Exhibit 10.1
THIS DEED OF TRUST AND SECURITY AGREEMENT (this “Security Instrument”) is made
as of the 10th day of October, 2012, by AAT CC BELLEVUE, LLC, a Delaware limited
liability company (“Borrower”), as grantor, having an address at 11455 El Camino
Real, Suite 200, San Diego, California 92130, Attention: John Chamberlain and
Robert Barton in favor of CHICAGO TITLE COMPANY OF WASHINGTON, a Washington
corporation, having an office at 701 5th Avenue, 23 Floor, Seattle, Washington
98104 (“Trustee”), as grantee, for the benefit of PNC BANK, NATIONAL
ASSOCIATION, a national banking association (together with its successors and
assigns, “Lender”), having an address at c/o Midland Loan Services, Inc., 10851
Mastin, Suite #300, Overland Park, Kansas 66210, Reference Loan Number
940960335, as beneficiary.
RECITALS:
Borrower by that certain Promissory Note given to Lender dated as of the date
hereof (together with all extensions, renewals, modifications, substitutions and
amendments thereof shall collectively be referred to herein as the “Note”) is
indebted to Lender in the aggregate principal sum of $111,000,000.00 (the
“Loan”) in lawful money of the United States of America, with interest from the
date thereof at the rates set forth in the Note, principal and interest to be
payable in accordance with the terms and conditions provided in the Note.
Borrower desires to secure the payment of the Debt (as defined in Article 2) and
the performance of all of the Other Obligations (as defined in Article 2).
Article 1. GRANTS OF SECURITY
Section 1.1.    PROPERTY GRANTED. For the purpose of securing payment and
performance of the Obligations (as defined in Article 2), Borrower, for and in
consideration of good and valuable consideration, the receipt of which hereby is
acknowledged, and the further consideration, uses, purposes and trusts herein
set forth and declared, has granted, deeded, sold, bargained, transferred,
assigned, set-over and conveyed and by these presents does grant, deed, bargain,
sell, transfer, assign, set-over and convey unto Trustee, and unto his or its
successors in the trust hereby created and his or its assigns, forever, in
trust, with power of sale, and grant a security interest in (each for the
benefit of Lender and its successors and assigns) all of Borrower’s right, title
and interest in and to the following property, rights, interests and estates to
the extent now owned, or hereafter acquired by Borrower (collectively, the
“Property”):
(a)    Land. The real property described in Exhibit A attached hereto (the
“Land”);
(b)    Additional Land. All additional lands, estates and development rights
hereafter acquired by Borrower for use in connection with the Land and the
development of the Land and all additional lands and estates therein which may,
from time to time, by supplemental mortgage or otherwise be expressly made
subject to the lien of this Security Instrument;
(c)    Improvements. The buildings, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and improvements
now or hereafter erected or located on the Land (the “Improvements”);
(d)    Easements. All easements, rights of way or use, rights, strips and gores
of land, streets, ways, alleys, passages, sewer rights, water, water courses,
water rights and powers, air rights and development rights, and all estates,
rights, titles, interests, privileges, liberties, servitudes, tenements,
hereditaments and appurtenances of any nature whatsoever, in any way now or
hereafter belonging, relating or pertaining to the Land and the Improvements and
the reversion and reversions, remainder and remainders, and all land lying in
the bed of any street, road or avenue, opened or proposed, in front of or
adjoining the Land, to the center line thereof and all the estates, rights,
titles, interests, dower and rights of dower, curtesy and rights of curtesy,
property, possession, claim and demand whatsoever, both at law and

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in equity, of Borrower of, in and to the Land and the Improvements and every
part and parcel thereof, with the appurtenances thereto;
(e)    Fixtures and Personal Property. All machinery, equipment, fixtures
(including, but not limited to, all heating, air conditioning, plumbing,
lighting, communications and elevator fixtures) and other property of every kind
and nature whatsoever owned by Borrower, or in which Borrower has or shall have
an interest, now or hereafter located upon the Land and the Improvements, or
appurtenant thereto, and usable in connection with the present or future
operation and occupancy of the Land and the Improvements and all building
equipment, materials and supplies of any nature whatsoever owned by Borrower, or
in which Borrower has or shall have an interest, now or hereafter located upon
the Land and the Improvements, or appurtenant thereto, or usable in connection
with the present or future operation and occupancy of the Land and the
Improvements (collectively, the “Personal Property”), and the right, title and
interest of Borrower in and to any of the Personal Property which may be subject
to any security interests, as defined in the Uniform Commercial Code, as adopted
and enacted by, as applicable, the state where any of the Property is located or
the state of formation of Borrower (the “Uniform Commercial Code”), superior in
lien to the lien of this Security Instrument and all proceeds and products of
the above;
(f)    Leases and Rents. All leases and other agreements (including, without
limitation, the Master Lease (defined below)) affecting the use, enjoyment or
occupancy of the Land and the Improvements heretofore or hereafter entered into,
including, without limitation, any guaranty of any of the foregoing leases (a
“Lease” or “Leases”), and all right, title and interest of Borrower, its
successors and assigns therein and thereunder, including, without limitation,
cash or securities deposited thereunder to secure the performance by the lessees
of their obligations thereunder and all rents (including, without limitation,
the Master Lease Rents (defined below)), additional rents, revenues, issues and
profits (including all oil and gas or other mineral royalties and bonuses) from
the Land and the Improvements (the “Rents”), subject to the License (as defined
in the ALR (defined below)), and all proceeds from the sale or other disposition
of the Leases;
(g)     Master Lease. That certain Lease Agreement (the “Master Lease”) between
Borrower, as landlord, and AAT Bellevue Master Tenant, LLC, a Delaware limited
liability company, as tenant (the “Master Lessee”) and all right, title and
interest of Borrower, its successors and assigns therein and thereunder,
including, without limitation, cash or securities deposited thereunder, if any,
to secure the performance by Master Lessee of its obligations thereunder and all
rents, additional rents, revenues, issues and profits (including all oil and gas
or other mineral royalties and bonuses) from the Land and the Improvements (the
“Master Lease Rents”), subject to the License, and all proceeds from the sale or
other disposition of the Master Lease, if any;
(h)    Condemnation Awards. All awards or payments, including interest thereon,
which may heretofore and hereafter be made with respect to the Property, whether
from the exercise of the right of eminent domain (including but not limited to
any transfer made in lieu of or in anticipation of the exercise of the right),
or for a change of grade, or for any other injury to or decrease in the value of
the Property;
(i)    Insurance Proceeds. All proceeds of and any unearned premiums on any
insurance policies covering the Property (whether or not Borrower is required to
carry such insurance by Lender hereunder), including, without limitation, the
right to receive and apply the proceeds of any insurance, judgments, or
settlements made in lieu thereof, for damage to the Property, subject to the
provisions hereof;
(j)    Tax Certiorari. All refunds, rebates or credits in connection with a
reduction in real estate taxes and assessments charged against the Property as a
result of tax certiorari or any applications or proceedings for reduction;
(k)    Conversion. All proceeds of the conversion, voluntary or involuntary, of
any of the foregoing including, without limitation, proceeds of insurance and
condemnation awards, into cash or liquidation claims;

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(l)    Agreements. All agreements, contracts, certificates, instruments,
franchises, permits, licenses, plans, specifications and other documents, now or
hereafter entered into, and all rights therein and thereto, respecting or
pertaining to the use, occupation, construction, management or operation of the
Land and any part thereof and any Improvements or respecting any business or
activity conducted on the Land and any part thereof and all right, title and
interest of Borrower therein and thereunder, including, without limitation, the
right, upon the happening of any default hereunder, to receive and collect any
sums payable to Borrower thereunder;
(m)    Intangibles. All tradenames, trademarks, servicemarks, logos, copyrights,
goodwill, books and records and all other general intangibles relating to or
used in connection with the operation of the Property;
(n)    Letter of Credit Rights. All letter of credit rights (whether or not the
letter of credit is evidenced by a writing) Borrower now has or hereafter
acquires relating to the properties, rights, titles and interest referred to in
this Section 1.1;
(o)    Tort Claims. All commercial tort claims Borrower now has or hereafter
acquires relating to the properties, rights, titles and interests referred to in
this Section 1.1;
(p)    Borrower Accounts. All payments for goods or property sold or leased or
for services rendered arising from the operation of the Land and the
Improvements, whether or not yet earned by performance, and not evidenced by an
instrument or chattel paper;
(q)    Reserve Accounts. All reserves, escrows and deposit accounts required
under the Loan Documents (defined below) and all cash, checks, drafts,
certificates, securities, investment property, financial assets, instruments and
other property held therein from time to time and all proceeds, products,
distributions or dividends or substitutions thereon and thereof (collectively,
the “Reserve Accounts”);
(r)    Proceeds. All proceeds of any of the foregoing items set forth in
subsections (a) through (q); and
(s)     Other Rights.    Any and all other rights of Borrower in and to the
items set forth in subsections (a) though (r) above.
Section 1.2.    ASSIGNMENT OF RENTS. Reference is hereby made to that certain
Assignment of Leases and Rents dated as of the date hereof and delivered by
Borrower to Lender in connection with the Loan (as the same may hereafter be
amended, restated, replaced and/or otherwise modified, the “ALR”). The terms and
conditions of the ALR are hereby incorporated by reference as if fully set forth
herein.
Section 1.3.    SECURITY AGREEMENT. This Security Instrument is both a real
property mortgage and a “security agreement” within the meaning of the Uniform
Commercial Code. The Property includes both real and personal property and all
other rights and interests, whether tangible or intangible in nature, of
Borrower in the Property. By executing and delivering this Security Instrument,
Borrower hereby grants to Lender, as security for the Obligations, a security
interest in the Property to the full extent that the Property may be subject to
the Uniform Commercial Code. To the extent permitted by law, Borrower and Lender
agree that with respect to all items of Personal Property, which are or will
become fixtures on the Land, this Security Instrument, upon recording or
registration in the real estate records of the proper office, shall constitute a
“fixture filing” within the meaning of the applicable provisions of the Uniform
Commercial Code. Borrower is the record owner of the Land.
Section 1.4.    PLEDGE OF MONIES HELD. Borrower hereby pledges to Lender any and
all monies belonging to Borrower which are now or hereafter held by Lender, and
which are (i) deposited in the Escrow Fund (as defined in Section 3.5) or in the
other Reserve Accounts, (ii) Net Proceeds (as defined in Section 4.4) and/or
(iii) condemnation awards or payments described in Section 3.6, as additional
security for the Obligations until expended or applied as provided in this
Security Instrument.

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CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property unto Trustee, as
trustee for the benefit of Lender, to its successor in the trust created by this
Security Instrument, and to its or their respective assigns forever, in trust,
however, upon the terms and conditions set forth herein;
IN TRUST, WITH THE POWER OF SALE, to secure payment to Lender of the Debt at the
time and in the manner provided for its payment in the Note and in this Security
Instrument;
PROVIDED, HOWEVER, upon written request of Lender stating that all sums secured
hereby have been paid in full in accordance with the terms hereof, and upon the
surrendering of this Security Instrument and the Note to Trustee for
cancellation and retention and upon payment by Borrower of Trustee’s fees,
Trustee shall reconvey to Borrower, or to the person or persons legally entitled
thereto, without warranty, any portion of the estate hereby granted and then
held hereunder. The recitals in such reconveyance of any matters or facts shall
be conclusive proof of the truthfulness thereof. The grantee in any reconveyance
may be described as “the person or persons legally entitled thereto”.
Article 2. PAYMENTS
Section 2.1.    DEBT AND OBLIGATIONS SECURED. This Security Instrument and the
grants, assignments and transfers made in Article 1 are given for the purpose of
securing the following, in such order of priority as Lender may determine in its
sole discretion (the “Debt”): (a) the payment of the indebtedness evidenced by
the Note in lawful money of the United States of America; (b) the payment of
interest, prepayment premiums, default interest, late charges and other sums, as
provided in the Note, this Security Instrument or the other Loan Documents
(defined below); (c) the payment of all other moneys agreed or provided to be
paid by Borrower in the Note, this Security Instrument or the other Loan
Documents; (d) the payment of all sums advanced pursuant to this Security
Instrument to protect and preserve the Property and the lien and the security
interest created hereby; and (e) the payment of all sums reasonably advanced and
costs and expenses reasonably incurred (including unpaid or unreimbursed
servicing and special servicing fees) by Lender in connection with the Debt or
any part thereof, any renewal, extension, or change of or substitution for the
Debt or any part thereof, or the acquisition or perfection of the security
therefor, whether made or incurred at the request of Borrower or Lender. This
Security Instrument and the grants, assignments and transfers made in Article 1
are also given for the purpose of securing the performance of all other
obligations of Borrower contained herein and the performance of each obligation
of Borrower contained in any renewal, extension, amendment, modification,
consolidation, change of, or substitution or replacement for, all or any part of
this Security Instrument, the Note, or the other Loan Documents (collectively,
the “Other Obligations”). Borrower’s obligations for the payment of the Debt and
the performance of the Other Obligations shall be referred to collectively
herein as the “Obligations.” As used herein, the term “Loan Documents” shall
mean, collectively, this this Security Instrument, the Note, the Environmental
Indemnity (defined below), the Indemnity Agreement (defined below), the Reserve
Agreement (defined below) and all other documents executed and/or delivered in
connection with the Loan, as each of the same may be amended, restated,
replaced, extended, renewed, supplemented or otherwise modified from time to
time. The foregoing provisions shall not be deemed to grant Lender the right to
apply any payments by Borrower under the Loan Documents, any Rents or other
proceeds of the Property, in each case, to any portion of the Debt prior to the
date that such portion of the Debt is due and payable pursuant to the terms and
conditions hereof and/or of the other Loan Documents. As used herein, the term
“Reserve Agreement” shall mean that certain Reserve and Security Agreement,
dated as of the date hereof, by and between Borrower and Lender, as the same may
be amended, restated, replaced, extended, renewed, supplemented or otherwise
modified from time to time.
Section 2.2.    PAYMENTS. Unless payments are made in the required amount in
immediately available funds at the place where the Note is payable, remittances
in payment of all or any part of the Debt shall not, regardless of any receipt
or credit issued therefor, constitute payment until the required amount is
actually received by Lender in funds immediately available at the place where
the Note is payable (or any other place as Lender, in Lender’s sole

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discretion, may have established by delivery of written notice thereof to
Borrower) and shall be made and accepted subject to the condition that any check
or draft may be handled for collection in accordance with the practice of the
collecting bank or banks. Acceptance by Lender of any payment in an amount less
than the amount then due shall be deemed an acceptance on account only, and the
failure to pay the entire amount then due shall not cure any then-existing Event
of Default (defined below).
Article 3. BORROWER COVENANTS
Borrower covenants and agrees that:
Section 3.1.    PAYMENT OF DEBT. Borrower will pay the Debt at the time and in
the manner provided in the Note and in this Security Instrument.
Section 3.2.    INCORPORATION BY REFERENCE. All the covenants, conditions and
agreements contained in (a) the Note and (b) the other Loan Documents, are
hereby made a part of this Security Instrument to the same extent and with the
same force as if fully set forth herein.
Section 3.3.    INSURANCE.
(a)    Borrower, at its sole cost and expense, for the mutual benefit of
Borrower and Lender, shall obtain and maintain, or cause to be maintained,
during the entire term of this Security Instrument, policies of insurance for
Borrower and the Property providing at least the following coverages:
(i)    comprehensive all risk insurance (“Special Form”) including, but not
limited to, loss caused by any type of windstorm or hail on the Improvements and
the Personal Property, (A) in an amount equal to one hundred percent (100%) of
the “Full Replacement Cost,” which for purposes of this Security Instrument
shall mean actual replacement value (exclusive of costs of excavations,
foundations, underground utilities and footings) with a waiver of depreciation,
but the amount shall in no event be less than the outstanding principal balance
of the Loan; (B) containing an agreed amount endorsement with respect to the
Improvements and Personal Property waiving all co-insurance provisions or to be
written on a no co-insurance form; (C) providing for no deductible in excess of
Fifty Thousand and No/100 Dollars ($50,000.00) for all such insurance coverage
and (D) if any of the Improvements or the use of the Property shall at any time
constitute legal non-conforming structures or uses, coverage for loss due to
operation of law in an amount equal to the Full Replacement Cost, coverage for
demolition costs and coverage for increased costs of construction. In addition,
Borrower shall obtain: (y) if any portion of the Improvements is currently or at
any time in the future located in a federally designated “special flood hazard
area,” flood hazard insurance in an amount equal to (A) the lesser of (1) the
outstanding principal balance of the Note or (2) the maximum amount of such
insurance available under the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of
1994, as each may be amended or such lesser amount as Lender shall require plus
(B) excess flood insurance in an amount equal to the building value of the first
floor of the Improvements plus three (3) months worth of the coverage set forth
in subsection (ii) hereof; and (z) earthquake insurance in amounts and in form
and substance reasonably satisfactory to Lender in the event the Property is
located in an area with a high degree of seismic activity, provided that the
insurance required to be maintained pursuant to clauses (y) and (z) above shall
be on terms consistent with the Special Form policy required pursuant to this
subsection (i). Notwithstanding anything to the contrary in this Security
Instrument, the insurance coverage described in the foregoing subparagraphs (y)
and (z) shall be required (1) as of the date hereof only if determined to be
necessary by Lender based upon its reasonable evaluation of third party reports
and (2) at any time hereafter in the event subsequent third party reports
indicate a change in the condition of or circumstances surrounding the Property;
(ii)    rental loss insurance (A) with loss payable to Lender; (B) covering all
risks required to be covered by the insurance provided for in subsection (i)
above; (C) in an annual aggregate amount equal to 100% of all rents or estimated
gross revenues from the operation of the Property (as reduced to reflect actual
vacancies and expenses

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not incurred during a period of Restoration) and covering rental losses for a
period of at least eighteen (18) months after the date of the casualty and
notwithstanding that the Policy may expire prior to the end of such period and
(D) containing an extended period of indemnity endorsement which provides that
after physical loss to the Improvements and the Personal Property has been
repaired, the continued loss of income will be insured until such income returns
to the same level it was prior to the loss, or the expiration of six (6) months
from the date of completion of the Restoration, whichever first occurs and
notwithstanding that the policy may expire prior to the end of such period. The
amount of such rental loss insurance shall be determined prior to the date
hereof and at least once each year thereafter based on Borrower’s reasonable
estimate of the gross income from the Property for the succeeding eighteen (18)
month period, taking into account a five percent (5%) vacancy factor. Provided
no Event of Default has occurred and is continuing, all proceeds payable to
Lender pursuant to this subsection (the “Rent Loss Proceeds”) shall (i) to the
extent such proceeds are not paid in a lump sum in advance, be disbursed by
Lender to Borrower promptly following Lender’s receipt thereof or (ii) in the
event such Rent Loss Proceeds are paid in a lump sum in advance, be held by
Lender in a segregated interest-bearing escrow account (which such account shall
be deemed a “Reserve Account” hereunder) and Lender shall estimate the number of
months required for Borrower to restore the damage caused by the applicable
casualty, shall divide the applicable aggregate Rent Loss Proceeds by such
number of months and shall, provided no Event of Default is continuing, disburse
such monthly installment of Rent Loss Proceeds from such escrow account to
Borrower each month during the performance of such Restoration, with the
balance, if any, to be disbursed from Lender to Borrower upon the occurrence of
Property Stabilization (defined below). From and after consummation of the
Restoration and until Property Stabilization, any remaining balance of Rent Loss
Proceeds shall, provided no Event of Default is continuing, be applied by Lender
to Borrower’s obligations hereunder and under the other Loan Documents as the
same become due and payable. From and after consummation of Restoration and
Property Stabilization, any Rent Loss Proceeds then held or thereafter received
by Lender on account of the casualty which was the subject of such completed
Restoration shall, provided no Event of Default has occurred and is continuing,
be disbursed by Lender to Borrower. During the continuance of an Event of
Default, all Rent Loss Proceeds shall be held by Lender and may be applied by
Lender, in each case, in the same manner as funds held in the Reserve Accounts
pursuant to the terms thereof and of the other Loan Documents. Nothing herein
contained shall be deemed to relieve Borrower of its obligations to pay the
obligations secured by the Loan Documents on the respective dates of payment
provided for in the Note and the other Loan Documents except to the extent such
amounts are actually paid out of the proceeds of such Rent Loss Proceeds. As
used herein, the term “Property Stabilization” shall mean a condition which
shall be deemed to have occurred on that date that, after the consummation of a
Restoration of the Property in accordance with the applicable terms and
conditions hereof and of the other Loan Documents, Borrower delivers to Lender
evidence reasonably satisfactory to Lender (which such evidence may include,
without limitation, duly executed estoppel certificates) that the Property has
achieved (A) a 90% occupancy by tenants with Leases either in existence as of
the date hereof or entered into in accordance with the terms and conditions
hereof and (B) a Debt Service Coverage Ratio (as defined on Schedule 1 attached
hereto) of not less than 1.50 to 1.00;
(iii)    at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements, and only if the
Property coverage form referenced in subsection (i), above, does not otherwise
apply, (A) owner’s contingent or protective liability insurance, otherwise known
as Owner Contractor’s Protective Liability, covering claims not covered by or
under the terms or provisions of the commercial general liability insurance
policy in (v) below; and (B) the insurance provided for in subsection (i) above
written in a so-called builder’s risk completed value form (1) on a
non-reporting basis, (2) against all risks insured against pursuant to
subsection (i) above, (3) including permission to occupy the Property, and (4)
with an agreed amount endorsement waiving co-insurance provisions;
(iv)    comprehensive boiler and machinery insurance, if steam boilers or other
pressure-fixed vessels are in operation, in amounts as shall be reasonably
required by Lender on terms consistent with the commercial property insurance
policy required under subsection (i) above;
(v)    commercial general liability insurance against claims for personal
injury, bodily injury, death or property damage occurring upon, in or about the
Property, such insurance (A) to be on the so-called “occurrence”

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form with a combined limit of not less than Two Million and No/100 Dollars
($2,000,000.00) in the aggregate and One Million and No/100 Dollars
($1,000,000.00) per occurrence; (B) to continue at not less than the aforesaid
limit until reasonably required to be changed by Lender as provided in
subsection 3.3(b) below; and (C) to cover at least the following hazards: (1)
premises and operations; (2) products and completed operations on an “if any”
basis; (3) independent contractors; (4) blanket contractual liability and (5)
contractual liability covering the indemnities contained in Section 13.1 to the
extent the same is available;
(vi)    automobile liability coverage for all owned and non-owned vehicles, if
any, used by Borrower in the operation of the Property, including rented and
leased vehicles containing minimum limits per occurrence of One Million and
No/100 Dollars ($1,000,000.00);
(vii)    umbrella liability insurance in an amount not less than Twenty-Five
Million and No/100 Dollars ($25,000,000.00) per occurrence on terms consistent
with the commercial general liability insurance policy required under subsection
(ii) above, including, but not limited to, supplemental coverage for workers’
compensation and automobile liability, which umbrella liability coverage shall
apply in excess of the automobile liability coverage in clause (vi) above;
(viii)    so-called “dramshop” insurance, if applicable, or other liability
insurance required in connection with the sale of alcoholic beverages;
(ix)    workers’ compensation, subject to the statutory limits of the state in
which the Property is located, and employer’s liability insurance with a limit
of at least $1,000,000 per accident and per disease per employee, and $1,000,000
for disease aggregate in respect of any work or operations on or about the
Property, or in connection with the Property or its operation (if applicable);
and
(x)     (A) such insurance as may be required pursuant to the terms of the
Property Documents and (B) upon sixty (60) days’ written notice, such other
reasonable insurance (such as sinkhole or land subsidence insurance) in such
reasonable amounts as Lender from time to time may reasonably request against
such other insurable hazards which at the time are commonly insured against for
property similar to the Property located in the City of Bellevue.
(b)    All insurance provided for in Section 3.3(a) shall be obtained under
valid and enforceable policies (collectively, the “Policies” or in the singular,
the “Policy”), and (i) shall be issued by financially sound and responsible
insurance companies reasonably approved by Lender, and authorized or licensed to
do business in the state where the Property is located, with (A) general policy
ratings of A or better and financial classes of X or better by A.M. Best
Company, Inc. and (B) either (i) such insurance companies having claims paying
ability/financial strength ratings of “A” (or its equivalent) or better by the
Rating Agencies (defined below) or (ii) to the extent that the Policies are
issued by a syndicate of not less than five (5) insurance companies each
otherwise meeting the requirements set forth herein, sixty percent (60%) of such
insurance companies having a claims paying ability/financial strength rating of
“A” (or its equivalent) or better by the Rating Agencies (with the first layers
of the coverages required hereunder provided by such insurance companies) and
the remaining forty percent (40%) of such insurance companies having a claims
paying ability/financial strength rating of "BBB" (or its equivalent) or better
by the Rating Agencies; (ii)  shall name Borrower as the insured and Lender as
an additional insured, as its interests may appear; (iii) in the case of
property damage, boiler and machinery and, if required pursuant to the
provisions hereof, flood and earthquake insurance, shall contain a so called New
York Non Contributory Standard Mortgagee Clause and (other than those strictly
limited to liability protection) a Lender’s Loss Payable Endorsement (Form 438
BFU NS), or their equivalents, naming Lender as the Person (defined below) to
which all payments made by such insurance company shall be paid; (iv) shall
contain a waiver of subrogation against Lender; (v) shall be maintained
throughout the term of this Security Instrument without cost to Lender; (vi)
shall be assigned and, if requested in writing by Lender, the originals (or
duplicate originals certified to be true and correct by the applicable insurer
or its agent) delivered to Lender; (vii) shall contain endorsements or clauses
providing that (I) neither Borrower, Lender nor any other party shall be a co
insurer under said Policies, (II)

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that Lender shall receive at least ten (10) days prior written notice of any
modification, reduction or cancellation of any Policy, (III) no act or
negligence of Borrower, or anyone acting for Borrower, or of any tenant or other
occupant, or failure to comply with the provisions of any Policy, which might
otherwise result in a forfeiture of the insurance or any part thereof, shall in
any way affect the validity or enforceability of the insurance insofar as Lender
is concerned, (IV) Lender shall not be liable for any Insurance Premiums
(defined below) thereon or subject to any assessments thereunder, and (V) such
Policies do not exclude coverage for acts of terror or similar acts of sabotage;
and (viii) shall contain such other provisions, consistent with the provisions
hereof, as Lender deems reasonably necessary or desirable to protect its
interest (but only to the extent available on commercially reasonable terms).
Any blanket Policy shall specifically allocate to the Property the amount of
coverage from time to time required hereunder and shall otherwise provide the
same protection as would a separate Policy insuring only the Property in
compliance with the provisions of Section 3.3(a). Borrower shall pay the
premiums for such Policies (the “Insurance Premiums”) as the same become due and
payable and shall furnish to Lender evidence of the renewal of each of the new
Policies with receipts for the payment of the Insurance Premiums or other
evidence of such payment reasonably satisfactory to Lender (provided that such
Insurance Premiums have not been paid to Lender or Servicer (defined below)
pursuant to Section 3.5 hereof). If Borrower does not furnish such evidence and
receipts at least twenty (20) days prior to the expiration of any apparently
expiring Policy, then Lender may procure, but shall not be obligated to procure,
such insurance and pay the Insurance Premiums therefor, and Borrower agrees to
reimburse Lender for the cost of such Insurance Premiums promptly on demand.
Within thirty (30) 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; provided, however, such increased coverages shall not be requested
more frequently than once every three years, and shall only be requested if such
coverage is commercially available at commercially reasonable rates and such
rates are consistent with those paid in respect of comparable properties in
comparable locations, and Lender also reasonably determines that either (I)
prudent owners of real estate comparable to the Property are maintaining same or
(II) prudent institutional lenders (including, without limitation, investment
banks) to such owners are generally requiring that such owners maintain such
insurance. As used herein, the term (1) “Rating Agencies” shall mean each of
S&P, Moody’s, Fitch and any other nationally-recognized statistical rating
agency designated by Lender (and any successor to any of the foregoing);
provided, that, the foregoing shall only be deemed to be included within the
definition of “Rating Agencies” hereunder to the extent that the same have rated
(or are reasonably anticipated by Lender to rate) the Securities; (2) “S&P”
shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.; (3) “Moody’s” shall mean Moody’s Investor Service, Inc.; and
(4) “Fitch” shall mean Fitch, Inc.
(c)    If the Property shall be damaged or destroyed, in whole or in part, by
fire or other casualty, Borrower shall give prompt notice of such damage to
Lender and shall promptly commence and diligently prosecute the completion of
Restoration (defined below) of the Property and otherwise comply with Section
4.4 of this Security Instrument. Borrower shall pay all costs of such
Restoration (including, without limitation, any applicable deductibles under the
Policies) whether or not such costs are covered by insurance. In case of loss
covered by Policies, Lender may either (1) settle and adjust any claim, or (2)
allow Borrower to agree with the insurance company or companies on the amount to
be paid upon the loss; provided, that (A) provided no Event of Default shall be
continuing, Borrower may adjust losses aggregating not in excess of the
Threshold Amount (defined below) if such adjustment is carried out in a
competent and timely manner and (B) if no Event of Default shall be continuing,
Lender shall not settle or adjust any such claim under clause (1), above,
without the consent of Borrower, which consent shall not be unreasonably
withheld or delayed. In any case Lender shall and is hereby authorized to
collect and receipt for any such insurance proceeds; and the reasonable expenses
incurred by Lender in the adjustment and collection of insurance proceeds shall
become part of the Debt and be secured hereby and shall be reimbursed by
Borrower to Lender upon demand. As used herein, the term “Restoration” shall
mean, following the occurrence of a casualty or a condemnation to the Property
which is of a type necessitating the repair of the Property (or any portion
thereof), the completion of the repair and restoration of the Property (or
applicable portion thereof) as nearly as possible to the condition the Property
(or applicable portion thereof) was in immediately prior to such casualty or
condemnation, with such alterations as may be reasonably approved by Lender.

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Section 3.4.    PAYMENT OF TAXES, ETC. (a) Subject to the provisions of
Sections 3.4(b) and 3.5 hereof, Borrower shall pay all taxes, assessments, water
rates, sewer rents, governmental impositions, and other charges, including
without limitation vault charges and license fees for the use of vaults, chutes
and similar areas adjoining the Land, now or hereafter levied or assessed or
imposed against the Property or any part thereof (the “Taxes”), all ground
rents, assessments, maintenance charges and similar charges, now or hereafter
levied or assessed or imposed against the Property or any part thereof (the
“Other Charges”), and all charges for utility services provided to the Property
prior to the same becoming delinquent. Borrower will deliver to Lender, promptly
upon Lender’s written request, evidence satisfactory to Lender that the Taxes,
Other Charges and utility service charges have been so paid or are not then
delinquent. Borrower shall not suffer and shall promptly cause to be paid and
discharged any lien or charge against the Property arising out of such Taxes,
Other Charges and utility service charges. Except to the extent sums sufficient
to pay all Taxes and Other Charges have been deposited with Lender in accordance
with the terms of this Security Instrument, Borrower shall furnish to Lender,
promptly upon Lender’s written request, paid receipts for the payment of the
Taxes and Other Charges.
(b)    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 in whole or in part of any of
the Taxes, provided that (i) no Event of Default is continuing under the Note,
this Security Instrument or any of the other Loan Documents, (ii) Borrower is
permitted to do so under the provisions of any other mortgage, deed of trust or
deed to secure debt affecting the Property, (iii) (A) such proceeding or other
actions taken by Borrower in connection with such proceeding shall suspend the
collection of the Taxes from Borrower and from the Property, (B) Borrower shall
have paid all of the Taxes under protest or (C) to the extent expressly
permitted by applicable law as a method of releasing any related lien for the
applicable contested Taxes, Borrower shall have deposited with the applicable
taxing authority Qualified Security (defined below) in an amount sufficient to
insure the payment of such contested Taxes, together with all interest and
penalties thereon, (iv) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any other instrument to which
Borrower is subject and shall not constitute a default thereunder, (v) neither
the Property nor any part thereof or interest therein will be in danger of being
sold, forfeited, terminated, canceled or lost, (vi) to the extent not already
secured pursuant to any Qualified Security deposited by Borrower with the
applicable taxing authority, Borrower shall have deposited with Lender adequate
reserves for the payment of the Taxes, together with all interest and penalties
thereon, unless Borrower has paid all of the Taxes under protest, and (vii) to
the extent not already secured pursuant to any Qualified Security deposited by
Borrower with the applicable taxing authority, Borrower shall have furnished the
security as may be required in the proceeding to insure the payment of any
contested Taxes, together with all interest and penalties thereon. In connection
with the foregoing, provided no Event of Default has occurred and is then
continuing and subject to the other applicable terms and conditions of Section
3.5, Lender shall allow Borrower to access then available monies in the Escrow
Fund (if any) to pay such Taxes under protest. As used herein, “Qualified
Security” shall mean, with respect to any contested Taxes, cash or cash
equivalents acceptable to the applicable taxing authority which such cash or
cash equivalents may be applied by the applicable taxing authority to the
payment of such contested Taxes (and any interest and penalties thereon) if
Borrower is unsuccessful in the applicable contest.
Section 3.5.    ESCROW FUND. In addition to any initial deposits to the Escrow
Fund (defined below) on the date hereof (if any), except as provided below,
Borrower shall pay to Lender on each Monthly Payment Date (a) one twelfth of an
amount which would be sufficient to pay the Taxes payable, or reasonably
estimated by Lender to be payable, during the next ensuing twelve (12) months
(such Taxes, the “Applicable Taxes”) and (b) one twelfth of an amount which
would be sufficient to pay the Insurance Premiums due for the renewal of the
coverage afforded by the Policies upon the expiration thereof (such Insurance
Premiums, the “Applicable Insurance Premiums”), which such amounts so paid to
Lender shall be held in an account with Lender or Servicer, with such amounts
and such account each being referred to herein as the “Escrow Fund”. Borrower
agrees to notify Lender immediately of any changes to the amounts, schedules and
instructions for payment of any Taxes and Insurance Premiums of which it has
obtained knowledge and authorizes Lender or its agent to obtain the bills for
Taxes and Other Charges directly from the appropriate taxing authority. The
Escrow Fund and the payments of interest or principal or both, payable pursuant
to the Note shall be added together and shall be paid as an aggregate sum by
Borrower to Lender. Provided no Event of Default is

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continuing, Lender will timely apply the Escrow Fund to payments of Taxes and
Insurance Premiums required to be made by Borrower pursuant to Sections 3.3 and
3.4 hereof. If the amount of the Escrow Fund shall exceed the amounts due for
Applicable Taxes and Applicable Insurance Premiums pursuant to Sections 3.3 and
3.4 hereof, Lender shall, provided no Event of Default is continuing, promptly
return any excess to Borrower. In disbursing such excess, Lender may deal with
the Person shown on the records of Lender to be the owner of the Property. If,
at any time, Lender determines that the Escrow Fund is not sufficient to pay any
Applicable Taxes and/or Applicable Insurance Premiums, Borrower shall promptly
pay to Lender, upon demand, an amount which Lender shall estimate as sufficient
to make up the deficiency. The Escrow Fund shall not constitute a trust fund and
may be commingled with other monies held by Lender. No earnings or interest on
the Escrow Fund shall be payable to Borrower. Notwithstanding the foregoing,
Borrower shall not be required to make deposits to the Escrow Fund for
Applicable Insurance Premiums and Applicable Taxes pursuant to this Section 3.5
so long as (i) no Event of Default occurs and is continuing hereunder, (ii)
solely with respect to Applicable Taxes, no Trigger Period (as defined on
Exhibit A hereof) exists, (iii) Borrower pays all Insurance Premiums and Taxes
by no later than five (5) Business Days prior to the delinquency thereof and
(iv) Borrower provides Lender paid receipts for the payment of the Insurance
Premiums and Taxes by no later than one (1) Business Day prior to the
delinquency thereof. Upon the occurrence of a failure of any of the conditions
specified in clauses (i) through (iv) above (as applicable), Borrower shall,
upon Lender’s written demand therefor, (A) pay to Lender an initial deposit to
be determined by Lender, in its reasonable discretion, to increase the amounts
in the Escrow Fund to an amount which, together with anticipated monthly
deposits to the Escrow Fund for, as applicable, Applicable Insurance Premiums
and Applicable Taxes, shall be sufficient to pay, as applicable, the Applicable
Insurance Premiums and the Applicable Taxes and (B) commence making the deposits
to the Escrow Fund for, as applicable, Applicable Insurance Premiums and
Applicable Taxes required pursuant to this Section 3.5 commencing with the next
Monthly Payment Date, which payments shall continue for the remainder of the
term of the Loan unless (x) the trigger event for such obligation was an Event
of Default or Trigger Period (other than a Trigger Period caused as a result of
an Event of Default) (such trigger event, an “Escrow Trigger Event”), (y) the
related Escrow Trigger Event is no longer continuing and (z) not more than one
(1) Escrow Trigger Event has occurred during the term of the Loan, whereupon
Borrower’s obligation to make deposits to the Escrow Fund for, as applicable,
Applicable Insurance Premiums and Applicable Taxes pursuant to this Section 3.5
will again be suspended and any funds then held by Lender for payment of, as
applicable, Applicable Insurance Premiums and Applicable Taxes shall be released
to Borrower for use in paying the next installment of, as applicable, Applicable
Insurance Premiums and Applicable Taxes.
Section 3.6.    CONDEMNATION. Borrower shall promptly give Lender notice of the
actual or threatened commencement of any condemnation or eminent domain
proceeding affecting the Land and/or the Improvements and shall deliver to
Lender copies of any and all papers served in connection with such proceedings.
Lender is hereby irrevocably appointed as Borrower’s attorney in fact coupled
with an interest, with exclusive powers to collect, receive and apply to the
Debt (or provide to Borrower to pay for Restoration) any award or payment for
any taking accomplished through a condemnation or eminent domain proceeding and,
at any time during which an Event of Default is continuing, to make any
compromise or settlement in connection therewith. All condemnation awards or
proceeds shall be either (a) paid to Lender for application against the Debt or
(b) applied to Restoration of the Property in accordance with Section 4.4
hereof. Notwithstanding any taking by any public or quasi public authority
through eminent domain or otherwise (including but not limited to any transfer
made in lieu of or in anticipation of the exercise of such taking), Borrower
shall continue to pay the Debt at the time and in the manner provided for its
payment in the Note and in this Security Instrument and the Debt shall not be
reduced until any award or payment therefor shall have been actually received
and applied by Lender (as and to the extent provided in Section 4.4), after the
deduction of expenses of collection, to the reduction or discharge of the Debt
as and to the extent provided in Section 4.4. 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 herein or in the
Note. Any award or payment to be applied to the reduction or discharge of the
Debt or any portion thereof may be so applied whether or not the Debt or such
portion thereof is then due and payable. If the Property is sold, through
foreclosure or otherwise, prior to the receipt by Lender of the award or
payment, Lender shall have the right, whether or not a deficiency judgment on
the Note shall have been or may be sought, recovered or denied, to receive the
award or payment, or a portion thereof sufficient to pay the unpaid portion of
the Debt. If the Property or any portion thereof is taken by a condemning
authority, Borrower shall promptly

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commence and diligently prosecute the Restoration of the Property and otherwise
comply with the provisions of Section 4.4. Borrower shall pay all costs of
Restoration whether or not such costs are covered by the Net Proceeds.
Notwithstanding anything contained in this Section 3.6 or this Security
Instrument to the contrary (but subject to the provisions of Section 4.4 below
(including Section 4.4(c)) and the last paragraph of this Section 3.6), Lender
may elect to (y) apply the net proceeds of any condemnation award (after
deduction of Lender’s reasonable costs and expenses, if any, in collecting the
same) in reduction of the Debt in such order and manner as Lender may elect,
whether due or not (provided, however, Lender shall apply such proceeds to
amounts then due prior to applying same to amounts not yet due), or (z) make the
proceeds available to Borrower for the restoration or repair of the Property.
Any implied covenant in this Security Instrument restricting the right of Lender
to make such an election is waived by Borrower. In addition, Borrower hereby
waives the provisions of any law prohibiting Lender from making such an
election.
Notwithstanding the foregoing or anything to the contrary contained herein or in
any other Loan Documents, in the event that, in accordance with the applicable
terms and conditions hereof, the Condemnation Net Proceeds are required to be
applied to the Debt and the amount of the Condemnation Net Proceeds applied to
the Debt in connection therewith are insufficient under REMIC Requirements,
Borrower shall, within five (5) days of demand by Lender, prepay the principal
amount of the Debt in an amount equal to such insufficiency plus the amount of
any then applicable Interest Shortfall (as defined in the Note) (such payment,
the “Condemnation Payment”). Provided no Event of Default exists, any such
prepayment shall not be subject to any prepayment premium or penalty (other than
any applicable Interest Shortfall).
Section 3.7.    LEASES AND RENTS. (a) All Leases entered into after the date
hereof shall be written on (i) the standard form of lease which has been
approved by Lender or (ii) an Acceptable Office Tenant Form (defined below).
Commercially reasonable changes may be made to the Lender-approved standard
lease or an Acceptable Office Tenant Form without the prior written consent of
Lender in the ordinary course of Borrower’s business. All Leases (including any
Acceptable Office Tenant Form) shall provide that they are subordinate to this
Security Instrument (subject to Lender's agreement (by Lender’s acceptance of
this Security Instrument hereby given) not to disturb such tenant's tenancies
while they are in compliance with the terms of their Lease) and that the tenant
thereunder agrees to attorn to Lender. As used herein, the term “Acceptable
Office Tenant Form” shall mean the form of lease promulgated by a prospective
national or regional office tenant that generally insists, on a programmatic or
institutional basis (although an occasional exception to such requirement shall
not cause this provision to fail), on using its own form of lease; provided,
that, the provisions contained in such form of lease (A) are commercially
reasonable for properties similar to the Property, (B) do not contain any
rights, options (including, without limitation, rights to purchase the Property
or any interest therein) or obligations that would be unacceptable to a prudent
secondary market lender substantially similar to Lender and (C) do not have a
Material Adverse Effect (defined below).
(b)    Borrower (i) shall observe and perform all material obligations imposed
upon the lessor under the Leases and shall not do or permit to be done anything
to impair the value of the Leases as security for the Debt; (ii) shall promptly
send copies to Lender of all notices of default which Borrower shall receive
thereunder; (iii) shall not collect any of the Rents more than one (1) month in
advance (other than security deposits and prepaid first and last month's rent
collected in the ordinary course of Borrower's business); and (iv) shall not
execute any other assignment of the lessor’s interest in the Leases or the
Rents. Borrower (A) shall enforce all material terms, covenants and conditions
contained in the Leases upon the part of the lessees thereunder to be observed
or performed, short of termination thereof and short of instituting litigation
(provided, that, Borrower (1) shall be obligated to so institute litigation if
the failure to do so would have a Material Adverse Effect and (2) may terminate
a Lease only in the event of (aa) a monetary event of default under such Lease
or (bb) a material non-monetary default under such Lease where the tenant fails
to cure such event of default (i) to the extent the Sponsorship Condition
remains satisfied, beyond the cure period set forth in the subject Lease or (ii)
to the extent the Sponsorship Condition is not satisfied, within thirty (30)
days beyond the cure period set forth in the subject Lease); (B) may alter,
modify or change the terms of the Leases in any material respect without the
prior written consent of Lender, provided that such alterations, modifications
or changes are commercially reasonable alterations, modifications or changes
agreed to in the ordinary course of Borrower’s business; (C) shall not,

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without Lender's consent, convey or transfer or suffer or permit a conveyance or
transfer of the Property or of any interest therein so as to effect a merger of
the estates and rights, or a termination or material diminution of the
obligations of, tenants under the Leases; (D) may approve or consent to any
assignment of or subletting under the Leases in accordance with the terms of
such Leases, without the prior written consent of Lender; and (E) shall not
cancel the Leases or accept a surrender thereof, except that any Lease may be
canceled if at the time of the cancellation thereof a new Lease is entered into
on substantially the same terms or more favorable terms than those contained in
the canceled Lease. As used herein, the term “Material Adverse Effect” shall
mean a material adverse effect on (1) the Property, (2) the business, profits,
prospects, management, operations or condition (financial or otherwise) of
Borrower, Guarantor or the Property, (3) the enforceability, validity,
perfection or priority of the lien of this Security Instrument or the other Loan
Documents, or (4) the ability of Borrower to perform its obligations under this
Security Instrument or the other Loan Documents.
(c)    Borrower, as the lessor thereunder, may enter into proposed lease
renewals and new leases without the prior written consent of Lender, provided
each such proposed lease: (i) shall have an initial term of not less than three
(3) years or greater than ten (10) years; (ii) shall provide for rental rates
(including rates during any renewal or option term or rates applicable to any
expansion space) comparable to then (i.e., at the time such lease or renewal is
being negotiated) existing local market rates that would be agreed to in an
arm’s length transaction; (iii) shall be to a tenant which Borrower reasonably
determines to be capable and reputable; and (iv) shall comply with the
provisions of subsection (a) above (except that any lease renewals may be on the
same form as the original lease). Borrower may enter into a proposed lease which
does not satisfy all of the conditions set forth in clauses (i) through (iv)
immediately above, provided Lender consents in writing to such proposed lease,
such consent not to be unreasonably withheld or delayed. Borrower expressly
understands that any and all proposed leases are included in the definition of
“Lease” or “Leases” as such terms may be used throughout this Security
Instrument, the Note and the other Loan Documents. Borrower shall furnish Lender
with executed copies of all Leases and any amendments or other agreements
pertaining thereto.
(d)    Notwithstanding anything to the contrary contained herein or in any other
Loan Document, Borrower shall not, without the prior written consent of Lender,
enter into, renew, extend, terminate (for reasons other than non-payment of rent
(provided, that, with respect to the Master Lease, the same shall not be
terminated without Lender’s prior written consent (except in connection with the
Master Lease Termination (defined below))), reduce rents under (which shall not
be deemed to include any rent reductions explicitly provided for under the terms
and conditions of said Lease occurring automatically and not requiring Borrower
or any other party’s consent thereto or approval thereof), permit an assignment
or subleasing of (other than in accordance with its express terms) or otherwise
amend, modify or waive any material or economic provisions of, accept a
surrender of space under, or shorten the term of, any Major Lease or any
instrument guaranteeing or providing credit support for any Major Lease
(provided, that, the foregoing shall not be deemed to prohibit the Master Lease
Termination). As used herein, the term “Major Lease” shall mean (i) the Master
Lease, (ii) any Lease which, individually or when aggregated with all other
Leases at the Property with the same tenant or any Affiliate (defined below) of
such tenant, demises twenty percent (20%) or more of the Property’s net rentable
square footage, (iii) any Lease which contains any option, offer, right of first
refusal or other similar entitlement to purchase all or any portion of the
Property (which such rights shall be deemed to be exclusive of any rights under
any Lease to extend the term thereof or to lease additional space at the
Property) or (iv) any instrument guaranteeing or providing credit support for
any Lease meeting the requirements of (i), (ii) or (iii) above. As used above,
the term “Affiliate” shall mean, with respect to any tenant under any Lease at
the Property, any affiliate of such tenant, unless such affiliate (A) operates
under a separate trade name and under a separate corporate or other similar
division from such tenant and (B) is otherwise treated as a separate tenant
under a separate Lease by Borrower.
(e)    Notwithstanding anything to the contrary contained herein, to the extent
Lender’s prior approval is required for any leasing matters set forth in this
Section 3.7, Lender shall have ten (10) Business Days from receipt of written
request and all reasonably required information and documentation relating
thereto in which to approve or disapprove such matter, provided that such
request to Lender is marked in bold lettering with the following language:
“LENDER’S RESPONSE IS REQUIRED WITHIN TEN (10) BUSINESS DAYS OF RECEIPT OF THIS
NOTICE

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PURSUANT TO THE TERMS OF A DEED OF TRUST BETWEEN THE UNDERSIGNED AND LENDER”. In
the event that Lender fails to respond to the leasing matter in question within
such time, Lender’s approval shall be deemed given for all purposes. Borrower
shall provide Lender with such information and documentation as may be
reasonably required and requested by Lender, including, without limitation,
lease comparables and other market information as reasonably required and
requested by Lender. Lender shall not be entitled to any fee or reimbursement in
connection with any such review and approval process in excess of the reasonable
fees or reimbursements customarily charged by lenders or servicers of secondary
market loans similar to the Loan for actions similar to the foregoing.
(f)    Within ten (10) Business Days after receipt of written request therefor
and a copy of the executed corresponding Lease, Lender shall execute and deliver
to Borrower a subordination, non-disturbance and attornment agreement (an
“SNDA”) with respect to any Lease approved or deemed approved hereunder or
otherwise entered into in accordance with the terms and provisions hereof. If
the form of the SNDA shall be prescribed by the Lease in question, and Lender
shall have approved (or been deemed to have approved) such Lease (including all
of the Leases reflected on the rent roll delivered by Borrower to Lender in
connection with the making of the Loan, it being understood that all of the
Leases on the rent roll of the Property as of the date hereof are deemed
approved), Lender shall execute and deliver the SNDA in the form prescribed by
such Lease. In the case of any other Lease or any Lease as to which Lender’s
approval is not required pursuant to the terms hereof where such tenant
thereunder requests an SNDA, the SNDA to be executed and delivered by Lender
shall be in substantially the form attached hereto as Exhibit B, as such form
may be modified to reflect reasonable changes thereto negotiated by Lender and
such tenant. Lender agrees to negotiate in good faith the terms of the SNDA with
any tenant under any Lease. All reasonable attorneys’ fees and disbursements
incurred by Lender in connection with the negotiation of material changes to
such form SNDA shall be payable by Borrower within ten (10) Business Days after
Lender’s written request therefor, whether or not the SNDA is ultimately
executed and/or recorded. No attorney's fees or other charges will be charged
for merely conforming such SNDA to the terms of the Lease in question (as
opposed to material changes to the substantive content thereof) or for executing
such SNDA.
(g)     Notwithstanding the foregoing, (I) any Lease executed on or after the
date hereof and prior to the Master Lease Termination shall expressly provide
that in the event the Master Lease is terminated, the Tenant under such Lease
shall automatically attorn to Borrower as Landlord thereunder, and (II) Borrower
shall, within five (5) days of the consummation of the 1031 Exchange Transfer
(hereafter defined), (i) cause the landlord’s interest in each of the Leases at
the Property (excluding the Master Lease) to be transferred to Borrower (to the
extent not already held by Borrower) in a manner which is enforceable under
Applicable Law and is in compliance with the applicable terms and conditions of
each applicable Lease, (ii) to the extent applicable, cause the Master Lessee’s
interest in the Management Agreement (defined below) and Parking Management
Agreement (defined below) to be transferred to Borrower (to the extent such
transfer does not automatically occur pursuant to the express terms and
conditions of the Management Agreement or Parking Management Agreement (as
applicable)), (iii) after the transfer in clause (i) above is consummated,
terminate the Master Lease and (iv) concurrently with the termination of the
Master Lease, provide written notice of such termination to Lender together with
all documents or other instruments evidencing such termination and the
consummation of the conditions contained in (i) through (iii) above
(satisfaction of (i) through (iv) above is collectively herein referred to as
the “Master Lease Termination”). Subject to Borrower’s satisfaction of the
applicable terms and conditions set forth above, Lender’s consent shall not be
required in order for Borrower to consummate the Master Lease Termination.
(h)     Notwithstanding anything to the contrary contained herein or in any
other Loan Document, prior to the Master Lease Termination, with regard to any
warranties, covenants or obligations of Borrower herein or in any Loan Document
relating to the use, management or operation of the Property or any other
provisions relating to items which, by virtue of the Master Lease, are wholly or
partially within the Master Lessee’s control, each such warranty, covenant or
obligation shall be deemed to impose an obligation upon Borrower to cause Master
Lessee to comply with the applicable term or provision hereof or of the other
Loan Documents and Borrower shall not be deemed to be relieved of any such
warranty, covenant or obligation by virtue of the Master Lease.

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Section 3.8.    MAINTENANCE OF PROPERTY. Borrower shall cause the Property to be
maintained in a good and safe condition and repair. The Improvements and the
Personal Property shall not be removed, demolished or materially altered (except
for normal replacement of the Personal Property) without the consent of Lender
(which such consent shall not be unreasonably withheld, conditioned or delayed
(subject, in each case, to applicable REMIC Requirements)). Borrower shall
promptly repair, replace or rebuild any part of the Property which may be
destroyed by any casualty, or become damaged, worn or dilapidated or which may
be affected by any proceeding of the character referred to in Section 3.6 hereof
and shall complete and pay for any structure at any time in the process of
construction or repair on the Land. Borrower shall not, without the prior
written consent of Lender, initiate, join in, acquiesce in, or consent to any
change in any private restrictive covenant, zoning law or other public or
private restriction, limiting or defining the uses which may be made of the
Property or any part thereof which may have a Material Adverse Effect. If under
applicable zoning provisions the use of all or any portion of the Property is or
shall become a nonconforming use, Borrower will not cause or permit the
nonconforming use to be discontinued or abandoned without the express written
consent of Lender. As used herein, the term (i) “REMIC Opinion” shall mean, as
to any matter, an opinion as to the compliance of such matter with applicable
REMIC Requirements (which such opinion shall be, in form and substance and from
a provider, in each case, reasonably acceptable to Lender and acceptable to the
Rating Agencies); (ii) “REMIC Requirements” shall mean any applicable legal
requirements relating to any REMIC Trust (including, without limitation, those
relating to the continued treatment of the Loan (or the applicable portion
thereof and/or interest therein) as a “qualified mortgage” held by such REMIC
Trust, the continued qualification of such REMIC Trust as such under the Code,
the non-imposition of any tax on such REMIC Trust under the Code (including,
without limitation, taxes on “prohibited transactions and “contributions”) and
any other constraints, rules and/or other regulations and/or requirements
relating to the servicing, modification and/or other similar matters with
respect to the Loan (or any portion thereof and/or interest therein) that may
now or hereafter exist under applicable legal requirements (including, without
limitation under the Code)); and (iii) “REMIC Trust” shall mean “any “real
estate mortgage investment conduit” within the meaning of Section 860D of the
Code that holds any interest in all or any portion of the Loan.
Section 3.9.    WASTE. Borrower shall not commit or suffer any physical waste of
the Property or make any change in the use of the Property which will in any way
materially increase the risk of fire or other hazard arising out of the
operation of the Property, or take any action that might invalidate or give
cause for cancellation of any Policy, or do or permit to be done thereon
anything that may in any way impair the value of the Property or the security of
this Security Instrument. Borrower will not, without the prior written consent
of Lender, permit any drilling or exploration for or extraction, removal, or
production of any minerals from the surface or the subsurface of the Land,
regardless of the depth thereof or the method of mining or extraction thereof.
Section 3.10.    COMPLIANCE WITH LAWS. Borrower shall promptly comply with all
existing and future federal, state and local laws, orders, ordinances,
governmental rules and regulations or court orders affecting or which may be
interpreted to affect Borrower, the Property or the use of the Property,
including, without limitation, the Prescribed Laws (defined below) (“Applicable
Laws”) (which such covenant shall be deemed to (i) include Environmental Laws
(as defined in the Environmental Indemnity) and (ii) require Borrower to keep
all Permits (defined below) in full force and effect). Borrower shall from time
to time, upon Lender’s request, based on Lender’s belief, in the exercise of
Lender’s reasonable judgment, that the Property or Borrower is in violation of
any Applicable Law, provide Lender with evidence satisfactory to Lender that the
Property or Borrower (as applicable) complies with the Applicable Laws which
Lender believes the Property or Borrower (as applicable) is in violation of or
is exempt from compliance with such Applicable Laws. Borrower shall give prompt
notice to Lender of the receipt by Borrower of any notice related to a violation
of any Applicable Laws and of the commencement of any proceedings or
investigations which relate to compliance with Applicable Laws. As used herein,
the term “Prescribed Laws” shall mean, collectively, (a) the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (Public Law 107-56) (The USA PATRIOT Act), (b)
Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001,
and relating to Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism, (c) the International
Emergency Economic Power Act, 50 U.S.C. §1701 et. seq. and (d) all other
Applicable Laws relating to money laundering or terrorism. As used herein, the
term “Permits” shall mean all necessary certificates, licenses, permits,
franchises, certificates of occupancy, consents, and other

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approvals (governmental and otherwise) required under Applicable Laws for the
operation of the Property and the conduct of Borrower’s business (including,
without limitation, all required zoning, building code, land use, environmental
and other similar permits or approvals).
Section 3.11.    BOOKS AND RECORDS. (a) Borrower shall keep adequate books and
records of account in accordance with GAAP (defined below) or such other
comprehensive basis of accounting as may be acceptable to Lender in its
reasonable discretion, in each case consistently applied (each or any of the
foregoing, the “Approved Accounting Method”) and furnish to Lender:
(i)    prior to Securitization (defined below), monthly (but in no event for a
period of more than two (2) years from the date hereof) and, thereafter,
quarterly, rent rolls signed, dated and certified by Borrower (or an officer,
general partner or principal of Borrower if Borrower is not an individual) to be
true and complete to the best knowledge of such Person, detailing the names of
all tenants of the Improvements, the portion of Improvements occupied by each
tenant, the base rent and any other charges payable under each Lease and the
term of each Lease, including the expiration date, and any other information as
is reasonably required by Lender, within thirty (30) days after the end of each
calendar month or quarter (as applicable);
(ii)    prior to Securitization, monthly (but in no event for a period of more
than two (2) years from the date hereof) and, thereafter, quarterly, operating
statements of the Property and a calculation of the then current Debt Service
Coverage Ratio, in each case, certified by Borrower (or an officer, general
partner or principal of Borrower if Borrower is not an individual) to be true
and complete to the best knowledge of such Person, detailing the total revenues
received, total expenses incurred, total capital expenditures (including, but
not limited to, all capital improvements (including, but not limited to, tenant
improvements)), leasing commissions and other leasing costs, total debt service
and total cash flow, within thirty (30) days after the close of each calendar
month or quarter (as applicable); and
(iii)    an annual balance sheet and profit and loss statement of Borrower,
prepared and certified by Borrower within ninety (90) days after the close of
each fiscal year of Borrower.
(b)    Upon request from Lender, Borrower shall furnish to Lender: (1) an
accounting of all security deposits held in connection with any Lease of any
part of the Property; and (2) an annual operating budget presented on a monthly
basis consistent with the annual operating statement described above for the
Property and all proposed capital replacements and improvements.
(c)     Borrower shall furnish Lender with such other additional financial or
management information regarding Borrower and/or the Property as may, from time
to time, be reasonably required and requested by Lender. Upon request of Lender,
Borrower shall furnish to Lender in a timely manner evidence reasonably
acceptable to Lender of compliance with Section 4.3 hereof.
(d)    Borrower agrees that, upon request of Lender, the Required Financial
Items (defined below) shall be prepared and/or audited by an independent
certified public accountant acceptable to Lender; provided, that, except with
respect to the Required Financial Items provided under subsection (e) below, so
long as the Sponsorship Condition (defined below) remains satisfied, the
foregoing requirement shall be deemed satisfied to the extent that Borrower
provides Lender (within the timeframes and other requirements set forth herein)
such of the Required Financial Items which Borrower or Sponsor (or any of their
respective agents, employees, representatives or affiliates) have elected to
have prepared and/or certified by an independent certified public accountant.
(e)    Upon request, Borrower shall furnish to Lender from time to time such
financial, statistical and operating data and financial statements (including,
to the extent applicable, financial statements prepared in accordance with GAAP
and audited by independent accountants of Borrower acceptable to Lender), in
each case, as Lender reasonably determines to be required in order to comply
with any applicable legal requirements (including those

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applicable to Lender or any Servicer (including, without limitation and to the
extent applicable, Regulation AB)) within the timeframes necessary in order to
comply with such legal requirements. As used herein, “GAAP” shall mean generally
accepted accounting principles in the United States of America as of the date of
the applicable financial report.
(f)     Any reports, statements or other information required to be delivered
under this Security Instrument and/or under the other Loan Documents (the
“Required Financial Items”) shall be delivered (i) in paper form and (ii) if
requested by Lender and within the capabilities of Borrower’s data systems
without change or modification thereto, in electronic form and prepared using
Microsoft Word for Windows or Microsoft Excel for Windows. Borrower agrees that
Lender may disclose information regarding the Property and Borrower that is
provided to Lender pursuant to this Section in connection with the
Securitization to such parties requesting such information in connection with
such Securitization.
(g)     As used above, the term “Regulation AB” shall mean Regulation AB under
the Securities Act and the Exchange Act, as such Regulation may be amended from
time to time.
Section 3.12.    PAYMENT FOR LABOR AND MATERIALS. Borrower will promptly pay
when due all bills and costs for labor, materials, and specifically fabricated
materials incurred in connection with the Property and never permit to exist
(subject to Borrower's right to contest any such matter as described below)
beyond the due date thereof in respect of the Property or any part thereof any
lien or security interest, even though inferior to the liens and the security
interests hereof. Nothing contained herein shall, however, affect or impair
Borrower’s ability to diligently and in good faith contest any lien or bill for
labor or materials, provided that any lien placed upon the Property must be
fully and irrevocably discharged (by bond or otherwise) at least 30 days prior
to the date such lien could otherwise be foreclosed upon pursuant to Applicable
Law.
Section 3.13.    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 recorded instrument affecting or pertaining to the
Property, or given by Borrower to Lender for the purpose of further securing an
obligation secured hereby and any amendments, modifications or changes thereto.
Section 3.14.    PROPERTY MANAGEMENT AND PARKING MANAGEMENT.
(a)        Borrower shall (i) promptly perform and observe all of the material
covenants required to be performed and observed by it or Master Lessee under the
agreement between Manager and Master Lessee and/or Borrower pursuant to which
the property manager of the Property (the “Manager”) is employed to perform
management services for the Property (the “Management Agreement”) and do all
things necessary to preserve and to keep unimpaired its material rights
thereunder; (ii) promptly notify Lender of any default under the Management
Agreement of which it is aware; (iii) promptly deliver to Lender a copy of any
notice of default or other material notice received by Borrower and/or Master
Lessee under the Management Agreement; (iv) promptly give notice to Lender of
any notice or information that Borrower and/or Master Lessee receives which
indicates that Manager is terminating the Management Agreement or that Manager
is otherwise discontinuing its management of the Property; and (v) promptly
enforce the performance and observance of all of the material covenants required
to be performed and observed by Manager under the Management Agreement. Subject
to the penultimate sentence of this paragraph, Borrower shall not, without the
prior written consent of Lender (which consent shall not be unreasonably
withheld, conditioned or delayed): (i) surrender, terminate or cancel the
Management Agreement, consent to any transfer or assignment of Manager’s rights
under the Management Agreement, or otherwise replace Manager or enter into any
other management agreement with respect to the Property (provided, that, the
foregoing shall not be deemed to prohibit Manager from sub-contracting some of
its responsibilities under the Management Agreement provided that Manager
retains responsibility and control of all material management decisions); (ii)
reduce or consent to the reduction of the term of the Management Agreement;
(iii) increase or consent to the increase of the amount of any charges under the
Management Agreement; or (iv) otherwise modify, change, supplement, alter or
amend, or waive or release any of its rights and remedies under, the Management
Agreement in any material respect. Without limitation of any term or condition

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contained herein or in the other Loan Documents, Borrower shall cause the
Property to be at all times managed by a Qualified Manager (defined below)
engaged in accordance with the applicable terms and conditions contained herein
and in the other Loan Documents. Notwithstanding anything to the contrary
contained herein or in the other Loan Documents, Lender’s receipt of a New
Non-Consolidation Opinion shall be a condition precedent to any appointment of
an Affiliated Manager (defined below) as Manager for the Property. Provided no
Event of Default is continuing, Borrower may terminate any Manager or otherwise
replace any Manager without Lender’s consent, provided, that, Borrower provides
Lender (A) ten (10) days prior written notice of such termination or
replacement, (B) evidence that a Qualified Manager has been engaged to manage
the Property pursuant to a Replacement Management Agreement (defined below)
effective as of the date of termination of the terminated Manager, (C) a duly
executed copy of the Replacement Management Agreement, (D) to the extent such
replacement Manager is an Affiliated Manager, a New Non-Consolidation Opinion
and (E) evidence reasonably acceptable to Lender that either (I) no termination
or similar fees are due in connection with the termination of the then current
Manager or (II) Borrower has sufficient sums to pay any such fees without
materially and adversely impacting the cash flow of the Property and/or Borrower
ability to perform hereunder or under the other Loan Documents. Manager shall
not (and Borrower shall not permit Manager to) resign as Manager or otherwise
cease managing the Property until a Qualified Manager is engaged to manage the
Property in accordance with the applicable terms and conditions hereof and of
the other Loan Documents.
(b)    Borrower shall (i) promptly perform and observe all of the material
covenants required to be performed and observed by it or Master Lessee under the
agreement between Parking Manager and Master Lessee and/or Borrower pursuant to
which the parking manager of the Property (the “Parking Manager”) is employed to
perform parking management services for the Property (the “Parking Management
Agreement”) and do all things necessary to preserve and to keep unimpaired its
material rights thereunder; (ii) promptly notify Lender of any default under the
Parking Management Agreement of which it is aware; (iii) promptly deliver to
Lender a copy of any notice of default or other material notice received by
Borrower or Master Lessee under the Parking Management Agreement; (iv) promptly
give notice to Lender of any notice or information that Borrower or Master
Lessee receives which indicates that Parking Manager is terminating the Parking
Management Agreement or that Parking Manager is otherwise discontinuing its
management of the Property; and (v) promptly enforce the performance and
observance of all of the material covenants required to be performed and
observed by Parking Manager under the Parking Management Agreement. Subject to
the penultimate sentence of this paragraph, Borrower shall not, without the
prior written consent of Lender (which consent shall not be unreasonably
withheld, conditioned or delayed): (i) surrender, terminate or cancel the
Parking Management Agreement, consent to any transfer or assignment of Parking
Manager’s rights under the Parking Management Agreement, or otherwise replace
Parking Manager or enter into any other parking management agreement with
respect to the Property (provided, that, the foregoing shall not be deemed to
prohibit Parking Manager from sub-contracting some of its responsibilities under
the Parking Management Agreement provided that Parking Manager retains
responsibility and control of all material management decisions); (ii) reduce or
consent to the reduction of the term of the Parking Management Agreement; (iii)
increase or consent to the increase of the amount of any charges under the
Parking Management Agreement; or (iv) otherwise modify, change, supplement,
alter or amend, or waive or release any of its rights and remedies under, the
Parking Management Agreement in any material respect. Without limitation of any
term or condition contained herein or in the other Loan Documents, Borrower
shall cause the parking related activities at the Property to at all times be
managed by a Qualified Manager (defined below) engaged in accordance with the
applicable terms and conditions contained herein and in the other Loan
Documents. Notwithstanding anything to the contrary contained herein or in the
other Loan Documents, Lender’s receipt of a New Non-Consolidation Opinion shall
be a condition precedent to any appointment of an Affiliated Manager (defined
below) as Parking Manager for the Property. Provided no Event of Default is
continuing, Borrower may terminate any Parking Manager or otherwise replace any
Parking Manager without Lender’s consent, provided, that, Borrower provides
Lender (A) ten (10) days prior written notice of such termination or
replacement, (B) evidence that a Qualified Manager has been engaged to manage
parking related activities at the Property pursuant to a Replacement Management
Agreement (defined below) effective as of the date of termination of the
terminated Parking Manager, (C) a duly executed copy of the Replacement
Management Agreement, (D) to the extent such replacement Parking Manager is an
Affiliated Manager, a New Non-Consolidation Opinion and (E) evidence reasonably
acceptable to Lender that either (I) no termination or similar fees are due in
connection with the termination of the then current Parking Manager or (II)
Borrower has sufficient sums

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to pay any such fees without materially and adversely impacting the cash flow of
the Property and/or Borrower ability to perform hereunder or under the other
Loan Documents. Parking Manager shall not (and Borrower shall not permit Parking
Manager to) resign as Parking Manager or otherwise cease managing the Property
until a Qualified Manager is engaged to manage the parking related activities at
the Property in accordance with the applicable terms and conditions hereof and
of the other Loan Documents.
(c)    During the existence of a Manager Termination Event (defined below),
Borrower shall, at Lender’s direction, immediately terminate the Management
Agreement and/or Parking Management Agreement and enter into a new property
management agreement and/or parking management agreement reasonably acceptable
to Lender with a management company reasonably acceptable to Lender, which such
new property or parking management company (as applicable) must (i) be a
Qualified Manager, (ii) not be an affiliate of, or controlled by, Lender or
Servicer, and (iii) have not provided (nor agreed to provide) Lender or Servicer
(or their respective affiliates, officers or employees) with any compensation
for being so named. In the event Lender directs Borrower to engage a
professional third party property or parking manager or such manager is
otherwise engaged in accordance with the terms and conditions hereof, then
Borrower shall engage such manager pursuant to an agreement reasonably
acceptable to Lender, and Borrower and such manager shall execute an agreement
acceptable to Lender conditionally assigning Borrower’s interest in such
management agreement to Lender and subordinating manager’s right to receive fees
and expenses under such agreement while the Debt remains outstanding (such
replacement management agreement and such assignment and subordination thereof
in favor of Lender, collectively, the “Replacement Management Agreement”). In no
event shall Lender or Borrower be liable for any termination, severance or other
fees to Manager, Parking Manager or others resulting from any termination of any
management agreement (including, without limitation the Management Agreement and
the Parking Management Agreement).
(d)    As used herein, (1) the term “Qualified Manager” shall mean (I) American
Assets Trust Management, LLC (unless such Person (A) is the Person being
replaced as property or parking manager or (B) has suffered a material adverse
change in its general business standing or reputation from that as exists as of
the date hereof (as reasonably determined by Lender)), (II) solely with respect
to parking management at the Property, Central Parking Remote Management, LLC
(unless such Person (A) is the Person being replaced as property manager or
parking manager (as applicable) or (B) has suffered a material adverse change in
its general business standing or reputation from that as exists as of the date
hereof (as reasonably determined by Lender)) or (III) a reputable and
experienced professional management organization approved by Lender, which
approval may not unreasonably be withheld, conditioned or delayed, and for which
Lender shall have received a Rating Agency Confirmation (defined below) and (2)
the term “Manager Termination Event” shall be an event occurring upon (i) the
occurrence of an Event of Default (which such Manager Termination Event shall
continue until Borrower’s cure, if applicable, of the applicable Event of
Default and Lender’s acceptance of such cure (whether voluntarily, as required
under Section 11.11(b) hereof or as required by law), provided, that, so long as
Manager is American Assets Trust Management, LLC or Parking Manager is Central
Parking Remote Management, LLC, Lender shall provide notice to Borrower and
Manager or Parking Manager of the applicable Event of Default and shall give
Borrower an opportunity to cure such Event of Default within ten (10) days of
such notice before such Event of Default will constitute a Manager Termination
Event), (ii) Manager or Parking Manager becoming insolvent or a debtor in a
proceeding under any applicable Insolvency Laws (as defined in the Note) or
(iii) the occurrence and continuance of a material default under the Management
Agreement by Manager or Parking Management Agreement by Parking Manager, in each
case, beyond any applicable grace, notice or cure periods.
Section 3.15.     PROPERTY DOCUMENT COVENANTS. Borrower agrees that without the
prior consent of Lender, Borrower will not enter into any new Property Document
or execute modifications to any existing Property Document if such new Property
Document or such modifications will have a Material Adverse Effect. Borrower
shall enforce, shall comply with, and shall use commercially reasonable efforts
to cause each of the parties to each Property Document to comply with all of the
terms and conditions contained in such Property Document.
Section 3.16.     LEASE TERMINATION FEES.

