EXHIBIT 10.4
LOAN AGREEMENT
Dated as of March 6, 2006
Between
BONSTORES REALTY TWO, LLC,
as Borrower
and
BANK OF AMERICA, N.A.,
as Lender

 

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TABLE OF CONTENTS
Page

         
ARTICLE I
       
 
       
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
       
 
       
Section 1.01 Definitions
    1  
Section 1.02 Principles of Construction
    18  
 
       
ARTICLE II
       
 
       
GENERAL TERMS
       
 
       
Section 2.01 Loan Commitment; Disbursement to Borrower
    18  
Section 2.02 Interest Rate
    18  
Section 2.03 Loan Payments
    19  
Section 2.04 Prepayments
    21  
Section 2.05 Property Releases
    22  
Section 2.06 Substitution of Properties
    24  
 
       
ARTICLE III
       
 
       
CONDITIONS PRECEDENT
       
 
       
Section 3.01 Representations and Warranties; Compliance with Conditions
    31  
Section 3.02 Delivery of Loan Documents; Title Insurance; Reports; Leases
    31  
Section 3.03 Related Documents
    32  
Section 3.04 Organizational Documents
    33  
Section 3.05 Opinions of Borrower’s Counsel
    33  
Section 3.06 Annual Budget
    33  
Section 3.07 Taxes and Other Charges
    33  
Section 3.08 Completion of Proceedings
    33  
Section 3.09 Payments
    33  
Section 3.10 Transaction Costs
    34  
Section 3.11 No Material Adverse Change
    34  
Section 3.12 Leases and Rent Roll
    34  
Section 3.13 Tenant Estoppels
    34  
Section 3.14 REA Estoppels
    34  
Section 3.15 Subordination and Attornment
    35  
Section 3.16 Tax Lot
    35  
Section 3.17 Physical Conditions Report
    35  
Section 3.18 Appraisal
    35  
Section 3.19 Financial Statements
    35  

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Section 3.20 Intentionally Deleted
    35  
Section 3.21 Purchase Agreement
    35  
Section 3.22 Further Documents
    35  
 
       
ARTICLE IV
       
 
       
REPRESENTATIONS AND WARRANTIES
       
 
       
Section 4.01 Organization
    36  
Section 4.02 Status of Borrower
    36  
Section 4.03 Validity of Documents
    36  
Section 4.04 No Conflicts
    37  
Section 4.05 Litigation
    37  
Section 4.06 Agreements
    37  
Section 4.07 Solvency
    37  
Section 4.08 Intentionally Deleted
    38  
Section 4.09 No Plan Assets
    38  
Section 4.10 Not a Foreign Person
    38  
Section 4.11 Enforceability
    38  
Section 4.12 Business Purposes
    38  
Section 4.13 Compliance
    39  
Section 4.14 Financial Information
    39  
Section 4.15 Condemnation
    39  
Section 4.16 Utilities and Public Access; Parking
    39  
Section 4.17 Separate Lots
    40  
Section 4.18 Assessments
    40  
Section 4.19 Insurance
    40  
Section 4.20 Use of Property
    40  
Section 4.21 Certificate of Occupancy; Licenses
    40  
Section 4.22 Flood Zone
    41  
Section 4.23 Physical Condition
    41  
Section 4.24 Boundaries
    41  
Section 4.25 Leases and Rent Roll
    41  
Section 4.26 Filing and Recording Taxes
    42  
Section 4.27 Management Agreement
    42  
Section 4.28 Illegal Activity
    42  
Section 4.29 Construction Expenses
    42  
Section 4.30 Collateral Property
    43  
Section 4.31 Taxes
    43  
Section 4.32 Permitted Encumbrances
    43  
Section 4.33 Federal Reserve Regulations
    43  
Section 4.34 Investment Company Act
    43  
Section 4.35 Reciprocal Easement Agreements
    43  
Section 4.36 No Change in Facts or Circumstances; Disclosure
    44  
Section 4.37 Intellectual Property
    44  
Section 4.38 Survey
    44  

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Section 4.39 Intentionally omitted
    44  
Section 4.40 Patriot Act
    44  
Section 4.41 Assumptions
    45  
Section 4.42 Survival
    45  
 
       
ARTICLE V
       
 
       
BORROWER COVENANTS
       
 
       
Section 5.01 Existence; Compliance with Legal Requirements
    46  
Section 5.02 Maintenance and Use of Property
    46  
Section 5.03 Waste
    47  
Section 5.04 Taxes and Other Charges; Contests
    47  
Section 5.05 Litigation
    48  
Section 5.06 Access to Property
    48  
Section 5.07 Notice of Default
    48  
Section 5.08 Cooperate in Legal Proceedings
    48  
Section 5.09 Performance by Borrower
    48  
Section 5.10 Awards; Insurance Proceeds
    48  
Section 5.11 Financial Reporting
    49  
Section 5.12 Estoppel Statement
    52  
Section 5.13 Leasing Matters
    53  
Section 5.14 Property Management
    54  
Section 5.15 Liens
    56  
Section 5.16 Debt Cancellation
    56  
Section 5.17 Zoning
    56  
Section 5.18 ERISA
    56  
Section 5.19 No Joint Assessment
    57  
Section 5.20 Reciprocal Easement Agreements
    57  
Section 5.21 Alterations
    57  
Section 5.22 Operating Leases
    57  
 
       
ARTICLE VI
       
 
       
ENTITY COVENANTS
       
 
       
Section 6.01 Single Purpose Entity/Separateness
    58  
Section 6.02 Change of Name, Identity or Structure
    63  
Section 6.03 Business and Operations
    63  
Section 6.04 Independent Director
    63  
 
       
ARTICLE VII
       
 
       
NO SALE OR ENCUMBRANCE
       
 
       
Section 7.01 Transfer Definitions
    64  

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Section 7.02 No Sale/Encumbrance
    64  
Section 7.03 Permitted Transfers
    65  
Section 7.04 Lender’s Rights
    66  
Section 7.05 Assumption
    67  
Section 7.06 Immaterial Transfers
    69  
 
       
ARTICLE VIII
       
 
       
INSURANCE; CASUALTY; CONDEMNATION; RESTORATION
       
 
       
Section 8.01 Insurance
    73  
Section 8.03 Condemnation
    73  
Section 8.04 Restoration
    74  
 
       
ARTICLE IX
       
 
       
RESERVE FUNDS
       
 
       
Section 9.01 Required Repairs
    78  
Section 9.02 Replacements
    78  
Section 9.03 Lease Shortfall Reserve Account
    79  
Section 9.04 Required Work
    79  
Section 9.05 Release of Reserve Funds
    82  
Section 9.06 Tax and Insurance Reserve Funds
    84  
Section 9.07 Excess Cash Reserve Account
    85  
Section 9.08 Reserve Funds Generally
    86  
 
       
ARTICLE X
       
 
       
CASH MANAGEMENT
       
 
       
Section 10.01 Cash Management Account
    89  
Section 10.02 Deposits and Withdrawals
    89  
Section 10.03 Security Interest
    91  
Section 10.04 Definitions
    93  
 
       
ARTICLE XI
       
 
       
EVENTS OF DEFAULT; REMEDIES
       
Section 11.01 Event of Default
    93  
Section 11.02 Remedies
    96  

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ARTICLE XII
       
 
       
ENVIRONMENTAL PROVISIONS
       
 
       
Section 12.01 Environmental Representations and Warranties
    97  
Section 12.02 Environmental Covenants
    97  
Section 12.03 Lender’s Rights
    98  
Section 12.04 Operations and Maintenance Programs
    98  
Section 12.05 Environmental Definitions
    99  
 
       
ARTICLE XIII
       
 
       
SECONDARY MARKET
       
 
       
Section 13.01 Transfer of Loan
    99  
Section 13.02 Delegation of Servicing
    100  
Section 13.03 Dissemination of Information
    100  
Section 13.04 Regulation A/B Information
    100  
Section 13.05 Cooperation
    101  
Section 13.06 Securitization Indemnification
    104  
Section 13.07 Servicer
    106  
 
       
ARTICLE XIV
       
 
       
INDEMNIFICATIONS
       
 
       
Section 14.01 General Indemnification
    107  
Section 14.02 Mortgage and Intangible Tax Indemnification
    107  
Section 14.03 ERISA Indemnification
    108  
Section 14.04 Provided Information Indemnification
    108  
Section 14.05 Survival
    108  
 
       
ARTICLE XV
       
 
       
EXCULPATION
       
Section 15.01 Exculpation
    108  
 
       
ARTICLE XVI
       
 
       
NOTICES
       
Section 16.01 Notices
    110  

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ARTICLE XVII
       
 
       
FURTHER ASSURANCES
       
 
       
Section 17.01 Replacement Documents
    112  
Section 17.02 Recording of Mortgage, Etc
    112  
Section 17.03 Further Acts, Etc
    112  
Section 17.04 Changes in Tax, Debt, Credit and Documentary Stamp Laws
    113  
Section 17.05 Expenses
    113  
 
       
ARTICLE XVIII
       
 
       
WAIVERS
       
 
       
Section 18.01 Remedies Cumulative; Waivers
    114  
Section 18.02 Modification, Waiver in Writing
    114  
Section 18.03 Delay Not a Waiver
    115  
Section 18.04 Trial by Jury
    115  
Section 18.05 Waiver of Notice
    115  
Section 18.06 Remedies of Borrower
    116  
Section 18.07 Waiver of Marshalling of Assets
    116  
Section 18.08 Waiver of Statute of Limitations
    116  
Section 18.09 Waiver of Counterclaim
    116  
 
       
ARTICLE XIX
       
 
       
GOVERNING LAW
       
 
       
Section 19.01 Choice of Law
    116  
Section 19.02 Severability
    117  
Section 19.03 Preferences
    117  
 
       
ARTICLE XX
       
 
       
MISCELLANEOUS
       
 
       
Section 20.01 Survival
    117  
Section 20.02 Lender’s Discretion
    117  
Section 20.03 Headings
    118  
Section 20.04 Cost of Enforcement
    118  
Section 20.05 Schedules Incorporated
    118  
Section 20.06 Offsets, Counterclaims and Defenses
    118  
Section 20.07 No Joint Venture or Partnership; No Third Party Beneficiaries
    118  
Section 20.08 Publicity
    119  
Section 20.09 Conflict; Construction of Documents; Reliance
    120  
Section 20.10 Entire Agreement
    120  

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EXHIBITS
       
 
       
Exhibit A
  Form of Tenant Estoppel Certificate    
Exhibit B
  Organizational Chart    
Exhibit C
  Non-Consolidation Opinion    
Exhibit D
  Form of Assignment of Management Agreement    
Exhibit E
  Form of Financial Statements for EBITDA Definition    
 
       
SCHEDULES
       
 
       
Schedule I
  Required Repairs    
Schedule II
  Intentionally Deleted    
Schedule III
  Individual Properties and Allocated Loan Amounts    
Schedule 1.01
  Operating Leases and Operating Lessees    
Schedule 5.13
  Leases    

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LOAN AGREEMENT
          THIS LOAN AGREEMENT, dated as of March 6, 2006 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this
“Agreement”), between BANK OF AMERICA, N.A., a national banking association,
having an address at 214 North Tryon Street, Charlotte, North Carolina 28255
(together with its successors and/or assigns, “Lender”) and BONSTORES REALTY
TWO, LLC, a Delaware limited liability company, having an address at 2801 E.
Market Street, York, Pennsylvania 17402 (together with its successors and/or
assigns, “Borrower”).
RECITALS:
          WHEREAS, Borrower is the fee owner of the Property (defined below);
          WHEREAS, Borrower desires to obtain the Loan (defined below) from
Lender; and
          WHEREAS, Lender is willing to make the Loan to Borrower, subject to
and in accordance with the terms of this Agreement and the other Loan Documents
(defined below).
          NOW, THEREFORE, in consideration of the making of the Loan by Lender
and the covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:
ARTICLE I
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
          Section 1.01 Definitions.
          For all purposes of this Agreement, except as otherwise expressly
required or unless the context clearly indicates a contrary intent:
          “Acceptable Accountant” shall mean a “Big Four” accounting firm or
other independent certified public accountant reasonably acceptable to Lender.
          “Act” shall have the meaning set forth in Section 6.01.
          “Additional Replacement” shall have the meaning set forth in
Section 9.05(g) hereof.
          “Additional Required Repair” shall have the meaning set forth in
Section 9.05(f) hereof.

 

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          “Affiliate” shall mean, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person or of an
Affiliate of such Person.
          “Affiliated Loans” shall mean a loan made by Lender to a parent,
subsidiary or such other entity affiliated with Borrower or Borrower Principal.
          “Affiliated Manager” shall have the meaning set forth in Section 7.01
hereof.
          “ALTA” shall mean American Land Title Association, or any successor
thereto.
          “Alteration Threshold” means $500,000.00.
          “Allocated Loan Amount” shall mean, with respect to any Individual
Property, the portion of the Loan allocated to each such Individual Property as
set forth on Schedule III hereto.
          “Annual Budget” shall mean the operating budget of Borrower, including
all planned capital expenditures, for the Property reasonably approved by Lender
in accordance with Section 5.11(a)(iv) hereof for the applicable calendar year
or other period.
          “Award” shall mean any compensation paid by any Governmental Authority
in connection with a Condemnation in respect of all or any part of any
Individual Property.
          “Borrower” shall mean Bonstores Realty Two, LLC.
          “Borrower Misstatement” shall have the meaning set forth in
Section 13.06(b) hereof.
          “Borrower Principal” shall mean Bonstores Holdings Two, LLC.
          “BTDS” shall mean The Bon-Ton Department Stores, Inc.
          “Business Day” shall mean any day other than (i) a Saturday or a
Sunday or (ii) a day on which federally insured depository institutions in the
States of New York or North Carolina or the state in which the offices of the
Servicer and the trustee in the Securitization are located are authorized or
obligated by law, governmental decree or executive order to be closed.
          “Cash Management Account” shall have the meaning set forth in
Section 10.01(a) hereof.
          “Casualty” shall have the meaning set forth in Section 8.02.
          “Change of Control” shall having the meaning set forth in the
Operating Lease Guaranty.
          “Closing Date” shall mean the date of this Agreement.

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          “Closing Date EBITDA” shall mean EBITDA for the Property, as
determined by Lender, on the Closing Date.
          “Collateral Property” shall have the meaning set forth in the granting
clause of each Mortgage.
          “Control” shall have the meaning set forth in Section 7.01 hereof.
          “Condemnation” shall mean a temporary or permanent taking by any
Governmental Authority as the result, in lieu or in anticipation, of the
exercise of the right of condemnation or eminent domain, of all or any part of
any Individual Property, or any interest therein or right accruing thereto,
including any right of access thereto or any change of grade affecting any
Individual Property or any part thereof.
          “Condemnation Proceeds” shall have the meaning set forth in
Section 8.04(b).
          “Credit Facility Pledge” shall have the meaning set forth in
Section 7.02 hereof.
          “Creditors Rights Laws” shall mean with respect to any Person any
existing or future law of any applicable jurisdiction relating to bankruptcy,
insolvency, reorganization, conservatorship, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to its debts or debtors.
          “Debt” shall mean the outstanding principal amount of the Loan,
together with all interest accrued and unpaid thereon and all other sums due to
Lender under the Note, this Agreement, the Mortgage and the other Loan
Documents.
          “Debt Service” shall mean, with respect to any particular period of
time, scheduled principal and/or interest payments under the Note and under the
New Mezzanine Loan, if any.
          “Debt Service Coverage Ratio” shall mean, as of any date of
determination, for the twelve (12) full calendar month period immediately
preceding such date of determination, the ratio, as reasonably determined by
Lender, of (i) Net Operating Income to (ii) the aggregate amount of Debt Service
which would be due for the same period assuming the principal amount of the Loan
and the New Mezzanine Loan, if any, following the application of any Release
Amount, respectively, is outstanding and calculated at a mortgage constant equal
to 7.8882%.
          “Default” shall mean the occurrence of any event hereunder or under
any other Loan Document which, but for the giving of notice or passage of time,
or both, would be an Event of Default.
          “Default Rate” shall mean, with respect to the Loan, a rate per annum
equal to the lesser of (a) the maximum rate permitted by applicable law, or
(b) four percent (4%) above the Note Rate.
          “Disclosure Document” shall have the meaning set forth in
Section 13.04(a) hereof.

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          “EBITDA” shall mean, with respect to each Individual Property and the
Property in the aggregate, store level “Gross Margin” (which shall be determined
in the same manner as set forth in the financial statements delivered to Lender
in connection with its underwriting of the Loan, an example of which is attached
hereto as Exhibit E, less the total of all operating expenses actually paid or
payable by each Operating Lessee with respect to Individual Property and the
Property in the aggregate, as applicable, and which relate to the operation,
maintenance and management of each Individual Property or the Property in the
aggregate, as applicable, but specifically excluding: Operating Lease Rent,
depreciation, amortization, capitalized expenses and income taxes, all as
determined in accordance with GAAP consistently applied.
          “Eligible Account” shall mean a separate and identifiable account from
all other funds held by the holding institution that is either (a) an account or
accounts maintained with a federal or state chartered depository institution or
trust company which complies with the definition of Eligible Institution or
(b) a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to regulations substantially similar to 12 C.F.R. §9.10(b),
having in either case a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal and state authority. An
Eligible Account will not be evidenced by a certificate of deposit, passbook or
other instrument.
          “Eligible Institution” shall mean Bank of America, N.A. or a
depository institution or trust company insured by the Federal Deposit Insurance
Corporation, the short term unsecured debt obligations or commercial paper of
which are rated at least “A-1+” by S&P, “P-1” by Moody’s and “F-1+” by Fitch in
the case of accounts in which funds are held for thirty (30) days or less (or,
in the case of accounts in which funds are held for more than thirty (30) days,
the long term unsecured debt obligations of which are rated at least “AA” by
Fitch and S&P and “Aa2” by Moody’s).
          “Environmental Indemnity” shall mean that certain Environmental
Indemnity Agreement, dated as of the date hereof, executed by Borrower and
Borrower Principal 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.
          “Environmental Law” shall have the meaning set forth in Section 12.05
hereof.
          “Environmental Liens” shall have the meaning set forth in
Section 12.05 hereof.
          “Environmental Report” shall have the meaning set forth in
Section 12.05 hereof.
          “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time and any successor statutes thereto and
applicable regulations issued pursuant thereto in temporary or final form.
          “Event of Default” shall have the meaning set forth in Section 11.01
hereof.
          “Exceptions to Non-Recourse Guaranty” shall mean that certain
Exceptions to Non-Recourse Guaranty dated of even date herewith from Borrower
Principal in favor of Lender.

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          “Excess Cash” shall mean an amount equal to all funds remaining in the
Cash Management Account on each Payment Date following the disbursements and
application of funds pursuant to Section 10.02(c)(i)-(vii) hereof.
          “Excess Cash After Lease Shortfall Deposits” shall mean an amount
equal to all funds remaining in the Cash Management Account on each Payment Date
following the disbursements and application of funds pursuant to
Section 10.02(c)(i)-(viii) hereof.
          “Excess Cash Reserve Account” shall have the meaning set forth in
Section 9.07 hereof.
          “Excess Cash Reserve Funds” shall have the meaning set forth in
Section 9.07 hereof.
          “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.
          “Exchange Act Filing” shall have the meaning set forth in
Section 5.11(c)(iv) hereof.
          “Excusable Delay” shall mean a delay solely due to acts of God,
governmental restrictions, stays, judgments, orders, decrees, enemy actions,
civil commotion, fire, casualty, strikes, work stoppages, shortages of labor or
materials or other causes beyond the reasonable control of Borrower, but
Borrower’s lack of funds in and of itself shall not be deemed a cause beyond the
control of Borrower.
          “Fitch” shall mean Fitch, Inc.
          “GAAP” shall mean generally accepted accounting principles in the
United States of America as of the date of the applicable financial report.
          “Governmental Authority” shall mean any court, board, agency,
department, commission, office or other authority of any nature whatsoever for
any governmental unit (federal, state, county, municipal, city, town, special
district or otherwise) whether now or hereafter in existence.
          “Hazardous Materials” shall have the meaning set forth in
Section 12.05 hereof.
          “Improvements” shall have the meaning set forth in the granting clause
of the Mortgage.
          “Indemnified Parties” shall mean (a) Lender, (b) any prior Borrower or
holder of the Loan or Participations in the Loan, (c) any servicer or prior
servicer of the Loan, (d) any Investor or any prior Investor in any Securities,
(e) any trustees, custodians or other fiduciaries who hold or who have held a
full or partial interest in the Loan for the benefit of any Investor or other
third party, (f) any receiver or other fiduciary appointed in a foreclosure or
other Creditors Rights Laws proceeding, (g) any officers, directors,
shareholders, partners, members, employees, agents, servants, representatives,
contractors, subcontractors, affiliates or subsidiaries of any and all of the
foregoing, and (h) the heirs, legal representatives, successors and assigns of
any and all

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of the foregoing (including, without limitation, any successors by merger,
consolidation or acquisition of all or a substantial portion of the Indemnified
Parties’ assets and business), in all cases whether during the term of the Loan
or as part of or following a foreclosure of the Mortgage.
          “Independent Director” shall have the meaning set forth in
Section 6.04.
          “Individual Property” shall mean each parcel of real property listed
on Schedule III attached hereto, the Improvements thereon and all Collateral
Property owned by Borrower and encumbered by a Mortgage, together with all
rights pertaining to such property and improvements as more particular described
in the granting clauses of such Mortgage.
          “Insurance Premiums” shall have the meaning set forth in
Section 8.01(b) hereof.
          “Insurance Proceeds” shall have the meaning set forth in
Section 8.04(b) hereof.
          “Interest Period” shall mean the calendar month preceding each Payment
Date.
          “Interim Interest Period” shall mean the period from and including the
Closing Date through but excluding the Payment Date first occurring after the
Closing Date, provided, however, there shall be no “Interim Interest Period” in
the event the Closing Date occurs on a Payment Date.
          “Internal Revenue Code” shall mean the Internal Revenue Code of 1986,
as amended, as it may be further amended from time to time, and any successor
statutes thereto, and applicable U.S. Department of Treasury regulations issued
pursuant thereto in temporary or final form.
          “Investor” shall have the meaning set forth in Section 13.03 hereof.
          “Issuer Group” shall have the meaning set forth in Section 13.06(b)
hereof.
          “Issuer Person” shall have the meaning set forth in Section 13.06(b)
hereof.
          “Late Payment Charge” shall have the meaning set forth in
Section 2.03(c).
          “Lease” shall mean each Operating Lease and each other lease,
occupancy agreement or other similar agreement entered into by Operating Lessee
or Borrower, as landlord or lessor, with respect to any Individual Property (or
any portion thereof).
          “Lease Guarantor” shall mean The Bon-Ton Stores, Inc.
          “Lease Shortfall Reserve Account” shall have the meaning set forth in
Section 9.03.
          “Lease Shortfall Reserve Funds” shall have the meaning set forth in
Section 9.03.
          “Legal Requirements” shall mean all statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of Governmental
Authorities affecting each

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Individual Property or any part thereof, or the construction, use, alteration or
operation thereof, whether now or hereafter enacted and in force, and all
permits, licenses, authorizations and regulations relating thereto, and all
covenants, agreements, restrictions and encumbrances contained in any material
instruments, either of record or known to Borrower, at any time in force
affecting each Individual Property or any part thereof, including, without
limitation, any which may (a) require repairs, modifications or alterations in
or to any Individual Property or any part thereof, or (b) in any way limit the
use and enjoyment thereof.
          “Letter of Credit” shall mean (a) an irrevocable, unconditional,
transferable, clean sight draft letter of credit (either an evergreen letter of
credit or a letter of credit which does not expire until at least five
(5) Business Days after the Maturity Date or such other date reasonably
acceptable to Lender) in favor of Lender and entitling Lender to draw thereon
based solely on a statement executed by an officer of Lender stating that it has
the right to draw thereon, and issued by a domestic Eligible Institution or the
U.S. agency or branch of a foreign Eligible Institution, or if there are no
domestic Eligible Institutions or U.S. agencies or branches of a foreign
Eligible Institution then issuing letters of credit, then such letter of credit
may be issued by a domestic bank, the long term unsecured debt rating of which
is the highest such rating then given by the Rating Agency or Rating Agencies,
as applicable, to a domestic commercial bank or (b) a letter of credit (i) in
form, scope and substance and (ii) issued by an issuer, in each case acceptable
to Lender in its sole and absolute discretion.
          “Level 1 EBITDA Period” shall mean the period commencing on the date
that EBITDA (as set forth in the statements required pursuant to
Section 5.11(a)(iii) of this Agreement) for any trailing twelve (12) month
period (tested quarterly) is less than eighty percent (80%) (but greater than
60%) of the Closing Date EBITDA and ending on the date that EBITDA for the
trailing twelve (12) month period (tested quarterly) is greater than eighty
percent (80%) of the Closing Date EBITDA for two (2) consecutive calendar
quarters.
          “Level 2 EBITDA Period” shall mean the period commencing on the date
that EBITDA (as set forth in the statements required pursuant to
Section 5.11(a)(iii) of this Agreement) for any trailing twelve (12) month
period (tested quarterly) is sixty percent (60%) or less of the Closing Date
EBITDA and ending on the date that EBITDA for the trailing twelve (12) month
period (tested quarterly) is greater than eighty percent (80%) of the Closing
Date EBITDA for two (2) consecutive calendar quarters.
          “Lien” shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance, charge
or transfer of, on or affecting Borrower, any Individual Property, any portion
thereof or any interest therein, including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, the filing of
any financing statement, and mechanic’s, materialmen’s and other similar liens
and encumbrances.
          “LLC Agreement” shall have the meaning set forth in Section 6.01.
          “Loan” shall mean the loan in the initial principal amount of One
Hundred Thirty Million and No/100 Dollars ($130,000,000.00) made by Lender to
Borrower pursuant to this Agreement.

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          “Loan Documents” shall mean, collectively, this Agreement, the Note,
the Mortgage, the Environmental Indemnity, the Exceptions to Non-Recourse
Guaranty and any and all other documents, agreements and certificates executed
and/or delivered in connection with the Loan, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
          “Lockout Period” shall mean the period commencing on the date hereof
and ending after the Payment Date occurring in April, 2008.
          “Lockout Yield Maintenance Premium” shall mean an amount equal to five
percent (5%) of the then outstanding principal amount of the Loan.
          “Losses” shall mean any and all claims, suits, liabilities (including,
without limitation, strict liabilities), actions, proceedings, obligations,
debts, damages, losses, costs, expenses, fines, penalties, charges, fees,
judgments, awards, amounts paid in settlement of whatever kind or nature
(including but not limited to reasonable legal fees and other costs of defense)
actually incurred.
          “Low EBITDA Period” shall mean individually or collectively, a Level 1
EBITDA Period or a Level 2 EBITDA Period.
          “MAE” means any material adverse effect upon (i) the business
operations or financial condition of the Borrower, (ii) the ability of the
Borrower to repay the principal and interest of the Loan as it becomes due, or
(iii) the value of the Property taken as a whole.
          “Management Agreement” shall mean any management or operating
agreement entered into by and between Borrower and Manager pursuant to which
Manager is to provide management and other services with respect to the
Property, as the same may be amended, restated, replaced, supplemented or
otherwise modified in accordance with the terms of this Agreement.
          “Manager” shall mean such entity, if any, selected as the manager of
the Property in accordance with the terms of this Agreement.
          “Maturity Date” shall mean the Payment Date occurring in April, 2016.
          “Maximum Legal Rate” shall mean the maximum nonusurious interest rate,
if any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the indebtedness evidenced by the Note and as
provided for herein or the other Loan Documents, under the laws of such state or
states whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.
          “Member” shall have the meaning set forth in Section 6.01(d).
          “Mold” shall have the meaning set forth in Section 12.5 hereof.
          “Moody’s” shall mean Moody’s Investor Services, Inc.

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          “Monthly Payment Amount” shall have the meaning set forth in Section
2.03(a)(ii).
          “Mortgage” or “Mortgages” shall mean each Mortgage, Assignment of
Leases and Rents and Security Agreement or each Deed of Trust, Assignment of
Leases and Rents and Security Agreement, dated as of the date hereof, executed
and delivered by Borrower as security for the Loan and encumbering the related
Individual Property, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
          “Net Operating Income” shall mean, with respect to any period of time,
the amount obtained by subtracting Operating Expenses from Operating Income.
          “Net Proceeds” shall have the meaning set forth in Section 8.04(b)
hereof.
          “Net Proceeds Deficiency” shall have the meaning set forth in Section
8.04(b)(vi) hereof.
          “New Mezzanine Lender” shall mean the lender of any New Mezzanine
Loan.
          “New Mezzanine Loan” shall have the meaning set forth in Section 13.05
hereof.
          “New Mezzanine Borrower” shall have the meaning set forth in
Section 13.05 hereof.
          “New Mezzanine Loan Documents” shall have the meaning set forth in
Section 13.05 hereof.
          “Note” shall mean that certain promissory note of even date herewith
in the principal amount of One Hundred Thirty Million and No/100 Dollars
($130,000,000.00), made by Borrower in favor of Lender, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.
          “Note Rate” shall mean 6.2125% per annum.
          “OFAC List” means the list of specially designated nationals and
blocked persons subject to financial sanctions that is maintained by the U.S.
Treasury Department, Office of Foreign Assets Control and accessible through the
internet website www.treas.gov/ofac/t11sdn.pdf.
          “Officer’s Certificate” means a certificate delivered to Lender and
signed by a duly authorized officer of Borrower.
          “Operating Expenses” shall mean, with respect to any period of time,
the total of all expenses actually paid or payable, computed in accordance with
GAAP, of whatever kind relating to the operation, maintenance and management of
each Individual Property, including without limitation, utilities, ordinary
repairs and maintenance, Insurance Premiums, license fees, Taxes and Other
Charges, advertising expenses, payroll and related taxes, computer processing
charges, management fees equal to one-half of one percent (0.5%) of the rent
paid by Operating

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Lessee to Borrower, operational equipment or other lease payments as approved by
Lender, normalized capital expenditures equal to $378,220 per annum, and
normalized tenant improvement and leasing commissions costs equal to $400,000
per annum but specifically excluding depreciation and amortization, income
taxes, Debt Service, any incentive fees due under the Management Agreement, any
item of expense that in accordance with GAAP should be capitalized but only to
the extent the same would qualify for funding from the Reserve Accounts, any
item of expense that would otherwise be covered by the provisions hereof but
which is paid by any Tenant under such Tenant’s Lease or other agreement, and
deposits into the Reserve Accounts.
          “Operating Income” shall mean, with respect to any period of time, all
income of Borrower, computed in accordance with GAAP, derived from the ownership
and operation of each Individual Property from whatever source, including, but
not limited to, Rents, utility charges, escalations, forfeited security
deposits, interest on credit accounts, service fees or charges, license fees,
parking fees, rent concessions or credits, and other required pass-throughs but
excluding sales, use and occupancy or other taxes on receipts required to be
accounted for by Borrower to any Governmental Authority, refunds and
uncollectible accounts, sales of furniture, fixtures and equipment, interest
income from any source other than the escrow accounts, Reserve Accounts or other
accounts required pursuant to the Loan Documents, Insurance Proceeds (other than
business interruption or other loss of income insurance), Awards, percentage
rents, unforfeited security deposits, utility and other similar deposits, income
from Tenants not paying rent, income from Tenants in bankruptcy, non-recurring
or extraordinary income, including, without limitation lease termination
payments, and any disbursements to Borrower from the Reserve Funds.
          “Operating Leases” shall mean collectively those certain Master Lease
Agreements identified on Schedule 1.01 hereof.
          “Operating Lease Guaranty” shall mean collectively, each Guaranty of
Lease executed and delivered by Lease Guarantor for the benefit of Borrower with
respect to each Operating Lease pursuant to which Lease Guarantor guarantees the
payment and performance obligations of the Operating Lessee under each Operating
Lease and identified on Schedule 1.01 hereof.
          “Operating Lease Rent” shall mean all rent owed by Operating Lessee to
Borrower under the Operating Lease.
          “Operating Lessee” shall mean the lessee under the applicable
Operating Lease as identified on Schedule 1.01 hereof or any replacement lessee
approved by Lender and the Rating Agencies.
          “Other Charges” shall mean all ground rents, maintenance charges,
impositions other than Taxes, and any other charges now or hereafter levied or
assessed or imposed against any Individual Property or any part thereof.
          “Participations” shall have the meaning set forth in Section 13.01
hereof.
          “Payment Date” shall mean the first day of each calendar month.

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          “Permitted Encumbrances” shall mean collectively (a) the Lien and
security interests created by the Loan Documents, (b) all Liens, encumbrances
and other matters disclosed in the applicable Title Insurance Policy, (c) Liens,
if any, for Taxes or other impositions imposed by any Governmental Authority not
yet due and delinquent, (d) Liens arising after the date hereof which are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted in accordance with Section 5.04(b) hereof; (e) in the case
of Liens arising after the date hereof, statutory Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens arising by
operation of law, which are incurred in the ordinary course of business for sums
which are not yet due or are being contested in good faith in accordance with
Section 5.04(b) hereof; (f) easements, rights-of-way, REAs, restrictions and
other similar charges or non-monetary encumbrances against real property which
would not individually or in the aggregate be reasonably likely to cause a MAE
with respect to an Individual Property; (g) any judgment Lien provided that the
judgment it secures shall have been discharged of record or the execution
thereof stayed pending appeal within 30 days after the entry thereof or within
30 days after the expiration of any stay, as applicable; (h) any matters
disclosed by the surveys (which are required to be delivered to Lender pursuant
to Section 3.02(c) hereof) provided that survey-related coverage reasonable
acceptable to Lender is included under the Title Insurance Policy; and (i) such
other title and survey exceptions or other Liens as Lender may approve in
writing in Lender’s sole discretion.
          “Permitted Investments” shall mean to the extent available from Lender
or Lender’s servicer for deposits in the Reserve Accounts, any one or more of
the following obligations or securities acquired at a purchase price of not
greater than par, including those issued by a servicer of the Loan, the trustee
under any securitization or any of their respective Affiliates, payable on
demand or having a maturity date not later than the Business Day immediately
prior to the date on which the funds used to acquire such investment are
required to be used under this Agreement and meeting one of the appropriate
standards set forth below:
     (a) obligations of, or obligations fully guaranteed as to payment of
principal and interest by, the United States of America or any agency or
instrumentality thereof provided such obligations are backed by the full faith
and credit of the United States of America including, without limitation,
obligations of: the U.S. Treasury (all direct or fully guaranteed obligations),
the Farmers Home Administration (certificates of beneficial ownership), the
General Services Administration (participation certificates), the U.S. Maritime
Administration (guaranteed Title XI financing), the Small Business
Administration (guaranteed participation certificates and guaranteed pool
certificates), the U.S. Department of Housing and Urban Development (local
authority bonds) and the Washington Metropolitan Area Transit Authority
(guaranteed transit bonds); provided, however, that the investments described in
this clause must (i) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (ii) be rated “AAA” or the equivalent by
each of the Rating Agencies, (iii) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (iv) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (v) such investments must not be subject to liquidation prior to
their maturity;
     (b) