSURABLE HAZARDS
AS, UNDER GOOD INSURANCE PRACTICES, FROM TIME TO TIME ARE INSURED AGAINST FOR
OTHER PROPERTY AND BUILDINGS SIMILAR TO THE PREMISES IN NATURE, USE, LOCATION,
HEIGHT, AND TYPE OF CONSTRUCTION. SUCH INSURANCE POLICY SHALL ALSO INSURE FOR
ORDINANCE OF LAW COVERAGE, COSTS OF DEMOLITION AND INCREASED COST OF
CONSTRUCTION IN AMOUNTS SATISFACTORY TO LENDER. EACH SUCH INSURANCE POLICY SHALL
(I) BE IN AN AMOUNT EQUAL TO ONE HUNDRED PERCENT (100%) OF THE THEN REPLACEMENT
COST OF THE IMPROVEMENTS WITHOUT DEDUCTION FOR PHYSICAL DEPRECIATION AND IN ANY
EVENT NOT LESS THAN SUCH

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AMOUNT AS IS NECESSARY SO THAT THE INSURER WOULD NOT DEEM BORROWER A CO-INSURER
UNDER SUCH POLICIES, (II) HAVE DEDUCTIBLES NO GREATER THAN $200,000 PER
OCCURRENCE, (III) BE PAID ANNUALLY IN ADVANCE AND (IV) BE ON A REPLACEMENT COST
BASIS AND CONTAIN EITHER NO COINSURANCE OR, IF COINSURANCE, AN AGREED AMOUNT
ENDORSEMENT, AND SHALL COVER, WITHOUT LIMITATION, ALL TENANT IMPROVEMENTS AND
BETTERMENTS THAT BORROWER IS REQUIRED TO INSURE ON A REPLACEMENT COST BASIS. IF
THE INSURANCE REQUIRED UNDER THIS SUBPARAGRAPH IS NOT OBTAINED BY BLANKET
INSURANCE POLICIES, THE INSURANCE POLICY SHALL BE ENDORSED TO ALSO PROVIDE
GUARANTEED BUILDING REPLACEMENT COST TO THE IMPROVEMENTS AND SUCH TENANT
IMPROVEMENTS IN AN AMOUNT TO BE SUBJECT TO THE CONSENT OF LENDER, WHICH CONSENT
SHALL NOT BE UNREASONABLY WITHHELD. LENDER SHALL BE NAMED MORTGAGEE AND LOSS
PAYEE ON A STANDARD MORTGAGEE ENDORSEMENT.

(B)           FLOOD INSURANCE IF ANY PART OF THE IMPROVEMENTS ARE LOCATED IN AN
AREA NOW OR HEREAFTER DESIGNATED BY THE FEDERAL EMERGENCY MANAGEMENT AGENCY AS A
ZONE “A” & “V” SPECIAL HAZARD AREA, OR SUCH OTHER SPECIAL HAZARD AREA IF LENDER
SO REQUIRES IN ITS SOLE DISCRETION. SUCH POLICY SHALL (I) BE IN AN AMOUNT EQUAL
TO (A) ONE HUNDRED PERCENT (100%) OF THE FULL REPLACEMENT COST OF THE
IMPROVEMENTS ON THE PROPERTY (WITHOUT ANY DEDUCTION FOR DEPRECIATION) OR
(B) SUCH OTHER AMOUNT AS IS AGREED TO BY LENDER IN WRITING, AND (II) HAVE A
MAXIMUM PERMISSIBLE DEDUCTIBLE OF $3,000.

(C)           PUBLIC LIABILITY INSURANCE, INCLUDING (I) “COMMERCIAL GENERAL
LIABILITY INSURANCE”, (II) “OWNED”, “HIRED” AND “NON OWNED AUTO LIABILITY”; AND
(III) UMBRELLA LIABILITY COVERAGE FOR PERSONAL INJURY, BODILY INJURY, DEATH,
ACCIDENT AND PROPERTY DAMAGE, SUCH INSURANCE PROVIDING IN COMBINATION NO LESS
THAN CONTAINING MINIMUM LIMITS PER OCCURRENCE OF $1,000,000 AND $2,000,000 IN
THE AGGREGATE FOR ANY POLICY YEAR WITH NO DEDUCTIBLE OR SELF INSURED RETENTION;
TOGETHER WITH AT LEAST $25,000,000 EXCESS AND/OR UMBRELLA LIABILITY INSURANCE
FOR ANY AND ALL CLAIMS WITH NO DEDUCTIBLE. THE POLICIES DESCRIBED IN THIS
SUBSECTION SHALL ALSO INCLUDE COVERAGE FOR ELEVATORS, ESCALATORS, INDEPENDENT
CONTRACTORS, “CONTRACTUAL LIABILITY” (COVERING, TO THE MAXIMUM EXTENT PERMITTED
BY LAW, BORROWER’S OBLIGATION TO INDEMNIFY LENDER AS REQUIRED UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS), “PRODUCTS” AND “COMPLETED OPERATIONS
LIABILITY” COVERAGE.

(D)           RENTAL LOSS AND/OR BUSINESS INTERRUPTION INSURANCE (I) WITH LENDER
BEING NAMED AS “LENDER LOSS PAYEE”, (II) IN AN AMOUNT EQUAL TO 100% OF THE
PROJECTED RENTS FROM THE PROPERTY DURING THE PERIOD OF RESTORATION; AND
(III) CONTAINING AN EXTENDED PERIOD OF INDEMNITY ENDORSEMENT WHICH PROVIDES THAT
AFTER THE PHYSICAL LOSS TO THE PROPERTY HAS BEEN REPAIRED, THE CONTINUED LOSS OF
INCOME WILL BE INSURED UNTIL SUCH INCOME EITHER RETURNS TO THE SAME LEVEL IT WAS
AT PRIOR TO THE LOSS, OR THE EXPIRATION OF EIGHTEEN (18) MONTHS FROM THE DATE
THAT THE PROPERTY IS REPAIRED OR REPLACED AND OPERATIONS ARE RESUMED, WHICHEVER
FIRST OCCURS, AND NOTWITHSTANDING THAT THE POLICY MAY EXPIRE PRIOR TO THE END OF
SUCH PERIOD. THE AMOUNT OF SUCH INSURANCE SHALL BE INCREASED FROM TIME TO TIME
DURING THE TERM AS AND WHEN THE ESTIMATED OR ACTUAL RENTS INCREASE.

(E)           COMPREHENSIVE BOILER AND MACHINERY INSURANCE COVERING ALL
MECHANICAL AND ELECTRICAL EQUIPMENT AGAINST PHYSICAL DAMAGE, RENT LOSS AND
IMPROVEMENTS LOSS AND COVERING, WITHOUT LIMITATION, ALL TENANT IMPROVEMENTS AND
BETTERMENTS THAT BORROWER IS REQUIRED TO INSURE PURSUANT TO THE LEASES ON A
REPLACEMENT COST BASIS AND IN AN AMOUNT EQUAL TO THE GREATER OF (I)

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$2,000,000 AND (II) ONE HUNDRED PERCENT (100%) OF THE FULL REPLACEMENT COST OF
THE IMPROVEMENTS ON THE PROPERTY (WITHOUT ANY DEDUCTION FOR DEPRECIATION).

(F)            WORKER’S COMPENSATION AND DISABILITY INSURANCE WITH RESPECT TO
ANY EMPLOYEES OF BORROWER, AS REQUIRED BY ANY LEGAL REQUIREMENT.

(G)           DURING ANY PERIOD OF REPAIR OR RESTORATION, BUILDER’S “ALL-RISK”
INSURANCE ON THE SO CALLED COMPLETED VALUE BASIS IN AN AMOUNT EQUAL TO NOT LESS
THAN THE FULL INSURABLE VALUE OF THE PROPERTY, AGAINST SUCH RISKS (INCLUDING
FIRE AND EXTENDED COVERAGE AND COLLAPSE OF THE IMPROVEMENTS TO AGREED LIMITS) AS
LENDER MAY REQUEST, IN FORM AND SUBSTANCE ACCEPTABLE TO LENDER.

(H)           COVERAGE TO COMPENSATE FOR ORDINANCE OF LAW, THE COST OF
DEMOLITION AND THE INCREASED COST OF CONSTRUCTION IN AN AMOUNT SATISFACTORY TO
LENDER.

(I)            SUCH OTHER INSURANCE (INCLUDING ENVIRONMENTAL LIABILITY
INSURANCE, EARTHQUAKE (BUT ONLY IF A FUTURE SEISMIC STUDY INDICATES A PML IN
EXCESS OF TWENTY PERCENT (20%)) INSURANCE, MINE SUBSIDENCE INSURANCE AND
WINDSTORM INSURANCE) AS MAY FROM TIME TO TIME BE REASONABLY REQUIRED BY LENDER
IN ORDER TO PROTECT ITS INTERESTS.

(J)            NOTWITHSTANDING ANYTHING IN SUBSECTION (A) ABOVE TO THE CONTRARY,
BORROWER SHALL BE REQUIRED TO OBTAIN AND MAINTAIN COVERAGE IN ITS PROPERTY
INSURANCE POLICY (OR BY A SEPARATE POLICY) AGAINST LOSS OR DAMAGE BY TERRORIST
ACTS IN AN AMOUNT EQUAL TO ONE HUNDRED PERCENT (100%) OF THE “FULL REPLACEMENT
COST” OF THE PROPERTY; PROVIDED THAT SUCH COVERAGE IS AVAILABLE. IN THE EVENT
THAT SUCH COVERAGE WITH RESPECT TO TERRORIST ACTS IS NOT INCLUDED AS PART OF THE
“ALL RISK” PROPERTY POLICY REQUIRED BY SUBSECTION (A) ABOVE, BORROWER SHALL,
NEVERTHELESS BE REQUIRED TO OBTAIN COVERAGE FOR TERRORISM (AS STAND ALONE
COVERAGE) IN AN AMOUNT EQUAL TO ONE HUNDRED PERCENT (100%) OF THE “FULL
REPLACEMENT COST” OF THE PROPERTY; PROVIDED THAT SUCH COVERAGE IS AVAILABLE.
NOTWITHSTANDING THE FOREGOING, WITH RESPECT TO ANY SUCH STAND-ALONE POLICY
COVERING TERRORIST ACTS, BORROWER SHALL NOT BE REQUIRED TO PAY ANY INSURANCE
PREMIUMS SOLELY WITH RESPECT TO SUCH TERRORISM COVERAGE IN EXCESS OF THE
TERRORISM PREMIUM CAP (HEREINAFTER DEFINED); PROVIDED THAT IF THE INSURANCE
PREMIUMS PAYABLE WITH RESPECT TO SUCH TERRORISM COVERAGE EXCEEDS THE TERRORISM
PREMIUM CAP, LENDER MAY, AT ITS OPTION (1) PURCHASE SUCH STAND-ALONE TERRORISM
POLICY, WITH BORROWER PAYING SUCH PORTION OF THE INSURANCE PREMIUMS WITH RESPECT
THERETO EQUAL TO THE TERRORISM PREMIUM CAP AND THE LENDER PAYING SUCH PORTION OF
THE INSURANCE PREMIUMS IN EXCESS OF THE TERRORISM PREMIUM CAP OR (2) MODIFY THE
DEDUCTIBLE AMOUNTS, POLICY LIMITS AND OTHER REQUIRED POLICY TERMS TO REDUCE THE
INSURANCE PREMIUMS PAYABLE WITH RESPECT TO SUCH STAND-ALONE TERRORISM POLICY TO
THE TERRORISM PREMIUM CAP. AS USED HEREIN, (I) “TERRORISM PREMIUM CAP” MEANS AN
AMOUNT EQUAL TO ONE HUNDRED PERCENT (100%) OF THE AGGREGATE INSURANCE PREMIUMS
PAYABLE WITH RESPECT TO ALL THE INSURANCE COVERAGE UNDER SECTION 7.1.1(A) ABOVE
FOR THE LAST POLICY YEAR IN WHICH COVERAGE FOR TERRORISM WAS INCLUDED AS PART OF
THE “ALL RISK” PROPERTY POLICY REQUIRED BY SUBSECTION (A) ABOVE, ADJUSTED
ANNUALLY BY A PERCENTAGE EQUAL TO THE INCREASE IN THE CONSUMER PRICE INDEX
(HEREINAFTER DEFINED) AND (II) “CONSUMER PRICE INDEX” MEANS THE CONSUMER PRICE
INDEX FOR ALL URBAN CONSUMERS PUBLISHED BY THE BUREAU OF LABOR STATISTICS OF THE
UNITED STATES DEPARTMENT OF LABOR, NEW YORK METROPOLITAN STATISTICAL AREA, ALL
ITEMS (1982-84 = 100), OR ANY SUCCESSOR INDEX THERETO,

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APPROXIMATELY ADJUSTED, AND IN THE EVENT THAT THE CONSUMER PRICE INDEX IS
CONVERTED TO A DIFFERENT STANDARD REFERENCE BASE OR OTHERWISE REVISED, THE
DETERMINATION OF ADJUSTMENTS PROVIDED FOR HEREIN SHALL BE MADE WITH THE USE OF
SUCH CONVERSION FACTOR, FORMULA OR TABLE FOR CONVERTING THE CONSUMER PRICE INDEX
AS MAY BE PUBLISHED BY THE BUREAU OF LABOR STATISTICS OR, IF SAID BUREAU SHALL
NOT PUBLISH THE SAME, THEN WITH THE USE OF SUCH CONVERSION FACTOR, FORMULA OR
TABLE AS MAY BE PUBLISHED BY PRENTICE-HALL, INC., OR ANY OTHER NATIONALLY
RECOGNIZED PUBLISHER OF SIMILAR STATISTICAL INFORMATION; AND IF THE CONSUMER
PRICE INDEX CEASES TO BE PUBLISHED, AND THERE IS NO SUCCESSOR THERETO (I) SUCH
OTHER INDEX AS LENDER AND BORROWER SHALL AGREE UPON IN WRITING OR (II) IF LENDER
AND BORROWER CANNOT AGREE ON A SUBSTITUTE INDEX, SUCH OTHER INDEX, AS REASONABLY
SELECTED BY LENDER. BORROWER SHALL OBTAIN THE COVERAGE REQUIRED UNDER THIS
SUBSECTION (J) FROM A CARRIER WHICH OTHERWISE SATISFIES THE RATING CRITERIA
SPECIFIED IN SECTION 7.1.2 BELOW (A “QUALIFIED CARRIER”) OR IN THE EVENT THAT
SUCH COVERAGE IS NOT AVAILABLE FROM A QUALIFIED CARRIER, BORROWER SHALL OBTAIN
SUCH COVERAGE FROM THE HIGHEST RATED INSURANCE COMPANY PROVIDING SUCH COVERAGE.

7.1.2       POLICIES. ALL POLICIES OF INSURANCE (THE “POLICIES”) REQUIRED
PURSUANT TO SECTION 7.1.1 ABOVE SHALL: (I) BE ISSUED BY COMPANIES APPROVED BY
LENDER AND LICENSED TO DO BUSINESS IN THE STATE, WITH A CLAIMS PAYING ABILITY
RATING OF “A” OR BETTER BY S&P (AND THE EQUIVALENT BY ANY OTHER RATING AGENCY),
AND A RATING OF “A:VIII” OR BETTER IN THE CURRENT BEST’S INSURANCE REPORTS,
PROVIDED, HOWEVER, THAT FOR MULTI-LAYERED POLICIES, (A) IF THERE ARE 4 OR FEWER
INSURERS PROVIDING SUCH POLICIES, THEN AT LEAST 75% OF THE ENTIRE AMOUNT OF THE
APPLICABLE INSURANCE COVERAGE PROVIDED UNDER SUCH POLICIES SHALL BE ISSUED BY
INSURERS HAVING MINIMUM CLAIMS PAYING ABILITY RATINGS OF “A” OR BETTER BY S&P
(AND THE EQUIVALENT BY ANY OTHER RATING AGENCY) AND NO INSURER PROVIDING ANY
PORTION OF SUCH COVERAGE SHALL HAVE A MINIMUM CLAIMS PAYING ABILITY RATING LOWER
THAN “BBB” BY S&P (OR LOWER THAN THE EQUIVALENT BY ANY OTHER RATING AGENCY), AND
(B) IF THERE ARE 5 OR MORE INSURERS PROVIDING SUCH POLICIES, THEN AT LEAST 60%
OF THE ENTIRE AMOUNT OF THE APPLICABLE INSURANCE COVERAGE PROVIDED UNDER SUCH
POLICIES SHALL BE ISSUED BY INSURERS HAVING MINIMUM CLAIMS PAYING ABILITY
RATINGS OF “A” OR BETTER BY S&P (AND THE EQUIVALENT BY ANY OTHER RATING AGENCY)
AND NO INSURER PROVIDING ANY PORTION OF SUCH COVERAGE SHALL HAVE A MINIMUM
CLAIMS PAYING ABILITY RATING LOWER THAN “BBB” BY S&P (OR LOWER THAN THE
EQUIVALENT BY ANY OTHER RATING AGENCY); (II) NAME LENDER AND ITS SUCCESSORS
AND/OR ASSIGNS AS THEIR INTEREST MAY APPEAR AS THE MORTGAGEE (IN THE CASE OF
PROPERTY INSURANCE), LOSS PAYEE (IN THE CASE OF BUSINESS INTERRUPTION/LOSS OF
RENTS COVERAGE) AND AN ADDITIONAL INSURED (IN THE CASE OF LIABILITY INSURANCE);
(III) CONTAIN (IN THE CASE OF PROPERTY INSURANCE) A NON-CONTRIBUTORY STANDARD
MORTGAGEE CLAUSE AND A LENDER’S LOSS PAYABLE ENDORSEMENT, OR THEIR EQUIVALENTS,
NAMING LENDER AS THE PERSON TO WHICH ALL PAYMENTS MADE BY SUCH INSURANCE COMPANY
SHALL BE PAID; (IV) CONTAIN A WAIVER OF SUBROGATION AGAINST LENDER; (V) BE
ASSIGNED AND THE ORIGINALS THEREOF DELIVERED TO LENDER; OR, IN LIEU OF
DELIVERING ORIGINALS OF THE POLICIES, BORROWER MAY, ON AN ANNUAL BASIS, DELIVER
ACORD EVIDENCES OF COVERAGES, OR THE EQUIVALENT, AS ADEQUATE PROOF OF COVERAGE;
PROVIDED, HOWEVER, IF AT, ANY TIME, LENDER REQUESTS CARRIER CERTIFICATION OF
POLICIES, BORROWER SHALL DELIVER SUCH CERTIFICATION WITHIN TEN (10) DAYS OF
LENDER’S REQUEST THEREFOR; (VI) CONTAIN SUCH PROVISIONS AS LENDER DEEMS
REASONABLY NECESSARY OR DESIRABLE TO PROTECT ITS INTEREST, INCLUDING
(A) ENDORSEMENTS PROVIDING THAT NEITHER BORROWER, LENDER NOR ANY OTHER PARTY
SHALL BE A CO-INSURER UNDER THE POLICIES, (B) THAT LENDER SHALL RECEIVE AT LEAST
THIRTY (30) DAYS’ PRIOR WRITTEN NOTICE OF ANY MODIFICATION, REDUCTION OR
CANCELLATION OF ANY OF THE POLICIES, (C) AN AGREEMENT WHEREBY THE INSURER WAIVES
ANY RIGHT TO CLAIM ANY PREMIUMS AND COMMISSIONS AGAINST LENDER, PROVIDED THAT
THE POLICY NEED NOT WAIVE THE REQUIREMENT THAT

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THE PREMIUM BE PAID IN ORDER FOR A CLAIM TO BE PAID TO THE INSURED AND
(D) PROVIDING THAT LENDER IS PERMITTED TO MAKE PAYMENTS TO EFFECT THE
CONTINUATION OF SUCH POLICY UPON NOTICE OF CANCELLATION DUE TO NON-PAYMENT OF
PREMIUMS; (VII) IN THE EVENT ANY INSURANCE POLICY (EXCEPT FOR GENERAL PUBLIC AND
OTHER LIABILITY AND WORKERS COMPENSATION INSURANCE) SHALL CONTAIN BREACH OF
WARRANTY PROVISIONS, SUCH POLICY SHALL PROVIDE THAT WITH RESPECT TO THE INTEREST
OF LENDER, SUCH INSURANCE POLICY SHALL NOT BE INVALIDATED BY AND SHALL INSURE
LENDER REGARDLESS OF (A) ANY ACT, FAILURE TO ACT OR NEGLIGENCE OF OR VIOLATION
OF WARRANTIES, DECLARATIONS OR CONDITIONS CONTAINED IN SUCH POLICY BY ANY NAMED
INSURED, (B) THE OCCUPANCY OR USE OF THE PREMISES FOR PURPOSES MORE HAZARDOUS
THAN PERMITTED BY THE TERMS THEREOF, OR (C) ANY FORECLOSURE OR OTHER ACTION OR
PROCEEDING TAKEN BY LENDER PURSUANT TO ANY PROVISION OF THE LOAN DOCUMENTS; AND
(VIII) BE SATISFACTORY IN FORM AND SUBSTANCE TO LENDER AND APPROVED BY LENDER AS
TO AMOUNTS, FORM, RISK COVERAGE, DEDUCTIBLES, LOSS PAYEES AND INSUREDS. BORROWER
SHALL PAY THE PREMIUMS FOR SUCH POLICIES (THE “INSURANCE PREMIUMS”) AS THE SAME
BECOME DUE AND PAYABLE AND FURNISH TO LENDER EVIDENCE OF THE RENEWAL OF EACH OF
THE POLICIES TOGETHER WITH (UNLESS SUCH INSURANCE PREMIUMS HAVE BEEN PAID BY
LENDER PURSUANT TO SECTION 3.3 HEREOF) RECEIPTS FOR OR OTHER EVIDENCE OF THE
PAYMENT OF THE INSURANCE PREMIUMS REASONABLY SATISFACTORY TO LENDER. IF BORROWER
DOES NOT FURNISH SUCH EVIDENCE AND RECEIPTS AT LEAST THIRTY (30) DAYS PRIOR TO
THE EXPIRATION OF ANY EXPIRING POLICY, THEN LENDER MAY, BUT SHALL NOT BE
OBLIGATED TO, PROCURE SUCH INSURANCE AND PAY THE INSURANCE PREMIUMS THEREFOR,
AND BORROWER SHALL REIMBURSE LENDER FOR THE COST OF SUCH INSURANCE PREMIUMS
PROMPTLY ON DEMAND, WITH INTEREST ACCRUING AT THE DEFAULT RATE. BORROWER SHALL
DELIVER TO LENDER A CERTIFIED COPY OF EACH POLICY WITHIN THIRTY (30) DAYS AFTER
ITS EFFECTIVE DATE. WITHIN THIRTY (30) DAYS AFTER REQUEST BY LENDER, BORROWER
SHALL OBTAIN SUCH INCREASES IN THE AMOUNTS OF COVERAGE REQUIRED HEREUNDER AS MAY
BE REASONABLY REQUESTED BY LENDER, TAKING INTO CONSIDERATION CHANGES IN THE
VALUE OF MONEY OVER TIME, CHANGES IN LIABILITY LAWS, CHANGES IN PRUDENT CUSTOMS
AND PRACTICES, AND THE LIKE.

7.2          CASUALTY.

7.2.1       NOTICE; RESTORATION. IF THE PROPERTY IS DAMAGED OR DESTROYED, IN
WHOLE OR IN PART, BY FIRE OR OTHER CASUALTY (A “CASUALTY”), BORROWER SHALL GIVE
PROMPT NOTICE THEREOF TO LENDER. FOLLOWING THE OCCURRENCE OF A CASUALTY,
BORROWER, REGARDLESS OF WHETHER INSURANCE PROCEEDS ARE AVAILABLE (UNLESS LENDER
HAS BREACHED ITS OBLIGATION (IF ANY) TO MAKE SUCH INSURANCE PROCEEDS AVAILABLE
PURSUANT TO SECTION 7.4.1), SHALL PROMPTLY PROCEED TO RESTORE, REPAIR, REPLACE
OR REBUILD THE PROPERTY IN ACCORDANCE WITH LEGAL REQUIREMENTS TO BE OF AT LEAST
EQUAL VALUE AND OF SUBSTANTIALLY THE SAME CHARACTER AS PRIOR TO SUCH DAMAGE OR
DESTRUCTION.

7.2.2       SETTLEMENT OF PROCEEDS. IF A CASUALTY COVERED BY ANY OF THE POLICIES
(AN “INSURED CASUALTY”) OCCURS WHERE THE LOSS DOES NOT EXCEED $2,000,000,
PROVIDED NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, BORROWER MAY SETTLE
AND ADJUST ANY CLAIM WITHOUT THE PRIOR CONSENT OF LENDER; PROVIDED SUCH
ADJUSTMENT IS CARRIED OUT IN A COMPETENT AND TIMELY MANNER, AND BORROWER IS
HEREBY AUTHORIZED TO COLLECT AND RECEIPT FOR THE INSURANCE PROCEEDS (THE
“PROCEEDS”). IN THE EVENT OF AN INSURED CASUALTY WHERE THE LOSS EXCEEDS
$2,000,000 (A “SIGNIFICANT CASUALTY”), BORROWER MAY SETTLE AND ADJUST ANY CLAIM
WITH THE PRIOR WRITTEN CONSENT OF LENDER (WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD OR DELAYED) UNLESS EITHER (I) AN EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING OR (II) THE LOSS EQUALS OR EXCEEDS $5,000,000, IN
WHICH EITHER SUCH CASE LENDER MAY, IN ITS SOLE DISCRETION, SETTLE AND ADJUST ANY
CLAIM WITHOUT THE

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CONSENT OF BORROWER AND AGREE WITH THE INSURER(S) ON THE AMOUNT TO BE PAID ON
THE LOSS, AND THE PROCEEDS SHALL BE DUE AND PAYABLE SOLELY TO LENDER AND HELD BY
LENDER IN THE CASUALTY/CONDEMNATION SUBACCOUNT AND DISBURSED IN ACCORDANCE
HEREWITH. IF BORROWER OR ANY PARTY OTHER THAN LENDER IS A PAYEE ON ANY CHECK
REPRESENTING PROCEEDS WITH RESPECT TO A SIGNIFICANT CASUALTY, BORROWER SHALL
IMMEDIATELY ENDORSE, AND CAUSE ALL SUCH THIRD PARTIES TO ENDORSE, SUCH CHECK
PAYABLE TO THE ORDER OF LENDER. BORROWER HEREBY IRREVOCABLY APPOINTS LENDER AS
ITS ATTORNEY-IN-FACT, COUPLED WITH AN INTEREST, TO ENDORSE SUCH CHECK PAYABLE TO
THE ORDER OF LENDER.  THE EXPENSES INCURRED BY LENDER IN THE SETTLEMENT,
ADJUSTMENT AND COLLECTION OF THE PROCEEDS SHALL BECOME PART OF THE DEBT AND
SHALL BE REIMBURSED BY BORROWER TO LENDER UPON DEMAND. NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED HEREIN, IF IN CONNECTION WITH A CASUALTY ANY INSURANCE
CARRIER MAKES A PAYMENT UNDER A PROPERTY INSURANCE POLICY THAT BORROWER PROPOSES
BE TREATED AS BUSINESS OR RENTAL INTERRUPTION INSURANCE, THEN, NOTWITHSTANDING
ANY DESIGNATION (OR LACK OF DESIGNATION) BY THE INSURANCE CARRIER AS TO THE
PURPOSE OF SUCH PAYMENT, AS BETWEEN LENDER AND BORROWER, SUCH PAYMENT SHALL NOT
BE TREATED AS BUSINESS OR RENTAL INTERRUPTION INSURANCE PROCEEDS UNLESS BORROWER
HAS DEMONSTRATED TO LENDER’S SATISFACTION THAT THE REMAINING NET PROCEEDS THAT
WILL BE RECEIVED FROM THE PROPERTY INSURANCE CARRIERS ARE SUFFICIENT TO PAY ONE
HUNDRED PERCENT (100%) OF THE COST OF FULLY RESTORING THE IMPROVEMENTS OR, IF
SUCH NET PROCEEDS ARE TO BE APPLIED TO REPAY THE DEBT IN ACCORDANCE WITH THE
TERMS HEREOF, THAT SUCH REMAINING NET PROCEEDS WILL BE SUFFICIENT TO PAY THE
DEBT IN FULL. ALL BUSINESS OR RENTAL INTERRUPTION PROCEEDS PAID TO LENDER SHALL
BE HELD BY LENDER AND APPLIED TO THE PAYMENT OF DEBT SERVICE AND RESERVES FROM
TIME TO TIME DUE AND PAYABLE WITH RESPECT TO THE LOAN AND, TO THE EXTENT LENDER
DETERMINES THAT THE CASH FLOW FROM THE PROPERTY OR (IF APPLICABLE) AMOUNTS IN
THE OPERATING EXPENSE SUBACCOUNT ARE NOT SUFFICIENT FOR SUCH PURPOSE, PAYMENT OF
OPERATING EXPENSES APPROVED BY LENDER.

7.3          CONDEMNATION.

7.3.1       NOTICE; RESTORATION. BORROWER SHALL PROMPTLY GIVE LENDER NOTICE OF
THE ACTUAL OR THREATENED COMMENCEMENT OF ANY CONDEMNATION OR EMINENT DOMAIN
PROCEEDING AFFECTING THE PROPERTY (A “CONDEMNATION”) AND SHALL DELIVER TO LENDER
COPIES OF ANY AND ALL PAPERS SERVED IN CONNECTION WITH SUCH CONDEMNATION.
FOLLOWING THE OCCURRENCE OF A CONDEMNATION, BORROWER, REGARDLESS OF WHETHER AN
AWARD IS AVAILABLE (UNLESS LENDER HAS BREACHED ITS OBLIGATION (IF ANY) TO MAKE
SUCH AWARD AVAILABLE PURSUANT TO SECTION 7.4.1), SHALL PROMPTLY PROCEED TO
RESTORE, REPAIR, REPLACE OR REBUILD THE PROPERTY IN ACCORDANCE WITH LEGAL
REQUIREMENTS TO THE EXTENT PRACTICABLE TO BE OF AT LEAST EQUAL VALUE AND OF
SUBSTANTIALLY THE SAME CHARACTER (AND TO HAVE THE SAME UTILITY) AS PRIOR TO SUCH
CONDEMNATION.

7.3.2       COLLECTION OF AWARD. IF A CONDEMNATION OCCURS WHERE THE AWARD OR
PAYMENT IN RESPECT THEREOF (AN “AWARD”) DOES NOT EXCEED $2,000,000 OR WHICH
RESULTS IN THE TAKING OF FIVE PERCENT (5%) OR LESS OF THE PROPERTY, PROVIDED NO
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, BORROWER MAY MAKE ANY
COMPROMISE, ADJUSTMENT OR SETTLEMENT IN CONNECTION WITH SUCH CONDEMNATION WITH
THE PRIOR WRITTEN CONSENT OF LENDER, NOT TO BE UNREASONABLY WITHHELD, PROVIDED
SUCH ADJUSTMENT IS CARRIED OUT IN A COMPETENT AND TIMELY MANNER, AND BORROWER IS
HEREBY AUTHORIZED TO COLLECT AND RECEIPT FOR THE AWARD. IN THE EVENT OF A
CONDEMNATION WHERE THE AWARD IS IN EXCESS OF $2,000,000 OR WHICH RESULTS IN THE
TAKING OF MORE THAN FIVE PERCENT (5%) OF THE PROPERTY, LENDER IS HEREBY
IRREVOCABLY APPOINTED AS BORROWER’S

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ATTORNEY-IN-FACT, COUPLED WITH AN INTEREST, WITH EXCLUSIVE POWER TO COLLECT,
RECEIVE AND RETAIN SUCH AWARD AND TO MAKE ANY COMPROMISE, ADJUSTMENT OR
SETTLEMENT IN CONNECTION WITH SUCH CONDEMNATION WITH THE PRIOR CONSENT OF
BORROWER (UNLESS AN EVENT OF DEFAULT IS CONTINUING, IN WHICH CASE, BORROWER’S
PRIOR CONSENT SHALL NOT BE REQUIRED), NOT TO BE UNREASONABLY WITHHELD (WHICH
SHALL BE DEEMED CONSENTED TO IF BORROWER FAILS TO RESPOND TO ANY REQUEST FOR
CONSENT THEREFOR WITHIN 10 DAYS’ OF REQUEST). NOTWITHSTANDING ANY CONDEMNATION
(OR ANY TRANSFER MADE IN LIEU OF OR IN ANTICIPATION OF SUCH CONDEMNATION),
BORROWER SHALL CONTINUE TO PAY THE DEBT AT THE TIME AND IN THE MANNER PROVIDED
FOR IN THE LOAN DOCUMENTS, AND THE DEBT SHALL NOT BE REDUCED UNLESS AND UNTIL
ANY AWARD SHALL HAVE BEEN ACTUALLY RECEIVED AND APPLIED BY LENDER TO EXPENSES OF
COLLECTING THE AWARD AND TO DISCHARGE OF THE DEBT. LENDER SHALL NOT BE LIMITED
TO THE INTEREST PAID ON THE AWARD BY THE CONDEMNING AUTHORITY BUT SHALL BE
ENTITLED TO RECEIVE OUT OF THE AWARD INTEREST AT THE RATE OR RATES PROVIDED IN
THE NOTE. IF THE PROPERTY IS SOLD, THROUGH FORECLOSURE OR OTHERWISE, PRIOR TO
THE RECEIPT BY LENDER OF SUCH AWARD, LENDER SHALL HAVE THE RIGHT, WHETHER OR NOT
A DEFICIENCY JUDGMENT ON THE NOTE SHALL BE RECOVERABLE OR SHALL HAVE BEEN
SOUGHT, RECOVERED OR DENIED, TO RECEIVE ALL OR A PORTION OF THE AWARD SUFFICIENT
TO PAY THE DEBT. BORROWER SHALL CAUSE ANY AWARD THAT IS PAYABLE TO BORROWER TO
BE PAID DIRECTLY TO LENDER. LENDER SHALL HOLD SUCH AWARD IN THE
CASUALTY/CONDEMNATION SUBACCOUNT AND DISBURSE SUCH AWARD IN ACCORDANCE WITH THE
TERMS HEREOF.

7.4          APPLICATION OF PROCEEDS OR AWARD.

7.4.1       APPLICATION TO RESTORATION. IF AN INSURED CASUALTY OR CONDEMNATION
OCCURS WHERE (I) THE LOSS IS IN AN AGGREGATE AMOUNT LESS THAN TWENTY FIVE
PERCENT (25%) OF THE UNPAID PRINCIPAL; (II) IN THE REASONABLE JUDGMENT OF
LENDER, THE PROPERTY CAN BE RESTORED WITHIN TWELVE (12) MONTHS AFTER ALL
APPLICABLE RESTORATION PERMITS HAVE BEEN OBTAINED, AND PRIOR TO SIX (6) MONTHS
BEFORE THE STATED MATURITY DATE AND PRIOR TO THE EXPIRATION OF THE RENTAL OR
BUSINESS INTERRUPTION INSURANCE WITH RESPECT THERETO, TO THE PROPERTY’S
PRE-EXISTING CONDITION AND UTILITY AS EXISTED IMMEDIATELY PRIOR TO SUCH INSURED
CASUALTY OR CONDEMNATION AND TO AN ECONOMIC UNIT NOT LESS VALUABLE AND NOT LESS
USEFUL THAN THE SAME WAS IMMEDIATELY PRIOR TO THE INSURED CASUALTY OR
CONDEMNATION, AND AFTER SUCH RESTORATION WILL ADEQUATELY SECURE THE DEBT;
(III) LESS THAN (X) THIRTY PERCENT (30%), IN THE CASE OF AN INSURED CASUALTY OR
(Y) FIFTEEN PERCENT (15%), IN THE CASE OF A CONDEMNATION, OF THE RENTABLE AREA
OF THE IMPROVEMENTS HAS BEEN DAMAGED, DESTROYED OR RENDERED UNUSABLE AS A RESULT
OF SUCH INSURED CASUALTY OR CONDEMNATION; (IV) LEASES DEMISING IN THE AGGREGATE
AT LEAST SIXTY-FIVE PERCENT (65%) OF THE TOTAL RENTABLE SPACE IN THE PROPERTY
AND IN EFFECT AS OF THE DATE OF THE OCCURRENCE OF SUCH INSURED CASUALTY OR
CONDEMNATION REMAIN IN FULL FORCE AND EFFECT DURING AND AFTER THE COMPLETION OF
THE RESTORATION (HEREINAFTER DEFINED); (V) LENDER SHALL DETERMINE THAT THE DEBT
SERVICE COVERAGE RATIO FOR THE REMAINING TERM FOLLOWING COMPLETION OF
RESTORATION SHALL BE AT LEAST 1.10:1.00; AND (VI) NO EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE THEN CONTINUING, THEN THE PROCEEDS OR THE AWARD, AS THE CASE MAY
BE (AFTER REIMBURSEMENT OF ANY EXPENSES INCURRED BY LENDER), SHALL BE APPLIED TO
PAY FOR OR REIMBURSE BORROWER FOR THE COST OF RESTORING, REPAIRING, REPLACING OR
REBUILDING THE PROPERTY (THE “RESTORATION”), IN THE MANNER SET FORTH HEREIN.
BORROWER SHALL COMMENCE AND DILIGENTLY PROSECUTE SUCH RESTORATION.
NOTWITHSTANDING THE FOREGOING, IN NO EVENT SHALL LENDER BE OBLIGATED TO APPLY
THE PROCEEDS OR AWARD TO REIMBURSE BORROWER FOR THE COST OF RESTORATION UNLESS,
IN ADDITION TO SATISFACTION OF THE FOREGOING CONDITIONS, BOTH (X) BORROWER SHALL
PAY (AND IF REQUIRED BY LENDER, BORROWER SHALL DEPOSIT WITH LENDER IN ADVANCE)
ALL COSTS OF SUCH RESTORATION

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IN EXCESS OF THE NET AMOUNT OF THE PROCEEDS OR THE AWARD MADE AVAILABLE PURSUANT
TO THE TERMS HEREOF; AND (Y) LENDER SHALL HAVE RECEIVED EVIDENCE REASONABLY
SATISFACTORY TO IT THAT DURING THE PERIOD OF THE RESTORATION, THE RENTS WILL BE
AT LEAST EQUAL TO THE SUM OF THE OPERATING EXPENSES AND DEBT SERVICE, AS
REASONABLY DETERMINED BY LENDER.

7.4.2       APPLICATION TO DEBT. EXCEPT AS PROVIDED IN SECTION 7.4.1 ABOVE, ANY
PROCEEDS AND/OR AWARD MAY, AT THE OPTION OF LENDER IN ITS DISCRETION, BE APPLIED
TO THE PAYMENT OF (I) ACCRUED BUT UNPAID INTEREST ON THE NOTE, (II) THE UNPAID
PRINCIPAL AND (III) OTHER CHARGES DUE UNDER THE NOTE AND/OR ANY OF THE OTHER
LOAN DOCUMENTS, OR APPLIED TO REIMBURSE BORROWER FOR THE COST OF ANY
RESTORATION, IN THE MANNER SET FORTH IN SECTION 7.4.3 BELOW. ANY SUCH PREPAYMENT
OF THE LOAN SHALL BE WITHOUT ANY YIELD MAINTENANCE PREMIUM, UNLESS AN EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING AT THE TIME THE PROCEEDS ARE RECEIVED
FROM THE INSURANCE COMPANY OR THE AWARD IS RECEIVED FROM THE CONDEMNING
AUTHORITY, AS THE CASE MAY BE, IN WHICH EVENT BORROWER SHALL PAY TO LENDER AN
ADDITIONAL AMOUNT EQUAL TO THE YIELD MAINTENANCE PREMIUM, IF ANY, THAT MAY BE
REQUIRED WITH RESPECT TO THE AMOUNT OF THE PROCEEDS OR AWARD APPLIED TO THE
UNPAID PRINCIPAL. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IF
ANY PROCEEDS OR AWARD ARE NOT REQUIRED TO BE MADE AVAILABLE FOR A RESTORATION
(OTHER THAN SURPLUS PROCEEDS OF AN AWARD APPLIED PURSUANT TO SECTION 7.4.3), ARE
RETAINED AND APPLIED BY LENDER TOWARD THE PAYMENT OF THE DEBT AND THE AMOUNT SO
APPLIED SHALL EXCEED $20,000,000, BORROWER MAY PREPAY THE ENTIRE OUTSTANDING
PRINCIPAL WITHOUT PAYMENT OF ANY YIELD MAINTENANCE PREMIUM PROVIDED THAT
(X) SUCH PREPAYMENT IS MADE WITHIN 90 DAYS AFTER LENDER APPLIES SUCH PROCEEDS OR
AWARD TO THE DEBT AND (Y) TOGETHER WITH SUCH PREPAYMENT, BORROWER SHALL PAY TO
LENDER ALL ACCRUED AND UNPAID INTEREST AND ALL OTHER SUMS PAYABLE UNDER THE LOAN
DOCUMENTS AND (Z) IF SUCH PREPAYMENT DOES NOT OCCUR ON A PAYMENT DATE, BORROWER
SHALL PAY ALL INTEREST THAT WOULD HAVE ACCRUED DURING THE BALANCE OF THE RELATED
INTEREST PERIOD.

7.4.3       PROCEDURE FOR APPLICATION TO RESTORATION. IF BORROWER IS ENTITLED TO
REIMBURSEMENT OUT OF THE PROCEEDS OR AN AWARD HELD BY LENDER, SUCH PROCEEDS OR
AWARD SHALL BE DISBURSED FROM TIME TO TIME FROM THE CASUALTY/CONDEMNATION
SUBACCOUNT UPON LENDER BEING FURNISHED WITH (I) EVIDENCE SATISFACTORY TO LENDER
OF THE ESTIMATED COST OF COMPLETION OF THE RESTORATION, (II) A FIXED PRICE OR
GUARANTEED MAXIMUM COST CONSTRUCTION CONTRACT FOR RESTORATION SATISFACTORY TO
LENDER, (III) PRIOR TO THE COMMENCEMENT OF RESTORATION, ALL IMMEDIATELY
AVAILABLE FUNDS IN ADDITION TO THE PROCEEDS OR AWARD THAT IN LENDER’S JUDGMENT
ARE REQUIRED TO COMPLETE THE PROPOSED RESTORATION (OR SUCH ADDITIONAL FUNDS ARE
IRREVOCABLY COMMITTED TO THE SATISFACTION OF LENDER BY OR ON BEHALF OF BORROWER
FOR THAT PURPOSE), (IV) SUCH ARCHITECT’S CERTIFICATES, WAIVERS OF LIEN,
CONTRACTOR’S SWORN STATEMENTS, TITLE INSURANCE ENDORSEMENTS, BONDS, PLATS OF
SURVEY, PERMITS, APPROVALS, LICENSES AND SUCH OTHER DOCUMENTS AND ITEMS AS
LENDER MAY REASONABLY REQUIRE AND APPROVE IN LENDER’S DISCRETION, AND (V) ALL
PLANS AND SPECIFICATIONS FOR SUCH RESTORATION, SUCH PLANS AND SPECIFICATIONS TO
BE APPROVED BY LENDER IN WRITING PRIOR TO COMMENCEMENT OF ANY WORK. LENDER MAY,
AT BORROWER’S EXPENSE, RETAIN A CONSULTANT TO REVIEW AND APPROVE ALL REQUESTS
FOR DISBURSEMENTS, WHICH APPROVAL SHALL ALSO BE A CONDITION PRECEDENT TO ANY
DISBURSEMENT. NO PAYMENT MADE PRIOR TO THE FINAL COMPLETION OF THE RESTORATION
SHALL EXCEED NINETY PERCENT (90%) OF THE VALUE OF THE WORK PERFORMED FROM TIME
TO TIME; FUNDS OTHER THAN THE PROCEEDS OR AWARD SHALL BE DISBURSED PRIOR TO
DISBURSEMENT OF SUCH PROCEEDS OR AWARD; AND AT ALL TIMES, THE UNDISBURSED
BALANCE OF SUCH PROCEEDS OR AWARD REMAINING IN THE HANDS OF LENDER, TOGETHER
WITH FUNDS DEPOSITED FOR THAT PURPOSE OR IRREVOCABLY COMMITTED TO THE

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SATISFACTION OF LENDER BY OR ON BEHALF OF BORROWER FOR THAT PURPOSE, SHALL BE AT
LEAST SUFFICIENT IN THE REASONABLE JUDGMENT OF LENDER TO PAY FOR THE COST OF
COMPLETION OF THE RESTORATION, FREE AND CLEAR OF ALL LIENS OR CLAIMS FOR LIEN.
PROVIDED NO DEFAULT OR EVENT OF DEFAULT THEN EXISTS, ANY SURPLUS THAT REMAINS
OUT OF THE PROCEEDS HELD BY LENDER AFTER PAYMENT OF SUCH COSTS OF RESTORATION
SHALL BE PAID TO BORROWER. ANY SURPLUS THAT REMAINS OUT OF THE AWARD RECEIVED BY
LENDER AFTER PAYMENT OF SUCH COSTS OF RESTORATION SHALL, IN THE DISCRETION OF
LENDER, BE RETAINED BY LENDER AND APPLIED TO PAYMENT OF THE DEBT OR RETURNED TO
BORROWER.

8.                                      DEFAULTS

8.1          EVENTS OF DEFAULT. AN “EVENT OF DEFAULT” SHALL EXIST WITH RESPECT
TO THE LOAN IF ANY OF THE FOLLOWING SHALL OCCUR:

(A)           ANY PORTION OF THE DEBT IS NOT PAID WHEN DUE OR ANY OTHER AMOUNT
UNDER SECTION 3.11(A)(I) THROUGH (VIII) HEREOF IS NOT PAID IN FULL ON EACH
PAYMENT DATE (PROVIDED, HOWEVER, IF ADEQUATE FUNDS ARE AVAILABLE IN THE DEPOSIT
ACCOUNT FOR SUCH PAYMENTS, THE FAILURE BY THE DEPOSIT BANK TO ALLOCATE SUCH
FUNDS INTO THE APPROPRIATE SUBACCOUNTS SHALL NOT CONSTITUTE AN EVENT OF
DEFAULT);

(B)           ANY OF THE TAXES ARE NOT PAID WHEN DUE (UNLESS LENDER IS PAYING
SUCH TAXES PURSUANT TO SECTION 3.3 HEREOF), SUBJECT TO BORROWER’S RIGHT TO
CONTEST TAXES IN ACCORDANCE WITH SECTION 5.2 HEREOF;

(C)           THE POLICIES ARE NOT KEPT IN FULL FORCE AND EFFECT, OR ARE NOT
DELIVERED TO LENDER PURSUANT TO SECTION 7.1.2(V) WITHIN TEN (10) DAYS AFTER
REQUEST;

(D)           (I) A TRANSFER OTHER THAN A PERMITTED TRANSFER OCCURS, OR (II) ANY
EVENT, OR SERIES OF EVENTS, OCCURS THAT RESULTS IN THE INDIVIDUALS WHO, AS OF
THE DATE OF THIS AGREEMENT, ARE MEMBERS OF THE INCUMBENT BOARD OF THE BEHRINGER
HARVARD REIT CEASING FOR ANY REASON TO CONSTITUTE AT LEAST A MAJORITY OF SUCH
BOARD OF DIRECTORS, PROVIDED, HOWEVER, THAT IF THE ELECTION, OR NOMINATION FOR
ELECTION BY THE BEHRINGER HARVARD REIT’S SHAREHOLDERS, OF ANY NEW DIRECTOR WAS
APPROVED BY A VOTE OF AT LEAST A MAJORITY OF THE INCUMBENT BOARD, SUCH NEW
DIRECTOR SHALL, FOR PURPOSES OF THIS AGREEMENT, BE CONSIDERED AS A MEMBER OF THE
INCUMBENT BOARD; PROVIDED FURTHER, HOWEVER, THAT NO INDIVIDUAL SHALL BE
CONSIDERED A MEMBER OF THE INCUMBENT BOARD IF SUCH INDIVIDUAL INITIALLY ASSUMED
OFFICE AS A RESULT OF EITHER AN ACTUAL OR THREATENED “ELECTION CONTEST” (AS
DESCRIBED IN RULE 14A-11 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934)
OR OTHER ACTUAL OR THREATENED SOLICITATION OF PROXIES OR CONSENTS BY OR ON
BEHALF OF A PERSON OTHER THAN THE BOARD (A “PROXY CONTEST”) INCLUDING BY REASON
OF ANY AGREEMENT INTENDED TO AVOID OR SETTLE ANY ELECTION CONTECT OR PROXY
CONTEST;

(E)           ANY REPRESENTATION OR WARRANTY MADE BY BORROWER OR GUARANTOR OR IN
ANY LOAN DOCUMENT, OR IN ANY REPORT, CERTIFICATE, FINANCIAL STATEMENT OR OTHER
INSTRUMENT, AGREEMENT OR DOCUMENT FURNISHED BY BORROWER OR GUARANTOR IN
CONNECTION WITH ANY LOAN DOCUMENT, SHALL BE FALSE OR MISLEADING IN ANY MATERIAL
RESPECT AS OF THE DATE THE REPRESENTATION OR WARRANTY WAS MADE;

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(F)            BORROWER OR GUARANTOR SHALL (I) MAKE AN ASSIGNMENT FOR THE
BENEFIT OF CREDITORS, OR (II) GENERALLY NOT BE PAYING ITS DEBTS AS THEY BECOME
DUE;

(G)           A RECEIVER, LIQUIDATOR OR TRUSTEE SHALL BE APPOINTED FOR BORROWER
OR GUARANTOR; OR BORROWER OR GUARANTOR SHALL BE ADJUDICATED A BANKRUPT OR
INSOLVENT; OR ANY PETITION FOR BANKRUPTCY, REORGANIZATION OR ARRANGEMENT
PURSUANT TO FEDERAL BANKRUPTCY LAW, OR ANY SIMILAR FEDERAL OR STATE LAW, SHALL
BE FILED BY OR AGAINST, CONSENTED TO, OR ACQUIESCED IN BY, BORROWER OR
GUARANTOR, AS THE CASE MAY BE; OR ANY PROCEEDING FOR THE DISSOLUTION OR
LIQUIDATION OF BORROWER OR GUARANTOR SHALL BE INSTITUTED; PROVIDED, HOWEVER, IF
SUCH APPOINTMENT, ADJUDICATION, PETITION OR PROCEEDING WAS INVOLUNTARY AND NOT
CONSENTED TO BY BORROWER OR GUARANTOR, AS THE CASE MAY BE, ONLY UPON THE SAME
NOT BEING DISCHARGED, STAYED OR DISMISSED WITHIN SIXTY (60) DAYS;

(H)           BORROWER BREACHES ANY COVENANT CONTAINED IN SECTIONS 5.12.1 (A) -
(F), 5.13, 5.15, 5.25, 5.27 OR 5.28 HEREOF;

(I)            EXCEPT AS EXPRESSLY PERMITTED HEREUNDER, THE ALTERATION,
IMPROVEMENT, DEMOLITION OR REMOVAL OF ALL OR ANY PORTION OF THE IMPROVEMENTS
WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER (IF SUCH CONSENT IS REQUIRED
PURSUANT TO THE TERMS OF THIS AGREEMENT);

(J)            AN EVENT OF DEFAULT AS DEFINED OR DESCRIBED ELSEWHERE IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT OCCURS;

(K)           A DEFAULT OCCURS UNDER ANY TERM, COVENANT OR PROVISION SET FORTH
HEREIN OR IN ANY OTHER LOAN DOCUMENT WHICH SPECIFICALLY CONTAINS A NOTICE
REQUIREMENT OR GRACE PERIOD AND SUCH NOTICE HAS BEEN GIVEN AND SUCH GRACE PERIOD
HAS EXPIRED;

(L)            ANY OF THE ASSUMPTIONS CONTAINED IN ANY SUBSTANTIVE
NON-CONSOLIDATION OPINION, DELIVERED TO LENDER BY BORROWER’S COUNSEL IN
CONNECTION WITH THE LOAN OR OTHERWISE HEREUNDER, WERE NOT TRUE AND CORRECT AS OF
THE DATE OF SUCH OPINION OR THEREAFTER BECAME UNTRUE OR INCORRECT;

(M)          BORROWER DIRECTLY OR INDIRECTLY CREATES, INCURS OR ASSUMES ANY
INDEBTEDNESS OTHER THAN (I) THE DEBT AND (II) UNSECURED TRADE PAYABLES INCURRED
IN THE ORDINARY COURSE OF BUSINESS RELATING TO THE OWNERSHIP AND OPERATION OF
THE PROPERTY WHICH DO NOT EXCEED, AT ANY TIME, A MAXIMUM AMOUNT OF TWO PERCENT
(2%) OF THE ORIGINAL AMOUNT OF THE PRINCIPAL; PROVIDED, HOWEVER, SUCH TWO
PERCENT (2%) LIMITATION SHALL NOT APPLY TO (I) ANY ASSET MANAGEMENT OR PROPERTY
MANAGEMENT FEE PAYABLE PURSUANT TO THE TERMS OF THE MANAGEMENT AGREEMENT OR
(II) ANY AMOUNTS THAT ARE PAYABLE OUT OF THE CAPITAL RESERVE SUBACCOUNT, THE
ROLLOVER RESERVE SUBACCOUNT OR ANY OTHER RESERVES ESTABLISHED UNDER THIS
AGREEMENT; OR

(N)           A DEFAULT SHALL BE CONTINUING UNDER ANY OF THE OTHER TERMS,
COVENANTS OR CONDITIONS OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT NOT
OTHERWISE SPECIFIED IN THIS SECTION 8.1, FOR TEN (10) DAYS AFTER NOTICE TO
BORROWER (AND GUARANTOR, IF APPLICABLE) FROM LENDER, IN THE CASE OF ANY DEFAULT
WHICH CAN BE CURED BY THE PAYMENT OF A SUM OF MONEY, OR FOR THIRTY (30) DAYS
AFTER NOTICE FROM LENDER IN THE CASE OF ANY OTHER DEFAULT; PROVIDED, HOWEVER,
THAT IF SUCH NON-MONETARY DEFAULT IS SUSCEPTIBLE OF CURE BUT CANNOT REASONABLY
BE CURED WITHIN SUCH THIRTY (30)-DAY PERIOD, AND BORROWER (OR GUARANTOR, IF
APPLICABLE) SHALL HAVE COMMENCED TO CURE SUCH DEFAULT WITHIN SUCH THIRTY
(30)-DAY PERIOD AND THEREAFTER DILIGENTLY AND EXPEDITIOUSLY PROCEEDS TO CURE THE
SAME, SUCH THIRTY (30)-DAY PERIOD SHALL BE EXTENDED FOR AN ADDITIONAL PERIOD OF
TIME AS IS REASONABLY NECESSARY FOR BORROWER (OR GUARANTOR, IF APPLICABLE) IN
THE EXERCISE OF DUE DILIGENCE TO CURE SUCH

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DEFAULT, SUCH ADDITIONAL PERIOD NOT TO EXCEED SIXTY (60) DAYS; IT BEING FURTHER
ACKNOWLEDGED THAT: (A) A DEFAULT UNDER SECTION 6(C) OF THE GUARANTY MAY BE CURED
BY DELIVERY TO LENDER OF CASH IN AN AMOUNT EQUAL TO THE GUARANTY LIMIT AMOUNT;
(B) ANY CASH DELIVERED PURSUANT TO THE FOREGOING CLAUSE (A) (IF AN EVENT OF
DEFAULT HAS OCCURRED) SHALL BE ALLOCATED TO THE DEBT, IN SUCH ORDER AND IN SUCH
MANNER AS LENDER SHALL ELECT IN ITS SOLE AND ABSOLUTE DISCRETION, INCLUDING (IF
THE LOAN HAS BEEN ACCELERATED) TO MAKE A PREPAYMENT OF PRINCIPAL (TOGETHER WITH
THE APPLICABLE YIELD MAINTENANCE PREMIUM APPLICABLE THERETO); AND (C) ANY CASH
DELIVERED PURSUANT TO THE FOREGOING CLAUSE (A) (IF NO EVENT OF DEFAULT HAS
OCCURRED) SHALL BE DEPOSITED BY LENDER INTO THE CAPITAL RESERVE SUBACCOUNT AND
THE ROLLOVER RESERVE SUBACCOUNT, IN THE RESPECTIVE AMOUNTS CONTEMPLATED UNDER
SECTION 3, AND SHALL BE GOVERNED BY THE PROVISIONS OF SECTIONS, 3.4 AND 3.5, AS
APPLICABLE, AS WELL AS THE OTHER TERMS AND CONDITIONS OF THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.

8.2          REMEDIES.

8.2.1       ACCELERATION. UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT (OTHER THAN AN EVENT OF DEFAULT DESCRIBED IN PARAGRAPH (F) OR
(G) OF SECTION 8.1 ABOVE) AND AT ANY TIME AND FROM TIME TO TIME THEREAFTER
DURING THE CONTINUANCE OF SUCH EVENT OF DEFAULT, IN ADDITION TO ANY OTHER RIGHTS
OR REMEDIES AVAILABLE TO IT PURSUANT TO THE LOAN DOCUMENTS OR AT LAW OR IN
EQUITY, LENDER MAY TAKE SUCH ACTION, WITHOUT NOTICE OR DEMAND, THAT LENDER DEEMS
ADVISABLE TO PROTECT AND ENFORCE ITS RIGHTS AGAINST BORROWER AND IN AND TO THE
PROPERTY; INCLUDING DECLARING THE DEBT TO BE IMMEDIATELY DUE AND PAYABLE
(INCLUDING UNPAID INTEREST), DEFAULT RATE INTEREST, LATE PAYMENT CHARGES, YIELD
MAINTENANCE PREMIUM AND ANY OTHER AMOUNTS OWING BY BORROWER), WITHOUT NOTICE OR
DEMAND; AND UPON ANY EVENT OF DEFAULT DESCRIBED IN PARAGRAPH (F) OR (G) OF
SECTION 8.1 ABOVE, THE DEBT (INCLUDING UNPAID INTEREST, DEFAULT RATE INTEREST,
LATE PAYMENT CHARGES, YIELD MAINTENANCE PREMIUM AND ANY OTHER AMOUNTS OWING BY
BORROWER) SHALL IMMEDIATELY AND AUTOMATICALLY BECOME DUE AND PAYABLE, WITHOUT
NOTICE OR DEMAND, AND BORROWER HEREBY EXPRESSLY WAIVES ANY SUCH NOTICE OR
DEMAND, ANYTHING CONTAINED IN ANY LOAN DOCUMENT TO THE CONTRARY NOTWITHSTANDING.

8.2.2       REMEDIES CUMULATIVE. UPON THE OCCURRENCE AND DURING THE CONTINUANCE
OF AN EVENT OF DEFAULT, ALL OR ANY ONE OR MORE OF THE RIGHTS, POWERS, PRIVILEGES
AND OTHER REMEDIES AVAILABLE TO LENDER AGAINST BORROWER UNDER THE LOAN DOCUMENTS
OR AT LAW OR IN EQUITY MAY BE EXERCISED BY LENDER AT ANY TIME AND FROM TIME TO
TIME, WHETHER OR NOT ALL OR ANY OF THE DEBT SHALL BE DECLARED, OR BE
AUTOMATICALLY, DUE AND PAYABLE, AND WHETHER OR NOT LENDER SHALL HAVE COMMENCED
ANY FORECLOSURE PROCEEDING OR OTHER ACTION FOR THE ENFORCEMENT OF ITS RIGHTS AND
REMEDIES UNDER ANY OF THE LOAN DOCUMENTS. ANY SUCH ACTIONS TAKEN BY LENDER SHALL
BE CUMULATIVE AND CONCURRENT AND MAY BE PURSUED INDEPENDENTLY, SINGLY,
SUCCESSIVELY, TOGETHER OR OTHERWISE, AT SUCH TIME AND IN SUCH ORDER AS LENDER
MAY DETERMINE IN ITS DISCRETION, TO THE FULLEST EXTENT PERMITTED BY LAW, WITHOUT
IMPAIRING OR OTHERWISE AFFECTING THE OTHER RIGHTS AND REMEDIES OF LENDER
PERMITTED BY LAW, EQUITY OR CONTRACT OR AS SET FORTH IN THE LOAN DOCUMENTS.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BORROWER AGREES THAT IF AN
EVENT OF DEFAULT IS CONTINUING, (I) TO THE EXTENT PERMITTED BY APPLICABLE LAW,
LENDER IS NOT SUBJECT TO ANY “ONE

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ACTION” OR “ELECTION OF REMEDIES” LAW OR RULE, AND (II) ALL LIENS AND OTHER
RIGHTS, REMEDIES OR PRIVILEGES PROVIDED TO LENDER SHALL REMAIN IN FULL FORCE AND
EFFECT UNTIL LENDER HAS EXHAUSTED ALL OF ITS REMEDIES AGAINST THE PROPERTY, THE
SECURITY INSTRUMENT HAS BEEN FORECLOSED, THE PROPERTY HAS BEEN SOLD AND/OR
OTHERWISE REALIZED UPON IN SATISFACTION OF THE DEBT OR THE DEBT HAS BEEN PAID IN
FULL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTHING CONTAINED IN ANY LOAN
DOCUMENT SHALL BE CONSTRUED AS REQUIRING LENDER TO RESORT TO ANY PARTICULAR
PROPERTY OR ANY PORTION OF THE PROPERTY FOR THE SATISFACTION OF ANY OF THE DEBT
IN PREFERENCE OR PRIORITY TO ANY OTHER PORTION, AND LENDER MAY SEEK SATISFACTION
OUT OF THE ENTIRE PROPERTY OR ANY PART THEREOF, IN ITS DISCRETION.

8.2.3       SEVERANCE. DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, LENDER
SHALL HAVE THE RIGHT FROM TIME TO TIME TO SEVER THE NOTE AND THE OTHER LOAN
DOCUMENTS INTO ONE OR MORE SEPARATE NOTES, MORTGAGES AND OTHER SECURITY
DOCUMENTS IN SUCH DENOMINATIONS AND PRIORITIES OF PAYMENT AND LIENS AS LENDER
SHALL DETERMINE IN ITS DISCRETION FOR PURPOSES OF EVIDENCING AND ENFORCING ITS
RIGHTS AND REMEDIES. BORROWER SHALL EXECUTE AND DELIVER TO LENDER FROM TIME TO
TIME, PROMPTLY AFTER THE REQUEST OF LENDER, A SEVERANCE AGREEMENT AND SUCH OTHER
DOCUMENTS AS LENDER SHALL REQUEST IN ORDER TO EFFECT THE SEVERANCE DESCRIBED IN
THE PRECEDING SENTENCE, ALL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
LENDER. BORROWER HEREBY ABSOLUTELY AND IRREVOCABLY APPOINTS LENDER AS ITS TRUE
AND LAWFUL ATTORNEY, COUPLED WITH AN INTEREST, IN ITS NAME AND STEAD TO MAKE AND
EXECUTE ALL DOCUMENTS NECESSARY OR DESIRABLE TO EFFECT SUCH SEVERANCE, BORROWER
RATIFYING ALL THAT SUCH ATTORNEY SHALL DO BY VIRTUE THEREOF.

8.2.4       DELAY. NO DELAY OR OMISSION TO EXERCISE ANY REMEDY, RIGHT OR POWER
ACCRUING UPON AN EVENT OF DEFAULT, OR THE GRANTING OF ANY INDULGENCE OR
COMPROMISE BY LENDER SHALL IMPAIR ANY SUCH REMEDY, RIGHT OR POWER HEREUNDER OR
BE CONSTRUED AS A WAIVER THEREOF, BUT ANY SUCH REMEDY, RIGHT OR POWER MAY BE
EXERCISED FROM TIME TO TIME AND AS OFTEN AS MAY BE DEEMED EXPEDIENT. A WAIVER OF
ONE DEFAULT OR EVENT OF DEFAULT SHALL NOT BE CONSTRUED TO BE A WAIVER OF ANY
SUBSEQUENT DEFAULT OR EVENT OF DEFAULT OR TO IMPAIR ANY REMEDY, RIGHT OR POWER
CONSEQUENT THEREON. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT,
LENDER RESERVES THE RIGHT TO SEEK A DEFICIENCY JUDGMENT OR PRESERVE A DEFICIENCY
CLAIM IN CONNECTION WITH THE FORECLOSURE OF THE SECURITY INSTRUMENT TO THE
EXTENT NECESSARY TO FORECLOSE ON ALL OR ANY PORTION OF THE PROPERTY, THE RENTS,
THE CASH MANAGEMENT ACCOUNTS OR ANY OTHER COLLATERAL.

8.2.5       LENDER’S RIGHT TO PERFORM. IF BORROWER FAILS TO PERFORM ANY COVENANT
OR OBLIGATION CONTAINED HEREIN AND SUCH FAILURE SHALL CONTINUE FOR A PERIOD OF
FIVE (5) BUSINESS DAYS AFTER BORROWER’S RECEIPT OF WRITTEN NOTICE THEREOF FROM
LENDER, WITHOUT IN ANY WAY LIMITING LENDER’S RIGHT TO EXERCISE ANY OF ITS
RIGHTS, POWERS OR REMEDIES AS PROVIDED HEREUNDER, OR UNDER ANY OF THE OTHER LOAN
DOCUMENTS, LENDER MAY, BUT SHALL HAVE NO OBLIGATION TO, PERFORM, OR CAUSE
PERFORMANCE OF, SUCH COVENANT OR OBLIGATION, AND ALL COSTS, EXPENSES,
LIABILITIES, PENALTIES AND FINES OF LENDER INCURRED OR PAID IN CONNECTION
THEREWITH SHALL BE PAYABLE BY BORROWER TO LENDER UPON DEMAND AND IF NOT PAID
SHALL BE ADDED TO THE DEBT (AND TO THE EXTENT PERMITTED UNDER APPLICABLE LAWS,
SECURED BY THE SECURITY INSTRUMENT AND OTHER LOAN DOCUMENTS) AND SHALL BEAR
INTEREST THEREAFTER AT THE DEFAULT RATE. NOTWITHSTANDING THE FOREGOING, LENDER
SHALL HAVE NO OBLIGATION TO SEND NOTICE TO BORROWER OF ANY SUCH FAILURE.
ADDITIONALLY, DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, LENDER SHALL HAVE
THE RIGHT, BUT NOT THE OBLIGATION, TO MAKE ANY PROTECTIVE ADVANCE (HEREINAFTER
DEFINED) (PROVIDED, HOWEVER, THAT LENDER WILL ONLY MAKE SUCH PROTECTIVE ADVANCE
FROM ITS OWN FUNDS IF THERE ARE INSUFFICIENT FUNDS IN THE CASH MANAGEMENT
ACCOUNTS),

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AND THE SAME SHALL BE ADDED TO THE DEBT (AND TO THE EXTENT PERMITTED UNDER
APPLICABLE LAWS, SECURED BY THE SECURITY INSTRUMENT AND OTHER LOAN DOCUMENTS)
AND SHALL BEAR INTEREST THEREAFTER AT THE DEFAULT RATE. AS USED HEREIN,
“PROTECTIVE ADVANCE” MEANS ALL SUMS ADVANCED FOR THE PURPOSE OF PAYMENT OF REAL
ESTATE TAXES (INCLUDING SPECIAL PAYMENTS IN LIEU OF REAL ESTATE TAXES),
MAINTENANCE COSTS, INSURANCE PREMIUMS, OPERATING EXPENSES, TRADE PAYABLES OR
OTHER ITEMS WITH RESPECT TO THE PROPERTY (INCLUDING CAPITAL ITEMS) REASONABLY
NECESSARY TO PROTECT THE PROPERTY OR ANY OTHER SECURITY GIVEN FOR THE LOAN OR TO
PRESERVE ANY OF LENDER’S RIGHTS OR REMEDIES UNDER THE LOAN DOCUMENTS.

9.                                      SPECIAL PROVISIONS

9.1          SALE OF NOTE AND SECONDARY MARKET TRANSACTION.

9.1.1       GENERAL; BORROWER COOPERATION. LENDER SHALL HAVE THE RIGHT AT ANY
TIME AND FROM TIME TO TIME (I) TO SELL OR OTHERWISE TRANSFER THE LOAN OR ANY
PORTION THEREOF OR THE LOAN DOCUMENTS OR ANY INTEREST THEREIN TO ONE OR MORE
INVESTORS, (II) TO SELL PARTICIPATION INTERESTS IN THE LOAN TO ONE OR MORE
INVESTORS OR (III) TO SECURITIZE THE LOAN OR ANY PORTION THEREOF IN A SINGLE
ASSET SECURITIZATION OR A POOLED LOAN SECURITIZATION OF RATED SINGLE OR
MULTI-CLASS SECURITIES (THE “SECURITIES”) SECURED BY OR EVIDENCING OWNERSHIP
INTERESTS IN THE NOTE AND THE SECURITY INSTRUMENT (EACH SUCH SALE, ASSIGNMENT,
PARTICIPATION AND/OR SECURITIZATION IS REFERRED TO HEREIN AS A “SECONDARY MARKET
TRANSACTION”). IN CONNECTION WITH ANY SECONDARY MARKET TRANSACTION, BORROWER
SHALL USE ALL REASONABLE EFFORTS AND COOPERATE FULLY AND IN GOOD FAITH WITH
LENDER AND OTHERWISE ASSIST LENDER IN SATISFYING THE MARKET STANDARDS TO WHICH
LENDER CUSTOMARILY ADHERES OR WHICH MAY BE REASONABLY REQUIRED IN THE
MARKETPLACE OR BY THE RATING AGENCIES IN CONNECTION WITH ANY SUCH SECONDARY
MARKET TRANSACTIONS, INCLUDING: (A) TO (I) TO PROVIDE SUCH FINANCIAL AND OTHER
INFORMATION WITH RESPECT TO THE PROPERTY, BORROWER AND ITS AFFILIATES, MANAGER
AND ANY TENANTS OF THE PROPERTY, (II)  PROVIDE BUSINESS PLANS AND BUDGETS
RELATING TO THE PROPERTY AND (III)  PERFORM OR PERMIT OR CAUSE TO BE PERFORMED
OR PERMITTED SUCH SITE INSPECTION, APPRAISALS, SURVEYS, MARKET STUDIES,
ENVIRONMENTAL REVIEWS AND REPORTS, ENGINEERING REPORTS AND OTHER DUE DILIGENCE
INVESTIGATIONS OF THE PROPERTY, AS MAY BE REASONABLY REQUESTED FROM TIME TO TIME
BY LENDER OR THE RATING AGENCIES OR AS MAY BE NECESSARY OR APPROPRIATE IN
CONNECTION WITH A SECONDARY MARKET TRANSACTION OR EXCHANGE ACT REQUIREMENTS (THE
ITEMS PROVIDED TO LENDER PURSUANT TO CLAUSES (I) AND (II) OF THIS PARAGRAPH
(A) BEING CALLED THE “PROVIDED INFORMATION”), TOGETHER, IF CUSTOMARY, WITH
APPROPRIATE VERIFICATION OF AND/OR CONSENTS TO THE PROVIDED INFORMATION THROUGH
LETTERS OF AUDITORS OR OPINIONS OF COUNSEL OF INDEPENDENT ATTORNEYS ACCEPTABLE
TO LENDER AND THE RATING AGENCIES; (B) AT BORROWER’S EXPENSE, CAUSE COUNSEL TO
RENDER OPINIONS AS TO NON-CONSOLIDATION (WHICH MAY BE AN UPDATE OF AN EXISTING
NON-CONSOLIDATION OPINION) AND ANY OTHER OPINION CUSTOMARY IN SECURITIZATION
TRANSACTIONS WITH RESPECT TO THE PROPERTY, BORROWER AND ITS AFFILIATES, WHICH
COUNSEL AND OPINIONS SHALL BE REASONABLY SATISFACTORY TO LENDER AND THE RATING
AGENCIES; (C) MAKE SUCH REPRESENTATIONS AND WARRANTIES AS OF THE CLOSING DATE OF
ANY SECONDARY MARKET TRANSACTION WITH RESPECT TO THE PROPERTY, BORROWER AND THE
LOAN DOCUMENTS AS ARE CUSTOMARILY PROVIDED IN SUCH TRANSACTIONS AND AS MAY BE
REASONABLY REQUESTED BY LENDER OR THE RATING AGENCIES AND CONSISTENT WITH THE
FACTS COVERED BY SUCH REPRESENTATIONS AND WARRANTIES AS THEY EXIST ON THE DATE
THEREOF, INCLUDING THE REPRESENTATIONS AND WARRANTIES MADE IN THE LOAN
DOCUMENTS; (D) PROVIDE CURRENT CERTIFICATES OF GOOD STANDING AND QUALIFICATION
WITH RESPECT TO BORROWER AND GUARANTOR FROM APPROPRIATE GOVERNMENTAL
AUTHORITIES; AND (E) EXECUTE SUCH

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AMENDMENTS TO THE LOAN DOCUMENTS AND BORROWER’S ORGANIZATIONAL DOCUMENTS, AS MAY
BE REQUESTED BY LENDER OR THE RATING AGENCIES OR OTHERWISE TO EFFECT A SECONDARY
MARKET TRANSACTION, PROVIDED THAT NOTHING CONTAINED IN THIS SUBSECTION (E) SHALL
RESULT IN CHANGES TO LOAN TERMS ADVERSE TO BORROWER OR REQUIRE BORROWER TO INCUR
ANY ADDITIONAL LIABILITIES. BORROWER’S COOPERATION OBLIGATIONS SET FORTH HEREIN
SHALL CONTINUE UNTIL THE LOAN HAS BEEN PAID IN FULL.

9.1.2       USE OF INFORMATION. BORROWER UNDERSTANDS THAT ALL OR ANY PORTION OF
THE PROVIDED INFORMATION AND ANY OTHER INFORMATION AND/OR MATERIALS DELIVERED BY
OR ON BEHALF OF BORROWER, GUARANTOR OR ANY OF THEIR RESPECTIVE AFFILIATES MAY BE
INCLUDED IN DISCLOSURE DOCUMENTS IN CONNECTION WITH A SECONDARY MARKET
TRANSACTION, INCLUDING A PROSPECTUS OR PRIVATE PLACEMENT MEMORANDUM (EACH, A
“DISCLOSURE DOCUMENT”) AND MAY ALSO BE INCLUDED IN FILINGS WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED (THE
“EXCHANGE ACT”), OR PROVIDED OR MADE AVAILABLE TO INVESTORS OR PROSPECTIVE
INVESTORS IN THE SECURITIES, THE RATING AGENCIES, AND SERVICE PROVIDERS OR OTHER
PARTIES RELATING TO THE SECONDARY MARKET TRANSACTION. IF THE DISCLOSURE DOCUMENT
IS REQUIRED TO BE REVISED, BORROWER SHALL COOPERATE WITH LENDER IN UPDATING THE
PROVIDED INFORMATION OR SUCH OTHER INFORMATION AND/OR MATERIALS FOR INCLUSION OR
SUMMARY IN THE DISCLOSURE DOCUMENT OR FOR OTHER USE REASONABLY REQUIRED IN
CONNECTION WITH A SECONDARY MARKET TRANSACTION BY PROVIDING ALL CURRENT
INFORMATION PERTAINING TO BORROWER, MANAGER AND THE PROPERTY NECESSARY TO KEEP
THE DISCLOSURE DOCUMENT ACCURATE AND COMPLETE IN ALL MATERIAL RESPECTS WITH
RESPECT TO SUCH MATTERS.

9.1.3       BORROWER OBLIGATIONS REGARDING DISCLOSURE DOCUMENTS. IN CONNECTION
WITH A DISCLOSURE DOCUMENT, BORROWER SHALL: (A) IF REQUESTED BY LENDER, CERTIFY
IN WRITING THAT BORROWER HAS CAREFULLY EXAMINED THOSE PORTIONS OF SUCH
DISCLOSURE DOCUMENT, PERTAINING TO BORROWER, THE PROPERTY, MANAGER AND THE LOAN,
AND THAT SUCH PORTIONS DO NOT CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR
OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS MADE, IN
THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING; AND
(B) INDEMNIFY (IN A SEPARATE INSTRUMENT OF INDEMNITY, IF SO REQUESTED BY LENDER)
(I) ANY UNDERWRITER, SYNDICATE MEMBER OR PLACEMENT AGENT (COLLECTIVELY, THE
“UNDERWRITERS”) RETAINED BY LENDER OR ITS ISSUING COMPANY AFFILIATE (THE
“ISSUER”) IN CONNECTION WITH A SECONDARY MARKET TRANSACTION, (II) LENDER AND
(III) THE ISSUER THAT IS NAMED IN THE DISCLOSURE DOCUMENT OR REGISTRATION
STATEMENT RELATING TO A SECONDARY MARKET TRANSACTION (THE “REGISTRATION
STATEMENT”), AND EACH OF THE ISSUER’S DIRECTORS, EACH OF ITS OFFICERS WHO HAVE
SIGNED THE REGISTRATION STATEMENT AND EACH PERSON OR ENTITY WHO CONTROLS THE
ISSUER OR THE LENDER WITHIN THE MEANING OF SECTION 15 OF THE SECURITIES ACT OR
SECTION 30 OF THE EXCHANGE ACT (COLLECTIVELY WITHIN (III), THE “LEHMAN GROUP”),
AND EACH OF ITS DIRECTORS AND EACH PERSON WHO CONTROLS EACH OF THE UNDERWRITERS,
WITHIN THE MEANING OF SECTION 15 OF THE SECURITIES ACT AND SECTION 20 OF THE
EXCHANGE ACT (COLLECTIVELY, THE “UNDERWRITER GROUP”) FOR ANY LOSSES, CLAIMS,
DAMAGES OR LIABILITIES (THE “LIABILITIES”) TO WHICH LENDER, THE LEHMAN GROUP OR
THE UNDERWRITER GROUP MAY BECOME SUBJECT (INCLUDING REIMBURSING ALL OF THEM FOR
ANY LEGAL OR OTHER EXPENSES ACTUALLY INCURRED IN CONNECTION WITH INVESTIGATING
OR DEFENDING THE LIABILITIES) INSOFAR AS THE LIABILITIES ARISE OUT OF OR ARE
BASED UPON ANY UNTRUE STATEMENT OF ANY MATERIAL FACT CONTAINED IN ANY OF THE
PROVIDED INFORMATION OR IN ANY OF THE APPLICABLE PORTIONS OF SUCH SECTIONS OF
THE DISCLOSURE DOCUMENT APPLICABLE TO BORROWER, MANAGER, THE PROPERTY OR THE
LOAN, OR ARISE OUT OF OR ARE BASED UPON THE OMISSION TO STATE THEREIN A MATERIAL
FACT REQUIRED TO BE STATED IN THE APPLICABLE

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PORTIONS OF SUCH SECTIONS OR NECESSARY IN ORDER TO MAKE THE STATEMENTS IN THE
APPLICABLE PORTIONS OF SUCH SECTIONS IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH
THEY WERE MADE, NOT MISLEADING; PROVIDED, HOWEVER, THAT BORROWER SHALL NOT BE
REQUIRED TO INDEMNIFY LENDER FOR ANY LIABILITIES RELATING TO UNTRUE STATEMENTS
OR OMISSIONS WHICH BORROWER IDENTIFIED TO LENDER IN WRITING AT THE TIME OF
BORROWER’S EXAMINATION OF SUCH DISCLOSURE DOCUMENT OR WHICH BORROWER IDENTIFIED
TO LENDER IN WRITING AT LEAST THREE (3) BUSINESS DAYS PRIOR TO LENDER’S DELIVERY
OF SUCH DISCLOSURE DOCUMENT TO ANY THIRD PARTY IN CONNECTION WITH ANY SECONDARY
MARKET TRANSACTION, OR (II) ANY INFORMATION OR DOCUMENT NOT PROVIDED TO OR
CERTIFIED BY BORROWER. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
THIS SECTION 9.1.3, NOTHING CONTAINED HEREIN SHALL IMPOSE LIABILITY UPON
BORROWER FOR ANY LOSSES, CLAIMS, DAMAGES OR LIABILITY ARISING OUT OF OR BASED
UPON AN UNTRUE STATEMENT OF ANY MATERIAL FACT CONTAINED IN ANY STATEMENT, REPORT
OR DOCUMENT PROVIDED TO LENDER ON BEHALF OF BORROWER BY A PARTY WHO IS NOT AN
AFFILIATE OF BORROWER (A “THIRD PARTY REPORT”), UNLESS BORROWER HAD ACTUAL
KNOWLEDGE AT THE TIME BORROWER PROVIDED SUCH STATEMENT, REPORT OR DOCUMENT TO
LENDER THAT SUCH THIRD PARTY REPORT CONTAINS SUCH UNTRUE STATEMENT.

9.1.4       BORROWER INDEMNITY REGARDING FILINGS. IN CONNECTION WITH FILINGS
UNDER THE EXCHANGE ACT, BORROWER SHALL (I) INDEMNIFY LENDER, THE LEHMAN GROUP
AND THE UNDERWRITER GROUP FOR ANY LIABILITIES TO WHICH LENDER, THE LEHMAN GROUP
OR THE UNDERWRITER GROUP MAY BECOME SUBJECT INSOFAR AS THE LIABILITIES ARISE OUT
OF OR ARE BASED UPON THE OMISSION TO STATE IN THE PROVIDED INFORMATION A
MATERIAL FACT REQUIRED TO BE STATED IN THE PROVIDED INFORMATION IN ORDER TO MAKE
THE STATEMENTS IN THE PROVIDED INFORMATION, IN LIGHT OF THE CIRCUMSTANCES UNDER
WHICH THEY WERE MADE NOT MISLEADING AND (II) REIMBURSE LENDER, THE LEHMAN GROUP
OR THE UNDERWRITER GROUP FOR ANY LEGAL OR OTHER EXPENSES ACTUALLY INCURRED BY
LENDER, LEHMAN GROUP OR THE UNDERWRITER GROUP IN CONNECTION WITH DEFENDING OR
INVESTIGATING THE LIABILITIES. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS SECTION 9.1.4, NOTHING CONTAINED HEREIN SHALL IMPOSE LIABILITY
UPON BORROWER FOR ANY LIABILITIES ARISING OUT OF OR BASED UPON AN UNTRUE
STATEMENT OF ANY MATERIAL FACT CONTAINED IN ANY THIRD PARTY REPORT, UNLESS
BORROWER HAD ACTUAL KNOWLEDGE AT THE TIME BORROWER PROVIDED SUCH STATEMENT,
REPORT OR DOCUMENT TO LENDER THAT SUCH THIRD PARTY REPORT CONTAINS SUCH UNTRUE
STATEMENT.

9.1.5       INDEMNIFICATION PROCEDURE. PROMPTLY AFTER RECEIPT BY AN INDEMNIFIED
PARTY UNDER SECTION 9.1.3 ABOVE OR SECTION 9.1.4 ABOVE OF NOTICE OF THE
COMMENCEMENT OF ANY ACTION FOR WHICH A CLAIM FOR INDEMNIFICATION IS TO BE MADE
AGAINST BORROWER, SUCH INDEMNIFIED PARTY SHALL NOTIFY BORROWER IN WRITING OF
SUCH COMMENCEMENT, BUT THE OMISSION TO SO NOTIFY BORROWER WILL NOT RELIEVE
BORROWER FROM ANY LIABILITY THAT IT MAY HAVE TO ANY INDEMNIFIED PARTY HEREUNDER
EXCEPT TO THE EXTENT THAT FAILURE TO NOTIFY CAUSES PREJUDICE TO BORROWER. IF ANY
ACTION IS BROUGHT AGAINST ANY INDEMNIFIED PARTY, AND IT NOTIFIES BORROWER OF THE
COMMENCEMENT THEREOF, BORROWER WILL BE ENTITLED, JOINTLY WITH ANY OTHER
INDEMNIFYING PARTY, TO PARTICIPATE THEREIN AND, TO THE EXTENT THAT IT (OR THEY)
MAY ELECT BY WRITTEN NOTICE DELIVERED TO THE INDEMNIFIED PARTY PROMPTLY AFTER
RECEIVING THE AFORESAID NOTICE OF COMMENCEMENT, TO ASSUME THE DEFENSE THEREOF
WITH COUNSEL SATISFACTORY TO SUCH INDEMNIFIED PARTY IN ITS DISCRETION. AFTER
NOTICE FROM BORROWER TO SUCH INDEMNIFIED PARTY UNDER THIS SECTION 9.1.5,
BORROWER SHALL NOT BE RESPONSIBLE FOR ANY LEGAL OR OTHER EXPENSES SUBSEQUENTLY
INCURRED BY SUCH INDEMNIFIED PARTY IN CONNECTION WITH THE DEFENSE THEREOF OTHER
THAN REASONABLE COSTS OF INVESTIGATION; PROVIDED, HOWEVER, IF THE DEFENDANTS IN
ANY SUCH ACTION INCLUDE BOTH BORROWER AND AN INDEMNIFIED PARTY, AND ANY
INDEMNIFIED PARTY SHALL HAVE REASONABLY CONCLUDED THAT THERE ARE ANY LEGAL
DEFENSES AVAILABLE TO IT AND/OR OTHER

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INDEMNIFIED PARTIES THAT ARE DIFFERENT FROM OR ADDITIONAL TO THOSE AVAILABLE TO
BORROWER, THEN THE INDEMNIFIED PARTY OR PARTIES SHALL HAVE THE RIGHT TO SELECT
SEPARATE COUNSEL TO ASSERT SUCH LEGAL DEFENSES AND TO OTHERWISE PARTICIPATE IN
THE DEFENSE OF SUCH ACTION ON BEHALF OF SUCH INDEMNIFIED PARTY OR PARTIES.
BORROWER SHALL NOT BE LIABLE FOR THE EXPENSES OF MORE THAN ONE SEPARATE COUNSEL
UNLESS THERE ARE LEGAL DEFENSES AVAILABLE TO IT THAT ARE DIFFERENT FROM OR
ADDITIONAL TO THOSE AVAILABLE TO ANOTHER INDEMNIFIED PARTY.

9.1.6       CONTRIBUTION. IN ORDER TO PROVIDE FOR JUST AND EQUITABLE
CONTRIBUTION IN CIRCUMSTANCES IN WHICH THE INDEMNITY AGREEMENT PROVIDED FOR IN
SECTION 9.1.3 ABOVE OR SECTION 9.1.4 ABOVE IS FOR ANY REASON HELD TO BE
UNENFORCEABLE BY AN INDEMNIFIED PARTY IN RESPECT OF ANY LIABILITIES (OR ACTION
IN RESPECT THEREOF) REFERRED TO THEREIN WHICH WOULD OTHERWISE BE INDEMNIFIABLE
UNDER SECTION 9.1.3 ABOVE OR SECTION 9.1.4 ABOVE, BORROWER SHALL CONTRIBUTE TO
THE AMOUNT PAID OR PAYABLE BY THE INDEMNIFIED PARTY AS A RESULT OF SUCH
LIABILITIES (OR ACTION IN RESPECT THEREOF); PROVIDED, HOWEVER, THAT NO PERSON
GUILTY OF FRAUDULENT MISREPRESENTATION (WITHIN THE MEANING OF SECTION 11(F) OF
THE SECURITIES ACT) SHALL BE ENTITLED TO CONTRIBUTION FROM ANY PERSON NOT GUILTY
OF SUCH FRAUDULENT MISREPRESENTATION.  IN DETERMINING THE AMOUNT OF CONTRIBUTION
TO WHICH THE RESPECTIVE PARTIES ARE ENTITLED, THE FOLLOWING FACTORS SHALL BE
CONSIDERED:  (I) THE LEHMAN GROUP’S AND BORROWER’S RELATIVE KNOWLEDGE AND ACCESS
TO INFORMATION CONCERNING THE MATTER WITH RESPECT TO WHICH THE CLAIM WAS
ASSERTED; (II) THE OPPORTUNITY TO CORRECT AND PREVENT ANY STATEMENT OR OMISSION;
AND (III) ANY OTHER EQUITABLE CONSIDERATIONS APPROPRIATE IN THE CIRCUMSTANCES.
LENDER AND BORROWER HEREBY AGREE THAT IT MAY NOT BE EQUITABLE IF THE AMOUNT OF
SUCH CONTRIBUTION WERE DETERMINED BY PRO RATA OR PER CAPITA ALLOCATION.

9.1.7       SEVERANCE OF LOAN. LENDER SHALL HAVE THE RIGHT, AT ANY TIME (WHETHER
PRIOR TO, IN CONNECTION WITH, OR AFTER ANY SECONDARY MARKET TRANSACTION), WITH
RESPECT TO ALL OR ANY PORTION OF THE LOAN, TO MODIFY, SPLIT AND/OR SEVER ALL OR
ANY PORTION OF THE LOAN AS HEREINAFTER PROVIDED. WITHOUT LIMITING THE FOREGOING,
LENDER MAY (I) CAUSE THE NOTE AND THE SECURITY INSTRUMENT TO BE SPLIT INTO A
FIRST AND SECOND MORTGAGE LOAN, (II) CREATE ONE MORE SENIOR AND SUBORDINATE
NOTES (I.E., AN A/B OR A/B/C STRUCTURE), (III) CREATE MULTIPLE COMPONENTS OF THE
NOTE OR NOTES (AND ALLOCATE OR REALLOCATE THE PRINCIPAL BALANCE OF THE LOAN
AMONG SUCH COMPONENTS) OR (IV) OTHERWISE SEVER THE LOAN INTO TWO (2) OR MORE
LOANS SECURED BY MORTGAGES AND BY A PLEDGE OF PARTNERSHIP OR MEMBERSHIP
INTERESTS (DIRECTLY OR INDIRECTLY) IN BORROWER (I.E., A SENIOR LOAN/MEZZANINE
LOAN STRUCTURE), IN EACH SUCH CASE, IN WHATEVER PROPORTION AND WHATEVER PRIORITY
LENDER DETERMINES; PROVIDED, HOWEVER, IN EACH SUCH INSTANCE THE OUTSTANDING
PRINCIPAL BALANCE OF ALL THE NOTES EVIDENCING THE LOAN (OR COMPONENTS OF SUCH
NOTES) IMMEDIATELY AFTER THE EFFECTIVE DATE OF SUCH MODIFICATION EQUALS THE
OUTSTANDING PRINCIPAL BALANCE OF THE LOAN IMMEDIATELY PRIOR TO SUCH MODIFICATION
AND THE WEIGHTED AVERAGE OF THE INTEREST RATES FOR ALL SUCH NOTES (OR COMPONENTS
OF SUCH NOTES) IMMEDIATELY AFTER THE EFFECTIVE DATE OF SUCH MODIFICATION EQUALS
THE INTEREST RATE OF THE ORIGINAL NOTE IMMEDIATELY PRIOR TO SUCH MODIFICATION
AND NO SUCH MODIFICATION SHALL HAVE A SIGNIFICANT ADVERSE ECONOMIC EFFECT ON
BORROWER. IF REQUESTED BY LENDER, BORROWER (AND BORROWER’S CONSTITUENT MEMBERS,
IF APPLICABLE, AND GUARANTOR) SHALL EXECUTE WITHIN SEVEN (7) BUSINESS DAYS AFTER
SUCH REQUEST, SUCH DOCUMENTATION AS LENDER MAY REASONABLY REQUEST TO EVIDENCE
AND/OR EFFECTUATE ANY SUCH MODIFICATION OR SEVERANCE.

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9.1.8       AUDITED STATEMENTS. WITHOUT LIMITATION TO THE OTHER PROVISIONS OF
THIS SECTION 9.1, IF REQUESTED BY LENDER IN CONNECTION WITH A SECONDARY MARKET
TRANSACTION, BORROWER SHALL CAUSE ALL ANNUAL FINANCIAL STATEMENTS TO BE
DELIVERED DURING THE TERM PURSUANT TO SECTION 6.3.2 TO BE AUDITED STATEMENTS
PREPARED BY A “BIG FOUR” ACCOUNTING FIRM OR ANOTHER REPUTABLE INDEPENDENT
CERTIFIED PUBLIC ACCOUNTING FIRM AND BE ACCOMPANIED BY AN UNQUALIFIED OPINION
FROM SUCH FIRM.

9.2          COSTS AND EXPENSES. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS ARTICLE 9, BORROWER SHALL NOT BE REQUIRED TO INCUR
OUT-OF-POCKET EXPENSES IN THE PERFORMANCE OF ITS OBLIGATIONS UNDER SECTIONS
9.1.1 (OTHER THAN WITH RESPECT TO THE DELIVERY OR UPDATE OF NON-CONSOLIDATION
OPINIONS), 9.1.2 AND 9.1.7.

9.3          MEZZANINE LOAN. LENDER AGREES TO PERMIT OWNER(S) OF DIRECT OR
INDIRECT EQUITY INTERESTS IN BORROWER (THE “MEZZANINE BORROWER”, PROVIDED
HOWEVER THAT IN NO EVENT SHALL ANY ENTITY REQUIRED HEREUNDER TO BE A SPECIAL
PURPOSE BANKRUPTCY REMOTE ENTITY BE A MEZZANINE BORROWER) TO OBTAIN A MEZZANINE
LOAN (THE “MEZZANINE LOAN”) THE PROCEEDS OF WHICH MAY BE USED SOLELY TO MAKE A
CAPITAL CONTRIBUTION TO BORROWER AND IN TURN USED BY BORROWER TO PAY APPROVED
LEASING EXPENSES INCURRED WITH RESPECT TO LEASES ENTERED INTO AFTER THE DATE
HEREOF, SUBJECT TO SATISFACTION OF THE FOLLOWING CONDITIONS (PROVIDED THAT NO
MORE THAN ONE MEZZANINE LOAN SHALL BE PERMITTED DURING THE TERM OF THE LOAN):

(A)           NO EVENT OF DEFAULT SHALL EXIST;

(B)           THE MEZZANINE LOAN MAY BE SECURED BY A PLEDGE BY MEZZANINE
BORROWER OF SUCH MEZZANINE BORROWER’S DIRECT OR INDIRECT EQUITY INTEREST IN
BORROWER, BUT NOT BY THE PROPERTY OR ANY ASSETS OF BORROWER OR OF ANY OTHER
ENTITY REQUIRED HEREUNDER TO BE A SINGLE PURPOSE BANKRUPTCY REMOTE ENTITY, AND
NEITHER BORROWER NOR ANY OTHER ENTITY REQUIRED HEREUNDER TO BE A SPECIAL PURPOSE
BANKRUPTCY REMOTE ENTITY SHALL IN ANY WAY BE OBLIGATED IN CONNECTION WITH THE
MEZZANINE LOAN (EXCEPT FOR NON-MONETARY OBLIGATIONS REASONABLY ACCEPTABLE TO
LENDER THAT ARE CUSTOMARY IN CONNECTION WITH MEZZANINE LOANS INVOLVING
SECURITIZED SENIOR LOANS);

(C)           IF A SECONDARY MARKET TRANSACTION HAS OCCURRED, BORROWER SHALL
HAVE OBTAINED (AND DELIVERED TO LENDER) A RATING COMFORT LETTER WITH RESPECT TO
THE PROPOSED MEZZANINE LOAN;

(D)           THE MEZZANINE LOAN LENDER (THE “MEZZANINE LENDER”) SHALL BE AN
ACCEPTABLE MEZZANINE LENDER;

(E)           THE  MEZZANINE LENDER SHALL, UPON LENDER’S REQUEST, EXECUTE A
SUBORDINATION AND STANDSTILL INTERCREDITOR AGREEMENT (THE “INTERCREDITOR
AGREEMENT”) IN FORM APPROVED BY LENDER, WHICH APPROVAL SHALL NOT BE UNREASONABLY
WITHHELD, CONDITIONED OR DELAYED SO LONG AS THE INTERCREDITOR AGREEMENT IS
OTHERWISE IN CONFORMANCE WITH RATING AGENCY APPROVED FORMS FOR INTERCREDITOR
AGREEMENTS;

(F)            THE NET OPERATING INCOME OF THE PROPERTY, AS REASONABLY
DETERMINED BY LENDER FOR THE 12 MONTH PERIOD THEN MOST RECENTLY ENDED, IS
SUFFICIENT TO SATISFY AN AGGREGATE

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PROJECTED DEBT SERVICE COVERAGE RATIO (BASED ON THE AGGREGATE OF THE DEBT
SERVICE ON THE LOAN AND THE MEZZANINE LOAN) OF AT LEAST 1.15:1.00;

(G)           LENDER SHALL HAVE APPROVED (SUCH APPROVAL NOT TO BE UNREASONABLY
WITHHELD, CONDITIONED OR DELAYED) THE LOAN DOCUMENTS EVIDENCING AND SECURING THE
MEZZANINE LOAN;

(H)           THE MATURITY OF THE MEZZANINE LOAN SHALL BE NO EARLIER THAN THE
MATURITY DATE;

(I)            THE PROPERTY VALUE, AS DETERMINED BY LENDER BASED ON AN APPRAISAL
DATED NOT MORE THAN SIX (6) MONTHS PRIOR TO THE DATE OF THE MEZZANINE LOAN AND
OTHERWISE REASONABLY ACCEPTABLE TO LENDER, PREPARED, AT BORROWER’S EXPENSE, ON
BEHALF OF LENDER BY AN APPRAISER REASONABLY APPROVED BY LENDER WHICH IS A MEMBER
OF THE APPRAISAL INSTITUTE WITH SUBSTANTIAL EXPERIENCE IN APPRAISING PROPERTIES
SIMILAR TO THE PROPERTY, IS SUFFICIENT TO SATISFY AN AGGREGATE LOAN-TO-VALUE
RATIO (BASED ON THE AGGREGATE BALANCES OF THE LOAN AND THE MEZZANINE LOAN) NOT
IN EXCESS OF 85%;

(J)            MEZZANINE LOAN PAYMENTS SHALL BE MADE SOLELY FROM EXCESS PROPERTY
CASH FLOW DISTRIBUTED BY THE BORROWER TO ITS OWNERS AFTER PAYMENT OF ALL DEBT
SERVICE AND RESERVE PAYMENTS UNDER THE LOAN AND OPERATING EXPENSES FOR THE
PROPERTY OR FROM OTHER FUNDS OF MEZZANINE BORROWER; AND

(K)           BORROWER SHALL ENTER INTO SUCH AMENDMENTS OR SUPPLEMENTS TO THE
LOAN DOCUMENTS AS LENDER MAY REQUIRE IN ORDER TO ESTABLISH A HARD LOCK BOX AND
CASH MANAGEMENT ARRANGEMENT WHEREBY (OR MODIFY THE EXISTING ARRANGEMENT SO THAT)
PROPERTY CASH FLOW IS DEPOSITED AND APPLIED, THROUGH LENDER-CONTROLLED ACCOUNTS,
FIRST TO DEBT SERVICE AND RESERVES REQUIRED UNDER THE LOAN, THEN TO FUND
OPERATING EXPENSES, PRIOR TO ANY DISTRIBUTIONS OF EXCESS PROPERTY CASH FLOW TO
THE BORROWER’S OWNERS FOR PAYMENTS UPON THE MEZZANINE LOAN.

Borrower shall pay or reimburse to Lender all Rating Agency fees and all
reasonable costs and expenses incurred by Lender, including fees and expenses of
Lender’s counsel, in connection with the review and documentation concerning the
Mezzanine Loan regardless of whether such Mezzanine Loan is closed.

10.                                 MISCELLANEOUS

10.1        EXCULPATION. (A) SUBJECT TO THE QUALIFICATIONS BELOW, LENDER SHALL
NOT ENFORCE THE LIABILITY AND OBLIGATION OF BORROWER TO PERFORM AND OBSERVE THE
OBLIGATIONS CONTAINED IN THE LOAN DOCUMENTS BY ANY ACTION OR PROCEEDING WHEREIN
A MONEY JUDGMENT SHALL BE SOUGHT AGAINST BORROWER, EXCEPT THAT LENDER MAY BRING
A FORECLOSURE ACTION, AN ACTION FOR SPECIFIC PERFORMANCE OR ANY OTHER
APPROPRIATE ACTION OR PROCEEDING TO ENABLE LENDER TO ENFORCE AND REALIZE UPON
ITS INTEREST AND RIGHTS UNDER THE LOAN DOCUMENTS, OR IN THE PROPERTY, THE RENTS
OR ANY OTHER COLLATERAL GIVEN TO LENDER PURSUANT TO THE LOAN DOCUMENTS;
PROVIDED, HOWEVER, THAT, EXCEPT AS SPECIFICALLY PROVIDED HEREIN, ANY JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE ENFORCEABLE AGAINST BORROWER ONLY TO THE
EXTENT OF BORROWER’S INTEREST IN THE PROPERTY, IN THE RENTS AND IN ANY OTHER
COLLATERAL GIVEN TO LENDER, AND LENDER SHALL NOT SUE FOR, SEEK OR DEMAND ANY
DEFICIENCY

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JUDGMENT AGAINST BORROWER IN ANY SUCH ACTION OR PROCEEDING UNDER OR BY REASON OF
OR UNDER OR IN CONNECTION WITH ANY LOAN DOCUMENT. THE PROVISIONS OF THIS
SECTION 10.1 SHALL NOT, HOWEVER, (I) CONSTITUTE A WAIVER, RELEASE OR IMPAIRMENT
OF ANY OBLIGATION EVIDENCED OR SECURED BY ANY LOAN DOCUMENT; (II) IMPAIR THE
RIGHT OF LENDER TO NAME BORROWER AS A PARTY DEFENDANT IN ANY ACTION OR SUIT FOR
FORECLOSURE AND SALE UNDER THE SECURITY INSTRUMENT; (III) AFFECT THE VALIDITY OR
ENFORCEABILITY OF ANY OF THE LOAN DOCUMENTS OR ANY GUARANTY MADE IN CONNECTION
WITH THE LOAN OR ANY OF THE RIGHTS AND REMEDIES OF LENDER THEREUNDER;
(IV) IMPAIR THE RIGHT OF LENDER TO OBTAIN THE APPOINTMENT OF A RECEIVER;
(V) IMPAIR THE ENFORCEMENT OF THE ASSIGNMENT OF LEASES; (VI) CONSTITUTE A
PROHIBITION AGAINST LENDER TO COMMENCE ANY OTHER APPROPRIATE ACTION OR
PROCEEDING IN ORDER FOR LENDER TO FULLY REALIZE THE SECURITY GRANTED BY THE
SECURITY INSTRUMENT OR TO EXERCISE ITS REMEDIES AGAINST THE PROPERTY; OR
(VII) CONSTITUTE A WAIVER OF THE RIGHT OF LENDER TO ENFORCE THE LIABILITY AND
OBLIGATION OF BORROWER, BY MONEY JUDGMENT OR OTHERWISE, TO THE EXTENT OF ANY
LOSS, DAMAGE, COST, EXPENSE, LIABILITY, CLAIM OR OTHER OBLIGATION INCURRED BY
LENDER (INCLUDING ATTORNEYS’ FEES AND COSTS REASONABLY INCURRED) (COLLECTIVELY,
“LENDER’S LOSSES”) ARISING OUT OF OR IN CONNECTION WITH THE FOLLOWING (ALL SUCH
LIABILITY AND OBLIGATION OF BORROWER FOR ANY OR ALL OF THE FOLLOWING BEING
REFERRED TO HEREIN AS “BORROWER’S RECOURSE LIABILITIES”): (1) FRAUD OR
INTENTIONAL MISREPRESENTATION BY BORROWER, OR GUARANTOR IN CONNECTION WITH
OBTAINING THE LOAN; (2) PHYSICAL WASTE OF THE PROPERTY OR ANY PORTION THEREOF
(OTHER THAN ACTS COMMITTED BY A THIRD PARTY NON-AFFILIATED PROPERTY MANAGER), OR
AFTER AN EVENT OF DEFAULT THE REMOVAL OR DISPOSAL OF ANY PORTION OF THE PROPERTY
(OTHER THAN ACTS COMMITTED BY A THIRD PARTY NON-AFFILIATED PROPERTY MANAGER);
(3) ANY PROCEEDS PAID BY REASON OF ANY INSURED CASUALTY OR ANY AWARD RECEIVED IN
CONNECTION WITH A CONDEMNATION OR OTHER SUMS OR PAYMENTS ATTRIBUTABLE TO THE
PROPERTY NOT APPLIED IN ACCORDANCE WITH THE PROVISIONS OF THE LOAN DOCUMENTS
(OTHER THAN ACTS COMMITTED BY A THIRD PARTY NON-AFFILIATED PROPERTY MANAGER)
(EXCEPT TO THE EXTENT THAT BORROWER DID NOT HAVE THE LEGAL RIGHT, BECAUSE OF A
BANKRUPTCY, RECEIVERSHIP OR SIMILAR JUDICIAL PROCEEDING, TO DIRECT DISBURSEMENT
OF SUCH SUMS OR PAYMENTS); (4) ALL RENTS OF THE PROPERTY RECEIVED OR COLLECTED
BY OR ON BEHALF OF BORROWER AFTER AN EVENT OF DEFAULT AND NOT APPLIED TO PAYMENT
OF PRINCIPAL AND INTEREST DUE UNDER THE NOTE, AND TO THE PAYMENT OF ACTUAL AND
REASONABLE OPERATING EXPENSES OF THE PROPERTY, AS THEY BECOME DUE OR PAYABLE
(OTHER THAN ACTS COMMITTED BY A THIRD PARTY NON-AFFILIATED PROPERTY MANAGER)
(EXCEPT TO THE EXTENT THAT SUCH APPLICATION OF SUCH FUNDS IS PREVENTED BY
BANKRUPTCY,  RECEIVERSHIP, OR SIMILAR JUDICIAL PROCEEDING IN WHICH BORROWER IS
LEGALLY PREVENTED FROM DIRECTING THE DISBURSEMENT OF SUCH SUMS);
(5) MISAPPROPRIATION (INCLUDING FAILURE TO TURN OVER TO LENDER ON DEMAND
FOLLOWING AN EVENT OF DEFAULT) OF TENANT SECURITY DEPOSITS AND RENTS COLLECTED
IN ADVANCE, OR OF FUNDS HELD BY BORROWER FOR THE BENEFIT OF ANOTHER PARTY (OTHER
THAN ACTS COMMITTED BY A THIRD PARTY NON-AFFILIATED PROPERTY MANAGER); (6) THE
FAILURE TO PAY TAXES, PROVIDED THAT BORROWER SHALL NOT BE LIABLE (A) TO THE
EXTENT FUNDS TO PAY SUCH AMOUNTS ARE AVAILABLE IN THE TAX AND INSURANCE
SUBACCOUNT AND LENDER FAILED TO PAY SAME OR HAS ELECTED NOT TO PAY THE SAME
PURSUANT TO SECTION 3.3 OR (B) RENTS ARE INSUFFICIENT TO YIELD SUFFICIENT FUNDS
TO PAY SUCH AMOUNTS; (7) THE BREACH OF ANY REPRESENTATION, WARRANTY, COVENANT OR
INDEMNIFICATION IN ANY LOAN DOCUMENT CONCERNING ENVIRONMENTAL LAWS OR HAZARDOUS
SUBSTANCES, INCLUDING, WITHOUT LIMITATION, SECTIONS 4.21 AND 5.8, AND CLAUSES
(VIII) THROUGH (XI) OF SECTION 5.30; (8) THE BREACH OF THE COVENANTS SET FORTH
IN SECTION 5.13 (OTHER THAN A BREACH OF ANY OF THE COVENANTS DESCRIBED IN
CLAUSES (X) AND (XXI) (WITH RESPECT TO UNSECURED TRADE PAYABLES) SET FORTH IN
THE DEFINITION OF “SPECIAL PURPOSE BANKRUPTCY REMOTE ENTITY” ON SCHEDULE 5, IF
THE SAME OCCURS AS A RESULT OF THE ECONOMIC PERFORMANCE OF THE PROPERTY); AND/OR
(9) BORROWER OR GUARANTOR OR ANY OF THEIR DIRECT OR INDIRECT AFFILIATES TAKING
ANY ACTION OR MAKING ANY OMISSION INTENDED OR

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REASONABLY LIKELY TO HINDER, DELAY, IMPAIR OR PREVENT LENDER IN OR FROM
ENFORCING ANY AND ALL OF ITS RIGHTS AND REMEDIES UNDER OR PURSUANT TO THE LOAN
DOCUMENTS OR AT LAW OR IN EQUITY (UNLESS THE SAME IS BROUGHT IN GOOD FAITH AND
IS DETERMINED IN FAVOR OF BORROWER OR GUARANTOR PURSUANT TO A FINAL,
NON-APPEALABLE JUDGMENT OF A COURT OF COMPETENT JURISDICTION).

(B)           NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT OR ANY
OF THE LOAN DOCUMENTS, (A) LENDER SHALL NOT BE DEEMED TO HAVE WAIVED ANY RIGHT
WHICH LENDER MAY HAVE UNDER SECTION 506(A), 506(B), 1111(B) OR ANY OTHER
PROVISIONS OF THE U.S. BANKRUPTCY CODE TO FILE A CLAIM FOR THE FULL AMOUNT OF
THE DEBT OR TO REQUIRE THAT ALL COLLATERAL SHALL CONTINUE TO SECURE ALL OF THE
DEBT IN ACCORDANCE WITH THE LOAN DOCUMENTS, AND (B) LENDER’S AGREEMENT NOT TO
PURSUE PERSONAL LIABILITY OF BORROWER AS SET FORTH ABOVE SHALL BECOME NULL AND
VOID AND SHALL BE OF NO FURTHER FORCE AND EFFECT, AND THE DEBT SHALL BE FULLY
RECOURSE TO THE BORROWER IN AN AMOUNT EQUAL TO THE GREATER OF (X) LENDER’S
LOSSES ARISING OUT OF OR IN CONNECTION WITH THE FOLLOWING MATTERS OR (Y) AN
AMOUNT EQUAL TO THE UNPAID BALANCE OF THE DEBT, IN THE EVENT THAT ONE OR MORE OF
THE FOLLOWING OCCURS (EACH, A “SPRINGING RECOURSE EVENT”): (I) AN EVENT OF
DEFAULT DESCRIBED IN SECTION 8.1(D) SHALL HAVE OCCURRED; (II) THE OCCURRENCE OF
ANY CONDITION OR EVENT DESCRIBED IN EITHER SECTION 8.1(F)(I) (WITH RESPECT TO
BORROWER ONLY) OR SECTION 8.1(G) (WITH RESPECT TO BORROWER ONLY) (EACH, AN
“INSOLVENCY ACTION”) AND, WITH RESPECT TO SUCH INSOLVENCY ACTION DESCRIBED IN
SECTION 8.1(G), EITHER BORROWER, GUARANTOR OR ANY PERSON OWNING AN INTEREST
(DIRECTLY OR INDIRECTLY) IN BORROWER OR GUARANTOR INITIATES, AIDS, SOLICITS,
SUPPORTS, OR OTHERWISE COOPERATES OR COLLUDES TO CAUSE SUCH INSOLVENCY ACTION
OR, EXCEPT TO THE EXTENT THAT ANY SUCH PARTY MAY NOT CONTEST SAME UNDER
APPLICABLE LAW, FAILS TO CONTEST AN INVOLUNTARY INSOLVENCY ACTION, (III) ANY
INVOLUNTARY BANKRUPTCY PROCEEDING IS BROUGHT BY BORROWER OR GUARANTOR OR ANY OF
THEIR RESPECTIVE AFFILIATES AGAINST ANY OF THEM; OR (IV) IF SUBSEQUENT TO THE
COMMENCEMENT OF ANY VOLUNTARY BANKRUPTCY PROCEEDING WITH RESPECT TO BORROWER,
ANY INVOLUNTARY BANKRUPTCY PROCEEDING IS BROUGHT BY LENDER AGAINST BORROWER AND
BORROWER OR GUARANTOR FILES ANY MOTION CONTESTING THE SAME.

10.2        BROKERS AND FINANCIAL ADVISORS. BORROWER HEREBY REPRESENTS THAT IT
HAS DEALT WITH NO FINANCIAL ADVISORS, BROKERS, UNDERWRITERS, PLACEMENT AGENTS,
AGENTS OR FINDERS IN CONNECTION WITH THE LOAN OTHER THAN NORTHMARQ CAPITAL, INC.
(“BROKER”), WHOSE FEE SHALL BE PAID BY BORROWER. BORROWER SHALL INDEMNIFY AND
HOLD LENDER HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, LIABILITIES, COSTS AND
EXPENSES (INCLUDING ATTORNEYS’ FEES, WHETHER INCURRED IN CONNECTION WITH
ENFORCING THIS INDEMNITY OR DEFENDING CLAIMS OF THIRD PARTIES) OF ANY KIND IN
ANY WAY RELATING TO OR ARISING FROM A CLAIM BY ANY PERSON (INCLUDING BROKER)
THAT SUCH PERSON ACTED ON BEHALF OF BORROWER IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREIN. THE PROVISIONS OF THIS SECTION 10.2 SHALL SURVIVE THE
EXPIRATION AND TERMINATION OF THIS AGREEMENT AND THE REPAYMENT OF THE DEBT.

10.3        RETENTION OF SERVICER. LENDER RESERVES THE RIGHT TO RETAIN THE
SERVICER TO ACT AS ITS AGENT HEREUNDER WITH SUCH POWERS AS ARE SPECIFICALLY
DELEGATED TO THE SERVICER BY LENDER, WHETHER PURSUANT TO THE TERMS OF THIS
AGREEMENT, ANY POOLING AND SERVICING AGREEMENT OR SIMILAR AGREEMENT ENTERED INTO
AS A RESULT OF A SECONDARY MARKET TRANSACTION, THE DEPOSIT ACCOUNT AGREEMENT OR
OTHERWISE, TOGETHER WITH SUCH OTHER POWERS AS ARE REASONABLY INCIDENTAL THERETO.
BORROWER SHALL PAY ANY REASONABLE FEES AND EXPENSES OF THE SERVICER IN
CONNECTION WITH A RELEASE OF THE PROPERTY, ASSUMPTION OR MODIFICATION OF THE
LOAN, ENFORCEMENT OF THE LOAN DOCUMENTS OR

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ANY OTHER ACTION TAKEN BY SERVICER HEREUNDER ON BEHALF OF LENDER, TO THE EXTENT
SUCH ACTIONS ARE PERMITTED TO BE TAKEN PURSUANT TO THE TERMS OF THE LOAN
DOCUMENTS, BUT ONLY TO THE EXTENT THAT BORROWER IS EXPRESSLY REQUIRED TO PAY
SUCH EXPENSES PURSUANT TO THE TERMS OF THIS AGREEMENT. NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED HEREIN, TO THE EXTENT ANY MATTER DESCRIBED IN THIS
AGREEMENT REQUIRES THE CONSENT OR APPROVAL OF THE SPECIAL SERVICER UNDER THE
POOLING AND SERVICING AGREEMENT (OR OTHER SIMILAR AGREEMENT) ENTERED INTO IN
CONNECTION WITH A SECURITIZATION, SUCH SPECIAL SERVICER SHALL BE AFFORDED A
CONSENT PERIOD FOR SUCH MATTER EQUAL TO THE GREATER OF (I) THE PERIOD OF TIME
GIVEN TO LENDER HEREUNDER WITHIN WHICH TO CONSENT OR APPROVE SUCH MATTER, OR
(II) 15 BUSINESS DAYS (TO THE EXTENT SUCH 15 BUSINESS DAY PERIOD IS REQUIRED
UNDER THE TERMS OF SUCH POOLING AND SERVICING AGREEMENT).

10.4        SURVIVAL. THIS AGREEMENT AND ALL COVENANTS, AGREEMENTS,
REPRESENTATIONS AND WARRANTIES MADE HEREIN AND IN THE CERTIFICATES DELIVERED
PURSUANT HERETO SHALL SURVIVE THE MAKING BY LENDER OF THE LOAN AND THE EXECUTION
AND DELIVERY TO LENDER OF THE NOTE, AND SHALL CONTINUE IN FULL FORCE AND EFFECT
SO LONG AS ANY OF THE DEBT IS UNPAID OR SUCH LONGER PERIOD IF EXPRESSLY SET
FORTH IN THIS AGREEMENT. ALL BORROWER’S COVENANTS AND AGREEMENTS IN THIS
AGREEMENT SHALL INURE TO THE BENEFIT OF THE RESPECTIVE LEGAL REPRESENTATIVES,
SUCCESSORS AND ASSIGNS OF LENDER.

10.5        LENDER’S DISCRETION. WHENEVER PURSUANT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, LENDER EXERCISES ANY RIGHT GIVEN TO IT TO APPROVE OR
DISAPPROVE, OR CONSENT OR WITHHOLD CONSENT, OR ANY ARRANGEMENT OR TERM IS TO BE
SATISFACTORY TO LENDER OR IS TO BE IN LENDER’S DISCRETION, THE DECISION OF
LENDER TO APPROVE OR DISAPPROVE, TO CONSENT OR WITHHOLD CONSENT, OR TO DECIDE
WHETHER ARRANGEMENTS OR TERMS ARE SATISFACTORY OR NOT SATISFACTORY, OR
ACCEPTABLE OR UNACCEPTABLE OR IN LENDER’S DISCRETION SHALL (EXCEPT AS IS
OTHERWISE SPECIFICALLY HEREIN PROVIDED) BE IN THE SOLE DISCRETION OF LENDER AND
SHALL BE FINAL AND CONCLUSIVE.

10.6        GOVERNING LAW.

(A)           THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK AND THE
PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF
NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND
THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION,
AND ENFORCEMENT OF THE LIENS CREATED PURSUANT TO THE LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE
PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED
BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE
VALIDITY AND THE ENFORCEABILITY OF ALL LOAN DOCUMENTS AND THE DEBT. TO THE
FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND

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IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION
GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
PURSUANT TO § 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

(B)           ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER
ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN ANY FEDERAL
OR STATE COURT IN NEW YORK COUNTY, NEW YORK  AND BORROWER WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES
HEREBY DESIGNATE AND APPOINT CT CORPORATION SYSTEM, 111 EIGHTH AVENUE, NEW YORK,
NEW YORK 10011 AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF
SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT
SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID
SERVICE OF BORROWER MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED
HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON
BORROWER (UNLESS LOCAL LAW REQUIRES ANOTHER METHOD OF SERVICE), IN ANY SUCH
SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE
PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH OFFICE SHALL BE
DESIGNATED AS THE ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY
DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN
NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

10.7        MODIFICATION, WAIVER IN WRITING. NO MODIFICATION, AMENDMENT,
EXTENSION, DISCHARGE, TERMINATION OR WAIVER OF ANY PROVISION OF THIS AGREEMENT
OR OF ANY OTHER LOAN DOCUMENT, NOR CONSENT TO ANY DEPARTURE BY BORROWER
THEREFROM, SHALL IN ANY EVENT BE EFFECTIVE UNLESS THE SAME SHALL BE IN A WRITING
SIGNED BY THE PARTY AGAINST WHOM ENFORCEMENT IS SOUGHT, AND THEN SUCH WAIVER OR
CONSENT SHALL BE EFFECTIVE ONLY IN THE SPECIFIC INSTANCE, AND FOR THE PURPOSE,
FOR WHICH GIVEN. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, NO NOTICE TO OR
DEMAND ON BORROWER SHALL ENTITLE BORROWER TO ANY OTHER OR FUTURE NOTICE OR
DEMAND IN THE SAME, SIMILAR OR OTHER CIRCUMSTANCES. NEITHER ANY FAILURE NOR ANY
DELAY ON THE PART OF LENDER IN INSISTING UPON STRICT PERFORMANCE OF ANY TERM,
CONDITION, COVENANT OR AGREEMENT, OR EXERCISING ANY RIGHT, POWER, REMEDY OR
PRIVILEGE HEREUNDER, OR UNDER ANY OTHER LOAN DOCUMENT, SHALL OPERATE AS OR
CONSTITUTE A WAIVER THEREOF, NOR SHALL A SINGLE OR PARTIAL EXERCISE THEREOF
PRECLUDE ANY OTHER FUTURE EXERCISE, OR THE EXERCISE OF ANY OTHER RIGHT, POWER,
REMEDY OR PRIVILEGE. IN PARTICULAR, AND NOT BY WAY OF LIMITATION, BY ACCEPTING
PAYMENT AFTER THE DUE DATE OF ANY AMOUNT PAYABLE UNDER ANY LOAN DOCUMENT, LENDER
SHALL NOT BE DEEMED TO HAVE WAIVED ANY RIGHT EITHER

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TO REQUIRE PROMPT PAYMENT WHEN DUE OF ALL OTHER AMOUNTS DUE UNDER THE LOAN
DOCUMENTS, OR TO DECLARE AN EVENT OF DEFAULT FOR FAILURE TO EFFECT PROMPT
PAYMENT OF ANY SUCH OTHER AMOUNT.

10.8        TRIAL BY JURY. BORROWER AND LENDER HEREBY AGREE NOT TO ELECT A TRIAL
BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. EITHER PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE
OTHER.

10.9        HEADINGS/EXHIBITS. THE SECTION HEADINGS IN THIS AGREEMENT ARE
INCLUDED HEREIN FOR CONVENIENCE OF REFERENCE ONLY AND SHALL NOT CONSTITUTE A
PART OF THIS AGREEMENT FOR ANY OTHER PURPOSE. THE EXHIBITS ATTACHED HERETO, ARE
HEREBY INCORPORATED  BY REFERENCE AS A PART OF THE AGREEMENT WITH THE SAME FORCE
AND EFFECT AS IF SET FORTH IN THE BODY HEREOF.

10.10      SEVERABILITY. WHEREVER POSSIBLE, EACH PROVISION OF THIS AGREEMENT
SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS AGREEMENT SHALL BE PROHIBITED BY OR
INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT
OF SUCH PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH
PROVISION OR THE REMAINING PROVISIONS OF THIS AGREEMENT.

10.11      PREFERENCES. UPON THE OCCURRENCE AND CONTINUANCE OF AN EVENT OF
DEFAULT, LENDER SHALL HAVE THE CONTINUING AND EXCLUSIVE RIGHT TO APPLY ANY AND
ALL PAYMENTS BY BORROWER TO ANY PORTION OF THE DEBT. TO THE EXTENT BORROWER
MAKES A PAYMENT TO LENDER, OR LENDER RECEIVES PROCEEDS OF ANY COLLATERAL, WHICH
IS IN WHOLE OR PART SUBSEQUENTLY INVALIDATED, DECLARED TO BE FRAUDULENT OR
PREFERENTIAL, SET ASIDE OR REQUIRED TO BE REPAID TO A TRUSTEE, RECEIVER OR ANY
OTHER PARTY UNDER ANY BANKRUPTCY LAW, STATE OR FEDERAL LAW, COMMON LAW OR
EQUITABLE CAUSE, THEN, TO THE EXTENT OF SUCH PAYMENT OR PROCEEDS RECEIVED, THE
DEBT OR PART THEREOF INTENDED TO BE SATISFIED SHALL BE REVIVED AND CONTINUE IN
FULL FORCE AND EFFECT, AS IF SUCH PAYMENT OR PROCEEDS HAD NOT BEEN RECEIVED BY
LENDER. THIS PROVISION SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS
AGREEMENT AND THE REPAYMENT OF THE DEBT.

10.12      WAIVER OF NOTICE. BORROWER SHALL NOT BE ENTITLED TO ANY NOTICES OF
ANY NATURE WHATSOEVER FROM LENDER EXCEPT WITH RESPECT TO MATTERS FOR WHICH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT SPECIFICALLY AND EXPRESSLY REQUIRES THE
GIVING OF NOTICE BY LENDER TO BORROWER AND EXCEPT WITH RESPECT TO MATTERS FOR
WHICH BORROWER IS NOT, PURSUANT TO APPLICABLE LEGAL REQUIREMENTS, PERMITTED TO
WAIVE THE GIVING OF NOTICE. BORROWER HEREBY EXPRESSLY WAIVES THE RIGHT TO
RECEIVE ANY NOTICE FROM LENDER WITH RESPECT TO ANY MATTER FOR WHICH NO LOAN
DOCUMENT SPECIFICALLY AND EXPRESSLY REQUIRES THE GIVING OF NOTICE BY LENDER TO
BORROWER.

10.13      REMEDIES OF BORROWER. IF A CLAIM OR ADJUDICATION IS MADE THAT LENDER
OR ANY OF ITS AGENTS, INCLUDING SERVICER, HAS ACTED UNREASONABLY OR UNREASONABLY
DELAYED ACTING IN ANY CASE

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WHERE BY LAW OR UNDER ANY LOAN DOCUMENT, LENDER OR ANY SUCH AGENT, AS THE CASE
MAY BE, HAS AN OBLIGATION TO ACT REASONABLY OR PROMPTLY, BORROWER AGREES THAT
NEITHER LENDER NOR ITS AGENTS, INCLUDING SERVICER, SHALL BE LIABLE FOR ANY
MONETARY DAMAGES, AND BORROWER’S SOLE REMEDY SHALL BE TO COMMENCE AN ACTION
SEEKING INJUNCTIVE RELIEF OR DECLARATORY JUDGMENT. ANY ACTION OR PROCEEDING TO
DETERMINE WHETHER LENDER HAS ACTED REASONABLY SHALL BE DETERMINED BY AN ACTION
SEEKING DECLARATORY JUDGMENT. BORROWER SPECIFICALLY WAIVES ANY CLAIM AGAINST
LENDER AND ITS AGENTS, INCLUDING SERVICER, WITH RESPECT TO ACTIONS TAKEN BY
LENDER OR ITS AGENTS ON BORROWER’S BEHALF.

10.14      PRIOR AGREEMENTS. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS CONTAIN
THE ENTIRE AGREEMENT OF THE PARTIES HERETO AND THERETO IN RESPECT OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND ALL PRIOR AGREEMENTS,
UNDERSTANDINGS AND NEGOTIATIONS AMONG OR BETWEEN SUCH PARTIES, WHETHER ORAL OR
WRITTEN, ARE SUPERSEDED BY THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.

10.15      OFFSETS, COUNTERCLAIMS AND DEFENSES. BORROWER HEREBY WAIVES THE RIGHT
TO ASSERT A COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN ANY ACTION OR
PROCEEDING BROUGHT AGAINST BORROWER BY LENDER OR ITS AGENTS, INCLUDING SERVICER,
OR OTHERWISE OFFSET ANY OBLIGATIONS TO MAKE PAYMENTS REQUIRED UNDER THE LOAN
DOCUMENTS. ANY ASSIGNEE OF LENDER’S INTEREST IN AND TO THE LOAN DOCUMENTS SHALL
TAKE THE SAME FREE AND CLEAR OF ALL OFFSETS, COUNTERCLAIMS OR DEFENSES WHICH
BORROWER MAY OTHERWISE HAVE AGAINST ANY ASSIGNOR OF SUCH DOCUMENTS, AND NO SUCH
OFFSET, COUNTERCLAIM OR DEFENSE SHALL BE INTERPOSED OR ASSERTED BY BORROWER IN
ANY ACTION OR PROCEEDING BROUGHT BY ANY SUCH ASSIGNEE UPON SUCH DOCUMENTS, AND
ANY SUCH RIGHT TO INTERPOSE OR ASSERT ANY SUCH OFFSET, COUNTERCLAIM OR DEFENSE
IN ANY SUCH ACTION OR PROCEEDING IS HEREBY EXPRESSLY WAIVED BY BORROWER.

10.16      PUBLICITY. ALL NEWS RELEASES, PUBLICITY OR ADVERTISING BY BORROWER OR
ITS AFFILIATES THROUGH ANY MEDIA INTENDED TO REACH THE GENERAL PUBLIC, WHICH
REFERS TO THE LOAN DOCUMENTS, THE LOAN, LENDER OR ANY MEMBER OF THE LEHMAN
GROUP, A LOAN PURCHASER, THE SERVICER OR THE TRUSTEE IN A SECONDARY MARKET
TRANSACTION, SHALL BE SUBJECT TO THE PRIOR WRITTEN APPROVAL OF LENDER; PROVIDED
HOWEVER, THAT LENDER’S CONSENT SHALL NOT BE REQUIRED BY BORROWER, BORROWER’S
AFFILIATES, OR ANY BROKER DEALER OR INVESTOR REPRESENTATIVE RELATED TO THE
MARKETING OR SALE OF ANY INVESTMENT FUND OR INVESTMENT TRUST MANAGED BY
BORROWER’S AFFILIATES WHICH DISCLOSURE IS REQUIRED UNDER THE SECURITIES ACT OF
1933 OR 1934 OR TO ANY POTENTIAL PURCHASER OF AN INTEREST IN THE PROPERTY.
LENDER SHALL HAVE THE RIGHT TO ISSUE ANY OF THE FOREGOING WITHOUT BORROWER’S
APPROVAL.

10.17      NO USURY. BORROWER AND LENDER INTEND AT ALL TIMES TO COMPLY WITH
APPLICABLE STATE LAW OR APPLICABLE UNITED STATES FEDERAL LAW (TO THE EXTENT THAT
IT PERMITS LENDER TO CONTRACT FOR, CHARGE, TAKE, RESERVE OR RECEIVE A GREATER
AMOUNT OF INTEREST THAN UNDER STATE LAW) AND THAT THIS SECTION 10.17 SHALL
CONTROL EVERY OTHER AGREEMENT IN THE LOAN DOCUMENTS. IF THE APPLICABLE LAW
(STATE OR FEDERAL) IS EVER JUDICIALLY INTERPRETED SO AS TO RENDER USURIOUS ANY
AMOUNT CALLED FOR UNDER THE NOTE OR ANY OTHER LOAN DOCUMENT, OR CONTRACTED FOR,
CHARGED, TAKEN, RESERVED OR RECEIVED WITH RESPECT TO THE DEBT, OR IF LENDER’S
EXERCISE OF THE OPTION TO ACCELERATE THE MATURITY OF THE LOAN OR ANY PREPAYMENT
BY BORROWER RESULTS IN BORROWER HAVING PAID ANY INTEREST IN EXCESS OF THAT
PERMITTED BY APPLICABLE LAW, THEN IT IS BORROWER’S AND LENDER’S EXPRESS INTENT
THAT

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ALL EXCESS AMOUNTS THERETOFORE COLLECTED BY LENDER SHALL BE CREDITED AGAINST THE
UNPAID PRINCIPAL AND ALL OTHER DEBT (OR, IF THE DEBT HAS BEEN OR WOULD THEREBY
BE PAID IN FULL, REFUNDED TO BORROWER), AND THE PROVISIONS OF THE LOAN DOCUMENTS
IMMEDIATELY BE DEEMED REFORMED AND THE AMOUNTS THEREAFTER COLLECTIBLE THEREUNDER
REDUCED, WITHOUT THE NECESSITY OF THE EXECUTION OF ANY NEW DOCUMENT, SO AS TO
COMPLY WITH APPLICABLE LAW, BUT SO AS TO PERMIT THE RECOVERY OF THE FULLEST
AMOUNT OTHERWISE CALLED FOR THEREUNDER. ALL SUMS PAID OR AGREED TO BE PAID TO
LENDER FOR THE USE, FORBEARANCE OR DETENTION OF THE LOAN SHALL, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, BE AMORTIZED, PRORATED, ALLOCATED, AND SPREAD
THROUGHOUT THE FULL STATED TERM OF THE LOAN UNTIL PAYMENT IN FULL SO THAT THE
RATE OR AMOUNT OF INTEREST ON ACCOUNT OF THE DEBT DOES NOT EXCEED THE MAXIMUM
LAWFUL RATE FROM TIME TO TIME IN EFFECT AND APPLICABLE TO THE DEBT FOR SO LONG
AS THE DEBT IS OUTSTANDING. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
IN ANY LOAN DOCUMENT, IT IS NOT THE INTENTION OF LENDER TO ACCELERATE THE
MATURITY OF ANY INTEREST THAT HAS NOT ACCRUED AT THE TIME OF SUCH ACCELERATION
OR TO COLLECT UNEARNED INTEREST AT THE TIME OF SUCH ACCELERATION.

10.18      CONFLICT; CONSTRUCTION OF DOCUMENTS. IN THE EVENT OF ANY CONFLICT
BETWEEN THE PROVISIONS OF THIS AGREEMENT AND ANY OF THE OTHER LOAN DOCUMENTS,
THE PROVISIONS OF THIS AGREEMENT SHALL CONTROL. THE PARTIES HERETO ACKNOWLEDGE
THAT EACH IS REPRESENTED BY SEPARATE COUNSEL IN CONNECTION WITH THE NEGOTIATION
AND DRAFTING OF THE LOAN DOCUMENTS AND THAT THE LOAN DOCUMENTS SHALL NOT BE
SUBJECT TO THE PRINCIPLE OF CONSTRUING THEIR MEANING AGAINST THE PARTY THAT
DRAFTED THEM.

10.19      NO THIRD PARTY BENEFICIARIES. THE LOAN DOCUMENTS ARE SOLELY FOR THE
BENEFIT OF LENDER AND BORROWER AND NOTHING CONTAINED IN ANY LOAN DOCUMENT SHALL
BE DEEMED TO CONFER UPON ANYONE OTHER THAN THE LENDER AND BORROWER ANY RIGHT TO
INSIST UPON OR TO ENFORCE THE PERFORMANCE OR OBSERVANCE OF ANY OF THE
OBLIGATIONS CONTAINED THEREIN.

10.20      ASSIGNMENT. THE LOAN, THE NOTE, THE LOAN DOCUMENTS AND/OR LENDER’S
RIGHTS, TITLE, OBLIGATIONS AND INTERESTS THEREIN MAY BE ASSIGNED BY LENDER AND
ANY OF ITS SUCCESSORS AND ASSIGNS TO ANY PERSON AT ANY TIME IN ITS DISCRETION,
IN WHOLE OR IN PART, WHETHER BY OPERATION OF LAW (PURSUANT TO A MERGER OR OTHER
SUCCESSOR IN INTEREST) OR OTHERWISE. UPON SUCH ASSIGNMENT, ALL REFERENCES TO
LENDER IN THIS LOAN AGREEMENT AND IN ANY LOAN DOCUMENT SHALL BE DEEMED TO REFER
TO SUCH ASSIGNEE OR SUCCESSOR IN INTEREST AND SUCH ASSIGNEE OR SUCCESSOR IN
INTEREST SHALL THEREAFTER STAND IN THE PLACE OF LENDER. BORROWER MAY NOT ASSIGN
ITS RIGHTS, TITLE, INTERESTS OR OBLIGATIONS UNDER THIS LOAN AGREEMENT OR UNDER
ANY OF THE LOAN DOCUMENTS.

10.21      SET-OFF. IN ADDITION TO ANY RIGHTS AND REMEDIES OF LENDER PROVIDED BY
THIS LOAN AGREEMENT AND BY LAW, LENDER SHALL HAVE THE RIGHT, WITHOUT PRIOR
NOTICE TO BORROWER, ANY SUCH NOTICE BEING EXPRESSLY WAIVED BY BORROWER TO THE
EXTENT PERMITTED BY APPLICABLE LAW, UPON ANY AMOUNT BECOMING DUE AND PAYABLE BY
BORROWER HEREUNDER (WHETHER AT THE STATED MATURITY, BY ACCELERATION OR
OTHERWISE) TO SET-OFF AND APPROPRIATE AND APPLY AGAINST SUCH AMOUNT ANY AND ALL
DEPOSITS (GENERAL OR SPECIAL, TIME OR DEMAND, PROVISIONAL OR FINAL), IN ANY
CURRENCY, AND ANY OTHER CREDITS, INDEBTEDNESS OR CLAIMS, IN ANY CURRENCY, IN
EACH CASE WHETHER DIRECT OR INDIRECT, ABSOLUTE OR CONTINGENT, MATURED OR
UNMATURED, AT ANY TIME HELD OR OWING BY LENDER OR ANY AFFILIATE THEREOF TO OR
FOR THE CREDIT OR THE ACCOUNT OF BORROWER. LENDER AGREES PROMPTLY TO NOTIFY
BORROWER AFTER ANY SUCH SET-OFF AND

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APPLICATION MADE BY LENDER; PROVIDED THAT THE FAILURE TO GIVE SUCH NOTICE SHALL
NOT AFFECT THE VALIDITY OF SUCH SET-OFF AND APPLICATION.

10.22      CERTAIN ADDITIONAL RIGHTS OF LENDER. NOTWITHSTANDING ANYTHING TO THE
CONTRARY WHICH MAY BE CONTAINED IN THIS AGREEMENT, LENDER SHALL HAVE:

(I)            THE RIGHT TO ROUTINELY CONSULT WITH BORROWER’S MANAGEMENT
REGARDING THE SIGNIFICANT BUSINESS ACTIVITIES AND BUSINESS AND FINANCIAL
DEVELOPMENTS OF BORROWER, PROVIDED, HOWEVER, THAT SUCH CONSULTATIONS SHALL NOT
INCLUDE DISCUSSIONS OF ENVIRONMENTAL COMPLIANCE PROGRAMS OR DISPOSAL OF
HAZARDOUS SUBSTANCES. CONSULTATION MEETINGS (WHICH MAY BE HELD BY
TELECONFERENCE) SHOULD OCCUR ON A REGULAR BASIS (NO LESS FREQUENTLY THAN
QUARTERLY) WITH LENDER HAVING THE RIGHT TO CALL SPECIAL MEETINGS AT ANY
REASONABLE TIMES UPON REASONABLE NOTICE;

(II)           THE RIGHT, IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, TO
EXAMINE THE BOOKS AND RECORDS OF BORROWER AT ANY TIME UPON REASONABLE NOTICE;

(III)          THE RIGHT, IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, TO
RECEIVE MONTHLY, QUARTERLY AND YEAR-END FINANCIAL REPORTS, INCLUDING BALANCE
SHEETS, STATEMENTS OF INCOME, SHAREHOLDER’S EQUITY AND CASH FLOW, A MANAGEMENT
REPORT AND SCHEDULES OF OUTSTANDING INDEBTEDNESS;

(IV)          THE RIGHT, WITHOUT RESTRICTING ANY OTHER RIGHTS OF LENDER UNDER
THIS AGREEMENT (INCLUDING ANY SIMILAR RIGHT), TO RESTRICT FINANCING TO BE
OBTAINED WITH RESPECT TO THE PROPERTY SO LONG AS ANY PORTION OF THE DEBT REMAINS
OUTSTANDING;

(V)           THE RIGHT, WITHOUT RESTRICTING ANY OTHER RIGHT OF LENDER UNDER
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS (INCLUDING ANY SIMILAR RIGHT), TO
RESTRICT, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, BORROWER’S PAYMENTS OF
MANAGEMENT, CONSULTING, DIRECTOR OR SIMILAR FEES TO AFFILIATES OF BORROWER FROM
THE RENTS;

(VI)          THE RIGHT, WITHOUT RESTRICTING ANY OTHER RIGHTS OF LENDER UNDER
THIS AGREEMENT (INCLUDING ANY SIMILAR RIGHT), TO APPROVE ANY OPERATING BUDGET
AND/OR CAPITAL BUDGET OF BORROWER;

(VII)         THE RIGHT, WITHOUT RESTRICTING ANY OTHER RIGHTS OF LENDER UNDER
THIS AGREEMENT (INCLUDING ANY SIMILAR RIGHT), TO APPROVE ANY ACQUISITION BY
BORROWER OF ANY OTHER SIGNIFICANT PROPERTY (OTHER THAN PERSONAL PROPERTY
REQUIRED FOR THE DAY TO DAY OPERATION OF THE PROPERTY); AND

(VIII)        THE RIGHT, WITHOUT RESTRICTING ANY OTHER RIGHTS OF LENDER UNDER
THIS AGREEMENT (INCLUDING ANY SIMILAR RIGHT), TO RESTRICT THE TRANSFER OF
INTERESTS IN BORROWER HELD BY ITS MEMBERS, AND THE RIGHT TO RESTRICT THE
TRANSFER OF INTERESTS IN SUCH MEMBER, EXCEPT FOR ANY TRANSFER THAT IS A
PERMITTED TRANSFER.

The rights described above may be exercised directly or indirectly by any Person
that owns substantially all of the ownership interests in Lender.

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10.23      COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS, EACH OF WHICH WHEN SO EXECUTED AND DELIVERED SHALL BE AN ORIGINAL,
BUT ALL OF WHICH SHALL TOGETHER CONSTITUTE ONE AND THE SAME INSTRUMENT.

10.24      YIELD MAINTENANCE PREMIUM. BORROWER ACKNOWLEDGES THAT (A) LENDER IS
MAKING THE LOAN IN CONSIDERATION OF THE RECEIPT BY LENDER OF ALL INTEREST AND
OTHER BENEFITS INTENDED TO BE CONFERRED BY THE LOAN DOCUMENTS AND (B) IF
PAYMENTS OF PRINCIPAL ARE MADE TO LENDER PRIOR TO THE STATED MATURITY DATE, FOR
ANY REASON WHATSOEVER, WHETHER VOLUNTARY, AS A RESULT OF LENDER’S ACCELERATION
OF THE LOAN AFTER AN EVENT OF DEFAULT, BY OPERATION OF LAW OR OTHERWISE, LENDER
WILL NOT RECEIVE ALL SUCH INTEREST AND OTHER BENEFITS AND MAY, IN ADDITION,
INCUR COSTS. FOR THESE REASONS, AND TO INDUCE LENDER TO MAKE THE LOAN, BORROWER
AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED IN SECTION 2.2.3,  SECTION 2.3.2,
SECTION 2.3.4 AND SECTION 7.4.2 HEREOF, ALL PREPAYMENTS, IF ANY, WHETHER
VOLUNTARY OR INVOLUNTARY, WILL BE ACCOMPANIED BY THE YIELD MAINTENANCE PREMIUM.
SUCH YIELD MAINTENANCE PREMIUM SHALL BE REQUIRED WHETHER PAYMENT IS MADE BY
BORROWER, BY A PERSON ON BEHALF OF BORROWER, OR BY THE PURCHASER AT ANY
FORECLOSURE SALE, AND MAY BE INCLUDED IN ANY BID BY LENDER AT SUCH SALE.
BORROWER FURTHER ACKNOWLEDGES THAT (A) IT IS A KNOWLEDGEABLE REAL ESTATE
DEVELOPER AND/OR INVESTOR; (B) IT FULLY UNDERSTANDS THE EFFECT OF THE PROVISIONS
OF THIS SECTION 10.24, AS WELL AS THE OTHER PROVISIONS OF THE LOAN DOCUMENTS;
(C) THE MAKING OF THE LOAN BY LENDER AT THE INTEREST RATE AND OTHER TERMS SET
FORTH IN THE LOAN DOCUMENTS ARE SUFFICIENT CONSIDERATION FOR BORROWER’S
OBLIGATION TO PAY A YIELD MAINTENANCE PREMIUM (IF REQUIRED); AND (D) LENDER
WOULD NOT MAKE THE LOAN ON THE TERMS SET FORTH HEREIN WITHOUT THE INCLUSION OF
SUCH PROVISIONS. BORROWER ALSO ACKNOWLEDGES THAT THE PROVISIONS OF THIS
AGREEMENT LIMITING THE RIGHT OF PREPAYMENT AND PROVIDING FOR THE PAYMENT OF THE
YIELD MAINTENANCE PREMIUM AND OTHER CHARGES SPECIFIED HEREIN WERE INDEPENDENTLY
NEGOTIATED AND BARGAINED FOR, AND CONSTITUTE A SPECIFIC MATERIAL PART OF THE
CONSIDERATION GIVEN BY BORROWER TO LENDER FOR THE MAKING OF THE LOAN EXCEPT AS
EXPRESSLY PERMITTED HEREUNDER. BY EXECUTING THIS AGREEMENT, BORROWER HEREBY
EXPRESSLY ACKNOWLEDGES AND UNDERSTANDS THAT, PURSUANT TO THE TERMS OF THIS
AGREEMENT, BORROWER HAS AGREED THAT IT DOES NOT HAVE THE RIGHT TO PREPAY THE
LOAN IN WHOLE OR IN PART WITHOUT PREMIUM EXCEPT AS OTHERWISE PROVIDED HEREIN,
AND THAT BORROWER SHALL BE LIABLE FOR THE PAYMENT OF THE YIELD MAINTENANCE
PREMIUM TO THE EXTENT PROVIDED HEREIN IF BORROWER PREPAYS THE LOAN FOLLOWING THE
OCCURRENCE OF AN ACCELERATION OF THE LOAN. BORROWER HEREBY FURTHER EXPRESSLY
ACKNOWLEDGES AND UNDERSTANDS THAT LENDER HAS MADE THE LOAN EVIDENCED HEREBY IN
RELIANCE ON THE FOREGOING AGREEMENTS AND WAIVERS OF BORROWER, THAT LENDER WOULD
NOT HAVE MADE THIS LOAN WITHOUT SUCH AGREEMENTS AND WAIVERS OF BORROWER, AND
THAT THE MAKING OF THE LOAN AT THE INTEREST RATE AND FOR THE TERMS SET FORTH
HEREIN CONSTITUTES ADEQUATE CONSIDERATION, GIVEN WEIGHT BY THE UNDERSIGNED, FOR
SUCH AGREEMENTS AND WAIVER.

[Remainder of page intentionally left blank. Signature
counterparts follow on next page(s).]

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

 

BEHRINGER HARVARD TERRACE LP,

 

 

a Delaware limited partnership

 

 

 

 

 

 

 

Behringer Harvard Terrace GP, LLC, a Delaware
limited liability company, its general partner

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

Gerald J. Reihsen, III, Secretary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LEHMAN BROTHERS BANK, FSB, a federal stock
savings bank

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Name:

 

 

 

 

 

 

Title:

 

 

 

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