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(a)     Borrower shall notify Lender in writing, within two (2) Business Days
following receipt thereof, of Borrower’s receipt of any early termination fee or
payment or any similar fee or payment paid by any tenant in connection with the
termination of its Lease (any such payment, a “Termination Payment”). Within
five (5) Business Days of receipt of any Termination Payment constituting an
Applicable Termination Payment, Borrower shall deposit such Applicable
Termination Payment(s) into an account held by Lender or Servicer (the “Leasing
Reserve Account”). Any Termination Payments received by Borrower and not
required to be deposited in the Leasing Reserve Account pursuant to the
immediately preceding sentence shall be held by Borrower and used in the
ordinary course of operating the Property. Amounts deposited pursuant to this
Section 3.16 are referred to herein as the “Leasing Reserve Funds”. The Leasing
Reserve Account shall be deemed a “Reserve Account” for all purposes hereunder
and under the other Loan Documents. As used above, the term “Applicable
Termination Payment” shall mean (i) with respect to any individual Lease (or
Leases with affiliates), any Termination Payment made thereunder which,
individually or in the aggregate with any other prior Termination Payments made
under said Lease(s), exceeds $25,000 and (ii) with respect to all Leases, any
Termination Payment made after the date on which Termination Payment(s)
aggregating in excess of $25,000 have been made under the Lease(s) for the then
current calendar year.
(b)     Lender shall disburse to Borrower the Leasing Reserve Funds upon
satisfaction by Borrower of each of the following conditions: (i) Borrower shall
submit a request for payment to Lender at least ten (10) Business Days prior to
the date on which Borrower requests such payment be made and specifies the
tenant improvement costs and leasing commissions to be paid; (ii) on the date
such request is received by Lender and on the date such payment is to be made,
no Event of Default shall be continuing; (iii) Lender shall have reviewed and
approved the Lease and related leasing commissions in respect of which Borrower
is obligated to pay or reimburse certain tenant improvement costs and leasing
commissions; (iv) Lender shall have received and approved a budget for tenant
improvement costs and a schedule of leasing commissions payments and the
requested disbursement will be used to pay all or a portion of such costs and
payments; (v) with respect to any disbursement relating to tenant improvements,
Lender shall have received a certificate from Borrower (A) stating that all
tenant improvements at the Property (or portion thereof) to be funded by the
requested disbursement have been completed in good and workmanlike manner and in
accordance with all applicable federal, state and local laws, rules and
regulations, such certificate to be accompanied by a copy of any license, permit
or other approval by any Governmental Authority required in connection with the
tenant improvements, (B) identifying each Person that supplied materials or
labor in connection with the tenant improvements to be funded by the requested
disbursement and (C) stating that each such Person has been paid in full or will
be paid in full upon such disbursement for the portion of the tenant improvement
work to which such disbursement relates, such certificate to be accompanied by
lien waivers, invoices and/or other evidence of payment satisfactory to Lender;
(vi) at Lender’s option, if the cost of any individual tenant improvement
exceeds $100,000, a title search for the Property indicating that the Property
is free from all liens, claims and other encumbrances not previously approved by
Lender; and (vii) Lender shall have received such other evidence as Lender shall
reasonably request that the tenant improvements at the Property and/or leasing
commissions to be funded by the requested disbursement have been completed (to
the extent applicable), are due and payable and are paid for or will be paid
upon such disbursement to Borrower. Provided Borrower has complied with each of
the foregoing requirements for disbursement from the Leasing Reserve Account,
Lender shall make the applicable disbursement by no later than ten (10) Business
Days from the date of Borrower’s consummation of such compliance.
Notwithstanding the foregoing or anything to the contrary contained herein,
disbursements from the Leasing Reserve Account shall (1) not occur more
frequently than once each calendar month and (2) only be made for tenant
improvement and leasing commission costs with respect to the portions of the
Property to which the corresponding Termination Payment relates. With respect to
any space at the Property as to which any Applicable Termination Payment was
received (the “Applicable Space”), at such time as the Applicable Space has been
re-let in accordance with the terms and conditions hereof, all tenant
improvements, leasing commissions and related work and costs have been completed
and paid for in full in a lien free manner and the applicable tenant has taken
possession of the Applicable Space and is paying full, unabated rent under the
applicable Lease, Lender shall, provided no Event of Default has occurred and is
continuing, disburse to Borrower any remaining Leasing Reserve Funds then held
by Lender on account of the Applicable Space.

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Article 4. SPECIAL COVENANTS
Borrower covenants and agrees that:
Section 4.1.    PROPERTY USE. The Property shall be used only for office, retail
(including restaurant / quick serve restaurant use) and appurtenant and related
uses typical of a property such as the Property allowed by the Property’s zoning
classification and all agreements pertaining to the Property and for no other
use without the prior written consent of Lender, which consent may be withheld
in Lender’s reasonable discretion.
Section 4.2.    ERISA. (a) 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 Security Instrument
and the other Loan Documents) to be a non exempt (under a statutory or
administrative class exemption) prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”).
(d)    Borrower further covenants and agrees to deliver to Lender such
certifications or other evidence from time to time throughout the term of the
Security Instrument, as requested by Lender in its reasonable discretion, that
(i) Borrower is not an “employee benefit plan” as defined in Section 3(3) of
ERISA, or other retirement arrangement, which is subject to Title I of ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended or as may be
amended and any successor statute (collectively, the “Code”), or a “governmental
plan” within the meaning of Section 3(32) of ERISA; (ii) Borrower is not subject
to state statutes regulating investments and fiduciary obligations with respect
to governmental plans; and (iii) one or more of the following circumstances is
true:
(A)
Equity interests in Borrower are publicly offered securities, within the meaning
of 29 C.F.R. § 2510.3 101(b)(2);

(B)
Less than 25 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

(C)
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) or an investment
company registered under The Investment Company Act of 1940.

Section 4.3.    SINGLE PURPOSE ENTITY.
(b)    Borrower has not and, so long as the Debt remains outstanding and an
obligation of Borrower, Borrower shall not:
(i)    Own any asset or property other than (A) the Property, (B) cash and cash
equivalents generated by the Property and (C) incidental personal property
reasonably necessary for the ownership, management and operation of the
Property;
(ii)    Engage in any business other than the ownership, management and
operation of the Property;
(iii)    Enter into any contract or agreement with any affiliate of Borrower,
any constituent party of Borrower or any affiliate of any constituent party,
except upon terms and conditions that are intrinsically fair and substantially
similar to those that would be available on an arms-length basis with third
parties other than any such party;
(iv)    Incur any Indebtedness (defined below), secured or unsecured, direct or
contingent (including guaranteeing any obligation), other than (A) the Debt, (B)
trade and operational Indebtedness incurred in the ordinary course of business
with trade creditors, provided such Indebtedness is (1) unsecured, (2) not
evidenced

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by a note, (3) on commercially reasonable terms and conditions, and (4) due not
more than sixty (60) days past the date incurred and paid on or prior to such
date, and/or (C) financing lease and purchase money Indebtedness incurred in the
ordinary course of business relating to personal property on commercially
reasonable terms and conditions; provided however, the aggregate amount of the
indebtedness described in (B) and (C) (the “Trade Payable Debt”) shall not
exceed at any time three percent (3%) of the outstanding principal amount of the
Debt. No Indebtedness other than the Debt may be secured (subordinate or pari
passu) by the Property;
(v)    Make any loans or advances to any third party (including any affiliate or
constituent party) or acquire obligations or securities of its affiliates;
(vi)    Fail, to the extent there exists sufficient cash flow from the Property
to do so, to remain solvent or fail, to the extent there exists sufficient cash
flow from the Property to do so, to pay its debts and liabilities (including, as
applicable, shared personnel and overhead expenses) from its funds and assets as
the same shall become due;
(vii)    Fail to do or cause to be done and will do all things necessary to
observe organizational formalities and preserve its existence (unless such
failure is due to a lack of sufficient cash flow from the Property to allow
compliance therewith), or permit any constituent party to amend, modify or
otherwise change the partnership certificate, partnership agreement, articles of
incorporation and bylaws, operating agreement, trust or other organizational
documents of Borrower or such constituent party without the prior consent of
Lender in any manner that (i) violates the single purpose covenants set forth in
this Section or (ii) amends, modifies or otherwise changes any provision thereof
that by its terms cannot be modified at any time when the Debt is outstanding or
by its terms cannot be modified without Lender’s consent;
(viii)    Fail to maintain all of its books, records, financial statements and
bank accounts separate from those of its affiliates and any constituent party.
Borrower’s assets have not been and will not be listed as assets on the
financial statement of any other Person, provided, however, that Borrower’s
assets may be included in a consolidated financial statement of its affiliates
provided that (A)  appropriate notation shall be made on such consolidated
financial statements to indicate the separateness of Borrower and such
affiliates and to indicate that Borrower’s assets and credit are not available
to satisfy the debts and other obligations of such affiliates or any other
Person and (B) such assets shall be listed on Borrower’s own separate balance
sheet. Borrower will file its own tax returns (to the extent Borrower is
required to file any such tax returns) and will not file a consolidated federal
income tax return with any other Person. Borrower shall maintain its books,
records, resolutions and agreements as official records;
(ix)    Fail to be, or fail to hold itself out to the public as, a legal entity
separate and distinct from any other entity (including any affiliate of Borrower
or any constituent party of Borrower), fail to correct any known
misunderstanding regarding its status as a separate entity, fail to conduct
business in its own name, identify itself or any of its affiliates as a division
or part of the other or of any other Person, fail to allocate shared expenses
(including, without limitation, shared office space and services performed by an
employee of an affiliate) among the Persons sharing such expenses or fail to
maintain and utilize separate stationery, invoices and checks bearing its own
name;
(x)    Fail, to the extent there exists sufficient cash flow from the Property
to do so, to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations;
(xi)    Seek or effect the liquidation, dissolution, winding up, liquidation,
consolidation or merger, in whole or in part, of Borrower;
(xii)    Commingle the funds and other assets of Borrower with those of any
affiliate or constituent party or any other Person or fail to hold all of its
assets in its own name. Borrower has and will maintain its assets in

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such a manner that it will not be costly or difficult to segregate, ascertain or
identify its individual assets from those of any affiliate or constituent party
or any other Person;
(xiii)    Guarantee, assume or become obligated for the debts of any other
Person or hold itself out to be responsible for or have its credit available to
satisfy the debts or obligations of any other Person;
(xiv)     Fail to conduct its business so that the assumptions made with respect
to Borrower in any substantive, non-consolidation opinion delivered in
connection with the Loan (together with any subsequently delivered confirmations
or amendments thereto or any subsequent substantive non-consolidation opinions,
collectively, the “Non-Consolidation Opinion”) shall fail to be true and correct
in all respects;
(xv)     Permit any affiliate or constituent party independent access to its
bank accounts (other than in accordance with the express terms and conditions of
the Management Agreement or the Loan Documents);
(xvi)    Fail to pay the salaries of its own employees (if any) from its own
funds or fail to maintain a sufficient number of employees (if any) in light of
its contemplated business operations (in each case, to the extent there exists
sufficient cash flow from the Property to do so);
(xvii)    Fail to compensate each of its consultants and agents from its funds
for services provided to it or fail to pay from its own assets all obligations
of any kind incurred (to the extent there exists sufficient cash flow from the
Property to do so);
(xviii)    Fail to observe all corporate, limited liability company or limited
partnership (as applicable) required formalities;
(xix)    Own any subsidiary, or make any investment in, any Person (other than,
with respect to an SPE Component Entity, in Borrower);
(xx)    without the prior unanimous written consent of all of its partners,
members or shareholders, as applicable, and the prior written consent of each
Independent Director (regardless of whether such Independent Director is engaged
at the Borrower or SPE Component Entity level) (a) file or consent to the filing
of any petition, either voluntary or involuntary, to take advantage of any
applicable Insolvency Laws, (b) seek or consent to the appointment of a
receiver, liquidator or any similar official, (c) take any action with the
intent of causing such entity to become insolvent, or (d) make an assignment for
the benefit of creditors (each of (a) through (d) above, a “Material Action”);
or
(xxi)    Pledge its assets for the benefit of any Person.
As used above, the term “Indebtedness” shall mean, for any Person, any
indebtedness or other similar obligation for which such Person is obligated
(directly or indirectly, by contact, operation of law or otherwise); provided,
that, with respect to Borrower, the following shall not be deemed to constitute
“Indebtedness” for the purposes of the foregoing: (A) Taxes and Insurance
Premiums incurred and paid (and, in each case, not financed) in the ordinary
course of business and in compliance with the applicable terms and conditions
hereof and (B) costs incurred and paid (and, in each case, not financed) in
connection with any alterations to the Property approved by Lender (if required
hereby) in accordance with the applicable terms and conditions hereof.

(b)    If Borrower is a partnership or limited liability company (other than an
Acceptable Delaware LLC), each general partner in the case of a general
partnership, each general partner in the case of a limited partnership, or the
managing member in the case of a limited liability company (each an “SPE
Component Entity”) of Borrower, as applicable, shall be a corporation or an
Acceptable Delaware LLC whose sole asset is its interest in Borrower. Each SPE
Component Entity (i) will own at least a 0.5% direct equity interest in
Borrower, (ii) will at all times comply with

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each of the covenants, terms and provisions contained in Section 4.3(a) above,
to the extent applicable, as if such representation, warranty or covenant was
made directly by such SPE Component Entity; (iii) will not engage in any
business or activity other than owning an interest in Borrower; (iv) will not
acquire or own any assets other than its partnership, membership, or other
equity interest in Borrower (and the proceeds thereof); (v) will not incur any
debt, secured or unsecured, direct or contingent (including guaranteeing any
obligation) (provided, that, ministerial and non-material costs associated with
any SPE Component Entity maintaining its good standing and formation and filing
tax returns, in each case, done in the ordinary course of business shall not be
deemed “debt” for purposes of the foregoing); and (vi) will cause Borrower to
comply with the provisions of Section 4.3. Prior to the withdrawal or the
disassociation of any SPE Component Entity from Borrower, Borrower shall
immediately appoint a new general partner or managing member whose articles of
incorporation are substantially similar to those of such SPE Component Entity
and deliver a New Non-Consolidation Opinion to Lender and the Rating Agencies
with respect to the new SPE Component Entity and its equity owners.
Notwithstanding the foregoing, to the extent Borrower is a Delaware limited
liability company whose organizational documents contain springing member
provisions satisfying the requirements hereof and of the Delaware Limited
Liability Company Act and are otherwise acceptable to Lender (an “Acceptable
Delaware LLC”), so long as Borrower maintains such formation status, (A) no SPE
Component Entity shall be required and (B) the terms and provisions hereof and
of the other Loan Documents relating to SPE Component Entities shall be deemed
to be inapplicable.
(c)    (i)    The organizational documents of each SPE Component Entity (if any)
or Borrower (to the extent Borrower is an Acceptable Delaware LLC or a
corporation) shall provide that at all times there shall be, and Borrower shall
cause there to be, at least one duly appointed director or manager (an
“Independent Director”) of such SPE Component Entity or Borrower (as applicable)
each of whom (I) are not at the time of such individual’s initial appointment,
and shall not have been at any time during the preceding five (5) years, and
shall not be at any time while serving as a director of such SPE Component
Entity or Borrower (as applicable), either (A) a shareholder (or other equity
owner) of, or an officer, director, partner, manager, member (other than as a
Special Member in the case of Acceptable Delaware LLC’s), employee, attorney or
counsel of, Borrower, such SPE Component Entity or any of their respective
shareholders, partners, members, subsidiaries or affiliates; (B) a customer or
creditor of, or supplier to, Borrower or any of its respective shareholders,
partners, members, subsidiaries or affiliates who derives any of its purchases
or revenue from its activities with Borrower or such SPE Component Entity or any
affiliate of any of them; (C) a Person who Controls (defined below) or is under
common Control with any such shareholder, officer, director, partner, manager,
member, employee, supplier, creditor or customer; or (D) a member of the
immediate family of any such shareholder, officer, director, partner, manager,
member, employee, supplier, creditor or customer; (II) shall have, at the time
of their appointment, had at least three (3) years experience in serving as an
independent director; and (III) shall be employed by, in good standing with and
engaged by Borrower in connection with, in each case, an Approved ID Provider.
Notwithstanding the foregoing, a Person who would otherwise not qualify to serve
as Independent Director solely by reason of serving as an independent director
for affiliates of Borrower shall not be so disqualified and may serve as an
Independent Director so long as such Person derives less than 5% of their total
annual income from their service as independent director for Borrower and each
applicable affiliate of Borrower.
(ii)    The organizational documents of each SPE Component Entity (if any) or
Borrower (as applicable) shall further provide that (A) the board of directors
or board of managers of such SPE Component Entity or Borrower (as applicable)
and the constituent equity owners of such Persons (such constituent equity
owners, the “Constituent Members”) shall not take any action which, under the
terms of any certificate of incorporation, by-laws or any voting trust agreement
with respect to any common stock, requires an unanimous vote of the board of
directors or managers of such SPE Component Entity or Borrower (as applicable)
or the Constituent Members unless at the time of such action there shall be at
least one Independent Director engaged as provided by the terms hereof and such
Independent Director votes in favor of such action; (B) such SPE Component
Entity or Borrower (as applicable) will not, without the unanimous written
consent of its board of directors or managers (including each Independent
Director) and the Constituent Members, on behalf of itself or Borrower, take any
Material Action; (C) any resignation, removal or replacement of any Independent
Director shall not be effective without (1) prior written notice to Lender and
the Rating Agencies (which such prior written notice must be given on the
earlier of five (5) days or three (3) Business

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Days prior to the applicable resignation, removal or replacement (unless due to
the death of any Independent Director, in which case such notice shall be given
within one (1) Business Day of Borrower or SPE Component Entity receiving notice
of such death)) and (2) evidence that the replacement Independent Director
satisfies the applicable terms and conditions hereof and of the applicable
organizational documents (which such evidence must accompany the aforementioned
notice); (D) to the fullest extent permitted by applicable law, including
Section 18-1101(c) of the Act (defined below) and notwithstanding any duty
otherwise existing at law or in equity, the Independent Director shall consider
only the interests of the Constituent Members and Borrower and any SPE Component
Entity (including Borrower’s and any SPE Component Entity’s respective
creditors) in acting or otherwise voting on the matters provided for herein and
in Borrower’s and SPE Component Entity’s organizational documents (which such
fiduciary duties to the Constituent Members and Borrower and any SPE Component
Entity (including Borrower’s and any SPE Component Entity’s respective
creditors), in each case, shall be deemed to apply solely to the extent of their
respective economic interests in Borrower or SPE Component Entity (as
applicable) exclusive of (x) all other interests (including, without limitation,
all other interests of the Constituent Members), (y) the interests of other
Affiliates of the Constituent Members, Borrower and SPE Component Entity and (z)
the interests of any group of Affiliates of which the Constituent Members,
Borrower or SPE Component Entity is a part)); (E) other than as provided in
subsection (D) above, the Independent Director shall not have any fiduciary
duties to any Constituent Members, any directors of Borrower or SPE Component
Entity or any other Person; (F) the foregoing shall not eliminate the implied
contractual covenant of good faith and fair dealing under applicable law; and
(G) to the fullest extent permitted by applicable law, including Section
18-1101(e) of the Act, an Independent Director shall not be liable to Borrower,
SPE Component Entity, any Constituent Member or any other Person for breach of
contract or breach of duties (including fiduciary duties), unless the
Independent Director acted in bad faith or engaged in willful misconduct.
 
(iii)    As used herein, the term “Approved ID Provider” shall mean each of CT
Corporation, Corporation Service Company, National Registered Agents, Inc.,
Wilmington Trust Company, Stewart Management Company and Lord Securities
Corporation; provided, that, (A) the foregoing shall only be deemed Approved ID
Providers to the extent acceptable to the Rating Agencies and (B) additional
national providers of Independent Directors may be deemed added to the foregoing
hereunder to the extent approved in writing by Lender and the Rating Agencies.

(d)    (I)    In the event Borrower or any SPE Component Entity is an Acceptable
Delaware LLC, the limited liability company agreement of Borrower or such SPE
Component Entity (as applicable) (the “LLC Agreement”) shall provide that
(i) upon the occurrence of any event that causes the sole member of Borrower or
such SPE Component Entity (as applicable) (“Member”) to cease to be the member
of Borrower or such SPE Component Entity (as applicable) (other than (A) upon an
assignment by Member of all of its limited liability company interest in
Borrower or such SPE Component Entity (as applicable) and the admission of the
transferee in accordance with the Loan Documents and the LLC Agreement, or (B)
the resignation of Member and the admission of an additional member of Borrower
or such SPE Component Entity (as applicable) in accordance with the terms of the
Loan Documents and the LLC Agreement), any Person acting as Independent Director
of Borrower or such SPE Component Entity (as applicable) shall, without any
action of any other Person and simultaneously with the Member ceasing to be the
member of Borrower or such SPE Component Entity (as applicable), automatically
be admitted to Borrower or such SPE Component Entity (as applicable) (“Special
Member”) and shall continue Borrower or such SPE Component Entity (as
applicable) without dissolution and (ii) Special Member may not resign from
Borrower or such SPE Component Entity (as applicable) or transfer its rights as
Special Member unless (A) a successor Special Member has been admitted to
Borrower or such SPE Component Entity (as applicable) as Special Member in
accordance with requirements of Delaware law and (B) such successor Special
Member has also accepted its appointment as an Independent Director. The LLC
Agreement shall further provide that (i) Special Member shall automatically
cease to be a member of Borrower or such SPE Component Entity (as applicable)
upon the admission to Borrower or such SPE Component Entity (as applicable) of a
substitute Member, (ii) Special Member shall be a member of Borrower or such SPE
Component Entity (as applicable) that has no interest in the profits, losses and
capital of Borrower or such SPE Component Entity (as applicable) and has no
right to receive any distributions of Borrower or such SPE Component Entity (as
applicable) assets, (iii) pursuant to Section 18-301 of the Delaware Limited
Liability Company Act (the “Act”), Special Member shall not be required to make
any capital contributions to Borrower or such SPE Component Entity (as
applicable) and

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shall not receive a limited liability company interest in Borrower or such SPE
Component Entity (as applicable), (iv) Special Member, in its capacity as
Special Member, may not bind Borrower or such SPE Component Entity (as
applicable), (v) except as required by any mandatory provision of the Act,
Special Member, in its capacity as Special Member, shall have no right to vote
on, approve or otherwise consent to any action by, or matter relating to,
Borrower or such SPE Component Entity (as applicable), including, without
limitation, the merger, consolidation or conversion of Borrower or such SPE
Component Entity (as applicable); provided, however, such prohibition shall not
limit the obligations of Special Member, in its capacity as Independent
Director, to vote on such matters required by the Loan Documents or the LLC
Agreement, (vi) in order to implement the admission to Borrower or such SPE
Component Entity (as applicable) of Special Member, Special Member shall execute
a counterpart to the LLC Agreement and (vii) prior to its admission to Borrower
or such SPE Component Entity (as applicable) as Special Member, Special Member
shall not be a member of Borrower or such SPE Component Entity (as applicable).
(II)    The LLC Agreement shall further provide that (i) upon the occurrence of
any event that causes the Member to cease to be a member of Borrower or such SPE
Component Entity (as applicable), to the fullest extent permitted by law, the
personal representative of Member shall, within ninety (90) days after the
occurrence of the event that terminated the continued membership of Member in
Borrower or such SPE Component Entity (as applicable), agree in writing (A) to
continue Borrower or such SPE Component Entity (as applicable) and (B) to the
admission of the personal representative or its nominee or designee, as the case
may be, as a substitute member of Borrower or such SPE Component Entity (as
applicable), effective as of the occurrence of the event that terminated the
continued membership of Member of Borrower or such SPE Component Entity (as
applicable) in Borrower or such SPE Component Entity (as applicable), (ii) any
action initiated by or brought against Member or Special Member under any
applicable Insolvency Laws shall not cause Member or Special Member to cease to
be a member of Borrower or such SPE Component Entity (as applicable) and upon
the occurrence of such an event, the business of Borrower or such SPE Component
Entity (as applicable) shall continue without dissolution and (iii) each of
Member and Special Member waives any right it might have to agree in writing to
dissolve Borrower or such SPE Component Entity (as applicable) upon the
occurrence of any action initiated by or brought against Member or Special
Member under any applicable Insolvency Laws, or the occurrence of an event that
causes Member or Special Member to cease to be a member of Borrower or such SPE
Component Entity (as applicable).
(e)    Borrower shall not change or permit to be changed (i) Borrower’s name,
(ii) Borrower’s identity (including its trade name or names), (iii) Borrower’s
principal place of business set forth on the first page of this Security
Instrument, (iv) the corporate, partnership or other organizational structure of
Borrower, each SPE Component Entity (if any), or Guarantor, (v) Borrower’s state
of organization, or (vi) Borrower’s organizational identification number,
without in each case 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 or any SPE Component Entity’s organizational structure,
without first obtaining the prior written consent of Lender (which such consent
may, if required by Lender, be conditioned upon Lender’s receipt of a Rating
Agency Confirmation with respect thereto); provided, that, the foregoing consent
of Lender and Rating Agency Confirmation shall, in each case, not be required in
connection with transfers of equity interests in Borrower and each SPE Component
Entity made in accordance with Section 8.3 hereof. In addition, Borrower shall
not change or permit to be changed any organizational documents of Borrower or
any SPE Component Entity (if any) if such change would adversely impact the
covenants set forth in this Section 4.3. Borrower authorizes Lender to file any
financing statement or financing statement amendment 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.
If Borrower does not now have an organizational identification number and later
obtains one, or if the organizational identification number assigned to Borrower
subsequently changes, Borrower shall promptly notify Lender of such
organizational identification number or change.
(f)     Notwithstanding the foregoing, prior to the Master Lease Termination,
nothing contained in this Section 4.3 shall be deemed to limit Borrower’s
ability to own, manage and operate the Property in accordance with

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the Master Lease, including, without limitation, Borrower’s right to operate the
Property under a fictitious business name co-owned by Borrower and Master
Lessee, to maintain all books and records relating to the Property on a
consolidated basis with Master Lessee and to commingle the Rents and profits
generated by the Property with Master Lessee. Furthermore, prior to the Master
Lease Termination, any act with respect to the Property which is permitted to be
taken by “Borrower” may be taken by any of Borrower or Master Lessee.
(g)     Until the Master Lease Termination, the representations, warranties and
covenants contained in Section 4.3(a) through (e) above are hereby restated and
remade as if all references to “Borrower” therein were instead deemed to be
references to Master Lessee; provided, that, (i) any reference therein to the
“Property” shall be deemed to refer to Master Lessee’s leasehold interest in the
Property under the Master Lease, and (ii) notwithstanding anything to the
contrary contained therein, Master Lessee has not and shall not incur any
Indebtedness, secured or unsecured, direct or contingent (including guaranteeing
any obligation) other than Trade Payable Debt, provided, that, the aggregate
amount of Trade Payable Debt incurred by Borrower and Master Lessee does not at
any time exceed, in the aggregate, three percent (3%) of the outstanding
principal amount of the Debt. Notwithstanding the foregoing, this Section 4.3
shall cease to apply to Master Lessee after the Master Lease Termination.
Section 4.4.    RESTORATION AFTER CASUALTY/CONDEMNATION. In the event of a
casualty or a taking by eminent domain, the following provisions shall apply in
connection with the Restoration of the Property:
(a)    If the Net Proceeds (defined below) shall be less than the Threshold
Amount (defined below) and the costs of completing the Restoration shall be less
than the Threshold Amount, the Net Proceeds will be disbursed by Lender to
Borrower upon receipt, provided that all of the conditions set forth in
Subsection 4.4(b)(i) are met and Borrower delivers to Lender a written
undertaking to expeditiously commence and to satisfactorily complete with due
diligence the Restoration in accordance with the terms of this Security
Instrument. As used herein, the term “Threshold Amount” shall mean (i) for any
period that the Sponsorship Condition remains satisfied, an amount equal to
seven percent (7%) of the original aggregate principal amount of the Loan and
(ii) for any period that the Sponsorship Condition is not satisfied, an amount
equal to five percent (5%) of the original aggregate principal amount of the
Loan. As used herein, the term “Sponsorship Condition” shall mean a condition
which shall be deemed satisfied so long as AAI Sponsor owns an aggregate 51%
direct and/or indirect interest in Borrower and Controls Borrower.
(b)    If the Net Proceeds are equal to or greater than the Threshold Amount or
the costs of completing the Restoration is equal to or greater than the
Threshold Amount, Lender shall make the Net Proceeds available for the
Restoration in accordance with the provisions of this Subsection 4.4(b);
provided, that, with the exception of Section 4.4(b)(i), the following
subsections of this Section 4.4(b) shall not be deemed to apply to any Net
Proceeds to be disbursed pursuant to Section 4.4(a) above. The term “Net
Proceeds” for purposes of this Section 4.4 shall mean: (i) the net amount of all
insurance proceeds received by Lender pursuant to Subsection 3.3(a)(i), (iii),
(iv) and (x) of this Security Instrument as a result of such damage or
destruction, after deduction of its reasonable costs and expenses (including,
but not limited to, reasonable counsel fees), if any, in collecting the same or
(ii) the net amount of all awards and payments received by Lender with respect
to a taking referenced in Section 3.6 of this Security Instrument, after
deduction of its reasonable costs and expenses (including, but not limited to,
reasonable counsel fees), if any, in collecting the same, whichever the case may
be (the “Condemnation Net Proceeds”).
(i)    The Net Proceeds shall be made available to Borrower for the Restoration
provided that each of the following conditions are met: (A) no Event of Default
is then continuing under the Note, this Security Instrument or any of the other
Loan Documents or an event which after the passage of time would constitute an
Event of Default; (B) Borrower shall deliver or cause to be delivered to Lender
a signed detailed budget approved in writing by Borrower’s architect or engineer
stating the entire estimated cost of completing the Restoration, reasonably
satisfactory to Lender; (C) the Net Proceeds together with any cash or cash
equivalent deposited by Borrower with Lender are sufficient in Lender’s
reasonable discretion to cover the cost of the Restoration; (D) Borrower shall
deliver to Lender, at its expense, the proceeds of the insurance described in
Subsection 3.3(a)(ii) hereof (which such proceeds shall be held and disbursed in
accordance with Subsection 3.3(a)(ii) hereof); (E) Borrower shall commence the

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Restoration as soon as reasonably practicable and shall diligently pursue the
same to satisfactory completion; (F) Lender shall be satisfied that any
operating deficits, including all scheduled payments of principal and interest
under the Note at the Applicable Interest Rate (as defined in the Note), which
will be incurred with respect to the Property as a result of the occurrence of
any such fire or other casualty or taking, whichever the case may be, will be
covered out of (1) the Net Proceeds, (2) the insurance coverage referred to in
Subsection 3.3(a)(ii), if applicable, or (3) by other funds of Borrower which
are deposited with Lender prior to the commencement of the Restoration; (G)
Lender shall be satisfied that, upon the completion of the Restoration and
following a rent-up period from the time such Restoration is complete through
the date which is three (3) months prior to the expiration of the rental loss
insurance coverage maintained by Borrower pursuant to Section 3.3(a)(ii) above,
the (1) fair market value of the Property, as reasonably determined by Lender,
is equal to or greater than the fair market value of the Property immediately
prior to the casualty or condemnation, and (2) gross cash flow and the net cash
flow of the Property will be restored to a level sufficient to cover all
carrying costs and operating expenses of the Property, including, without
limitation, a Debt Service Coverage Ratio of at least 1.00 to 1.00; (H) Lender
shall be reasonably satisfied that the Restoration will be completed on or
before the earliest to occur of (1) six (6) months prior to the Maturity Date
(as defined in the Note), (2) one (1) year after the occurrence of such fire or
other casualty or taking, whichever the case may be, or (3) such time as may be
required under (I) the Property Documents and (II) applicable zoning laws,
ordinances, rules or regulations in order to repair and restore the Property to
the condition it was in immediately prior to such fire or other casualty or to
as nearly as possible the condition it was in immediately prior to such taking,
as applicable; (I) the Property and the use thereof after the Restoration will
be in compliance with and permitted under (I) the Property Documents and (II)
all applicable zoning laws, ordinances, rules and regulations; (J) the
Restoration shall be done and completed by Borrower in an expeditious and
diligent fashion and in compliance with (I) the Property Documents and (II) all
applicable governmental laws, rules and regulations (including, without
limitation, all applicable Environmental Laws (as defined in the Environmental
Indemnity)); (K) such fire or other casualty or taking, as applicable, does not
result in a loss of access to the Property or the Improvements which will exist
following Restoration; (L) (1) in the event the Net Proceeds are insurance
proceeds, less than thirty-five percent (35%) of each of (i) fair market value
of the Property as reasonably determined by Lender, and (ii) rentable area of
the Property has been damaged, destroyed or rendered unusable as a result of a
casualty or (2) in the event the Net Proceeds are condemnation proceeds, less
than fifteen percent (15%) of each of (i) the fair market value of the Property
as reasonably determined by Lender and (ii) rentable area of the Property is
taken and such land is located along the perimeter or periphery of the Property;
(M) the Required Leases (defined below) shall remain in full force and effect
during and after the completion of the Restoration (subject to applicable rent
abatement provisions related to the applicable casualty or condemnation); (N)
the Property Documents will remain in full force and effect during and after the
Restoration and a Property Document Event shall not occur as a result of the
applicable casualty, condemnation and/or Restoration; and (O) Lender shall be
satisfied that making the Net Proceeds available for Restoration shall be
permitted pursuant to REMIC Requirements and, in that regard, Lender may require
Borrower to deliver a REMIC Opinion in connection therewith. Lender agrees to
use due diligence and good faith efforts to process its determination of
Borrower’s compliance with the requirements of this Paragraph 4.4(b)(i) as
promptly as possible, recognizing the need for a quick determination in order to
avoid delay in Restoration of the Property. As used above, the term “Required
Leases” shall mean Leases encumbering, in the aggregate, 65% of the rentable
square footage at the Property.
(ii)    The Net Proceeds shall be held by Lender, and until disbursed in
accordance with the provisions of this Subsection 4.4(b), shall constitute
additional security for the Obligations. Without limiting the foregoing, if the
Net Proceeds then held by Lender exceed $500,000, same shall be held by Lender
in an interest-bearing account (which shall (i) be deemed to be included within
the definition of the (A) the “Reserve Accounts” hereunder and (B) the “Interest
Bearing Reserve Accounts” under the Reserve Agreement and (ii) bear interest in
accordance with the applicable terms and conditions of the Reserve Agreement).
The Net Proceeds shall be disbursed by Lender to, or as directed by, Borrower on
a monthly basis during the course of the Restoration, upon receipt of evidence
reasonably satisfactory to Lender that (A) all materials installed and work and
labor performed to date (except to the extent that they are to be paid for out
of the requested disbursement) in connection with the Restoration have been paid
for in full, and (B) there exist no notices of pendency, stop orders, mechanic’s
or materialmen’s liens or notices of intention to file same, or any other liens
or encumbrances of any nature whatsoever on the Property (other than items being
disputed

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by Borrower in accordance with Borrower’s contest rights contained in Section
3.12 hereof) arising out of the Restoration which have not either been fully
bonded to the reasonable satisfaction of Lender and discharged of record or in
the alternative fully insured to the reasonable satisfaction of Lender by the
title company insuring the lien of this Security Instrument.
(iii)    All plans and specifications required in connection with the
Restoration shall be subject to prior reasonable review and acceptance in all
respects by Lender and by an independent consulting engineer selected by Lender
(the “Casualty Consultant”). Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required or obtained in
connection with the Restoration. The identity of the contractors, subcontractors
and materialmen engaged in the Restoration, as well as the contracts under which
they have been engaged, shall be subject to prior reasonable review and
acceptance by Lender and the Casualty Consultant. All reasonable costs and
expenses incurred by Lender in connection with making the Net Proceeds available
for the Restoration including, without limitation, the Casualty Consultant’s
reasonable fees, shall be paid by Borrower. Lender shall not require Borrower to
pay attorney’s fees and expenses in connection therewith unless such process
involves unusual circumstances that cannot reasonably be handled by Lender (or
its Servicer) in-house and which otherwise reasonably justify the need for
counsel.
(iv)    In no event shall Lender be obligated to make disbursements of the Net
Proceeds under this Subsection 4.4(b) in excess of an amount equal to the costs
actually incurred from time to time for work in place as part of the
Restoration, as certified by the Casualty Consultant, minus the Casualty
Retainage. The term “Casualty Retainage” as used in this Subsection 4.4(b) shall
mean an amount equal to 10% of the costs actually incurred for work in place as
part of the Restoration, as certified by the Casualty Consultant, until such
time as the Casualty Consultant certifies to Lender that 50% of the required
Restoration has been completed. There shall be no Casualty Retainage with
respect to costs actually incurred by Borrower for work in place in completing
the last 50% of the required Restoration. The Casualty Retainage shall in no
event, and notwithstanding anything to the contrary set forth above in this
Subsection 4.4(b), be less than the amount actually held back by Borrower from
contractors, subcontractors and materialmen engaged in the Restoration. The
Casualty Retainage shall not be released until the Casualty Consultant certifies
to Lender that the Restoration has been completed in accordance with the
provisions of this Subsection 4.4(b) and that all approvals necessary for the
re-occupancy and use of the Property have been obtained from all appropriate
governmental and quasi-governmental authorities, and Lender receives evidence
reasonably satisfactory to Lender that the costs of the Restoration have been
paid in full or will be paid in full out of the Casualty Retainage, provided,
however, that Lender will release the portion of the Casualty Retainage being
held with respect to any contractor, subcontractor or materialman engaged in the
Restoration as of the date upon which the Casualty Consultant certifies to
Lender that the contractor, subcontractor or materialman has satisfactorily
completed all work and has supplied all materials in accordance with the
provisions of the contractor’s, subcontractor’s or materialman’s contract, and
the contractor, subcontractor or materialman delivers the lien waivers and
evidence of payment in full of all sums due to the contractor, subcontractor or
materialman as may be reasonably requested by Lender or by the title company
insuring the lien of this Security Instrument. If required by Lender, the
release of any such portion of the Casualty Retainage shall be approved by the
surety company, if any, which has issued a payment or performance bond with
respect to the contractor, subcontractor or materialman.
(v)    Lender shall not be obligated to make disbursements of the Net Proceeds
more frequently than once every calendar month.
(vi)    If at any time the Net Proceeds or the undisbursed balance thereof shall
not, in the reasonable opinion of Lender, be sufficient to pay in full the
balance of the costs which are estimated by the Casualty Consultant to be
incurred in connection with the completion of the Restoration, Borrower shall
deposit the deficiency (the “Net Proceeds Deficiency”) with Lender in an
interest-bearing account before any further disbursement of the Net Proceeds
shall be made. The Net Proceeds Deficiency deposited with Lender shall be held
by Lender and shall be disbursed for costs actually incurred in connection with
the Restoration on the same conditions applicable to the disbursement of the

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Net Proceeds, and until so disbursed pursuant to this Subsection 4.4(b) shall
constitute additional security for the Obligations.
(vii)    With respect to Restorations related to casualties, the excess, if any,
of the Net Proceeds, and the remaining balance, if any, of the Net Proceeds
Deficiency deposited with Lender after the Casualty Consultant certifies to
Lender that the Restoration has been completed in accordance with the provisions
of this Subsection 4.4(b), and the receipt by Lender of evidence reasonably
satisfactory to Lender that all costs incurred in connection with the
Restoration have been paid in full, shall be remitted by Lender to Borrower,
provided no Event of Default shall be continuing under the Note, this Security
Instrument or any of the other Loan Documents.
(c)    All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant
to Subsection 4.4(b)(vii) may, at Lender’s election, be retained and applied by
Lender toward the payment of the principal balance of the Debt whether or not
then due and payable (provided, however, Lender shall apply such proceeds to
amounts then due prior to applying same to amounts not yet due), either in whole
or in part, or disbursed to Borrower. If Lender shall receive and retain Net
Proceeds, as permitted above, the lien of this Security Instrument shall be
reduced only by the amount thereof received and retained by Lender and actually
applied by Lender in reduction of the Debt. Notwithstanding the foregoing, with
respect to any Net Proceeds received by Lender (x) that Lender has determined
are not required to be made available for Restoration or returned to Borrower as
excess Net Proceeds pursuant to Subsection 4.4(b)(vii) and (y) which Lender
elects to retain, Lender shall (A) promptly apply such Net Proceeds in reduction
of the Debt and (B) allow Borrower to prepay the balance of the Debt in whole
(but not in part) at par, without penalty or premium, provided, that, (I) such
prepayment is made by Borrower by no later than the date which is the later of
(1) sixty (60) days prior to the expiration of the rental loss insurance
coverage maintained by Borrower pursuant to Section 3.3(a)(ii) above and (2)
thirty (30) days following the date Lender notifies Borrower in writing that it
will elect to apply any Net Proceeds then held or thereafter received by Lender
to the Debt in accordance with the applicable terms and conditions hereof, (II)
no Event of Default is continuing and (III) if such prepayment is made on a date
other than a Monthly Payment Date, Borrower pays Lender, concurrently with such
prepayment, a sum equal to the amount of interest which would have accrued on
the Note if such prepayment had occurred on the next occurring Monthly Payment
Date.
Section 4.5.    COVENANTS RELATING TO ROLLOVER SPACE.
(a)     On or before each occurrence of the Required Date (defined below),
Borrower shall (a) furnish Lender the applicable Rollover Lease Extension
Evidence (defined below) with respect to the entirety of the applicable portion
of the Rollover Space (defined below) (or, if the DSCR Condition (defined below)
is satisfied, at least 90% of the applicable portion of the Rollover Space) or
(b) deposit the applicable Rollover Reserve Deposit Amount (defined below) into
an account held by Lender or Servicer (the “Rollover Reserve Account”). Amounts
deposited into the Rollover Reserve Account pursuant to this Section are
referred to herein as the “Rollover Reserve Funds”. Borrower’s failure to comply
with the foregoing within the foregoing timeframe and subsequent failure to
comply with the foregoing within three (3) Business Days of notice of such
original failure from Lender shall be referred to herein and in the other Loan
Documents as a “Rollover Extension Breach” and shall, at Lender’s option,
constitute an Event of Default. The Rollover Reserve Account shall be deemed to
be included within the definition of “Interest Bearing Reserve Accounts” under
the Reserve Agreement and shall bear interest in accordance with the applicable
terms and conditions of the Reserve Agreement.
(b)    Within ten (10) Business Days of Borrower’s satisfaction of the
applicable disbursement criteria set forth below, Lender shall disburse the
Rollover Reserve Funds to Borrower on a pro-rata basis as the Non-Renewed Space
(defined below) is re-leased pursuant to one or more Rollover Replacement
Lease(s) (defined below) and subject to satisfaction by Borrower of each the
following conditions: (i) Borrower shall submit a request for disbursement to
Lender at least ten (10) Business Days prior to the date on which Borrower
requests such disbursement be made, which such request shall include a copy of
the applicable Rollover Replacement Lease to which it relates (the “Related
Rollover Replacement Lease”); and (ii) on the date such request is received by
Lender and on the date such payment

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is to be made, (A) no Event of Default is then continuing and (B) Lender shall
have received the Rollover Replacement Lease Evidence (defined below) for the
applicable Related Rollover Replacement Lease. Notwithstanding the foregoing or
anything to the contrary herein, in no event shall (A) Lender be required to
disburse Rollover Reserve Funds more frequently than once each calendar month
and (B) the amount of any disbursement to Borrower exceed the corresponding
Rollover Reserve Disbursement Amount (defined below).
(c)     Notwithstanding the foregoing, Borrower shall not be required to deposit
the Rollover Reserve Deposit Amount as a cash payment as above provided, if, on
or before the applicable Required Date, (i) Borrower delivers to Lender a Letter
of Credit (defined below) in accordance with the terms and conditions hereof in
an amount equal to the applicable Rollover Reserve Deposit Amount or (ii) a
guarantor reasonably acceptable to Lender and acceptable to the Rating Agencies
delivers to Lender a “bottom” guaranty of the Loan in an amount equal to the
applicable Rollover Reserve Deposit Amount and in form and substance reasonably
acceptable to Lender and acceptable to the Rating Agencies (the “Rollover
Guaranty”) in each case, provided, that Borrower (A) gives Lender at least ten
(10) days prior notice thereof, (B) pays to Lender all of Lender’s reasonable
out-of-pocket costs and expenses in connection therewith and (C) if a
Securitization has occurred and if requested by Lender, provides a New
Non-Consolidation Opinion addressing such Letter of Credit or Rollover Guaranty,
as applicable.
(d)    As used herein, the following terms shall have the following meanings:
(i)    “Rollover Tenant” shall mean each of Caradigm USA LLC, HDR Engineering,
Inc., Sucker Punch Productions, L.L.C., each of their respective successors and
assigns as tenant under the applicable Rollover Lease and each subsequent tenant
under each Lease at the Property for all or any portion of the Rollover Space
(in each case, to the extent such Lease with such subsequent tenant would
constitute a Major Lease in accordance with the applicable terms and conditions
hereof).
(ii)     “Rollover Lease” shall mean each respective Lease at the Property with
each Rollover Tenant, as each of the same may have been or may hereafter be
amended, extended, renewed, replaced and/or otherwise modified in accordance
with the terms hereof.
(iii)    “Rollover Lease Extension Evidence” shall mean evidence reasonably
acceptable to Lender (which such evidence shall include, without limitation, a
duly executed estoppel certificate from the applicable Rollover Tenant) that (i)
the applicable Rollover Tenant has extended the applicable Rollover Lease for a
term ending no sooner than five (5) after the expiration date of such Rollover
Lease as of the date hereof and otherwise in accordance with the applicable
terms and conditions thereof and hereof and (ii) such Rollover Lease (as so
extended) is in full force and effect with no defaults thereunder.
(iv)    “Rollover Replacement Lease” shall mean a new Lease entered into with a
replacement tenant that (x) demises all or any portion of the applicable
Rollover Space for a minimum term of five (5) years (or such shorter term as may
be approved by Lender in writing), (y) requires payment of rent at a net
effective rental rate equal to or greater than the net effective rental rate
that would have applied to the space demised thereby if the applicable Rollover
Tenant had exercised the applicable extension option set forth in such Rollover
Lease as in effect of the date hereof with respect to such space (or such lower
net effective rental rate as may be reasonably approved by Lender in writing)
and (z) has otherwise been entered in accordance with the terms hereof.
(v)    “Rollover Replacement Lease Evidence” shall mean, with respect to each
Rollover Replacement Lease, evidence reasonably satisfactory to Lender (which
such evidence shall include, without limitation, a duly executed estoppel
certificate from the applicable tenant under such Rollover Replacement Lease)
that (i) such Rollover Replacement Lease is in full force and effect with no
defaults thereunder, (ii) the applicable tenant under such Rollover Replacement
Lease is (A) in actual, physical occupancy of, and, if applicable, open to the
public for business in, the space demised under such Rollover Replacement Lease
and (B) paying the full, unabated rent due under such Rollover Replacement
Lease, without offset rights, rent credits or free rent periods (unless Lender
expressly waives

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such requirement in Lender’s sole discretion in writing for purposes of this
Section 4.5) and (iii) all tenant improvement work of the landlord required
under such Rollover Replacement Lease has been satisfactorily completed and all
tenant allowances required to be paid under such Rollover Replacement Lease have
been paid in full and the applicable tenant claims no offset rights or rent
credits with respect to the same.
(vi)    “Rollover Reserve Deposit Amount” shall mean an amount equal to the
product of (x) $25.00 and (y) the amount of usable square footage of the
Non-Renewed Space.
(vii)    “Rollover Reserve Disbursement” shall mean any disbursement to be made
from the Rollover Reserve Account to Borrower in accordance with the terms
hereof.
(viii)    “Rollover Reserve Disbursement Amount” shall mean, with respect to
each Rollover Reserve Disbursement, an amount equal to the lesser of (x) the
amount on deposit in the Rollover Reserve Account as of the date of such
Rollover Reserve Disbursement and (y) an amount equal to the product of (A)
$25.00 and (B) the amount of usable square footage of the Non-Renewed Space
demised pursuant to the applicable Related Rollover Replacement Lease.
(ix)    “Rollover Space” shall mean that portion of the Property (comprising
158,260 usable square feet) demised, as of the date hereof, to the Rollover
Tenants pursuant to the Rollover Leases.
(x)    “Approved Bank” shall mean (a) a bank or other financial institution
which has the Required Rating, (b) if a Securitization has not occurred, a bank
or other financial institution acceptable to Lender or (c) if a Securitization
has occurred, a bank or other financial institution with respect to which Lender
shall have received a Rating Agency Confirmation. Notwithstanding the forgoing,
so long as Bank of America, N.A. maintains its long term, unsecured debt rating
from the Rating Agencies at the same level (or better) as the same exists as of
the date hereof, Bank of America, N.A. shall be deemed to be an “Approved Bank”
for all purposes hereunder.
(xi)    “DSCR Condition” shall mean a condition which shall be deemed to have
been satisfied if Borrower delivers to Lender evidence reasonably satisfactory
to Lender that, as of the Required Date, the Property has a Debt Service
Coverage Ratio of not less than 1.50 to 1.00.
(xii)     “Letter of Credit” shall mean an irrevocable, auto-renewing,
unconditional, transferable, clean sight draft standby letter of credit having
an initial term of not less than one (1) year and with automatic renewals for
one (1) year periods (unless (i) one (1) year auto-renewal periods are not
commercially available, in which case with lesser auto-renewal periods as may
reasonably agreed to by Lender or (ii) the obligation being secured by, or
otherwise requiring the delivery of, such letter of credit is required to be
performed at least thirty (30) days prior to the initial expiry date of such
letter of credit), for which Borrower shall have no reimbursement obligation and
which reimbursement obligation is not secured by the Property or any other
property pledged to secure the Note, in favor of Lender and entitling Lender to
draw thereon in New York, New York, based solely on a statement that Lender has
the right to draw thereon executed by an officer or authorized signatory of
Lender. A Letter of Credit must be issued by an Approved Bank. Borrower’s
delivery of any Letter of Credit hereunder shall, at Lender’s option, be
conditioned upon Lender’s receipt of a New Non-Consolidation Opinion relating to
such Letter of Credit.
(xiii)     “Non-Renewed Space” shall mean, as of the applicable date of
determination, the applicable portion of the Rollover Space (if any) with
respect to which Lender has not received Rollover Lease Extension Evidence or
Rollover Replacement Lease Evidence.
(xiv)    “Required Date” shall mean the earlier to occur of (i) twelve (12)
months prior to the expiration date of the then current term of the applicable
Rollover Lease and (ii) any termination of the applicable Rollover Lease.

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(xv)    “Required Rating” shall mean (A) a rating of not less than “A-” (or its
equivalent) from each of the Rating Agencies or (B) such other rating with
respect to which Lender shall have received a Rating Agency Confirmation.
Section 4.6.     LETTER OF CREDIT RIGHTS.
(a)     This Section shall apply to any Letters of Credit which are permitted to
be delivered pursuant to the express terms and conditions hereof. Borrower shall
give Lender no less than ten (10) days written notice of Borrower’s election to
deliver a Letter of Credit together with a draft of the proposed Letter of
Credit and Borrower shall pay to Lender all of Lender’s reasonable out-of-pocket
costs and expenses in connection therewith. No party other than Lender shall be
entitled to draw on any such Letter of Credit. If the terms and conditions
thereof (including, without limitation, those pertaining to reductions in face
value) are expressly approved by Lender in writing, a Letter of Credit may allow
serial reductions in face value as the funds from the related Reserve Account
would be disbursed if such Reserve Account had been funded with a cash deposit
(any such Letter of Credit so approved by Lender in writing, a “Serial Letter of
Credit”). In the event that any disbursement of funds from a Reserve Account
relates to a portion thereof provided through a Letter of Credit, any
“disbursement” of said funds as provided above shall be deemed to refer to (i)
in the case of a Serial Letter of Credit, a reduction of the Serial Letter of
Credit in accordance with its terms and (ii) in the case of any other Letter of
Credit, (A) Borrower providing Lender a replacement Letter of Credit in an
amount equal to the original Letter of Credit posted less the amount of the
applicable disbursement provided hereunder and (B) Lender, after receiving such
replacement Letter of Credit, returning such original Letter of Credit to
Borrower; provided, that, no replacement Letter of Credit shall be required with
respect to the final disbursement to be made from the applicable Reserve Account
such that no further sums are required to be deposited in the applicable Reserve
Account.
(b)     Each Letter of Credit delivered hereunder shall be additional security
for the payment of the Debt. During the continuance of an Event of Default or a
Draw Event (defined below), Lender shall have the right, at its option, to draw
on any Letter of Credit (in whole or in part) and to apply all or any part
thereof to the payment of the items for which such Letter of Credit was
established or to payment of the Debt in such order, proportion or priority as
Lender may determine (provided, that, (A) Lender shall only be permitted to
apply the proceeds of such Letter of Credit to the payment of the portion of
aforementioned items or that portion of the Debt, in each case, which is then
due and payable pursuant to the terms hereof and/or of the other Loan Documents
and (B) the balance of the proceeds of such draw, if any, shall be held by
Lender in an interest-bearing escrow account (which shall (i) be deemed to be
included within the definition of the (x) the “Reserve Accounts” hereunder and
(y) the “Interest Bearing Reserve Accounts” under the Reserve Agreement and (ii)
bear interest in accordance with the applicable terms and conditions of the
Reserve Agreement) as additional security for the Debt and shall be applied to
the aforementioned items or the Debt (as applicable) as the same become due and
payable hereunder and/or under the other Loan Documents). Any such application
to the Debt shall be subject to the terms and conditions hereof relating to
application of sums to the Debt. Lender shall have the additional rights to draw
in full any Letter of Credit upon the occurrence of any one or more of the
following events (each, a “Draw Event”): (i) if Lender has received a notice
from the issuing bank that the Letter of Credit will not be renewed and a
substitute Letter of Credit is not provided at least twenty (20) days prior to
the date on which the outstanding Letter of Credit is scheduled to expire; (ii)
if Lender has not received a notice from the issuing bank that it has renewed
the Letter of Credit at least twenty (20) days prior to the date on which such
Letter of Credit is scheduled to expire and a substitute Letter of Credit is not
provided at least twenty (20) days prior to the date on which the outstanding
Letter of Credit is scheduled to expire; (iii) upon receipt of notice from the
issuing bank that the Letter of Credit will be terminated (except if the
termination of such Letter of Credit is permitted pursuant to the terms and
conditions hereof or a substitute Letter of Credit is provided by no later than
twenty (20) days prior to such termination); (iv) if Lender has received notice
that the bank issuing the Letter of Credit shall cease to be an Approved Bank
and Borrower has not substituted a Letter of Credit from an Approved Bank within
fifteen (15) days after notice; and/or (v) if the bank issuing the Letter of
Credit shall fail to (A) issue a replacement Letter of Credit in the event the
original Letter of Credit has been lost, mutilated, stolen and/or destroyed or
(B) consent to the transfer of the Letter of Credit to any Person designated by
Lender (provided that Lender shall not transfer the Letter of Credit except in
connection with a transfer of its interest in this Security Instrument).
Notwithstanding anything to the contrary

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contained in the above, Lender is not obligated to draw any Letter of Credit
upon the happening of any Draw Event and shall not be liable for any losses
sustained by Borrower due to the insolvency of the bank issuing the Letter of
Credit if Lender has not drawn the Letter of Credit.
SECTION 4.7.     COVENANTS RELATING TO 1031 EXCHANGE TRANSFER.
Within one-hundred eighty (180) days of the date hereof, Borrower shall cause
the following events to occur (the consummation of each of the following, the
“1031 Exchange Transfer”):
(a)    100% of the direct equity interest in Borrower shall have been
transferred to Sponsor or a Person which is Controlled by Sponsor and in which
Sponsor owns at least a 51% direct or indirect equity interest, each of which
such transfers shall have been made in accordance with the applicable terms and
conditions of Section 8.3 hereof;
(b)    the Junior Loan (as defined in the certain Subordination and Standstill
Agreement by and among Lender and AAI Sponsor, among others dated as of the date
hereof (the “Subordination Agreement”)) shall have been forgiven or indefeasibly
satisfied in full from a source other than the assets of Borrower or Master
Lessee or the other income generated by the Property and the Junior Loan
Documents (as defined in the Subordination Agreement) shall have been terminated
and released of record (if applicable); and
(c)     Lender shall have received (i) copies of all documentation relating to
the 1031 Exchange Transfer evidencing the consummation thereof (including,
without limitation, copies of the 1031 Organizational Document Amendments
(defined below)), and (ii) a written certification (executed by a responsible
officer of Borrower and Guarantor) attesting that (1) the requirements of this
Section 4.7 and the applicable requirements of Section 8.3 hereof have each been
satisfied, and (2) that there exists no litigation (pending or threatened) or
other controversy relating to the 1031 Exchange Transfer between Borrower and
any other person or entity involved therewith (including, without limitation,
any “exchange accommodator” or similar Person).
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, in connection with the consummation of the 1031 Exchange Transfer in
accordance with the applicable terms and conditions hereof, Borrower may,
without Lender’s prior consent, make such amendments to the organizational
documents of Borrower as may be required to reflect the transfers made in
connection therewith (the “1031 Organizational Document Amendments”).
Article 5. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that:
Section 5.1.    WARRANTY OF TITLE. Borrower has good title to the Property and
has the right to mortgage, grant, bargain, sell, pledge, assign, warrant,
transfer and convey the same, and that Borrower possesses an unencumbered fee
simple absolute in the Land and the Improvements, and that it owns the Property
free and clear of all liens, encumbrances and charges whatsoever except for
those exceptions (other than standard printed exceptions) shown in the title
insurance policy insuring the lien of this Security Instrument (the “Permitted
Exceptions”). Borrower shall forever warrant, defend and preserve the title and
the validity and priority of the lien of this Security Instrument and shall
forever warrant and defend the same to Lender against the claims of all Persons
whomsoever. Borrower hereby represents and warrants that none of the Permitted
Exceptions will materially and adversely affect the ability of the Borrower to
pay in full the Loan, the use of the Property for the use currently being made
thereof, the operation of the Property or the value thereof.
Section 5.2.    AUTHORITY. Borrower has full power, authority and legal right to
execute this Security Instrument, and to mortgage, grant, bargain, sell, pledge,
assign, warrant, transfer and convey the Property pursuant to the terms hereof
and to keep and observe all of the terms of this Security Instrument on
Borrower’s part to be performed.

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Section 5.3.    LEGAL STATUS AND AUTHORITY. Borrower (a) is duly organized,
validly existing and in good standing under the laws of its state of
organization or incorporation; (b) is duly qualified to transact business and is
in good standing in the State where the Property is located; and (c) has all
necessary approvals, governmental and otherwise, and full power and authority to
own the Property and carry on its business as now conducted and proposed to be
conducted. Borrower now has and shall continue to have the full right, power and
authority to operate and lease the Property, to encumber the Property as
provided herein and to perform all of the other obligations to be performed by
Borrower under the Note, this Security Instrument and the other Loan Documents.
Borrower’s exact legal name is correctly set forth on the first page of this
Security Instrument. Borrower’s organization identification number assigned by
its state of formation, if any, is 5190312.
Section 5.4.    VALIDITY OF DOCUMENTS. The execution, delivery and performance
of the Note, this Security Instrument and the other Loan Documents and the
borrowing evidenced by the Note (i) are within the corporate/partnership/limited
liability company (as the case may be) power of Borrower; (ii) have been
authorized by all requisite corporate/partnership/limited liability company (as
the case may be) action; (iii) have received all necessary approvals and
consents, corporate, governmental or otherwise; (iv) will not violate, conflict
with, result in a breach of or constitute (with notice or lapse of time, or
both) a default under any provision of law, any order or judgment of any court
or governmental authority, the articles of incorporation, bylaws, partnership,
trust or operating agreement, or other governing instrument of Borrower, or any
indenture, agreement or other instrument to which Borrower is a party or by
which it or any of its assets or the Property is or may be bound or affected;
(v) will not result in the creation or imposition of any lien, charge or
encumbrance whatsoever upon any of its assets, except the lien and security
interest created hereby; and (vi) will not require any authorization or license
from, or any filing with, any governmental or other body (except for the
recordation of this instrument in appropriate land records in the State where
the Property is located and except for Uniform Commercial Code filings relating
to the security interest created hereby).
Section 5.5.    LITIGATION. There is no action, suit or proceeding (including
any condemnation or similar proceeding), or any governmental investigation or
any arbitration, in each case pending or, to the knowledge of Borrower,
threatened against Borrower or the Property before any governmental or
administrative body, agency or official which (i) challenges the validity of
this Security Instrument, the Note or any of the other Loan Documents or the
authority of Borrower to enter into this Security Instrument, the Note or any of
the other Loan Documents or to perform the transactions contemplated hereby or
thereby or (ii) if adversely determined would have a material adverse effect on
the occupancy of the Property or the business, financial condition or results of
operations of Borrower or the Property.
Section 5.6.    STATUS OF PROPERTY. (a) No portion of the Improvements is
located in an area identified by the Secretary of Housing and Urban Development
or any successor thereto as an area having special flood hazards pursuant to the
National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973
or the National Flood Insurance Reform Act of 1994, as each may be amended, or
any successor law, or, if located within any such area, Borrower has obtained
and will maintain the insurance prescribed in Section 3.3 hereof, if required
under the terms of that Section.
(b)    Borrower has obtained and provided copies to Lender of all Permits. The
Permits foregoing are in full force and effect as of the date hereof and not
subject to revocation, suspension, forfeiture or modification.
(c)    The Property and the present and contemplated use and occupancy thereof
are in compliance in all material respects with all applicable zoning
ordinances, building codes, land use and Environmental Laws and other similar
laws. Borrower and the Property each comply in all material respects with
Prescribed Laws.
(d)    The Property is served by all utilities required for the current or
contemplated use thereof. All utility service is provided by public utilities
and the Property has accepted or is equipped to accept such utility service.

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(e)    All public roads and streets necessary for service of and access to the
Property for the current or contemplated use thereof have been completed, are
serviceable and all weather and are physically and legally open for use by the
public.
(f)    The Property is served by public water and sewer systems.
(g)    The Property is free from damage caused by fire or other casualty.
(h)    All costs and expenses of any and all labor, materials, supplies and
equipment used in the construction of the Improvements have been paid in full.
(i)    Borrower has paid in full for, and is the owner of, all furnishings,
fixtures and equipment (other than tenants’ property) used in connection with
the operation of the Property, free and clear of any and all security interests,
liens or encumbrances, except the lien and security interest created hereby.
(j)    All liquid and solid waste disposal, septic and sewer systems located on
the Property are in a good and safe condition and repair and in compliance with
all Applicable Laws.
Section 5.7.    NO FOREIGN PERSON. Borrower is not a “foreign person” within the
meaning of Sections 1445(f)(3) of the Code and the related Treasury Department
regulations, including temporary regulations.
Section 5.8.    SEPARATE TAX LOT. The Property is assessed for real estate tax
purposes as one or more wholly independent tax lot or lots, separate from any
adjoining land or improvements not constituting a part of such lot or lots, and
no other land or improvements is assessed and taxed together with the Property
or any portion thereof.
Section 5.9.    ERISA COMPLIANCE. (a) As of the date hereof and throughout the
term of this Security Instrument, (i) Borrower is not and will not be an
“employee benefit plan” as defined in Section 3(3) of ERISA, or other retirement
arrangement, which is subject to Title I of ERISA or Section 4975 of the Code,
and (ii) the assets of Borrower do not and will not constitute “plan assets” of
one or more such plans for purposes of Title I of ERISA or Section 4975 of the
Code; and
(a)    As of the date hereof and throughout the term of this Security Instrument
(i) Borrower is not and will not be a “governmental plan” within the meaning of
Section 3(32) of ERISA and (ii) transactions by or with Borrower are not and
will not be subject to state statutes applicable to Borrower regulating
investments of and fiduciary obligations with respect to governmental plans.
Section 5.10.    LEASES. (a) Borrower is the sole owner of the entire lessor’s
interest in the Leases; (b) the Leases are valid and enforceable (subject to
principles of equity and laws affecting creditors’ rights generally); (c) the
terms of all alterations, modifications and amendments to the Leases are
reflected in the copies of the Leases delivered to Lender in connection with the
closing of the Loan; (d) none of the Rents reserved in the Leases have been
assigned or otherwise pledged or hypothecated; (e) none of the Rents have been
collected for more than one (1) month in advance (other than typical first
and/or last month's rent and security deposits); (f) except as expressly
disclosed to Lender in connection with the closing of the Loan, the premises
demised under the Leases have been completed for the tenants who have accepted
and have taken possession of the same on a rent paying basis; (g) to Borrower’s
Knowledge (defined below), there exist no offsets or defenses to the payment of
any portion of the Rents; and (h) the number and type of parking spaces
available at the Property as of the date hereof satisfy any applicable
requirements relating thereto contained in the Leases. As used herein,
“Borrower’s Knowledge” shall mean the actual knowledge of John W. Chamberlain.
Section 5.11.    FINANCIAL CONDITION. (a) Borrower is solvent, and no
bankruptcy, reorganization, insolvency or similar proceeding under any state or
federal law with respect to Borrower has been initiated, and (b)

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Borrower has received reasonably equivalent value for the granting of this
Security Instrument. Borrower has not entered into the Loan or any Loan Document
with the actual intent to hinder, delay, or defraud any creditors.
Section 5.12.    BUSINESS PURPOSES. The loan evidenced by the Note is solely for
the business purpose of Borrower, and is not for personal, family, household, or
agricultural purposes.
Section 5.13.    TAXES. Borrower has filed all federal, state, county,
municipal, and city income and other tax returns required to have been filed by
it and has paid all taxes and related liabilities which have become due pursuant
to such returns or pursuant to any assessments received by it. Borrower does not
know of any basis for any additional assessment in respect of any such taxes and
related liabilities for prior years.
Section 5.14.    MAILING ADDRESSES. Borrower’s mailing address, as set forth in
the opening paragraph hereof or as changed in accordance with the provisions
hereof, is true and correct.
Section 5.15.    NO CHANGE IN FACTS OR CIRCUMSTANCES. All information submitted
to Lender by Borrower (or any of its agents, employees, representatives or
affiliates) in connection with any request by Borrower for the loan evidenced by
the Note and/or any letter of application or other application or letter of
intent (including, but not limited to, all financial statements, rent rolls,
reports and certificates) were accurate, complete and correct in all respects
when delivered. There has been no adverse change in any condition, fact,
circumstance or event that would make any such information inaccurate,
incomplete or otherwise misleading.
Section 5.16.    DISCLOSURE. To the best of Borrower’s Knowledge, Borrower has
disclosed to Lender all material facts and has not failed to disclose any
material fact that could cause any representation or warranty made herein to be
materially misleading.
Section 5.17.     LETTER-OF-CREDIT RIGHTS. If Borrower is at any time a
beneficiary under a letter of credit relating to the properties, rights, titles
and interests referenced in Section 1.1 of this Security Instrument now or
hereafter issued in favor of Borrower, Borrower shall promptly notify Lender
thereof and, at the request and option of Lender, Borrower shall, pursuant to an
agreement in form and substance satisfactory to Lender, either (i) arrange for
the issuer and any confirmer of such letter of credit to consent to an
assignment to Lender of the proceeds of any drawing under the letter of credit
or (ii) arrange for Lender to become the transferee beneficiary of the letter of
credit, with Lender agreeing in each case that upon an Event of Default, the
proceeds of any drawing under the letter of credit are to be applied as provided
in Section 11.2 of this Security Agreement.
Section 5.18.    AUTHORIZATION TO FILE FINANCING STATEMENTS, POWER OF ATTORNEY.
Borrower hereby authorizes Lender at any time and from time to time to file any
initial financing statements, amendments thereto and continuation statements
with or without the signature of Borrower as authorized by Applicable Law, as
applicable to all or part of the fixtures owned by Borrower or Personal
Property. For purposes of such filings, Borrower agrees to furnish any
information requested by Lender promptly upon request by Lender. Borrower also
ratifies its authorization for Lender to have filed any like initial financing
statements, amendments thereto and continuation statements, if filed prior to
the date of this Security Instrument. Borrower hereby irrevocably constitutes
and appoints Lender and any officer or agent of Lender, with full power of
substitution, as its true and lawful attorneys-in-fact with full irrevocable
power and authority in the place and stead of Borrower or in Borrower’s own name
to execute in Borrower’s name any documents and otherwise to carry out the
purposes of this Section, to the extent that Borrower authorization above is not
sufficient. To the extent permitted by law, Borrower hereby ratifies all acts
said attorneys-in-fact have lawfully done in the past or shall lawfully do or
cause to be in the future by virtue hereof. This power of attorney is coupled
with an interest and shall be irrevocable.
Section 5.19.     EMBARGOED PERSONS. To the best of Borrower’s Knowledge, as of
the date hereof and at all times throughout the term of the Loan, including
after giving effect to any transfers of interests permitted pursuant to the Loan
Documents, (a) none of the funds or other assets of Borrower, Sponsor or
Guarantor constitute

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(or will constitute) property of, or are (or will be) beneficially owned,
directly or indirectly, by any Person or government subject to trade
restrictions under U.S. law, including but not limited to, the International
Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the
Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations
promulgated thereunder with the result that the investment in Borrower, Sponsor
and/or Guarantor, as applicable (whether directly or indirectly), is prohibited
by Applicable Law or the Loan made by Lender is in violation of Applicable Law
(“Embargoed Person”); (b) no Embargoed Person has (or will have) any interest of
any nature whatsoever in Borrower, Sponsor or Guarantor, as applicable, with the
result that the investment in Borrower, Sponsor and/or Guarantor, as applicable
(whether directly or indirectly), is prohibited by Applicable Law or the Loan is
in violation of Applicable Law; and (c) none of the funds of Borrower, Sponsor
or Guarantor, as applicable, have been (or will be) derived from any unlawful
activity with the result that the investment in Borrower, Sponsor and/or
Guarantor, as applicable (whether directly or indirectly), is prohibited by
Applicable Law or the Loan is in violation of Applicable Law.
Section 5.20.    PATRIOT ACT. All capitalized words and phrases and all defined
terms used in the USA Patriot Act of 2001, 107 Public Law 56 (October 26, 2001)
and in other statutes and all orders, rules and regulations of the United States
government and its various executive departments, agencies and offices related
to the subject matter of the Patriot Act, including Executive Order 13224
effective September 24, 2001 (collectively referred to in this Section only as
the “Patriot Act”) and are incorporated into this Section. Borrower hereby
represents and warrants that Borrower, Sponsor and Guarantor and each and every
Person affiliated with Borrower, Sponsor and/or Guarantor or that to Borrower’s
knowledge has an economic interest in Borrower, or, to Borrower’s knowledge,
that has or will have an interest in the transaction contemplated by this
Security Instrument or in the Property or will participate, in any manner
whatsoever, in the Loan, is: (i) not a “blocked” Person listed in the Annex to
Executive Order Nos. 12947, 13099 and 13224 and all modifications thereto or
thereof (as used in this Section only, the “Annex”); (ii) in full compliance
with the requirements of the Patriot Act and all other requirements contained in
the rules and regulations of the Office of Foreign Assets Control, Department of
the Treasury (as used in this Section only, “OFAC”); (iii) operated under
policies, procedures and practices, if any, that are in compliance with the
Patriot Act and available to Lender for Lender’s review and inspection during
normal business hours and upon reasonable prior notice; (iv) not in receipt of
any notice from the Secretary of State or the Attorney General of the United
States or any other department, agency or office of the United States claiming a
violation or possible violation of the Patriot Act; (v) not listed as a
Specially Designated Terrorist or as a “blocked” Person on any lists maintained
by the OFAC pursuant to the Patriot Act or any other list of terrorists or
terrorist organizations maintained pursuant to any of the rules and regulations
of the OFAC issued pursuant to the Patriot Act or on any other list of
terrorists or terrorist organizations maintained pursuant to the Patriot Act;
(vi) not a Person who has been determined by competent authority to be subject
to any of the prohibitions contained in the Patriot Act; and (vii) not owned or
controlled by or now acting and or will in the future act for or on behalf of
any Person named in the Annex or any other list promulgated under the Patriot
Act or any other Person who has been determined to be subject to the
prohibitions contained in the Patriot Act. Borrower covenants and agrees that in
the event Borrower receives any notice that Borrower, Sponsor or Guarantor (or
any of their respective beneficial owners, affiliates or participants) become
listed on the Annex or any other list promulgated under the Patriot Act or is
indicted, arraigned, or custodially detained on charges involving money
laundering or predicate crimes to money laundering, Borrower shall immediately
notify Lender. It shall be an Event of Default hereunder if Borrower, Guarantor,
Sponsor or any other party to any Loan Document becomes listed on any list
promulgated under the Patriot Act or is indicted, arraigned or custodially
detained on charges involving money laundering or predicate crimes to money
laundering.
Section 5.21.     BROKER. Borrower hereby represents that, except for Eastdil
Secured, it has dealt with no financial advisors, brokers, underwriters,
placement agents, agents or finders in connection with the transactions
contemplated by this Security Instrument.
Section 5.22.     MASTER LEASE REPRESENTATIONS. (a) The Master Lease is in full
force and effect and has not been modified or amended in any manner whatsoever,
(b) there are no material defaults under the Master Lease by Master Lessee or
Borrower, and, to the best of Borrower’s knowledge, no event has occurred which
but for the passage of time, or notice, or both would constitute a material
default under the Master Lease, (c) all rents, additional

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rents and other sums due and payable under the Master Lease as of the date
hereof have been paid in full, and (d) neither Master Lessee nor Borrower has
commenced any action or given or received any notice for the purpose of
terminating the Master Lease.
Section 5.23.     PROPERTY DOCUMENT REPRESENTATIONS. Each Property Document is
in full force and effect and neither Borrower nor, to Borrower’s knowledge, any
other party to any Property Document, is in default thereunder, and to the best
of Borrower’s knowledge, there are no conditions which, with the passage of time
or the giving of notice, or both, would constitute a default thereunder. No
Property Document has been modified, amended or supplemented (except, in each
case, as expressly set forth herein).
Article 6. OBLIGATIONS AND RELIANCES
Section 6.1.    RELATIONSHIP OF BORROWER AND LENDER. The relationship between
Borrower and Lender is solely that of debtor and creditor, and Lender has no
fiduciary or other special relationship with Borrower, and no term or condition
of any of the Note, this Security Instrument and the other Loan Documents shall
be construed so as to deem the relationship between Borrower and Lender to be
other than that of debtor and creditor.
Section 6.2.    NO RELIANCE ON LENDER. The general partners, shareholders,
members, principals or other beneficial owners of Borrower are experienced in
the ownership and operation of properties similar to the Property, and Borrower
and Lender are relying solely upon such expertise and business plan in
connection with the ownership and operation of the Property. Borrower is not
relying on Lender’s expertise, business acumen or advice in connection with the
Property.
Section 6.3.    NO LENDER OBLIGATIONS. (a) Notwithstanding any of the provisions
of this Security Instrument (including, but not limited to, the provisions of
Subsections 1.1(f) and (l), or Section 1.2 or Section 3.7), Lender is not
undertaking the performance of (i) any obligations under the Leases; or (ii) any
obligations with respect to such agreements, contracts, certificates,
instruments, franchises, permits, trademarks, licenses and other documents.
(b)    By accepting or approving anything required to be observed, performed or
fulfilled or to be given to Lender pursuant to this Security Instrument, the
Note or the other Loan Documents, including without limitation, any officer’s
certificate, balance sheet, statement of profit and loss or other financial
statement, survey, appraisal, or insurance policy, Lender shall not be deemed to
have warranted, consented to, or affirmed the sufficiency, the legality or
effectiveness of same, and such acceptance or approval thereof shall not
constitute any warranty or affirmation with respect thereto by Lender.
Section 6.4.    RELIANCE. Borrower recognizes and acknowledges that in accepting
the Note, this Security Instrument and the other Loan Documents, Lender is
expressly and primarily relying on the truth and accuracy of the warranties and
representations set forth in Article 5 without any obligation to investigate the
Property and notwithstanding any investigation of the Property by Lender; that
such reliance existed on the part of Lender prior to the date hereof; that the
warranties and representations are a material inducement to Lender in accepting
the Note, this Security Instrument and the other Loan Documents; and that Lender
would not be willing to make the loan evidenced by the Note, this Security
Instrument and the other Loan Documents and accept this Security Instrument in
the absence of the warranties and representations as set forth in Article 5.
Article 7. FURTHER ASSURANCES
Section 7.1.    RECORDING OF SECURITY INSTRUMENT, ETC. Borrower forthwith upon
the execution and delivery of this Security Instrument and thereafter, from time
to time, will cause this Security Instrument and any of the other Loan Documents
creating a lien or security interest or evidencing the lien hereof upon the
Property and each instrument of further assurance to be filed, registered or
recorded in such manner and in such places as may be required by any present or
future law in order to publish notice of and fully to protect and perfect the
lien or security

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interest hereof upon, and the interest of Lender in, the Property. Borrower will
pay all taxes, filing, registration or recording fees, and all reasonable
expenses (the “Expenses”) incident to the preparation, execution, acknowledgment
and/or recording of the Note, this Security Instrument, the other Loan
Documents, any note or mortgage supplemental hereto, any security instrument
with respect to the Property and any instrument of further assurance, and any
modification or amendment of the foregoing documents, and all federal, state,
county and municipal taxes, duties, imposts, assessments and charges arising out
of or in connection with the execution and delivery of this Security Instrument,
any mortgage supplemental hereto, any security instrument with respect to the
Property or any instrument of further assurance, and any modification or
amendment of the foregoing documents, except where prohibited by law to do so.
Section 7.2.    FURTHER ACTS, ETC. Except as expressly provided to the contrary
in Article 19 or elsewhere herein, Borrower will, at the cost of Borrower, and
without expense to Lender, do, execute, acknowledge and deliver all and every
such further acts, deeds, conveyances, mortgages, assignments, notices of
assignments, transfers and assurances as Lender shall, from time to time,
reasonably require, for the better assuring, conveying, assigning, transferring,
and confirming unto Lender the property and rights hereby mortgaged, granted,
bargained, sold, conveyed, confirmed, pledged, assigned, warranted and
transferred, or which Borrower may be or may hereafter become bound to convey or
assign to Lender, or for carrying out the intention or facilitating the
performance of the terms of this Security Instrument or for filing, registering
or recording this Security Instrument, or for complying with all Applicable
Laws. Borrower, on demand, will execute and deliver and hereby authorizes Lender
to execute in the name of Borrower or without the signature of Borrower to the
extent Lender may lawfully do so, one or more financing statements, chattel
mortgages or other instruments, to evidence more effectively the security
interest of Lender in the Property. Borrower grants to Lender an irrevocable
power of attorney coupled with an interest for the purpose of exercising and
perfecting any and all rights and remedies available to Lender pursuant to this
Section 7.2.
Section 7.3.    CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS. (a) If
any law is enacted or adopted or amended after the date of this Security
Instrument which deducts the Debt from the value of the Property for the purpose
of taxation or which imposes a tax, either directly or indirectly, on the Debt
or Lender’s interest in the Property, Borrower will pay the tax, with interest
and penalties thereon, if any. If Lender is advised by counsel chosen by it that
the payment of tax by Borrower would be unlawful or taxable to Lender or
unenforceable or provide the basis for a defense of usury, then Lender shall
have the option by written notice of not less than ninety (90) days to declare
the Debt immediately due and payable.
(b)    Borrower will not claim or demand or be entitled to any credit or credits
on account of the Debt for any part of the Taxes or Other Charges assessed
against the Property, or any part thereof, and no deduction shall otherwise be
made or claimed from the assessed value of the Property, or any part thereof,
for real estate tax purposes by reason of this Security Instrument or the Debt.
If such claim, credit or deduction shall be required by law, Lender shall have
the option, by written notice of not less than one hundred eighty (180) days, to
declare the Debt immediately due and payable.
(c)    If at any time the United States of America, any State thereof or any
subdivision of any such State shall require revenue or other stamps to be
affixed to the Note, this Security Instrument, or any of the other Loan
Documents or impose any other tax or charge on the same, Borrower will pay for
the same, with interest and penalties thereon, if any.
(d)     Any prepayment of the Debt made by Borrower under this Section 7.3 shall
not require the payment of any Yield Maintenance Premium (as defined in the
Note) or other prepayment premium or penalty (other than the payment of any
applicable Interest Shortfall).
Section 7.4.    ESTOPPEL CERTIFICATES. (a) After request by Lender, Borrower,
within ten (10) Business Days, shall furnish Lender or any proposed assignee or
Investor (as defined in Section 19.1) with a statement, duly acknowledged and
certified, setting forth (i) the amount of the original principal amount of the
Loan, (ii) the unpaid principal amount of the Note, (iii) the rate of interest
of the Note, (iv) the terms of payment and maturity date

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of the Note, (v) the date installments of interest and/or principal were last
paid, (vi) that, except as provided in such statement, to Borrower’s Knowledge,
there exist no defaults or events which with the passage of time or the giving
of notice or both, would constitute an event of default under the Note or the
Security Instrument, (vii) that the Note and this Security Instrument are valid,
legal and binding obligations (except as may be limited by (A) bankruptcy,
insolvency or other similar laws affecting the rights of creditors generally and
(B) general principles of equity) and have not been modified or if modified,
giving particulars of such modification, (viii) whether, to Borrower’s
Knowledge, any offsets or defenses exist against the obligations secured hereby
and, if any are alleged to exist, a detailed description thereof, (ix) that all
Leases are in full force and effect, (x) the date to which the Rents thereunder
have been paid pursuant to the Leases, (xi) whether or not, to Borrower’s
Knowledge, any of the lessees under the Leases are in default under the Leases,
and, if any of the aforesaid lessees are in default, setting forth the specific
nature of all such defaults, (xii) the amount of security deposits held by
Borrower under each Lease and that such amounts are consistent with the amounts
required under each Lease, and (xiii) as to any other factual matters reasonably
requested by Lender and reasonably related to the Leases, the obligations
secured hereby, the Property or this Security Instrument.
(b)    Borrower shall use its commercially reasonable good faith efforts to
deliver to Lender, promptly upon request (provided such request is not made more
than once in any calendar year other than any request by Lender made in
connection with the securitization of the Loan or during the continuance of an
Event of Default), duly executed estoppel certificates from any one or more
lessees as required by Lender attesting to such facts regarding the Lease as
Lender may require, including but not limited to attestations that each Lease
covered thereby is in full force and effect (and to the best of lessee’s
knowledge) with no defaults thereunder on the part of any party, that none of
the Rents have been paid more than one month in advance (other than typical and
customary security deposits and first and last months’ rents), and that the
lessee claims no defense or offset against the full and timely performance of
its obligations under the Lease.
(c)    Lender, by its acceptance of this Security Instrument, agrees to deliver
to Borrower (at no cost to Borrower) promptly upon Borrower’s request therefor
(provided such request is not made more than twice in any calendar year) a
written statement setting forth the unpaid principal amount of the Note, the
accrued and unpaid interest thereon, the date on which an installment of
interest and/or principal were last paid thereunder and whether there are any
Events of Default which currently exist and are actually known to Lender.
(c)     Borrower shall use its commercially reasonable best efforts to deliver
to Lender, promptly upon request (provided such request is not made more than
once in any calendar year other than any request by Lender made in connection
with the securitization of the Loan or during the continuance of an Event of
Default), duly executed estoppel certificates from any one or more parties to
the Property Documents as reasonably required by Lender attesting to such facts
regarding the Property Documents as Lender may reasonably require.
Section 7.5.    FLOOD INSURANCE. After Lender’s request, Borrower shall deliver
evidence satisfactory to Lender that no portion of the Improvements is situated
in a federally designated “special flood hazard area.” or, if any of the
Improvements are located within any such area Borrower will obtain and maintain
the insurance required prescribed in Section 3.3 hereof, if required under the
terms of that section.
Section 7.6.    SPLITTING OF SECURITY INSTRUMENT. This Security Instrument and
the Note shall, at any time during the continuance of an Event of Default, at
the sole election of Lender, be split or divided into two or more notes and two
or more security instruments, each of which shall cover all or a portion of the
Property to be more particularly described therein. To that end, Borrower, upon
written request of Lender and at Lender’s sole cost and expense, shall execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered by
the then owner of the Property, to Lender and/or its designee or designees
substitute notes and security instruments in such principal amounts, aggregating
not more than the then unpaid principal amount of this Security Instrument, and
containing terms, provisions and clauses similar to those contained herein and
in the Note, and such other documents and instruments as may be reasonably
required by Lender. Borrower's obligations hereunder are conditioned upon
Lender's agreement, as evidenced by its acceptance hereof, that such splitting
or division shall not result in any decrease

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of any rights of Borrower or any Indemnitor (as defined in the Indemnity
Agreement (defined below)) hereunder or under any other Loan Document or any
additional cost or potential liability to Borrower or any Indemnitor that
exceeds that which exists hereunder prior to such splitting or division.
Section 7.7.    REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation of the Note
or any other Loan Document which is not of public record: (i) with respect to
any Loan Document other than the Note, Borrower will issue, in lieu thereof, a
replacement of such other Loan Document, dated the date of such lost, stolen,
destroyed or mutilated Loan Document in the same principal amount thereof and
otherwise of like tenor and (ii) with respect to the Note, (a) Borrower will
execute a reaffirmation of the portion of the Debt as evidenced by the Note
acknowledging that Lender has informed Borrower that the Note was lost, stolen
destroyed or mutilated and that such portion of the Debt continues to be an
obligation and liability of the Borrower as set forth in the Note, a copy of
which shall be attached to such reaffirmation or (b) if requested by Lender,
Borrower will execute a replacement note, provided, that Lender or Lender’s
custodian (at Lender’s option) shall provide to Borrower Lender’s (or Lender’s
custodian’s) then standard form of lost note affidavit and indemnity, which such
form shall be reasonably acceptable to Borrower.
Article 8. DUE ON SALE/ENCUMBRANCE
Section 8.1.    LENDER RELIANCE. Borrower acknowledges that Lender has examined
and relied on the experience of Borrower and Sponsor in owning and operating
properties such as the Property in agreeing to make the loan secured hereby, and
will continue to rely on Borrower’s ownership of the Property as a means of
maintaining the value of the Property as security for repayment of the Debt and
the performance of the Other Obligations. Borrower acknowledges that Lender has
a valid interest in maintaining the value of the Property so as to ensure that,
should Borrower default in the repayment of the Debt or the performance of the
Other Obligations, Lender can recover the Debt by a sale of the Property.
Section 8.2.    NO SALE/ENCUMBRANCE.
(a)    Except as provided in this Security Instrument, Borrower shall not cause
or permit a Sale or Pledge of the Property or any part thereof or any legal or
beneficial interest therein nor permit a Sale or Pledge of an interest in any
Restricted Party (in each case, a “Prohibited Transfer”), other than pursuant to
Leases of space at the Property to tenants in accordance with the applicable
provisions hereof, without the prior written consent of Lender.
(b)    A Prohibited Transfer shall include, but not be limited to, (i) an
installment sales agreement wherein Borrower agrees to sell the Property or any
part thereof for a price to be paid in installments; (ii) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder; (iii) a sale, assignment or other
transfer of, or the grant of a security interest in, Borrower’s right, title and
interest in and to (A) any Leases or any Rents or (B) the Property Documents;
(iv) if a Restricted Party is a corporation, any merger, consolidation or Sale
or Pledge of such corporation’s stock or the creation or issuance of new stock
in one or a series of transactions; (v) any action for partition of the Property
(or any portion thereof or interest therein) or any similar action instituted or
prosecuted by any Borrower, as a tenant-in-common, or by any other Person,
pursuant to any contractual agreement or other instrument or under Applicable
Law (including, without limitation, common law) and/or any other action
instituted by (or at the behest of) Borrower or its affiliates or consented to
or acquiesced in by Borrower or its affiliates which results in a Property
Document Event; (vi) if a Restricted Party is a limited or general partnership
or joint venture, any merger or consolidation or the change, removal,
resignation or addition of a general partner or the Sale or Pledge of the
partnership interest of any general or limited partner or any profits or
proceeds relating to such partnership interests or the creation or issuance of
new partnership interests; (vii) if a Restricted Party is a limited liability
company, any merger or consolidation or the change, removal, resignation or
addition of a managing member or non-member manager (or if no managing member,
any member) or the Sale or Pledge of the membership interest of any member or
any profits or proceeds relating to such membership interest; (viii) if a
Restricted Party is a trust or nominee trust, any merger, consolidation or the
Sale or Pledge of the legal or beneficial interest in a Restricted

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Party or the creation or issuance of new legal or beneficial interests; (ix) the
removal or the resignation of Manager and/or Parking Manager (including, without
limitation, an Affiliated Manager) other than in accordance with the applicable
terms and conditions hereof; or (x) any conversion (statutory or otherwise) of
any Restricted Party.
Section 8.3.    PERMITTED EQUITY TRANSFERS. Notwithstanding anything to the
contrary contained in this Article 8, the following transfers shall not be
Prohibited Transfers and shall be permitted without Lender’s consent: (a) a
transfer (but not a pledge) by (i) devise or descent or by operation of law upon
the death of a member, partner or shareholder of a Restricted Party or (ii)
voluntary act as part of an estate planning process, (b) the transfer (but not
the pledge), in one or a series of transactions, of the stock, partnership
interests or membership interests (as the case may be) in a Restricted Party,
(c) in addition to the transfers permitted by clause (b), any other transaction
involving the direct and/or indirect equity interests in a Restricted Party
(other than a pledge) that would fit within the definition of Prohibited
Transfer (including, without limitation, a transaction of the type described in
clauses (iv), (vi), (vii) or (viii) of Section 8.2(b) hereof) constituting a
transfer of less than 49% of the direct and/or indirect equity ownership of any
Borrower, Guarantor, Sponsor any SPE Component Entity and/or Affiliated Manager
and (d) the sale, transfer or issuance of shares of common stock in any
Restricted Party that is a publicly traded entity, provided such shares of
common stock are listed on the New York Stock Exchange or another nationally
recognized stock exchange; provided, that, with respect to the transfers listed
in clauses (a), (b) or (c) above, each of the following are complied with in
connection with any such transfer: (A) Lender shall receive not less than five
(5) days prior written notice thereof, (B) no such transfers shall result in a
change in Control of Sponsor or Affiliated Manager (provided, however, a “change
in Control” of Sponsor or Affiliated Manager shall not be deemed to have
occurred for the purposes of this subsection (B) if any one of the entities
meeting the definition of “Sponsor” contained herein succeeds to the interest of
the then current Sponsor and such successor Sponsor Controls the Affiliated
Manager), (C) after giving effect to any such transfer, one of the entities
meeting the definition of “Sponsor” contained herein shall (I) own at least a
51% direct or indirect equity interest in each of Borrower, Master Lessee (if
the Master Lease Termination has not occurred) and any SPE Component Entity,
(II) Control Borrower, Master Lessee (if the Master Lease Termination has not
occurred) and any SPE Component Entity and (III) control the day-to-day
operation of the Property, (D) after giving effect to any such transfer, the
Property (including, without limitation, the parking related activities at the
Property) shall continue to be managed by Manager and Parking Manager (as
applicable) or a Qualified Manager, (E) in the case of the transfer of any
direct or indirect equity ownership interests in Borrower, Master Lessee (if the
Master Lease Termination has not occurred) or in any SPE Component Entity, the
relevant provisions of Sections 4.2, 4.3 and 5.9 hereof shall continue to be
complied with after giving effect to such transfers, (F) in the case of (1) the
transfer of the management or parking management of the Property to a new
Affiliated Manager in accordance with the applicable terms and conditions
hereof, or (2) the transfer (in one or in a series of transactions) in excess of
49% (in the aggregate) of any equity ownership interests (I) directly in
Borrower, Master Lessee (if the Master Lease Termination has not occurred) or in
any SPE Component Entity, or (II) in any Restricted Party whose sole asset is a
direct or indirect equity ownership interest in Borrower, Master Lessee (if the
Master Lease Termination has not occurred) or in any SPE Component Entity,
Lender shall receive a substantive non-consolidation opinion, which such opinion
shall be provided by outside counsel acceptable to Lender and the Rating
Agencies and shall otherwise be in form, scope and substance reasonably
acceptable to Lender and acceptable to the Rating Agencies (such opinion, the
“New Non-Consolidation Opinion”) addressing the relevant transfer, (G) such
transfers shall not cause a Property Document Event and (H) after giving effect
to any such transfer, the Guarantor Control Condition shall continue to be
satisfied.
Section 8.4.    PERMITTED PROPERTY TRANSFERS (ASSUMPTION). Notwithstanding
anything to the contrary contained in this Article 8 and in addition to the
transfers permitted under Section 8.3, the following transfers shall not be
Prohibited Transfers and Lender’s consent to any transfers of the Property in
its entirety (at any time after the first (1st) anniversary of the closing of
the Loan or at any time prior to such date if Lender determines that such
assignment or transfer will not hinder, delay or prevent Lender from completing
a Secondary Market Transaction (as defined in Section 19.3)) shall not be
withheld; provided, that, in each case, Lender receives sixty (60) days prior
written notice of each such transfer hereunder and no Event of Default is
continuing, and further provided that, the following additional requirements are
satisfied:

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(a)    Borrower shall pay to Lender the Applicable Assumption / Transfer Fee
applicable to such transfer;
(b)    Borrower shall pay any and all reasonable out-of-pocket costs incurred in
connection with each transfer of the Property (including, without limitation,
Lender’s reasonable counsel fees and disbursements and all recording fees, title
insurance premiums and mortgage and intangible taxes and the fees and expenses
of the Rating Agencies pursuant to clause (j) below);
(c)    The proposed transferee (the “Transferee”) or Transferee’s Principals
(hereinafter defined) must have demonstrated expertise in owning and operating
properties similar in location, size and operation to the Property, which
expertise shall be reasonably determined by Lender; provided, however, in the
event one of the entities meeting the definition of “Sponsor” contained herein
owns (directly or indirectly) 51% or more of Transferee and Controls Transferee,
this subsection (c) shall be deemed satisfied (each of the aforesaid conditions,
collectively, the “Sponsor Conditions”). The term “Transferee’s Principals”
shall include Transferee’s (A) managing members, general partners or Controlling
shareholders and (B) such other members, partners or shareholders which directly
or indirectly shall own a 51% or greater interest in Transferee;
(d)    Transferee’s Principals shall, as of the date of such transfer, have an
aggregate net worth and liquidity reasonably acceptable to Lender; provided,
however, to the extent the Sponsor Conditions have been satisfied, this
subsection (d) shall also be deemed satisfied;
(e)    Transferee, Transferee’s Principals and all other entities which may be
owned or controlled directly or indirectly by Transferee’s Principals (“Related
Entities”) must not have been a party to any bankruptcy proceedings, voluntary
or involuntary, made an assignment for the benefit of creditors or taken
advantage of any insolvency act, or any act for the benefit of debtors within
seven (7) years prior to the date of the proposed transfer of the Property;
(f)    Transferee shall assume all of the obligations of Borrower under the Loan
Documents accruing from and after the date of the transfer in a manner
satisfactory to Lender in all respects, including, without limitation, by
entering into an assumption agreement in form and substance reasonably
satisfactory to Lender (but which does not materially adversely affect the
rights of the Borrower under this Security Instrument, the Note, or any of the
other instruments and documents relating to the Loan);
(g)    There shall be no material litigation or regulatory action pending or
threatened against, as applicable, Transferee, Transferee’s Principals or
Related Entities which is not reasonably acceptable to Lender;
(h)    Transferee’s Principals and Related Entities shall not have defaulted
(beyond applicable notice and cure periods) under its or their obligations with
respect to any other indebtedness in a manner which is not reasonably acceptable
to Lender;
(i)        Transferee must be able to satisfy all the representations and
covenants set forth in Section 4.3 hereof, and both Transferee and Transferee’s
Principals must be able to satisfy all the representations and covenants set
forth in Sections 4.2, 4.3 and 5.9 hereof, no Event of Default or event which,
with the giving of notice, passage of time or both, shall constitute an Event of
Default, shall otherwise occur as a result of such transfer, and Transferee and
Transferee’s Principals shall deliver (A) all organizational documentation
reasonably requested by Lender, which shall be reasonably satisfactory to
Lender, and (B) all certificates, agreements and covenants reasonably required
by Lender (including, without limitation, hazard insurance endorsements or
certificates or other similar evidence that the Policies required hereunder have
been obtained or maintained, as applicable);
(j)    At Lender’s option, Borrower shall deliver to Lender a Rating Agency
Confirmation as to the transfer; provided, however, to the extent that the
Sponsor Conditions have been satisfied, this subsection (j) shall be deemed
satisfied;

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(k)    Transferee shall furnish to Lender (I) a New Non-Consolidation Opinion,
(II) a REMIC Opinion and (III) an opinion of counsel reasonably satisfactory to
Lender and its counsel (A) that the assumption of the Debt has been duly
authorized, executed and delivered, and that the Note, this Security Instrument,
the assumption agreement and the other Loan Documents are valid, binding and
enforceable against Transferee in accordance with their terms (subject to
principles of equity and laws affecting creditors’ rights generally), and (B)
that Transferee and any entity which is a controlling stockholder, member or
general partner of Transferee have been duly organized, and are in existence and
good standing;
(l)    Borrower shall deliver, at its sole cost and expense, an endorsement to
the existing title policy insuring the Security Instrument, as modified by the
assumption agreement, as a valid first lien on the Property and naming the
Transferee as owner of the Property, which endorsement shall insure that, as of
the date of the recording of the assumption agreement, the Property shall not be
subject to any additional exceptions or liens other than those contained in the
title policy issued on the date hereof. Immediately upon a transfer of the
Property to such Transferee and the satisfaction of all of the above
requirements, the named Borrower herein shall be released from all liability
under this Security Instrument, the Note and the other Loan Documents accruing
after such transfer, and Guarantor under each of that certain Indemnity
Agreement in favor of Lender relating hereto dated of even date herewith (the
“Indemnity Agreement”) and the Environmental Indemnity, shall be released from
its obligations and liabilities thereunder accruing after such transfer provided
that a new indemnitor approved by Lender, which approval shall be granted or
withheld pursuant to Lender’s customary underwriting procedures, enters into and
delivers to Lender a new indemnity agreement and environmental indemnity
agreement in the form and content of the Indemnity Agreement and Environmental
Indemnity. The foregoing release shall be effective upon the date of such
transfer, but Lender agrees to provide written evidence thereof reasonably
requested by Borrower;
(m)    Lender shall have received evidence reasonably acceptable to Lender that
a Property Document Event will not occur as a result of the proposed transfer;
and
(n)     Borrower’s obligations under the contract of sale pursuant to which the
transfer is proposed to occur shall expressly be subject to the satisfaction of
the terms and conditions of this Section.
Any transfer made pursuant to and in accordance with the terms and provisions of
this Section 8.4 shall not be deemed to be a Prohibited Transfer. A consent by
Lender with respect to a transfer of the Property in its entirety to, and the
related assumption of the Loan by, a Transferee pursuant to this Section shall
not be construed to be a waiver of the right of Lender to consent to any
subsequent transfer of the Property.

Section 8.5.    LENDER’S RIGHTS. Lender reserves the right to condition the
consent to a Prohibited Transfer requested hereunder upon (a) a modification of
the terms hereof and an assumption of the Note and the other Loan Documents as
so modified by the proposed Prohibited Transfer, (b) receipt of payment of a
transfer fee equal to one percent (1%) of the outstanding principal balance of
the Loan and all of Lender’s expenses incurred in connection with such
Prohibited Transfer, (c) receipt of a Rating Agency Confirmation with respect to
the Prohibited Transfer, (d) the proposed transferee’s continued compliance with
the covenants set forth in this Security Instrument (including, without
limitation, the covenants in Sections 4.2, 4.3 and 5.9) and the other Loan
Documents, (e) a new manager and parking manager for the Property and a new
management agreement and parking management agreement, in each case,
satisfactory to Lender, and (f) the satisfaction of such other conditions and/or
legal opinions as Lender shall determine in its sole discretion to be in the
interest of Lender. All reasonable expenses incurred by Lender shall be payable
by Borrower whether or not Lender consents to the Prohibited Transfer. Lender
shall not be required to demonstrate any actual impairment of its security or
any increased risk of default hereunder in order to declare the Debt immediately
due and payable upon a Prohibited Transfer made without Lender’s consent. This
provision shall apply to each and every Prohibited Transfer, whether or not
Lender has consented to any previous Prohibited Transfer.
Section 8.6.    DEFINITIONS. As used in this Article 8 (and elsewhere in this
Security Instrument), the following terms shall have the following meanings:

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(a)    “AAI Sponsor” shall mean American Assets Trust, L.P., a Maryland limited
partnership.
(b)    “Affiliated Manager” shall mean any Person serving as Manager and/or
Parking Manager in which Borrower, Guarantor, Sponsor, Master Lessee (if the
Master Lease Termination has not occurred), any SPE Component Entity or any
affiliate of such entities has, directly or indirectly, any legal, beneficial or
economic interest; it being understood that the provisions hereof and of the
other Loan Documents relating to Affiliated Managers shall only be deemed to
apply to Manager and/or Parking Manger so long as the foregoing condition is met
with respect to Manager and/or Parking Manager (as applicable).
(c)    “Applicable Assumption / Transfer Fee” shall mean, with respect to each
applicable transfer hereunder requiring payment of the same, a fee equal to (i)
0.25% of the outstanding principal amount of the Loan for the first such
transfer, (ii) 0.50% of the outstanding principal amount of the Loan for the
second such transfer and (iii) 1% of the outstanding principal amount of the
Loan for each subsequent transfer.
(d)     “Control” shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management, policies or activities
of an entity, whether through ownership of voting securities, by contract or
otherwise.
(e)    “Guarantor” shall mean American Assets Trust, L.P., a Maryland limited
partnership.
(f)     “Guarantor Control Condition” shall mean a condition which shall be
satisfied to the extent that each of Borrower, Master Lessee (if the Master
Lease Termination has not occurred) and Guarantor are under common Control.
(g)     “Investment Grade Rating” shall mean a long-term, unsecured debt rating
of not less than “BBB-” (or its equivalent) from each of the Rating Agencies.
(h)     “Person” shall mean any individual, corporation, partnership, joint
venture, limited liability company, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
(i)     “Property Documents” shall mean (individually or collectively as the
context requires) (i) that certain Grant of Reciprocal Easements dated May 21,
2010 and recorded on June 1, 2010 in the records of King County, Washington as
Instrument No. 20100601000722, as the same may hereafter be amended,
supplemented and/or otherwise modified in accordance with the terms hereof and
(ii) that certain Grant of Easement dated July 9, 2010 and recorded on July 9,
2010 in the records of King County, Washington as Instrument No. 20100709000574,
as the same may hereafter be amended, supplemented and/or otherwise modified in
accordance with the terms hereof.
(j)         “Property Document Event” shall mean any event which would, directly
or indirectly, cause a termination right under the Property Documents, right of
first refusal under the Property Documents, first offer under the Property
Documents or any other similar right under the Property Documents, cause any
termination fees to be due under the Property Documents or would cause a
Material Adverse Effect to occur under the Property Documents; provided,
however, any of the foregoing shall not be deemed a Property Document Event to
the extent Lender’s prior written consent is obtained with respect to the same.
(k)     “Qualified Equityholder” shall mean any one of the following Persons (in
each case, tested immediately prior to the applicable transfer or other
applicable transaction):
(i)    a pension fund, pension trust or pension account that (A) has total real
estate assets of at least $1 Billion (exclusive of the Property) and (1)
committed capital of at least of $250 Million (exclusive of the Property) or (2)
a net worth of at least $200 Million and a liquidity of at least $25 Million (in
each case, exclusive of

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the Property) and (B) is managed by a Person who (I) is a nationally recognized
manager of investment funds that regularly invest in debt or equity interests
relating to commercial real estate and (II) controls at least $1 Billion of real
estate equity assets (exclusive of the Property); or
(ii)    a pension fund advisor who (A) is a nationally recognized manager of
investment funds that regularly invest in debt or equity interests relating to
commercial real estate, (B) controls at least $1 Billion of real estate equity
assets (exclusive of the Property) and (C) is acting on behalf of one or more
pension funds that, in the aggregate, satisfy the requirements of clause (i) of
this definition; or
(iii)    an insurance company which is subject to supervision by the insurance
commissioner, or a similar official or agency, of a state or territory of the
United States (including the District of Columbia) (A) with (1) a net worth of
at least $250 Million (exclusive of the Property) or (2) a net worth of at least
$200 Million and a liquidity of at least $25 Million (in each case, exclusive of
the Property) and (B) which controls real estate equity assets of at least $1
Billion (exclusive of the Property); or
(iv)    a corporation organized under the banking laws of the United States or
any state or territory of the United States (including the District of Columbia)
(A) with (1) a combined capital and surplus of at least $250 Million (exclusive
of the Property) or (2) a net worth of at least $200 Million and a liquidity of
at least $25 Million (in each case, exclusive of the Property) and (B) who
controls real estate equity assets of at least $1 Billion (exclusive of the
Property); or
(v)    any Person (A) with an Investment Grade Rating or (B) who (i) has (1) a
net worth of at least $250 Million (exclusive of the Property) or (2) a net
worth of at least $200 Million and a liquidity of at least $25 Million (in each
case, exclusive of the Property) and (iii) controls real estate equity assets of
at least $1 Billion (exclusive of the Property);
provided, however, that (A) none of the foregoing Persons shall be deemed
Qualified Equityholders unless such Persons are regularly engaged in owning
and/or operating commercial real estate properties similar to the Property and
(B) in no event shall any Person be deemed to be a Qualified Equityholder to the
extent that such Person (I) is unable to make or comply with (or would not allow
Borrower to continue to make or comply with) any applicable representations and
covenants contained herein and/or in the other Loan Documents (including,
without limitation, those relating to ERISA, the Patriot Act, Embargoed Persons
and OFAC), (II) itself has been and/or any other Person owned or Controlled by
such Person or affiliated with such Person has been, within the ten (10) years
preceding the date of determination, the subject of any action or proceeding
under applicable Insolvency Laws or (III) is Controlled by and/or owned in any
material respect by any Person(s) which have ever convicted of a felony.
(l)     “Rating Agency Condition” shall be deemed to exist if (i) any Rating
Agency fails to respond to any request for a Rating Agency Confirmation with
respect to any applicable matter or otherwise elects (orally or in writing) not
to consider any applicable matter or (ii) Lender (or its Servicer) is not
required to and/or elects not to obtain (or cause to be obtained) a Rating
Agency Confirmation with respect to any applicable matter, in each case,
pursuant to and in compliance with any pooling and servicing agreement(s) or
similar agreement(s), in each case, relating to the servicing and/or
administration of the Loan.
(m)     “Rating Agency Confirmation” shall mean (i) prior to a Securitization or
if the Rating Agency Condition exists, that Lender has (in consultation with the
Rating Agencies (if required by Lender)) approved the matter in question in
writing based upon Lender’s good faith determination of applicable Rating Agency
standards and criteria and (ii) from and after a Securitization (to the extent
the Rating Agency Condition does not exist), a written affirmation from each of
the Rating Agencies (obtained at Borrower’s sole cost and expense) that the
credit rating of the Securities by such Rating Agency immediately prior to the
occurrence of the event with respect to which such Rating Agency Confirmation is
sought will not be qualified, downgraded or withdrawn as a result of the
occurrence of such event, which affirmation may be granted or withheld in such
Rating Agency’s sole and absolute discretion.

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(n)    “Restricted Party” shall mean Borrower, Master Lessee (if the Master
Lease Termination has not occurred), Guarantor, Sponsor, any SPE Component
Entity, any Affiliated Manager, or any shareholder, partner, member, non-member
manager or any direct or indirect legal or beneficial owner of any of the
foregoing.
(o)    “Sale or Pledge” shall mean a voluntary or involuntary sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, grant of any options
with respect to, or any other transfer or disposition of (directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise, and
whether or not for consideration or of record) of a legal or beneficial
interest.
(p)    “Sponsor” shall mean (i) AAI Sponsor or (ii) any Qualified Equityholder;
provided, that, (I) any entity comprising the defined term “Sponsor” above shall
not be deemed to be the “Sponsor” hereunder unless a state of facts exists that
would require such entity to be the “Sponsor” hereunder in order to satisfy the
conditions set forth in Sections 8.3(B) and 8.3(C) above (such event, a “Sponsor
Succession”), (II) any transfer which results in a Sponsor Succession shall
require, as a condition precedent to such transfer, payment to Lender of the
Applicable Assumption / Transfer Fee and (III) except as noted in the foregoing
subsection (II), no transfer fee shall be payable in connection with an equity
ownership transfer consummated in accordance with Section 8.3 hereof.
Section 8.7.     EASEMENT AGREEMENTS. By acceptance hereof, Lender agrees that
it shall execute and subordinate this Security Instrument and the other Loan
Documents to (and Borrower shall be permitted to enter into without Lender’s
consent) reasonable easements, restrictions, covenants, reservations and rights
of way in the ordinary course of Borrower’s business for traffic circulation,
ingress, egress, parking, access, utilities lines or for other similar purposes
(including, without limitation, easements for fire exiting purposes, traffic and
pedestrian circulation, landscaping and easements to governmental entities for
road widening and corner roundings); provided, that, in each case or taken as a
whole, the same do not have a Material Adverse Effect.
Article 9. PREPAYMENT
Section 9.1.    PREPAYMENT. The Debt may be prepaid only in strict accordance
with the express terms and conditions of the Note and this Security Instrument
including the payment (if applicable) of any prepayment consideration or premium
due under the Note (whether due prior to or after the occurrence of an Event of
Default).
Article 10. DEFAULT
Section 10.1.    EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an “Event of Default”:
(a)    (i) any Monthly Payment (as defined in the Note) is not paid within five
(5) days of the date when due, (ii) any other portion of the Debt is not paid
within five (5) days of the date when due or (iii) the entire Debt is not paid
on or before the Maturity Date;
(b)    if any of the Taxes or Other Charges are not paid within ten (10) days
following the date the same is due and payable except to the extent sums
sufficient to pay such Taxes and Other Charges have been deposited with Lender
in accordance with the terms of this Security Instrument;
(c)    if the Policies are not kept in full force and effect, or if the Policies
are not delivered to Lender within ten (10) days of Lender’s written request;
(d)    if the Property is subject to actual, physical waste;

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(e)    if Borrower or Master Lessee (if the Master Lease Termination has not
occurred) violates or does not comply with any of the provisions of Sections 3.7
(and does not cure such failure within ten days of written notice) or 4.3 or
Articles 8 or 13;
(f)    if any representation or warranty of Borrower or any Person guaranteeing
payment of the Debt or any portion thereof or performance by Borrower of any of
the terms of this Security Instrument (including, without limitation, Guarantor)
or any general partner, managing member, principal or beneficial owner of any of
the foregoing, made herein or any guaranty or indemnity, or in any certificate,
report, financial statement or other instrument or document furnished to Lender
shall have been false or misleading in any material respect when made;
(g)    if (i) Borrower, Guarantor, Master Lessee (if the Master Lease
Termination has not occurred) or any SPE Component Entity or any general partner
or managing member of Borrower, Guarantor, Master Lessee (if the Master Lease
Termination has not occurred) or any SPE Component Entity shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, conservatorship or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets; or (ii) Borrower, Guarantor, Master Lessee (if the Master Lease
Termination has not occurred) or any SPE Component Entity or any general partner
or managing member of Borrower, Guarantor, Master Lessee (if the Master Lease
Termination has not occurred) or any SPE Component Entity shall make a general
assignment for the benefit of its creditors; or (iii) there shall be commenced
against Borrower, Guarantor, Master Lessee (if the Master Lease Termination has
not occurred) or SPE Component Entity or any general partner or managing member
of Borrower, Guarantor, Master Lessee (if the Master Lease Termination has not
occurred) or any SPE Component Entity any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of ninety (90) days; or (iv)
there shall be commenced against Borrower, Guarantor, Master Lessee (if the
Master Lease Termination has not occurred) or any SPE Component Entity or any
general partner or managing member of Borrower, Guarantor, Master Lessee (if the
Master Lease Termination has not occurred) or any SPE Component Entity any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of any order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within ninety (90) days from the entry thereof; or (v) Borrower, Guarantor,
Master Lessee (if the Master Lease Termination has not occurred) or any SPE
Component Entity or any general partner or managing member of Borrower,
Guarantor, Master Lessee (if the Master Lease Termination has not occurred) or
any SPE Component Entity shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), (iii) or (iv) above; or (vi) Borrower, Guarantor, Master
Lessee (if the Master Lease Termination has not occurred) or any SPE Component
Entity or any general partner or managing member of Borrower, Guarantor, Master
Lessee (if the Master Lease Termination has not occurred) or any SPE Component
Entity shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due;
(h)    if Borrower shall be in default under any other mortgage, deed of trust,
deed to secure debt or other security agreement covering any part of the
Property whether it be superior or junior in lien to this Security Instrument;
(i)    subject to Borrower’s contest rights contained in Section 3.12 hereof, if
the Property becomes subject to any mechanic’s, materialman’s or other lien
(other than a lien for local real estate taxes and assessments not then due and
payable) and the lien shall remain undischarged of record (by payment, bonding
or otherwise) for a period of ninety (90) days;
(j)    if any federal tax lien or final judgment is filed against Borrower,
Guarantor, any general partner or managing member of Borrower or Guarantor, or
the Property and same is not discharged of record within ninety (90) days after
same is filed;

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(k)    if Borrower fails to cure any violations of Applicable Laws within ninety
(90) days, of first having received notice thereof;
(l)    if (i) Borrower fails to timely provide Lender with the written
certification and evidence referred to in Section 4.2 hereof and such failure is
not cured within five (5) days of written request, or (ii) Borrower consummates
a transaction which would cause the Security Instrument or Lender’s exercise of
its rights under this Security Instrument, the Note or the other Loan Documents
to constitute a nonexempt prohibited transaction under ERISA or result in a
violation of a state statute regulating governmental plans, subjecting Lender to
liability for a violation of ERISA or a state statute;
(m)    if Borrower shall fail to reimburse Lender within ten (10) days of
written demand, with interest calculated at the Default Rate (defined below),
for all Insurance Premiums or Taxes, together with interest and penalties
imposed thereon, paid by Lender pursuant to this Security Instrument (other than
amounts paid by Lender from the Escrow Fund prior to the continuance of an Event
of Default);
(n)    if Borrower shall fail to timely deliver to Lender an estoppel
certificate pursuant to the terms of Subsections 7.4(a) and does not cure such
failure within ten (10) days of written notice;
(o)    if Borrower shall fail to timely deliver to Lender, after request by
Lender, the statements referred to in Section 3.11 in accordance with the terms
thereof and does not cure such failure within ten (10) days of written notice;
(p)    if any default occurs in the performance of any guarantor’s or
indemnitor’s (including, without limitation, Guarantor’s) obligations under any
guaranty or indemnity executed in connection herewith (including, without
limitation, the Indemnity Agreement and the Environmental Indemnity) and such
default continues after the expiration of applicable grace periods set forth in
such guaranty or indemnity, or if any representation or warranty of any
guarantor or indemnitor thereunder shall be false or misleading in any material
respect when made;
(q)     if (A) the 1031 Exchange Transfer shall fail to occur within one-hundred
eighty (180) days of the date hereof, (B) if a default shall occur under the
Master Lease prior to the Master Lease Termination or (C) if the Master Lease
Termination shall fail to occur within five (5) days of the consummation of the
1031 Exchange Transfer;
(r)     if (i) Borrower defaults under the Property Documents beyond the
expiration of applicable notice and grace periods, if any, thereunder, (ii) any
of the Property Documents are amended, supplemented, replaced, restated or
otherwise modified without Lender’s prior written consent or if Borrower
consents to a transfer of any party’s interest thereunder without Lender’s prior
written consent, (iii) any Property Document is canceled, terminated,
surrendered or expires pursuant to its terms, unless in such case Borrower
enters into a replacement thereof in accordance with the applicable terms and
provisions hereof or (iv) a Property Document Event occurs (provided, however,
with respect to the events described in subsections (i) through (iv) above, any
such events shall not constitute an Event of Default hereunder to the extent
that (A) the same is curable by Borrower and (B) Borrower cures the same within
the earlier of (I) the timeframe required prior to the period in which any such
event would no longer be curable or (II) thirty (30) days after Borrower’s
receipt of notice thereof) (the foregoing, a “Property Document EOD”);
(s)    if Borrower or Master Lessee defaults under the Management Agreement or
Parking Management Agreement beyond the expiration of applicable notice and
grace periods, if any, thereunder or if the Management Agreement or Parking
Management Agreement is canceled, terminated or surrendered or, expires pursuant
to its terms or otherwise ceased to be in full force and effect, unless, in each
such case, Borrower, contemporaneously with such cancellation, termination,
surrendered, expiration or cessation, enters into a Replacement Management
Agreement with a Qualified Manager in accordance with the applicable terms and
provisions hereof for each of the management and parking management of the
Property (as applicable);

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(t)     if Borrower attempts to assign its rights under this Security Instrument
or any of the other Loan Documents or any interest herein or therein in
contravention of the Loan Documents;
(u)     if, without Lender’s prior written consent, Borrower forgives or cancels
any material debt owed to it;
(v)     if Borrower, any SPE Component Entity, Guarantor, any affiliate of
Borrower, any SPE Component Entity or any Guarantor, or any of their respective
agents or representatives shall commit any criminal act which results in the
seizure, forfeiture or loss of the Property;
(w)     If Borrower misappropriates, converts or misapplies any (A) insurance
proceeds, (B) condemnation awards, (C) Rents during the continuance of an Event
of Default or (D) funds disbursed by Lender from any of the Reserve Accounts;
(x)     With respect to any term, covenant or provision set forth herein which
specifically contains a notice requirement or grace period, if Borrower shall be
in default under such term, covenant or condition after the giving of such
notice or the expiration of such grace period;
(y)     if Guarantor revokes or attempts to revoke the Indemnity Agreement or
the Environmental Indemnity;
(z)     if an uninsured material loss, theft, damage or destruction to Property
occurs and Borrower does not, within thirty (30) days of the occurrence thereof,
provide evidence reasonably acceptable to Lender that Borrower has the funds
necessary to consummate the applicable Restoration;
(aa)     if for more than thirty (30) days after notice from Lender, Borrower
shall continue to be in default under any other term, covenant or condition of
the Note, this Security Instrument or the other Loan Documents in the case of
any default which can be cured by the payment of a sum of money or for sixty
(60) days after notice from Lender in the case of any other default, provided
that if such default cannot reasonably be cured within such sixty (60) day
period and Borrower shall have commenced to cure such default within such sixty
(60) day period and thereafter diligently and expeditiously proceeds to cure the
same, such sixty (60) day period shall be extended for so long as it shall
require Borrower in the exercise of due diligence to cure such default, it being
agreed that no such extension shall be for a period in excess of one hundred
twenty (120) days; or
(bb)    a default beyond applicable notice or cure periods (if any) shall occur
under any other Loan Documents.
Section 10.2.    LATE PAYMENT CHARGE. If any monthly installment of principal or
interest is not paid on the date on which it was due, Borrower shall pay to
Lender upon demand an amount equal to the lesser of 2.5% of such unpaid portion
of the outstanding monthly installment of principal or interest then due or the
maximum amount permitted by Applicable Law, 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, and such amount shall
be secured by this Security Instrument and the other Loan Documents.
Section 10.3.    DEFAULT INTEREST. Borrower will pay, from the date of an Event
of Default through the earlier of the date upon which the Event of Default is
cured or the date upon which the Debt is paid in full, interest on the unpaid
principal balance of the Note at a per annum rate equal to the lesser of (a)
four percent (4%) plus the Applicable Interest Rate (as defined in the Note),
and (b) the maximum interest rate which Borrower may by law pay or Lender may
charge and collect (the “Default Rate”). Notwithstanding the foregoing, in the
event Borrower becomes liable for interest at the Default Rate under this
Section 10.3 (such interest, the “Default Interest”) due to the occurrence of a
Qualifying Non-Monetary Default (as defined in the Note), Borrower shall only be
liable for such Default Interest for a period not to exceed six (6) months
unless (i) Lender actively pursues a foreclosure action (or non-judicial

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foreclosure) as a result of such Qualifying Non-Monetary Default (in which case,
Borrower shall be liable for Default Interest for a period equal to (I) the
duration of Lender's pursuit of the remedies described above plus (II) the first
six (6) months following the occurrence of the applicable Qualifying
Non-Monetary Default (less any portion of such six (6) month period occurring
after Lender's commencement of its pursuit of the remedies described above)) or
(ii) a monetary Event of Default shall at any time exist (in which case,
Borrower shall be liable for Default Interest from the date of the occurrence of
the applicable Qualifying Non-Monetary Default).
Article 11. RIGHTS AND REMEDIES
Section 11.1.    REMEDIES. Except as expressly limited hereby or by the other
Loan Documents, during the continuance of any Event of Default, Borrower agrees
that Trustee or Lender may take such action, without notice or demand, as it
deems advisable to protect and enforce its rights against Borrower and in and to
the Property, including, but not limited to, the following actions, each of
which may be pursued concurrently or otherwise, at such time and in such order
as Trustee or Lender may determine, in its sole discretion, without impairing or
otherwise affecting the other rights and remedies of Trustee or Lender: (a)
declare the entire unpaid Debt to be immediately due and payable; (b) institute
proceedings, judicial or otherwise, for the complete foreclosure of this
Security Instrument under any applicable provision of law in which case the
Property or any interest therein may be sold for cash or upon credit in one or
more parcels or in several interests or portions and in any order or manner; (c)
with or without entry, to the extent permitted and pursuant to the procedures
provided by Applicable Law, institute proceedings for the partial foreclosure of
this Security Instrument for the portion of the Debt then due and payable,
subject to the continuing lien and security interest of this Security Instrument
for the balance of the Debt not then due, unimpaired and without loss of
priority; (d) sell for cash or upon credit the Property or any part thereof and
all estate, claim, demand, right, title and interest of Borrower therein and
rights of redemption thereof, pursuant to power of sale or otherwise, at one or
more sales, as an entity or in parcels, at such time and place, upon such terms
and after such notice thereof as may be required or permitted by law; (e)
institute an action, suit or proceeding in equity for the specific performance
of any covenant, condition or agreement contained herein, in the Note or in the
other Loan Documents; (f) to the fullest extent permitted by Applicable Law,
recover judgment on the Note either before, during or after any proceedings for
the enforcement of this Security Instrument or the other Loan Documents; (g)
seek and obtain the appointment of a receiver, trustee, liquidator or
conservator of the Property, without notice and without regard for the adequacy
of the security for the Debt and without regard for the solvency of Borrower or
of any Person, firm or other entity liable for the payment of the Debt; (h) to
the fullest extent permitted by Applicable Law, Lender may enter into or upon
the Property, either personally or by its agents, nominees or attorneys and
dispossess Borrower and its agents and servants therefrom, without liability for
trespass, damages or otherwise and exclude Borrower and its agents or servants
wholly therefrom, and take possession of all books, records and accounts
relating thereto and Borrower agrees to surrender possession of the Property and
of such books, records and accounts to Lender upon demand, and thereupon Lender
may (i) use, operate, manage, control, insure, maintain, repair, restore and
otherwise deal with all and every part of the Property and conduct the business
thereat; (ii) complete any construction on the Property in such manner and form
as Lender deems advisable; (iii) make alterations, additions, renewals,
replacements and improvements to or on the Property; (iv) exercise all rights
and powers of Borrower with respect to the Property, whether in the name of
Borrower or otherwise, including, without limitation, the right to make, cancel,
enforce or modify Leases, obtain and evict tenants, and demand, sue for, collect
and receive all Rents of the Property and every part thereof; (v) require
Borrower to pay monthly in advance to Lender, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of such part of the Property as may be occupied by Borrower; (vi)
require Borrower to vacate and surrender possession of the Property to Lender or
to such receiver and, in default thereof, Borrower may be evicted by summary
proceedings or otherwise; and (vii) apply the receipts from the Property to the
payment of the Debt, in such order, priority and proportions as Lender shall
deem appropriate in its sole discretion after deducting therefrom all expenses
(including reasonable attorneys’ fees) incurred in connection with the aforesaid
operations and all amounts necessary to pay the Taxes, Other Charges, insurance
and other expenses in connection with the Property, as well as just and
reasonable compensation for the services of Lender, its counsel, agents and
employees; (i) exercise any and all rights and remedies granted to a secured
party upon default under the Uniform Commercial Code, including, without
limiting the generality of the foregoing: (I) the right to take possession of
the Personal Property or any part thereof, and to take such other measures

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as Lender may deem necessary for the care, protection and preservation of the
Personal Property, and (II) request Borrower at its expense to assemble the
Personal Property and make it available to Lender at a convenient place
acceptable to Lender. Any notice of sale, disposition or other intended action
by Lender with respect to the Personal Property sent to Borrower in accordance
with the provisions hereof at least ten (10) days prior to such action, shall
constitute commercially reasonable notice to Borrower; (j) apply any sums then
deposited in the Escrow Fund, the Reserve Accounts and any other sums held in
escrow or otherwise by Lender in accordance with the terms of this Security
Instrument or any other Loan Document to the payment of the following items in
any order in its discretion: (i) Taxes and Other Charges; (ii) Insurance
Premiums; (iii) any other items or expenses for which such Reserve or escrow was
established; or (iv) (A) interest on the unpaid principal balance of the Note,
(B) the unpaid principal balance of the Note; or (C) all other sums payable
pursuant to the Note, this Security Instrument and the other Loan Documents,
including without limitation advances made by Lender pursuant to the terms of
this Security Instrument; (k) prior to Borrower’s cure, if applicable, of the
Event of Default giving rise thereto and Lender’s acceptance of such cure
(whether voluntarily, as required under Section 11.11(b) hereof or as required
by law) surrender the Policies maintained pursuant to Article 3 hereof, collect
the unearned Insurance Premiums and apply such sums as a credit on the Debt in
such priority and proportion as Lender in its discretion shall deem proper, and
in connection therewith, Borrower hereby appoints Lender as agent and attorney
in fact (which is coupled with an interest and is therefore irrevocable) for
Borrower to collect such Insurance Premiums; (l) pursue such other remedies as
Lender may have under Applicable Law; (m) apply the undisbursed balance of any
Net Proceeds Deficiency deposit, together with interest thereon, to the payment
of the Debt in such order, priority and proportions as Lender shall deem to be
appropriate in its discretion; or (n) under the power of sale hereby granted,
Lender shall have the discretionary right to cause some or all of the Property,
including any Personal Property, to be sold or otherwise disposed of in any
combination and in any manner permitted by Applicable Law.
In the event of a sale, by foreclosure, power of sale, or otherwise, of less
than all of the Property, this Security Instrument shall continue as a lien and
security interest on the remaining portion of the Property unimpaired and
without loss of priority. In the event of a sale, by foreclosure, power of sale,
or otherwise, Lender may bid for and acquire the Property and, in lieu of paying
cash therefor, may make settlement for the purchase price by crediting against
the Obligations the amount of the bid made therefor, after deducting therefrom
the expenses of the sale, the cost of any enforcement proceeding hereunder and
any other sums which Lender is authorized to deduct under the terms hereof, to
the extent necessary to satisfy such bid. Notwithstanding the provisions of this
Section 11.1 to the contrary, if any Event of Default as Subsection 10.1(g)
shall occur as to Borrower, Master Lessee (if the Master Lease Termination has
not yet occurred) or any SPE Component Entity, the entire unpaid Debt shall be
automatically due and payable, without any further notice, demand or other
action by Lender.
Section 11.2.    APPLICATION OF PROCEEDS. The purchase money, proceeds and
avails of any disposition of the Property, or any part thereof, or any other
sums collected, paid to or received by Lender after the occurrence of an Event
of Default pursuant to the Note, this Security Instrument or the other Loan
Documents, may be applied by Lender to the payment of the Debt in such priority
and proportions as Lender in its discretion shall deem proper. Upon any
foreclosure sale or sales of all or any portion of the Property under the power
of sale herein granted, Lender may bid for and purchase the Property and shall
be entitled to apply all or any part of the Debt as a credit to the purchase
price.
Section 11.3.    RIGHT TO CURE DEFAULTS. Upon the occurrence of any Event of
Default, Lender may, but without any obligation to do so and without notice to
or demand on Borrower and without releasing Borrower from any obligation
hereunder, make or do the same in such manner and to such extent as Lender may
deem necessary to protect the security hereof. Lender is authorized to enter
upon the Property for such purposes (to the fullest extent permitted by
Applicable Law), or appear in, defend, or bring any action or proceeding to
protect its interest in the Property or to foreclose this Security Instrument or
collect the Debt, and the cost and expense thereof (including reasonable
attorneys’ fees to the extent permitted by law), with interest as provided in
this Section 11.3, shall constitute a portion of the Debt and shall be due and
payable to Lender upon demand. All such costs and expenses incurred by Lender in
remedying such Event of Default or such failed payment or act or in appearing
in, defending, or bringing

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any such action or proceeding shall bear interest at the Default Rate, for the
period after notice from Lender that such cost or expense was incurred to the
date of payment to Lender. All such costs and expenses incurred by Lender
together with interest thereon calculated at the Default Rate shall be deemed to
constitute a portion of the Debt and be secured by this Security Instrument and
the other Loan Documents and shall be immediately due and payable upon demand by
Lender therefor.
Section 11.4.    ACTIONS AND PROCEEDINGS. Lender has the right to appear in and
defend any action or proceeding brought with respect to the Property and to
bring any action or proceeding, in the name and on behalf of Borrower, which
Lender, in its discretion, decides should be brought to protect its interest in
the Property.
Section 11.5.    RECOVERY OF SUMS REQUIRED TO BE PAID. Lender shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Lender thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by Borrower existing at the time such earlier action was
commenced.
Section 11.6.    EXAMINATION OF BOOKS AND RECORDS. Lender, its agents,
accountants and attorneys shall have the right to examine the records, books,
management and other papers of Borrower and each other “Indemnitor” under the
Indemnity Agreement delivered in connection herewith which reflect upon their
financial condition, at the Property or at any office regularly maintained by
Borrower or such other Indemnitor or where the books and records are located.
Lender and its agents shall have the right to make copies and extracts from the
foregoing records and other papers. In addition, Lender, its agents, accountants
and attorneys shall have the right to examine and audit the books and records of
Borrower and such other Indemnitor pertaining to the income, expenses and
operation of the Property during reasonable business hours at any office of
Borrower and such other Indemnitor where the books and records are located. To
the extent that any information obtained by Lender under this Section 11.6
constitutes Identified Information (defined below), the same shall be subject to
the restrictions on circulating the same to the General Public as set forth in
Section 19.5 below.
Section 11.7.    OTHER RIGHTS, ETC. (a) The failure of Lender to insist upon
strict performance of any term hereof shall not be deemed to be a waiver of any
term of this Security Instrument. Borrower shall not be relieved of Borrower’s
obligations hereunder by reason of (i) the failure of Lender to comply with any
request of Borrower to take any action to foreclose this Security Instrument or
otherwise enforce any of the provisions hereof or of the Note or the other Loan
Documents, (ii) the release, regardless of consideration, of the whole or any
part of the Property, or of any Person liable for the Debt or any portion
thereof, or (iii) any agreement or stipulation by Lender extending the time of
payment or otherwise modifying or supplementing the terms of the Note, this
Security Instrument or the other Loan Documents.
(b)    Unless the applicable loss or damage is of a physical nature and directly
caused by the affirmative acts of Lender or Lender’s agents, it is agreed that
the risk of loss or damage to the Property is on Borrower, and Lender shall have
no liability whatsoever for decline in value of the Property, for failure to
maintain the Policies, or for failure to determine whether insurance in force is
adequate as to the amount of risks insured. Possession by Lender shall not be
deemed an election of judicial relief, if any such possession is requested or
obtained, with respect to any Property or collateral not in Lender’s possession.
(c)    Trustee or Lender may resort for the payment of the Debt to any other
security held by Trustee or Lender in such order and manner as Lender, in its
discretion, may elect. Trustee or Lender may take action to recover the Debt, or
any portion thereof, or to enforce any covenant hereof without prejudice to the
right of Trustee or Lender thereafter to foreclose this Security Instrument. The
rights of Lender under this Security Instrument shall be separate, distinct and
cumulative and none shall be given effect to the exclusion of the others. No act
of Trustee or Lender shall be construed as an election to proceed under any one
provision herein to the exclusion of any other provision. Trustee

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and Lender shall not be limited exclusively to the rights and remedies herein
stated but shall be entitled to every right and remedy now or hereafter afforded
at law or in equity.
Section 11.8.    RIGHT TO RELEASE ANY PORTION OF THE PROPERTY. Lender may
release any portion of the Property for such consideration as Lender may require
without, as to the remainder of the Property, in any way impairing or affecting
the lien or priority of this Security Instrument, or improving the position of
any subordinate lienholder with respect thereto, except to the extent that the
obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Lender for such release, and may accept by
assignment, pledge or otherwise any other property in place thereof as Lender
may require without being accountable for so doing to any other lienholder. This
Security Instrument shall continue as a lien and security interest in the
remaining portion of the Property.
Section 11.9.    VIOLATION OF LAWS. If the Property is not in compliance with
Applicable Laws, Lender may, until such violations are remedied, impose
additional requirements upon Borrower in connection therewith including, without
limitation, monetary reserves or financial equivalents.
Section 11.10.    RIGHT OF ENTRY. Lender and its agents shall have the right to
enter and inspect the Property at all reasonable times, subject to the rights of
tenants under Leases.
Section 11.11.    EXCULPATION; ACCEPTANCE OF CURE.
(a)     All rights and remedies of Lender under this Security Instrument and the
other Loan Documents are expressly made subject to the limitations and
exculpations set forth in Article 15, below. In the event of any conflict
between the terms and conditions hereof and those contained in Article 15
hereof, the terms and conditions of Article 15 hereof shall control.
(b)     Notwithstanding anything to the contrary contained herein or in any
other Loan Document, Lender shall not refuse to accept a Complete Cure (defined
below) by Borrower of any Event of Default by Borrower susceptible thereto
unless Lender (A) has commenced foreclosure proceedings (judicial or
non-judicial) and (B) is not otherwise required to accept such Complete Cure
under Applicable Law. Lender and Borrower will return to a status quo pro ante
after the consummation of any such Complete Cure by Borrower made in accordance
with the foregoing. As used above, the term “Complete Cure” shall mean a
complete and total cure of the applicable Event of Default in a manner
reasonably acceptable to Lender, which such cure shall be deemed to include,
without limitation, (A) both the payment of any sums due and the performance of
any obligations under, in each case, the Loan Documents associated with such
applicable Event of Default, (B) in the case of a non-monetary Event of Default,
the performance of such additional acts (such as the furnishing of opinions) in
connection therewith as may be reasonably required by Lender and (C) the payment
of (1) any applicable Default Interest and (2) the entire amount of the Debt to
the extent that the Debt shall have been accelerated in accordance with the
applicable terms and conditions of the Loan Documents in connection with the
applicable Event of Default and such acceleration is permitted under applicable
law.
Article 12. ENVIRONMENTAL INDEMNITY
Section 12.1.     ENVIRONMENTAL INDEMNITY. Simultaneously herewith, Borrower and
Guarantor have executed and delivered the Environmental Indemnity to Lender,
which Environmental Indemnity shall (a) constitute a Loan Document for all
purposes hereof and of the other Loan Documents and (b) notwithstanding anything
herein or any in other Loan Document to the contrary, not be secured by the
Security Instrument (unless Lender expressly opts to the contrary in accordance
with the express terms and conditions of the Environmental Indemnity). As used
herein, the term “Environmental Indemnity” shall mean that certain Environmental
Indemnity Agreement, dated as of the date hereof, executed by Borrower and
Guarantor in connection with the Loan for the benefit of Lender, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.

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Article 13. INDEMNIFICATION
Section 13.1.    GENERAL INDEMNIFICATION. Borrower shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties from and against any and all claims, suits, liabilities (including,
without limitation, strict liabilities), actions, proceedings, obligations,
debts, damages, losses, costs, expenses, diminutions in value, fines, penalties,
charges, fees, expenses, judgments, awards, amounts paid in settlement, punitive
damages, foreseeable and unforeseeable consequential damages, of whatever kind
or nature (including but not limited to attorneys’ fees and other costs of
defense) (the “Losses”) imposed upon or incurred by or asserted against any
Indemnified Parties (defined below) and directly or indirectly arising out of or
in any way relating to any one or more of the following which shall have
occurred prior to the foreclosure of this Security Instrument (or delivery and
acceptance of a deed in lieu of such foreclosure), except to the extent any of
the following are attributable to the gross negligence or willful misconduct of
an Indemnified Party: (a) any and all lawful action that may be taken by Lender
in connection with the enforcement of the provisions of this Security Instrument
or the Note or any of the other Loan Documents, whether or not suit is filed in
connection with same, or in connection with Borrower and/or any partner, joint
venturer or shareholder thereof becoming a party to a voluntary or involuntary
federal or state bankruptcy, insolvency or similar proceeding; (b) any accident,
injury to or death of Persons or loss of or damage to property occurring in, on
or about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (c) any use,
nonuse or condition in, on or about the Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (d) performance of any labor or services or the furnishing of any
materials or other property in respect of the Property or any part thereof; (e)
the failure of any Person other than an Indemnified Party to file timely with
the Internal Revenue Service an accurate Form 1099 B, Statement for Recipients
of Proceeds from Real Estate, Broker and Barter Exchange Transactions, which may
be required in connection with this Security Instrument, or to supply a copy
thereof in a timely fashion to the recipient of the proceeds of the transaction
in connection with which this Security Instrument is made; (f) any failure of
the Property to be in compliance with any Applicable Laws; (g) the enforcement
by any Indemnified Party of the provisions of this Article 13; (h) any and all
claims and demands whatsoever which may be asserted against Lender by reason of
any alleged obligations or undertakings on its part to perform or discharge any
of the terms, covenants, or agreements contained in any Lease; (i) the payment
and/or non-payment of any commission, charge or brokerage fee to anyone which
may be payable in connection with the funding of the loan evidenced by the Note
and secured by this Security Instrument; or (j) any misrepresentation made by
Borrower in this Security Instrument or any other Loan Document. Any amounts
payable to Lender by reason of the application of this Section 13.1 shall become
immediately due and payable and shall bear interest at the Default Rate from the
date written notice demanding payment for the amount suffered as a result of
such loss or damage is delivered to Borrower by Lender until paid. As used
herein, the term “Indemnified Parties” means Lender and any Person who is or
will have been involved in the origination of the loan evidenced by the Note,
any Person who is or will have been involved in the servicing of the loan
evidenced by the Note, any Person in whose name the encumbrance created by this
Security Instrument is or will have been recorded, Persons and entities who may
hold or acquire or will have held a full or partial interest in the loan
evidenced by the Note (including, but not limited to, Investors (as defined
herein) or prospective Investors in the Securities (as defined herein), as well
as custodians, trustees and other fiduciaries who hold or have held a full or
partial interest in the loan evidenced by the Note as well as the respective
directors, officers, shareholders, partners, employees, agents, servants,
representatives, contractors, subcontractors, affiliates, subsidiaries,
participants, successors and assigns of any and all of the foregoing (including
but not limited to any other Person who holds or acquires or will have held a
participation or other full or partial interest in the loan evidenced by the
Note or the Property, whether during the term of the loan evidenced by the Note
or as a part of or following a foreclosure of the loan evidenced by the Note and
including, but not limited to, any successors by merger, consolidation or
acquisition of all or a substantial portion of Lender’s assets and business)).
Section 13.2.    MORTGAGE AND/OR INTANGIBLE TAX. Borrower shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses imposed upon or incurred
by or asserted against any Indemnified Parties and directly or indirectly
arising out of or in any way relating to any tax on the making and/or recording
of this Security Instrument, the Note or any of the other

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Loan Document, except for income taxes and franchise taxes (imposed in lieu of
income taxes) imposed on an Indemnified Party as a result of a present or former
connection between the jurisdiction of the government or taxing authority
imposing such tax and the Indemnified Party (excluding a connection arising
solely from the Indemnified Party having executed, delivered, or performed its
obligations or received a payment under, or enforced, this Security Instrument,
the Note and the other Loan Documents) or any political subdivision or taxing
authority thereof or therein. Notwithstanding the foregoing, Borrower shall have
no indemnity obligations to any Indemnified Party under this Section to the
extent that any such Losses arise by reason of the gross negligence, illegal
acts, fraud or willful misconduct of such Indemnified Party.
Section 13.3.    ERISA INDEMNIFICATION. Borrower shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties from and against any and all Losses (including, without limitation,
attorneys’ fees and costs incurred in the investigation, defense, and settlement
of Losses incurred in correcting any prohibited transaction or in the sale of a
prohibited loan, and in obtaining any individual prohibited transaction
exemption under ERISA that may be required, in Lender’s sole discretion) that
Lender may incur, directly or indirectly, as a result of a default under
Sections 4.2 or 5.9.
Section 13.4.    DUTY TO DEFEND; ATTORNEYS’ FEES AND OTHER FEES AND EXPENSES.
Upon written request by any Indemnified Party to whom indemnification is owed
pursuant to the preceding provisions of this Article 13, Borrower shall defend
such Indemnified Party (if requested by any Indemnified Party, in the name of
the Indemnified Party) by attorneys and other professionals reasonably approved
by the Indemnified Parties. Notwithstanding the foregoing, any Indemnified
Parties may, if they reasonably believe that their interests are not properly
being represented by the counsel selected by Borrower, engage their own
attorneys and other professionals to defend them. Upon demand, Borrower shall
pay or, in the sole and absolute discretion of the Indemnified Parties to whom
indemnification is owed pursuant to the preceding provisions of this Article 13,
reimburse, the Indemnified Parties for the payment of reasonable fees and
disbursements of attorneys, engineers, environmental consultants, laboratories
and other professionals in connection therewith.
Article 14. WAIVERS
Section 14.1.     WAIVER OF COUNTERCLAIM. Borrower hereby waives the right to
assert a counterclaim, other than a mandatory or compulsory counterclaim, in any
action or proceeding brought against it by Lender arising out of or in any way
connected with this Security Instrument, the Note, any of the other Loan
Documents, or the Obligations. The foregoing shall not be deemed a waiver of
Borrower’s right to assert in a separate proceeding any claim against Lender
which otherwise would constitute a defense, setoff, counterclaim or cross-claim
of any nature arising from and after the date hereof.    
Section 14.2.     MARSHALLING AND OTHER MATTERS. Borrower hereby waives, to the
extent permitted by law, the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale hereunder of the Property or any
part thereof or any interest therein. Further, Borrower hereby expressly waives
any and all rights of redemption from sale under any order or decree of
foreclosure of this Security Instrument on behalf of Borrower, and on behalf of
each and every Person acquiring any interest in or title to the Property
subsequent to the date of this Security Instrument and on behalf of all Persons
to the extent permitted by Applicable Law.
Section 14.3.    WAIVER OF NOTICE. Borrower shall not be entitled to any notices
of any nature whatsoever from Trustee or Lender except with respect to matters
for which this Security Instrument, the Note, or the other Loan Documents
provides for the giving of notice by Trustee or Lender to Borrower and except
with respect to matters for which Trustee or Lender is required by Applicable
Law to give notice, and Borrower hereby expressly waives the right to receive
any notice from Trustee or Lender with respect to any matter for which this
Security Instrument does not specifically and expressly provide for the giving
of notice by Trustee or Lender to Borrower or as required by law.

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Section 14.4.    DETERMINATIONS BY LENDER. Except as otherwise specifically set
forth in the Note, this Security Instrument, or the other Loan Documents,
wherever pursuant to this Security Instrument (i) Lender exercises any right
given to it to approve or disapprove, (ii) any arrangement or term is to be
satisfactory to Lender, or (iii) any other decision or determination is to be
made by Lender, the decision of Lender to approve or disapprove, all decisions
that arrangements or terms are satisfactory or not satisfactory, and all other
decisions and determinations made by Lender, shall be based upon a standard of
reasonability. All approvals of or waivers by Lender in respect of any of the
terms, conditions or requirements of this Security Instrument must be in
writing. No waiver with respect to any condition, breach or other matter shall
extend to or be taken in any manner whatsoever to affect any other condition,
breach or matter or affect Lender’s rights resulting therefrom.
Section 14.5.    SURVIVAL. The indemnifications made pursuant to Section 13.3
shall continue indefinitely in full force and effect and shall survive and shall
in no way be impaired by: any satisfaction or other termination of this Security
Instrument, any assignment or other transfer of all or any portion of this
Security Instrument or Lender’s interest in the Property (but, in such case,
shall benefit both Indemnified Parties and any assignee or transferee), any
exercise of Lender’s rights and remedies pursuant hereto including but not
limited to foreclosure or acceptance of a deed in lieu of foreclosure, any
exercise of any rights and remedies pursuant to the Note or any of the other
Loan Documents, any transfer of all or any portion of the Property (whether by
Borrower or by Lender following foreclosure or acceptance of a deed in lieu of
foreclosure or at any other time), any amendment to this Security Instrument,
the Note or the other Loan Documents, and any act or omission that might
otherwise be construed as a release or discharge of Borrower from the
obligations pursuant hereto. Notwithstanding the foregoing, upon a permitted
transfer of Borrower’s fee interest in the Property pursuant to and in
accordance with Article 8 or after Lender has obtained possession of the
Property to the exclusion of Borrower in connection with an exercise of remedies
under the Loan Documents, the transferring Borrower shall be released from any
liability thereafter accruing under any such indemnification provision (other
than as to matters which have already occurred).
Section 14.6.    WAIVER OF TRIAL BY JURY. BORROWER HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR
INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR THE LOAN
EVIDENCED BY THE NOTE, THE NOTE, THIS SECURITY INSTRUMENT OR THE OTHER LOAN
DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS
OR AGENTS IN CONNECTION THEREWITH.
Article 15. EXCULPATION
Section 15.1.    EXCULPATION. All rights and remedies of Lender under this
Security Instrument and the other Loan Documents are expressly made subject to
the limitations and exculpations set forth in Article 14 of the Note, the
provisions of which are incorporated herein by this reference. In the event of
any conflict between the terms and conditions hereof and those contained in
Article 14 of the Note, the terms and conditions of Article 14 of the Note shall
control.
Article 16. NOTICES
Section 16.1.    NOTICES. (a) All notices or other written communications
hereunder shall be deemed to have been properly given (i) upon delivery, if
delivered in person with receipt acknowledged by the recipient thereof, (ii) one
(l) Business Day (defined below) after having been deposited for overnight
delivery with any reputable overnight courier service, or (iii) three (3)
Business Days after having been deposited in any post office or mail depository
regularly maintained by the U.S. Postal Service and sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:

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If to Borrower
and/or Master
Lessee:
AAT CC Bellevue, LLC
11455 El Camino Real, Suite 200
San Diego, California 92130
Attention: John W. Chamberlain and Robert Barton
Facsimile No.: (858) 350-2620
and a copy by e-mail to:
awyll@americanassets.com
 
and
 
gis@smclawoffices.com
 
 
If to Lender:
PNC Bank, National Association
c/o Midland Loan Services, Inc.
10851 Mastin
Suite # 300
Overland Park, Kansas 66210
Reference Loan Number 940960335
Facsimile No.: (913) 253-9718
 
 
with a copy to:
Alston & Bird LLP
90 Park Avenue
New York, New York 10016
Attention: Gerard Keegan, Esq.
Facsimile No.: (212) 210-9444
 
 

or addressed as such party may from time to time designate by written notice to
the other parties. Either party by notice to the other may designate additional
or different addresses for subsequent notices or communications. For purposes of
this Security Instrument, “Business Day” shall mean any day other than Saturday,
Sunday or any other day on which banks are authorized or required to close in
New York, New York, San Diego, California or Bellevue, Washington.
Article 17. SERVICE OF PROCESS
Section 17.1.    CONSENT TO SERVICE. (a) Borrower will maintain a place of
business or an agent for service of process in Bellevue, Washington and give
prompt notice to Lender of the address of such place of business and of the name
and address of any new agent appointed by it, as appropriate. Borrower further
agrees that the failure of its agent for service of process to give it notice of
any service of process will not impair or affect the validity of such service or
of any judgment based thereon. If, despite the foregoing, there is for any
reason no agent for service of process of Borrower available to be served, and
if it at that time has no place of business in Bellevue, Washington, then
Borrower irrevocably consents to service of process by registered or certified
mail, postage prepaid, to it at its address given in or pursuant to Section 16.1
above.
(b)     Borrower initially designates Paracorp Incorporated, with an address of
1780 Barnes Blvd., Tumwater, WA 98512 to receive for and on behalf of Borrower
service of process with respect to this Security Instrument and the other Loan
Documents; provided, that, no notice shall be effective unless,
contemporaneously therewith, a copy thereof is sent by nationally recognized
overnight courier (such as FedEx or UPS) to American Assets Trust, L.P.,
Attention: John W. Chamberlain and Robert Barton, with offices on the date
hereof at 11455 El Camino Real, Suite 200, San Diego, California 92130. With
respect to the aforesaid “copy” agent and address, (i) Borrower shall give
Lender prior written notice of any change in such agent and/or address, (ii) the
failure of any such agent to give Borrower notice of the same will not impair or
affect the validity of such service or of any judgment based thereon and (iii)
if, despite the foregoing, there is for any reason no such agent available to
receive said copy, then Borrower irrevocably consents to service of process by
registered or certified mail, postage prepaid, to it at its address given in or
pursuant to Section 16.1 above.

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Article 18. APPLICABLE LAW
Section 18.1.    CHOICE OF LAW. THIS SECURITY INSTRUMENT SHALL BE DEEMED TO BE A
CONTRACT ENTERED INTO PURSUANT TO THE LAWS OF THE STATE OF WASHINGTON AND SHALL
IN ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF WASHINGTON AND APPLICABLE FEDERAL LAWS OF THE UNITED
STATES OF AMERICA.
Section 18.2.    USURY LAWS. This Security Instrument and the Note are subject
to the express condition that at no time shall Borrower be obligated or required
to pay interest on the Debt at a rate which could subject the holder of the Note
to either civil or criminal liability as a result of being in excess of the
maximum interest rate which Borrower is permitted by Applicable Law to contract
or agree to pay. If by the terms of this Security Instrument or the Note,
Borrower is at any time required or obligated to pay interest on the Debt at a
rate in excess of such maximum rate, the rate of interest under the Security
Instrument and the Note shall be deemed to be immediately reduced to such
maximum rate and the interest payable shall be computed at such maximum rate and
all prior interest payments in excess of such maximum rate shall be applied and
shall be deemed to have been payments in reduction of the principal balance of
the Note. All sums paid or agreed to be paid to Lender for the use, forbearance,
or detention of the Debt shall, to the extent permitted by Applicable Law, be
amortized, prorated, allocated, and spread throughout the full stated term of
the Note until payment in full so that the rate or amount of interest on account
of the Debt does not exceed the maximum lawful rate of interest from time to
time in effect and applicable to the Debt for so long as the Debt is
outstanding.
Section 18.3.    PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers and
remedies provided in this Security Instrument may be exercised only to the
extent that the exercise thereof does not violate any applicable provisions of
law and are intended to be limited to the extent necessary so that they will not
render this Security Instrument invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any Applicable Law. If any
term of this Security Instrument or any application thereof shall be invalid or
unenforceable, the remainder of this Security Instrument and any other
application of the term shall not be affected thereby.
Article 19. SECONDARY MARKET
Section 19.1.    TRANSFER OF LOAN. Lender may, at any time following the initial
funding of the Loan, enter into any Secondary Market Transaction, sell, transfer
or assign any or all servicing rights with respect to the Loan and/or or issue
Securities (as defined below) in connection therewith. Lender may forward to any
Rating Agency, each actual or potential purchaser, transferee, assignee,
servicer, participant or investor in any Secondary Market Transaction
(collectively, the “Investor” and the “Investors”), all documents and
information which Lender now has or may hereafter acquire relating to the Debt,
Sponsor, Indemnitor, Borrower, and the Property, whether furnished by Borrower,
or otherwise, as Lender determines necessary or desirable. Subject to any
specific limitations contained herein, Borrower agrees to reasonably cooperate
with Lender in connection with any Secondary Market Transaction, including,
without limitation, the delivery of an estoppel certificate in accordance
therewith, and such other documents as may be reasonably requested by Lender.
Borrower shall also furnish (and Borrower consents to Lender furnishing) to such
Investors or Rating Agencies any and all information concerning the Property,
the Leases, the financial condition of Borrower, Indemnitor or Sponsor as may be
requested by Lender, any Investor or Rating Agency in connection with any
Secondary Market Transaction. Lender may, from time to time, retain or assign
responsibility for servicing the Note, this Security Instrument, and the other
Loan Documents, or may delegate some or all of such responsibility and/or
obligations to a servicer including, but not limited to, any subservicer,
special servicer or master servicer (each of the forgoing, collectively and as
applicable, “Servicer”); provided, however, that (I) Borrower shall only be
required to deal with one Servicer designated from time to time with respect to
any consents, approvals, notices, required from, or to, Lender pursuant to the
Loan Documents (it being understood that other Servicers may replace and/or
otherwise succeed such Servicer and any Servicer may need to consult with other
Persons that hold a portion of Lender's rights and obligations under the Loan or
with the Rating Agencies in connection with any such consent, approval or
notice), (II) the time

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periods for Lender approvals under the Loan Documents (to the extent applicable)
shall not be increased and Borrower shall not be required to pay multiple fees
and expenses (or higher fees and expenses) if more than one Servicer is
consulted by such Servicer and (III) other than Borrower’s right to refuse to
deal with multiple Servicers and/or to pay the fees of multiple Servicers, in
each case, in a manner consistent with the foregoing, the failure of Lender or
any Servicer to comply with the provisions of this sentence shall not otherwise
waive, abrogate or otherwise affect Borrower's other obligations hereunder or
any of the other Loan Documents. Lender may make such assignment or delegation
on behalf of the Investors if the Note is sold or this Security Instrument or
the other Loan Documents are assigned. All references to Lender herein shall
refer to and include any such servicer to the extent applicable.
Section 19.2.    CONVERSION TO REGISTERED FORM. At the request and the expense
of Lender, Borrower shall appoint, as its agent, a registrar and transfer agent
(the “Registrar”) reasonably acceptable to Lender which shall maintain, subject
to such reasonable regulations as it shall provide, such books and records as
are necessary for the registration and transfer of the Note in a manner that
shall cause the Note to be considered to be in registered form for purposes of
Section 163(f) of the Code. The option to convert the Note into registered form
once exercised may not be revoked. Any agreement setting out the rights and
obligation of the Registrar shall be subject to the reasonable approval of
Lender. Borrower may revoke the appointment of any particular Person as
Registrar, effective upon the effectiveness of the appointment of a replacement
Registrar. The Registrar shall not be entitled to any fee from Borrower or
Lender or any other lender in respect of transfers of the Note and Security
Instrument (other than Taxes and governmental charges and fees).
Section 19.3.    COOPERATION. Borrower acknowledges that Lender shall have the
right to (a) sell or otherwise transfer the Loan (or any portion thereof and/or
interest therein), (b) to sell participation interests in the Loan (or any
portion thereof and/or interest therein) or (c) to securitize the Loan (or any
portion thereof and/or interest therein) in a single asset securitization or a
pooled asset securitization. The transaction referred to in clauses (a), (b) and
(c) above shall hereinafter be referred to collectively as “Secondary Market
Transactions” and the transactions referred to in clause (c) shall hereinafter
be referred to as a “Securitization”. Any certificates, notes or other
securities issued in connection with a Securitization are hereinafter referred
to as “Securities”. Borrower shall cooperate reasonably and in good faith with
Lender in effecting any such Secondary Market Transaction and shall cooperate
reasonably and in good faith to implement all requirements imposed by any Rating
Agencies or Investors in connection therewith. Without limitation of the
foregoing, in connection with any Secondary Market Transaction, Borrower agrees,
upon Lender’s written request, to (A) obtain opinions of counsel, which may be
relied upon by Lender, the Rating Agencies and their respective counsel, agents
and representatives, as to matters of Delaware and federal bankruptcy law
relating to limited liability companies in a form and from counsel reasonably
acceptable to Lender, (B) amend and/or supplement the Independent Director
provisions provided herein and in Borrower’s, Master Lessee’s (if the Master
Lease Termination has not occurred) and SPE Component Entity’s organizational
documents, in each case, for the sole purpose of adding a second Independent
Director in accordance with the applicable requirements of the Rating Agencies
(such event, the “Second ID Event”) and (C) enter into and effectuate all
structural or other changes to the Loan (including delivery of one or more new
component notes to replace the Note or modify the Note to reflect multiple
components of the Loan and such new notes or modified note may have different
interest rates and amortization schedules), modifications to any Loan Documents,
delivery of opinions of counsel acceptable to the Rating Agencies or Investors
and addressing such matters as the Rating Agencies or Investors may require;
provided, however, notwithstanding anything to the contrary in this Security
Instrument, the Note, or the other Loan Documents, Borrower shall not be
required to modify any Loan Documents (or otherwise take any action) which would
(i) modify the initial weighted average interest rate payable under the Note,
(ii) modify the stated maturity of the Note, (iii) modify the aggregate
amortization of principal of the Note, (iv) modify any other material economic
term of the Loan, (v) decrease the time periods during which Borrower is
permitted to perform its obligations under this Security Instrument or any of
the other Loan Documents, or (vi) otherwise increase Borrower’s or Indemnitor’s
obligations or decrease any of their rights or protections in any material
respect under the Note, this Security Instrument or any of the other Loan
Documents, in each case, except as otherwise expressly permitted herein.
Borrower shall provide such information, documents and agreements relating to
Borrower, Indemnitor, Sponsor, the Property, the Property Documents and any
tenants of the Improvements as Lender may reasonably request in connection with
a Secondary Market Transaction. Lender shall

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have the right to provide to Investors or Rating Agencies any information in its
possession, including, without limitation, financial statements relating to
Borrower, Sponsor, Indemnitor, the Property and any tenant of the Improvements.
Borrower acknowledges that certain information regarding the Loan and the
parties thereto, Sponsor and the Property may be included in Disclosure
Documents (defined below) 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”), and may be made available to Investors, the Rating
Agencies, and service providers relating to any Secondary Market Transaction.
With respect to Borrower’s cooperation in connection with any Secondary Market
Transaction under this Article 19, Lender shall pay its own costs and expenses
and shall, except to the extent incurred in connection with a Second ID Event,
reimburse Borrower for Borrower’s initial (as opposed to ongoing), reasonable,
demonstrable, out of pocket, third party costs and expenses incurred as a direct
result of such cooperation (such costs and expenses, the “Initial Cooperation
Costs”), which Initial Cooperation Costs shall be deemed to include those
incurred in evaluating and responding to any applicable cooperation requests and
negotiating and documenting the same.
Section 19.4.     PROVIDED INFORMATION; LIABILITY.
(a)     Borrower shall indemnify Lender and its officers, directors, partners,
employees, representatives, agents and affiliates against any losses, claims,
damages or liabilities (collectively, the “Liabilities”) to which Lender and/or
its officers, directors, partners, employees, representatives, agents and/or
affiliates may become subject in connection with any Disclosure Document and/or
any Covered Rating Agency Information, in each case, insofar as such Liabilities
arise out of or are based upon any untrue statement of any material fact in the
Provided Information and/or arise out of or are based upon the omission to state
a material fact in the Provided Information required to be stated therein or
necessary in order to make the statements in the applicable Disclosure Document
and/or Covered Rating Agency Information, in light of the circumstances under
which they were made, not misleading.
(b)     The liabilities and obligations of both Borrower and Lender under this
Section 19.4 shall survive the termination of this Security Instrument and the
satisfaction and discharge of the Debt. Failure by Borrower and/or any Borrower
Party to promptly comply with this Article 19 shall, at Lender’s option,
constitute a breach of the terms thereof and/or an Event of Default. Borrower
(on its own behalf and on behalf of each Borrower Party) hereby expressly
authorizes and appoints Lender its attorney-in-fact to take any actions required
of any Borrower Party under this Article 19 in the event any Borrower Party
fails to do the same, which power of attorney shall be irrevocable and shall be
deemed to be coupled with an interest.
(c)     As used herein, the term (i) “Borrower Party” and “Borrower Parties”
shall mean each of Borrower, Sponsor and Guarantor; (ii) “Covered Rating Agency
Information” shall mean any Provided Information furnished to the Rating
Agencies in connection with issuing, monitoring and/or maintaining the
Securities; (iii) “Disclosure Documents” shall mean, collectively and as
applicable, any offering circular, prospectus, prospectus supplement, private
placement memorandum or other offering document, in each case, in connection
with a Securitization; and (iv) “Provided Information” shall mean any
information provided by Borrower, Sponsor or Guarantor and/or on behalf of any
of the foregoing Persons by their respective agents or representatives in
connection with the Loan, the Property, such Person and/or any related matter or
Person.
(d)         AAI Sponsor shall not be required to disclose any information which
would violate any applicable securities regulations; provided, that, with
respect to such information, AAI Sponsor and Borrower shall (i) provide Lender
the legal basis as to why such disclosure would so violate securities
regulations together with any additional background related thereto as Lender
shall reasonably require and (ii) reasonably cooperate with Lender to disclose
all or a portion of such information in an manner which would not violate any
applicable securities law regulations.
Section 19.5.     DISCLOSURE OF INFORMATION. Notwithstanding anything to the
contrary contained herein or in any other Loan Document, (a) each of Borrower
and Lender shall be permitted to make disclosures regarding

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the Loan (including, without limitation, any information obtained and/or
provided in connection therewith) in connection with their respective ordinary
course reporting under applicable laws (including, without limitation,
applicable securities laws), to their respective investors or regulators and/or
as may be required by applicable law, in each case, without the approval of the
other Person and (b) if the Rating Agencies hired to rate the Securities and/or
any Investor request that Lender and/or Servicer approve the release by such
Person(s) to the General Public of any non-public information relating to
Sponsor and/or pertaining to the financial performance of the Property that has
been previously identified by Borrower to Lender in writing as being
confidential or proprietary (the “Identified Information”), Lender and/or
Servicer shall not consent to such release without the prior, good faith and
reasonable written consent of Borrower; provided, however, in no event shall
Lender or Servicer be prohibited from disclosing, or consenting to the
disclosure of any information (including, without limitation, any Identified
Information) in connection with any Secondary Market Transaction (including,
without limitation, to any Investor and/or any accountants, legal counsel and
other similar agents of any Investor) or any applicable legal or regulatory
requirement. As used herein, the term “General Public” shall mean Persons in the
general public or population and shall not be deemed to include any Servicer,
Lender, Investors, Rating Agencies, governmental or quasi-governmental and
regulatory authorities, the direct and indirect constituent owners of such
Persons, officers, directors or affiliates of such Persons or, in each case, any
accountants, legal counsel and other similar agents of any of the foregoing.
Article 20. COSTS
Section 20.1.    PERFORMANCE AT BORROWER’S EXPENSE.
(a)    Subject to any applicable express limitations set forth herein and/or in
the other Loan Documents, Borrower covenants and agrees to pay its own costs and
expenses and pay, or, if Borrower fails to pay, to reimburse, Lender, upon
receipt of written notice from Lender (but again subject to the express
limitations set forth herein and/or in the other Loan Documents), for Lender’s
reasonable costs and expenses (including reasonable, actual attorneys’ fees and
disbursements) in each case, incurred by Lender in accordance with this Security
Instrument or the other Loan Documents in connection with (i) the preparation,
negotiation, execution and delivery of this Security Instrument, the Note and
the other Loan Documents and the consummation of the transactions contemplated
hereby and thereby and all the costs of furnishing all opinions by counsel for
Borrower; (ii) Borrower’s ongoing performance of and compliance with Borrower’s
respective agreements and covenants contained in this Security Instrument, the
Security Instrument, the Note and the other Loan Documents on its part to be
performed or complied with after the Closing Date, including, without
limitation, confirming compliance with environmental and insurance requirements;
(iii) the negotiation, preparation, execution and delivery of any consents,
amendments, waivers or other modifications to this Security Instrument, the Note
and the other Loan Documents and any other documents or matters requested by
Lender; (iv) securing Borrower’s compliance with any requests made pursuant to
the provisions of this Security Instrument or the other Loan Documents; (v) the
filing and recording fees and expenses, title insurance and reasonable fees and
expenses of counsel for providing to Lender all required legal opinions, and
other similar expenses incurred in creating and perfecting the lien in favor of
Lender pursuant to this Security Instrument, the Security Instrument, the Note
and the other Loan Documents; (vi) enforcing or preserving any rights, in
response to third party claims or the prosecuting or defending of any action or
proceeding or other litigation, in each case against, under or affecting
Borrower, this Security Instrument, the Note, the other Loan Documents, the
Property, or any other security given for the Loan; and (vii) enforcing any
obligations of or collecting any payments due from Borrower under this Security
Instrument, the Note and the other Loan Documents or with respect to the
Property or in connection with any refinancing or restructuring of the credit
arrangements provided under this Security Instrument and the other Loan
Documents in the nature of a “work-out” or of any insolvency or bankruptcy
proceedings (which such costs and expenses shall be deemed to include, without
limitation and in each case, any special servicing fees, liquidation fees,
modification fees, work-out fees and other similar costs or expenses payable to
any servicer, trustee and/or special servicer of the Loan (or any portion
thereof and/or interest therein)); provided, however, that Borrower shall not be
liable for the payment of any such costs and expenses to the extent the same
arise by reason of the gross negligence, illegal acts, fraud or willful
misconduct of Lender.

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(b)    Borrower acknowledges and confirms that Lender may (subject to any
limitations contained elsewhere in this Security Instrument) impose certain
reasonable administrative, processing and/or commitment fees in connection with
(a) the extension, renewal, modification, amendment and termination of the Loan,
(b) the release or substitution of collateral therefor, (c) if an Event of
Default occurs and the Loan is transferred to a special servicer, (d) obtaining
certain consents, waivers and approvals required hereunder (including, without
limitation, Rating Agency Confirmations), and/or (e) the review of any Major
Lease, proposed Major Lease or any other Lease for which Lender’s approval is
required hereunder or the negotiation of material modifications to any SNDA (as
provided above). Borrower further acknowledges and confirms that it shall be
responsible for the payment of all costs of reappraisal of the Property or any
part thereof required by law, regulation, or any governmental or quasi
governmental authority. Subject to any applicable express limitations set forth
herein and/or in the other Loan Documents, Borrower hereby acknowledges and
agrees to pay, immediately, with or without demand, all such fees (as the same
may be increased or decreased from time to time), and any additional fees of a
similar type or nature which may be reasonably imposed by Lender from time to
time, upon the occurrence of any Event of Default. Wherever it is provided for
herein that Borrower pay any costs and expenses, such costs and expenses shall
include, but not be limited to, all reasonable legal fees and disbursements of
Lender, whether retained firms, the reimbursement for the expenses of in house
staff or otherwise.
Section 20.2.    ATTORNEYS’ FEES FOR ENFORCEMENT. (a) Subject to any applicable
express limitations set forth herein and/or in the other Loan Documents,
Borrower shall pay all reasonable legal fees incurred by Lender in connection
with the items set forth in Section 20.1 above and (b) Borrower shall pay to
Trustee or Lender on demand any and all expenses, including reasonable legal
expenses and attorneys’ fees, reasonably incurred or paid by Trustee or Lender
in protecting its interest in the Property or Personal Property or in collecting
any amount payable hereunder or in enforcing its rights hereunder with respect
to the Property or Personal Property, whether or not any legal proceeding is
commenced hereunder or thereunder and whether or not any default or Event of
Default shall have occurred and is continuing, together with interest thereon at
the Default Rate from the date paid or incurred by Trustee or Lender until such
expenses are paid by Borrower.
Section 20.3.     RATING AGENCY COSTS. In connection with any Rating Agency
Confirmation or other Rating Agency consent, approval or review required
hereunder (other than the initial review of the Loan by the Rating Agencies in
connection with a Securitization, which cost shall be borne by Lender), Borrower
shall pay all of the costs and expenses of Lender, any servicer and each Rating
Agency in connection therewith, and, if applicable, shall pay any fees imposed
by any Rating Agency in connection therewith.
Section 20.4.     RESERVES/ESCROWS. From and after a Securitization and to the
extent required by Lender, all funds held by Lender or Servicer in escrow or
pursuant to reserves in accordance with this Security Instrument and the other
Loan Documents shall be deposited in “eligible accounts” at “eligible
institutions” and, to the extent applicable, invested in “permitted investments”
as then defined and required by the Rating Agencies.
Article 21. DEFINITIONS
Section 21.1.    GENERAL DEFINITIONS. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Security Instrument may be used interchangeably in singular or plural form
and the word “Borrower” shall mean “each Borrower, each party comprising
Borrower (if Borrower consists of more than one Person) and any subsequent owner
or owners of the Property or any part thereof or any interest therein”; the word
“Lender” shall mean “Lender and any subsequent holder of the Note”; the word
“Note” shall mean “the Note and any other evidence of indebtedness secured by
this Security Instrument”; the word “Property” shall include any portion of the
Property and any interest therein, and the phrases “attorneys’ fees” and
“counsel fees” shall include any and all reasonable attorneys’, paralegal and
law clerk fees and disbursements, including, but not limited to, fees and
disbursements at the pre trial, trial and appellate levels incurred or paid by
Lender in protecting its interest in the Property, the Leases and the Rents and
enforcing its rights hereunder.

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Article 22. MISCELLANEOUS PROVISIONS
Section 22.1.    NO ORAL CHANGE. This Security Instrument, and any provisions
hereof, may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Borrower or
Lender, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.
Section 22.2.    LIABILITY. If there is more than one Borrower, the obligations
and liabilities of each such Person hereunder shall be joint and several. This
Security Instrument shall be binding upon and inure to the benefit of Borrower
and Lender and their respective successors and assigns forever.
Section 22.3.    INAPPLICABLE PROVISIONS. If any term, covenant or condition of
the Note or this Security Instrument is held to be invalid, illegal or
unenforceable in any respect, the Note and this Security Instrument shall be
construed without such provision.
Section 22.4.    HEADINGS, ETC. The headings and captions of various Sections of
this Security Instrument are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
Section 22.5.    DUPLICATE ORIGINALS; COUNTERPARTS. This Security Instrument may
be executed in any number of duplicate originals and each duplicate original
shall be deemed to be an original. This Security Instrument may be executed in
several counterparts, each of which counterparts shall be deemed an original
instrument and all of which together shall constitute a single Security
Instrument. The failure of any party hereto to execute this Security Instrument,
or any counterpart hereof, shall not relieve the other signatories from their
obligations hereunder.
Section 22.6.    NUMBER AND GENDER. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.
Section 22.7.    SUBROGATION. If any or all of the proceeds of the Note have
been used to extinguish, extend or renew any indebtedness heretofore existing
against the Property, then, to the extent of the funds so used, Lender shall be
subrogated to all of the rights, claims, liens, titles, and interests existing
against the Property heretofore held by, or in favor of, the holder of such
indebtedness and such former rights, claims, liens, titles, and interests, if
any, are not waived but rather are continued in full force and effect in favor
of Lender and are merged with the lien and security interest created herein as
cumulative security for the repayment of the Debt, the performance and discharge
of Borrower’s obligations hereunder, under the Note and the other Loan Documents
and the performance and discharge of the Other Obligations.
Section 22.8.    ENTIRE AGREEMENT. The Note, this Security Instrument and the
other Loan Documents constitute the entire understanding and agreement between
Borrower and Lender with respect to the transactions arising in connection with
the Debt and supersede all prior written or oral understandings and agreements
between Borrower and Lender with respect thereto. Borrower hereby acknowledges
that, except as incorporated in writing in the Note, this Security Instrument
and the other Loan Documents, there are not, and were not, and no Persons are or
were authorized by Lender to make, any representations, understandings,
stipulations, agreements or promises, oral or written, with respect to the
transaction which is the subject of the Note, this Security Instrument and the
other Loan Documents.
Section 22.9.    TAX DISCLOSURE. Notwithstanding anything herein or in any other
Loan Document to the contrary, except as reasonably necessary to comply with
applicable securities laws, each party (and each employee, representative or
other agent of each party) hereto may disclose to any and all Persons, without
limitation of any kind, any information with respect to the United States
federal income “tax treatment” and “tax structure” (in each case, within the
meaning of Treasury Regulation Section 1.6011-4) of the transactions
contemplated hereby and all materials

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of any kind (including opinions or other tax analyses) that are provided to such
parties (or their representatives) relating to such tax treatment and tax
structure; provided, that with respect to any document or similar item that in
either case contains information concerning the tax treatment or tax structure
of the transaction as well as other information, this sentence shall only apply
to such portions of the document or similar item that relate to the United
States federal income tax treatment or tax structure of the transactions
contemplated hereby.
Section 22.10.    SERVICER FEES. Lender and Borrower hereby each acknowledge and
agree that the general schedule of servicing fees attached hereto as Schedule 2
shall be deemed to list the reasonable fees customarily charged by lenders or
servicers of secondary market loans similar to the Loan for actions specified on
the aforesaid Schedule (barring any atypical or extraordinary
circumstances).    
[PROVISIONS CONTINUE ON FOLLOWING PAGE]

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Section 22.11.    DUE ON SALE/ENCUMBRANCE. Borrower expressly agrees that upon a
violation of Article 8 of this Security Instrument by Borrower and acceleration
of the principal balance of the Note because of such violation, Borrower will
pay all sums required to be paid in connection with a prepayment, if any, as
described in the Note, herein imposed on prepayment after an Event of Default
and acceleration of the principal balance. Borrower expressly acknowledges that
Borrower has received adequate consideration for the foregoing agreement.

 
 
 
AAT CC BELLEVUE, LLC, a Delaware limited liability company
 
 
 
 
 
 
 
 
 
 
By:
AAT CC Bellevue Holdings, LLC, a Delaware limited liability company, its Sole
Member
 
 
 
 
 
 
 
 
 
 
 
By:
First American Exchange Company, LLC, its Sole Member
 
 
 
 
 
 
 
 
 
 
 
 
By:
/s/ Anthony Alosi
 
 
 
 
 
 
Name: Anthony Alosi
 
 
 
 
 
 
Title: Senior Vice President

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Article 23. TRUSTEE PROVISIONS
Section 23.1.         CONCERNING THE TRUSTEE. Trustee shall be under no duty to
take any action hereunder except as expressly required hereunder or by law, or
to perform any act which would involve Trustee in any expense or liability or to
institute or defend any suit in respect hereof, unless properly indemnified to
Trustee's reasonable satisfaction. Trustee, by acceptance of this Security
Instrument, covenants to perform and fulfill the trusts herein created, being
liable, however, only for gross negligence or willful misconduct, and hereby
waives any statutory fee and agrees to accept reasonable compensation, in lieu
thereof, for any services rendered by Trustee in accordance with the terms
hereof. Trustee may resign at any time upon giving thirty (30) days' notice to
Borrower and to Lender. Lender may remove Trustee at any time or from time to
time and select a successor trustee. In the event of the death, removal,
resignation, refusal to act, or inability to act of Trustee, or in its sole
discretion for any reason whatsoever Lender may, without notice and without
specifying any reason therefor and without applying to any court, select and
appoint a successor trustee, by an instrument recorded wherever this Security
Instrument is recorded and all powers, rights, duties and authority of Trustee,
as aforesaid, shall thereupon become vested in such successor. Such substitute
trustee shall not be required to give bond for the faithful performance of the
duties of Trustee hereunder unless required by Lender. The procedure provided
for in this paragraph for substitution of Trustee shall be in addition to and
not in exclusion of any other provisions for substitution, by law or otherwise.
Section 23.2.         TRUSTEE’S FEES. Borrower shall pay all reasonable costs,
fees and expenses incurred by Trustee and Trustee's agents and counsel in
connection with the performance by Trustee of Trustee's duties hereunder and all
such costs, fees and expenses shall be secured by this Security Instrument, but
not in excess of the maximum amounts legally permitted under applicable law.
Section 23.3.         CERTAIN RIGHTS. With the approval of Lender, Trustee shall
have the right to take any and all of the following actions: (i) to select,
employ, and advise with counsel (who may be, but need not be, counsel for
Lender) upon any matters arising hereunder, including the preparation,
execution, and interpretation of the Note, this Security Instrument or the other
Loan Documents, and shall be fully protected in relying as to legal matters on
the advice of counsel, (ii) to execute any of the trusts and powers hereof and
to perform any duty hereunder either directly or through his/her agents or
attorneys, (iii) to select and employ, in and about the execution of his/her
duties hereunder, suitable accountants, engineers and other experts, agents and
attorneys-in-fact, either corporate or individual, not regularly in the employ
of Trustee, and Trustee shall not be answerable for any act, default,
negligence, or misconduct of any such accountant, engineer or other expert,
agent or attorney-in-fact, if selected with reasonable care, or for any error of
judgment or act done by Trustee in good faith, or be otherwise responsible or
accountable under any circumstances whatsoever, except for Trustee's gross
negligence or bad faith, and (iv) any and all other lawful action as Lender may
instruct Trustee to take to protect or enforce Lender's rights hereunder.
Trustee shall not be personally liable in case of entry by Trustee, or anyone
entering by virtue of the powers herein granted to Trustee, upon the Property
for debts contracted for or liability or damages incurred in the management or
operation of the Property. Trustee shall have the right to rely on any
instrument, document, or signature authorizing or supporting an action taken or
proposed to be taken by Trustee hereunder, believed by Trustee in good faith to
be genuine. Trustee shall be entitled to reimbursement for actual expenses
incurred by Trustee in the performance of Trustee's duties hereunder and to
reasonable compensation for such of Trustee's services hereunder as shall be
rendered.
Section 23.4.         RETENTION OF MONEY. All moneys received by Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated in any manner from any
other moneys (except to the extent required by applicable law) and Trustee shall
be under no liability for interest on any moneys received by Trustee hereunder.
Section 23.5.         PERFECTION OF APPOINTMENT. Should any deed, conveyance, or
instrument of any nature be required from Borrower by any Trustee or substitute
trustee to more fully and certainly vest in and confirm to Trustee or substitute
trustee such estates rights, powers, and duties, then, upon request by Trustee
or substitute

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trustee, any and all such deeds, conveyances and instruments shall be made,
executed, acknowledged, and delivered and shall be caused to be recorded and/or
filed by Borrower.
Section 23.6.         SUCCESSION INSTRUMENTS. Any substitute trustee appointed
pursuant to any of the provisions hereof shall, without any further act, deed,
or conveyance, become vested with all the estates, properties, rights, powers,
and trusts of its or his/her predecessor in the rights hereunder with like
effect as if originally named as Trustee herein; but nevertheless, upon the
written request of Lender or of the substitute trustee, Trustee ceasing to act
shall execute and deliver any instrument transferring to such substitute
trustee, upon the trusts herein expressed, all the estates, properties, rights,
powers, and trusts of Trustee so ceasing to act, and shall duly assign, transfer
and deliver any of the property and moneys held by such Trustee to the
substitute trustee so appointed in Trustee's place.
Article 24. SPECIAL STATE OF WASHINGTON PROVISIONS
Section 24.1.        CONFLICTS. In the event of any conflict between the
provisions of this Article 24 and any provision of this Security Instrument or
the other Loan Documents, then the provisions of this Article 24 shall control
and be binding.
Section 24.2.          POWER OF SALE.
(a)         In addition to all other remedies of Lender and Trustee, upon the
occurrence of any Event of Default, Lender shall have the right to have the
Property sold by the Trustee by its power of sale pursuant to the provisions of
the laws of the State of Washington then in effect with respect to foreclosure
pursuant to Trustee’s sale under deeds of trust or, at Lender’s option, to have
this Security Instrument foreclosed in judicial proceedings as a mortgage, and
Lender and Trustee shall have the right to exercise all other remedies provided
for herein or by law, including the Uniform Commercial Code. All rights and
remedies of Lender and Trustee are cumulative. Lender and Trustee may exercise
rights and remedies at such times and in such order as Lender may elect in
accordance with Applicable Law. In the exercise of rights and remedies,
Property, whether real or personal, and any portions thereof, may be sold,
whether at Trustee’s sale or execution sale after judicial foreclosure or in any
other manner permitted by law, in one parcel or several parcels as Lender may
elect. Borrower agrees that a sale pursuant to the power of sale (or sheriff’s
sale pursuant to judicial foreclosure) of all the Property as real estate
constitutes a commercially reasonable disposition thereof, but that with respect
to all of any part of the Property which may be personal property, Trustee shall
have and exercise, at Beneficiary’s sole election, all the rights and remedies
of a secured party under the Uniform Commercial Code. Whenever notice is
permitted or required hereunder or under the Uniform Commercial Code, ten (10)
days shall be deemed reasonable. If this Security Instrument is foreclosed as a
mortgage in judicial proceedings, any judgment recovered, including a deficiency
judgment if Lender shall be entitled to a deficiency, shall bear at the rate
applicable to sums secured hereby after an Event of Default, not to exceed,
however, the highest rate permitted by applicable law. Notwithstanding the
foregoing, Lender shall not to foreclose on any fixtures, equipment or Personal
Property prior to the expiration of the reinstatement period as provided in RCW
§ 61.24.090, if applicable.
(b)         If Lender invokes the power of sale, Lender shall send written
notice as prescribed by applicable law to Borrower and to the other persons
prescribed by applicable law of the occurrence of an event of default and of
Lender’s election to cause the Property to be sold. Trustee shall give notice of
sale by public advertisement as Trustee deems proper to protect the interests of
Borrower and Lender. After the time required by applicable law, Trustee, without
demand on Borrower, shall sell the Property at public auction to the highest
bidder at the time and place and under the terms designated in the notice of
sale in one or more parcels and in any order Trustee determines. Trustee may
postpone sale of all or any portion of the Property, and from time to time
thereafter may postpone such sale, as provided by statute Lender or its designee
may purchase the Property at any sale.
(c)         Trustee shall deliver to the purchaser Trustee’s deed conveying the
Property without any covenant or warranty, expressed or implied. The recitals in
the Trustee’s deed shall be prima facie evidence of the truth of the statements
made therein. Trustee shall apply the proceeds of the sale in the following
order: (1) to all expenses

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of the sale, including, but not limited to, Trustee’s fees and reasonable
attorneys’ fees, but such fees shall be limited to an amount that a judge would
set as a reasonable fee in an uncontested mortgage foreclosure action; (2) to
all sums secured by this Security Instrument; and (3) any excess to the person
or persons legally entitled to it pursuant to RCW § 61.24.080.
Section 24.3.         NO AGRICULTURAL PURPOSES. Borrower represents, warrants
and covenants that the Property is not presently nor will during the term of
this Deed of Trust be used principally or at all for agricultural or farming
purposes.
Section 24.4.         USE OF PROCEEDS. Borrower represents and warrants to
Lender that the proceeds of the Loan will be used exclusively for commercial,
business or investment purposes, and no portion thereof will be used by Borrower
for any consumer, personal, family or household purposes. Additionally, Borrower
represents and warrants to Lender that that this is not a consumer transaction,
that the Property does not constitute the homestead of Borrower or any of its
principals and that the Loan is a “commercial loan” as that term is defined in
RCW § 61.24.005 and RCW § 61.24.100.
Section 24.5.         FUTURE ADVANCES. In addition to (and without limitation
of) the foregoing described obligations, this Security Instrument also secures
future advances to Borrower, protective advances and all obligations of Borrower
to Lender, direct or indirect, absolute or contingent in an amount up to the
full amount of the Debt to the same extent as if the future obligation and/or
advance were made as of the date of this Security Instrument.
SECTION 24.6.        ACCEPTANCE AND NATURE OF DEED OF TRUST. The acceptance by
Trustee of this trust shall be evidenced when this Security Instrument, duly
executed and acknowledged, is made a public record as provided by law. The trust
created hereby is irrevocable by Borrower.
Section 24.7.     INSURANCE. Notwithstanding anything herein to the contrary,
Borrower shall, under no circumstances, provide insurance in amounts in excess
of those allowed pursuant to RCW §§ 48.27.010 and 48.27.020.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

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IN WITNESS WHEREOF, Borrower has executed this instrument the day and year first
above written.
 
 
 
AAT CC BELLEVUE, LLC, a Delaware limited liability company
 
 
 
 
 
 
 
 
 
 
By:
AAT CC Bellevue Holdings, LLC, a Delaware limited liability company, its Sole
Member
 
 
 
 
 
 
 
 
 
 
 
By:
First American Exchange Company, LLC, its Sole Member
 
 
 
 
 
 
 
 
 
 
 
 
By:
/s/ Anthony Alosi
 
 
 
 
 
 
Name: Anthony Alosi
 
 
 
 
 
 
Title: Senior Vice President

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ACKNOWLEDGMENT

STATE OF ___________
)

)ss.:
COUNTY OF _______________
)

THIS IS TO CERTIFY that on this ____ day of __________, ______, before me, the
undersigned, a notary public in and for the State of _________________ duly
commissioned and sworn, personally appeared ______________________________, to
me known to be the ___________________________ of _________________, a
_____________ that executed the within and foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of
said _________________for the uses and purposes therein mentioned, and on oath
stated that they were authorized to execute said instrument.
WITNESS my hand and official seal the day and year in this certificate first
above written.
______________________________
Signature

______________________________
Print Name:        

Notary Public in and for the state of
_________________, residing at
_____________________________
My appointment expires: _________________

[ACKNOWLEDGMENTS CONTINUE ON FOLLOWING PAGE]

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ACKNOWLEDGMENT

STATE OF ___________
)

)ss.:
COUNTY OF _______________
)

THIS IS TO CERTIFY that on this ____ day of __________, ______, before me, the
undersigned, a notary public in and for the State of _________________ duly
commissioned and sworn, personally appeared ______________________________, to
me known to be the ___________________________ of _________________, a
_____________ that executed the within and foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of
said _________________for the uses and purposes therein mentioned, and on oath
stated that they were authorized to execute said instrument.
WITNESS my hand and official seal the day and year in this certificate first
above written.
______________________________
Signature

______________________________
Print Name:

Notary Public in and for the state of
_________________, residing at
_____________________________
My appointment expires: _________________

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Schedule 1
“Trigger Period” shall mean a period (A) commencing upon the earliest of (i) the
occurrence and continuance of an Event of Default and (ii) the Debt Service
Coverage Ratio being less than 1.35 to 1.00 for the two (2) calendar quarters
immediately preceding the applicable date of determination; and (B) expiring
upon (x) with regard to any Trigger Period commenced in connection with clause
(i) above, the cure (if applicable) of such Event of Default and (y) with regard
to any Trigger Period commenced in connection with clause (ii) above, the date
that the Debt Service Coverage Ratio is equal to or greater than 1.35 to 1.00
for two (2) consecutive calendar quarters. Notwithstanding the foregoing, a
Trigger Period shall not be deemed to expire in the event that a Trigger Period
then exists for any other reason.
“Debt Service Coverage Ratio” shall mean the ratio of (a) Net Operating Income
to (b) Annual Debt Service, all as determined by Lender.
“Annual Debt Service” shall mean an imputed amount of annual debt service which
would be due assuming a mortgage constant equal to 5.72%.
“Net Operating Income” shall mean for the 12-month period immediately preceding
the date of calculation, (A) all sustainable Rents and other income received
from the Property received from tenants during such 12-month period less (B) all
Operating Expenses for such 12-month period. Notwithstanding the foregoing, any
Free Rent (as defined in the Note) constituting all or any portion of the Free
Rent Amount (as defined in the Note) shall not be deducted from sustainable
Rents for purposes of the foregoing.
“Operating Expenses” shall mean the total of all expenditures, computed in
accordance with the Approved Accounting Method, of whatever kind relating to the
operation, maintenance and management of the Property that are incurred on a
regular monthly or other periodic basis, including without limitation, (and
without duplication): (a) real estate taxes, general and special assessments or
similar charges; (b) sales, use and personal property taxes; (c) without
duplication, (i) management fees of not less than 4% of the gross income derived
from the operation of the Property (exclusive of parking operations at the
Property) and disbursements for property management services whether such
services are performed at the Property or off-site and (ii) parking management
fees of not less than 4% of the gross income derived from the operation of the
parking related activities Property and disbursements for parking management
services whether such services are performed at the Property or off-site; (d)
wages, salaries, pension costs and all fringe and other employee-related
benefits and expenses, of all employees up to and including (but not above) the
level of the on-site manager, engaged in the repair, operation and maintenance
of the Property and service to tenants and on-site personnel engaged in audit
and accounting functions performed by Borrower; (e) insurance premiums
including, but not limited to, casualty, liability, rent and fidelity insurance
premiums; (f) cost of all electricity, oil, gas, water, steam, HVAC and any
other energy, utility or similar item and overtime services, the cost of
building and cleaning supplies, and all other administrative, management,
ownership, operating, advertising, marketing and maintenance expenses incurred
by Borrower (and not paid directly by any tenant) in connection with the
operation of the Property; (g) costs of necessary cleaning, repair, replacement,
maintenance, decoration or painting of existing improvements on the Property
(including, without limitation, parking lots and roadways), of like kind or
quality or such kind or quality which is necessary to maintain the Property to
the same standards as competitive properties of similar size and location of the
Property; (h) the cost of such other maintenance materials, HVAC repairs, parts
and supplies, and all equipment to be used in the ordinary course of business,
which is not capitalized in accordance with the Approved Accounting Method; (i)
legal, accounting and other professional expenses incurred in connection with
the Property; (j) casualty losses to the extent not reimbursed by a third party;
and (k) to the extent not already included in any of (f)-(h) above, a reserve
for structural repairs, normalized leasing commissions and tenant improvements
equal to $1,299,826. The Operating Expenses shall be based on the
above-described items actually incurred or payable on an accrual basis in
accordance with the Approved Accounting Method by Borrower during the twelve
(12) month period ending one month prior to the date on which the Net Operating
Income is to be calculated, with customary adjustments for items such as taxes
and insurance which accrue but are paid periodically, as adjusted by Lender to
reflect projected adjustments for only those items which are

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definitively ascertainable and of a fixed amount (for example, real estate
taxes) for the subsequent twelve (12) month period beginning on the date on
which the Net Operating Income is to be calculated. Notwithstanding the
foregoing, the term “Operating Expenses” shall not include (i) depreciation or
amortization or any other non-cash item of expense unless approved by Lender,
(ii) interest or principal payable under the Note, fees, costs and expense
reimbursements of Lender in administering the Loan or exercising remedies under
the Note, this Security Instrument or the other Loan Documents or any other
payments required to be made by Borrower to Lender under any Loan Documents; or
(iii) any expenditure properly treated as a capital item under the Approved
Accounting Method.

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Schedule 2

SCHEDULE OF SERVICING FEES

Servicing Action
Estimated Servicing Fee
 
 
Disbursements from Reserve Accounts
$200 - $500
 
 
Lease Approvals
$500 - $4,000 (based upon transactional and/or legal complexity)
 
 
SNDA Approvals
$500 – $2,000 (based upon transactional and/or legal complexity)

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EXHIBIT A
LEGAL DESCRIPTION

(attached hereto)

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EXHIBIT B

FORM OF SNDA

(attached hereto)

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____________________________________________________
(Lender)
- and -
[_______________________]
(Tenant)
- and –
[____________________________________]
(Landlord)

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SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT

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Dated:    
Location:    
Section:    
Block:    
Lot:    
City:    
County:    
PREPARED BY AND UPON
RECORDATION RETURN TO:
_________________________
_________________________
_________________________
Attention: ________________    

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SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”)
is made as of the ______ day of ________________, 200[__] by and among
______________________________, a _____________________, having an address at
______________________________ (together with its successors and assigns,
“Lender”), [_______________________] (“Tenant”) and _________________________, a
Delaware limited liability company, having an address at
_________________________, _________________ (“Landlord”).
RECITALS:
A.    Lender is the present owner and holder of a certain Deed of Trust and
Security Agreement (the “Security Instrument”) given by Landlord to the trustee
named therein for the benefit of Lender which encumbers the fee estate of
Landlord in certain premises described in Exhibit A attached hereto (the
“Property”) and which secures the payment of certain indebtedness owed by
Landlord to Lender evidenced by the Note (as defined in the Security
Instrument);
B.    Tenant is the holder of a leasehold estate in a portion of the Property
under and pursuant to the provisions of a certain [Lease] dated
[_________________, 200[_] between Landlord, as landlord, and Tenant, as tenant
(the “Lease”); and
C.    Tenant has agreed to subordinate the Lease to the Security Instrument and
Lender has agreed to grant non-disturbance to Tenant under the Lease on the
terms and conditions hereinafter set forth.
AGREEMENT:
For good and valuable consideration, Tenant, Lender and Landlord agree as
follows:
1.    Subordination. The Lease and all of the terms, covenants and provisions
thereof and all rights, remedies and options of Tenant thereunder are and shall
at all times continue to be subject and subordinate to the lien and terms of the
Security Instrument, including without limitation, all renewals, increases,
modifications, spreaders, consolidations, replacements and extensions thereof
and to all sums secured thereby and advances made thereunder with the same force
and effect as if the Security Instrument had been executed, delivered and
recorded prior to the execution and delivery of the Lease.
2.    Non-Disturbance. If any action or proceeding is commenced by Lender for
the foreclosure of the Security Instrument or the sale of the Property, Tenant
shall not be named as a party therein unless such joinder shall be required by
law, provided, however, such joinder shall not result in the termination of the
Lease or disturb the Tenant’s possession or use of the premises demised
thereunder, and the sale of the Property in any such action or proceeding and
the exercise by Lender of any of its other rights under the Note or the Security
Instrument shall be made subject to all rights of Tenant under the Lease,
provided that at the time of the commencement of any such action or proceeding
or at the time of any such sale or exercise of any such other rights (a) the
term of the Lease shall have commenced pursuant to the provisions thereof, (b)
Tenant shall be in possession of the premises demised under the Lease, (c) the
Lease shall be in full force and effect and (d) Tenant shall not be in default
beyond any applicable notice and cure period under any of the terms, covenants
or conditions of the Lease or of this Agreement on Tenant’s part to be observed
or performed.
3.    Attornment. If Lender or any other subsequent purchaser of the Property
shall become the owner of the Property by reason of the foreclosure of the
Security Instrument or the acceptance of a deed or assignment in lieu of
foreclosure or by reason of any other enforcement of the Security Instrument
(Lender or such other purchaser

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being hereinafter referred as “Purchaser”), and the conditions set forth in
Section 2 above have been met at the time Purchaser becomes owner of the
Property, the Lease shall not be terminated or affected thereby but shall
continue in full force and effect as a direct lease between Purchaser and Tenant
upon all of the terms, covenants and conditions set forth in the Lease and in
that event, Tenant agrees to attorn to Purchaser and Purchaser by virtue of such
acquisition of the Property shall be deemed to have agreed to accept such
attornment, provided, however, that Purchaser shall not be (a) liable for the
failure (other than with respect to a default of a continuing nature) of any
prior landlord (any such prior landlord, including Landlord and any successor
landlord, being hereinafter referred to as a “Prior Landlord”) to perform any of
its obligations under the Lease which have accrued prior to the date on which
Purchaser shall become the owner of the Property, provided that the foregoing
shall not limit Purchaser’s obligations under the Lease to correct any
conditions of a continuing nature that (i) existed as of the date Purchaser
shall become the owner of the Property and (ii) violate Purchaser’s obligations
as landlord under the Lease; provided further, however, that Purchaser shall
have received written notice of such omissions, conditions or violations and has
had a reasonable opportunity to cure the same, all pursuant to the terms and
conditions of the Lease, (b) subject to any offsets, defenses, abatements or
counterclaims which shall have accrued in favor of Tenant against any Prior
Landlord prior to the date upon which Purchaser shall become the owner of the
Property, except for those that are specifically provided for in the Lease, (c)
liable for the return of rental security deposits, if any, paid by Tenant to any
Prior Landlord in accordance with the Lease unless such sums are actually
received by Purchaser, (d) bound by any payment of rents, additional rents or
other sums which Tenant may have paid more than one (1) month in advance to any
Prior Landlord unless (i) such sums are actually received by Purchaser or (ii)
such prepayment shall have been expressly approved of by Purchaser, (e) bound by
any agreement terminating or amending or modifying the rent, term, commencement
date or other material term of the Lease, or any voluntary surrender of the
premises demised under the Lease, made without Lender’s or Purchaser’s prior
written consent prior to the time Purchaser succeeded to Landlord’s interest
(provided, however, Purchaser's consent is not required for a termination of the
Lease exercised pursuant to the original terms of the Lease) or (f) bound by any
assignment of the Lease or sublease of the Property, or any portion thereof,
made prior to the time Purchaser succeeded to Landlord’s interest other than if
pursuant to the provisions of the Lease. In the event that any liability of
Purchaser does arise pursuant to this Agreement, such liability shall be limited
and restricted to Purchaser’s interest in the Property and shall in no event
exceed such interest. Alternatively, upon the written request of Lender or its
successors or assigns, Tenant shall enter into a new lease of the Premises with
Lender or such successor or assign for the then remaining term of the Lease,
upon the same terms and conditions as contained in the Lease (including without
limitation any renewal options), except as otherwise specifically provided in
this Agreement.
4.    Notice to Tenant. After notice is given to Tenant by Lender that the
Landlord is in default under the Note and the Security Instrument and that the
rentals under the Lease should be paid to Lender pursuant to the terms of the
assignment of leases and rents executed and delivered by Landlord to Lender in
connection therewith, Tenant shall thereafter pay to Lender or as directed by
Lender, all rentals and all other monies due or to become due to Landlord under
the Lease and Landlord hereby expressly authorizes Tenant to make such payments
to Lender and hereby releases and discharges Tenant from any liability to
Landlord on account of any such payments.
5.    Intentionally Omitted.
6.    Notice to Lender and Right to Cure. Tenant shall notify Lender of any
default by Landlord under the Lease if the default is of such a nature as to
give Tenant a right to terminate the Lease, reduce the rent or to credit or
offset any amounts against future rents, and agrees that, notwithstanding any
provisions of the Lease to the contrary, no notice of cancellation thereof or of
an abatement shall be effective unless Lender shall have received notice of
default giving rise to such cancellation or abatement and (i) in the case of any
such default that can be cured by the payment of money, until thirty (30) days
shall have elapsed following the giving of such notice or (ii) in the case of
any other such default, until a reasonable period for remedying such default
shall have elapsed following the giving of such notice, provided Lender, with
reasonable diligence, shall have commenced and continued to remedy such default
or cause the same to be remedied. Notwithstanding the foregoing, (i) Lender
shall have no obligation to cure any such default and (ii) in the event that any
aforesaid default cannot, by its nature, be cured by Lender prior to Lender’s

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gaining possession of Landlord’s interest in the Property, the aforesaid
“reasonable period for remedying such default” shall be deemed to include such
time as is required for Lender to gain possession of Tenant’s interest in the
Property.
7.    Notices. All notices or other written communications hereunder shall be
deemed to have been properly given (i) upon delivery, if delivered in person
with receipt acknowledged by the recipient thereof, (ii) one (1) Business Day
(hereinafter defined) after having been deposited for one (1) day overnight
delivery with any reputable overnight courier service, or (iii) three (3)
Business Days after having been deposited in any post office or mail depository
regularly maintained by the U.S. Postal Service and sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:

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If to Tenant:
[________________________________]

If to Lender:
__________________________
__________________________
__________________________
Attention: _________________
Facsimile No.: ______________

With a copy to:
__________________________

__________________________
__________________________

or addressed as such party may from time to time designate by written notice to
the other parties. For purposes of this Section 7, the term “Business Day” shall
mean a day on which commercial banks are not authorized or required by law to
close in the state where the Property is located. Either party by notice to the
other may designate additional or different addresses for subsequent notices or
communications.
8.    Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of Lender, Tenant and Purchaser and their respective successors and
assigns.
9.    Governing Law. This Agreement shall be deemed to be a contract entered
into pursuant to the laws of the State where the Property is located and shall
in all respects be governed, construed, applied and enforced in accordance with
the laws of the State where the Property is located.
10.    Miscellaneous. This Agreement may not be modified in any manner or
terminated except by an instrument in writing executed by the parties hereto. If
any term, covenant or condition of this Agreement is held to be invalid, illegal
or unenforceable in any respect, this Agreement shall be construed without such
provision. This Agreement may be executed in any number of duplicate originals
and each duplicate original shall be deemed to be an original. This Agreement
may be executed in several counterparts, each of which counterparts shall be
deemed an original instrument and all of which together shall constitute a
single Agreement. The failure of any party hereto to execute this Agreement, or
any counterpart hereof, shall not relieve the other signatories from their
obligations hereunder. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms, and
the singular form of nouns and pronouns shall include the plural and vice versa.
11.    Joint and Several Liability. If there is more than one Tenant under the
Lease, the obligations and liabilities of each hereunder shall be joint and
several.
12.        Definitions. The term “Lender” as used herein shall include the
successors and assigns of Lender and any person, party or entity which shall
become the owner of the Property by reason of a foreclosure of the Security
Instrument or the acceptance of a deed or assignment in lieu of foreclosure or
otherwise. The term “Landlord” as used herein shall mean and include the present
landlord under the Lease and such landlord’s predecessors and successors in
interest under the Lease, but shall not mean or include Lender. The term
“Property” as used herein shall mean the Property, the improvements now or
hereafter located thereon and the estates therein encumbered by the Security
Instrument.

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13.    Limitations on Purchaser’s Liability. In no event shall the Purchaser,
nor any heir, legal representative, successor, or assignee of the Purchaser have
any personal liability for the obligations of Landlord under the Lease and
should the Purchaser succeed to the interests of the Landlord under the Lease,
Tenant shall look only to the estate and property of any such Purchaser in the
Property for the satisfaction of Tenant’s remedies for the collection of a
judgment (or other judicial process) requiring the payment of money in the event
of any default by any Purchaser as landlord under the Lease, and no other
property or assets of any Purchaser shall be subject to levy, execution or other
enforcement procedure for the satisfaction of Tenant’s remedies under or with
respect to the Lease; provided, however, that the Tenant may exercise any other
right or remedy provided thereby or by law in the event of any failure by
Landlord to perform any such material obligation. Notwithstanding the foregoing,
Tenant may offset against rent due under the Lease the amount of any judgment
obtained against any Purchaser.
14.    Estoppel Certificate. Tenant, shall, from time to time, within
[_________] Business Days after request by Lender, execute, acknowledge and
deliver to Lender a statement by Tenant certifying (a) that the Lease is
unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect as modified and stating the
modifications), (b) the amounts of fixed rent, additional rent, or other sums,
if any, which are payable in respect of the Lease and the commencement date and
expiration date of the Lease, (c) the dates to which the fixed rent, additional
rent, and other sums which are payable in respect to the Lease have been paid,
(d) whether or not Tenant is entitled to any then presently accrued credits or
offsets against rent, and, if so, the reasons therefor and the amount thereof,
(e) that to Tenant's actual knowledge (without investigation) it is not in
default in the performance of any of its obligations under the Lease and no
event has occurred which, with the giving of notice or the passage of time, or
both, would constitute such a default, (f) whether or not, to the actual
knowledge (without investigation) of the person certifying on behalf of Tenant,
Landlord is in default in the performance of any of its obligations under the
Lease, and, if so, specifying the same, (g) whether or not, to the actual
knowledge (without investigation) of such person, any event has occurred which
with the giving of such notice or passage of time, or both would constitute such
a default, and, if so, specifying each such event, and (h) whether or not, to
the actual knowledge (without investigation) of such person, Tenant has any then
presently accrued claims, defenses or counterclaims against Landlord under the
Lease, and, if so, specifying the same, it being intended that any such
statement delivered pursuant hereto shall be deemed a certification by Tenant to
be relied upon by Lender and by others with whom Lender may be dealing. Tenant
also shall include in any such statement such other information concerning the
status of the Lease as Lender may reasonably request.
IN WITNESS WHEREOF, Lender, Tenant and Landlord have duly executed this
Agreement as of the date first above written.

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TENANT:
 
 
 
 
 
 
 
 
By:
 
 
 
 
Name:
 
 
 
 
Title:
 
 
 
 
 
 
 
 
 
LANDLORD:
 
 
 
 
 
 
 
 
By:
 
 
 
 
Name:
 
 
 
 
Title:
 
 
 
 
 
 
 
 
 
LENDER:
 
 
 
 
 
 
 
 
By:
 
 
 
 
Name:
 
 
 
 
Title:
 

[Attach State-specific Form of Acknowledgments]

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EXHIBIT A

A-1

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RECORDED AT THE REQUEST OF:
AND AFTER RECORDING RETURN TO:

Alston & Bird LLP
90 Park Avenue
New York, New York 10016
Attention: Gerard Keegan, Esq.
Facsimile No.: (212) 210-9444

DEED OF TRUST AND
SECURITY AGREEMENT
 
 
Grantor/Trustor:
AAT CC BELLEVUE, LLC
 
 
Grantee#1 (Trustee):
CHICAGO TITLE COMPANY OF WASHINGTON 
 
 
Grantee #2 (Beneficiary):
PNC BANK, NATIONAL ASSOCIATION
 
 
Abbreviated Legal
Description:
Property commonly known as “City Center Bellevue” and located at 500 108th
Avenue NE, City of Bellevue, County of King, Washington
 
Official legal description on Exhibit A.
 
 
Assessor’s Tax Parcel ID#:
322505-9066-00
 
 
Reference # (If applicable):
N/A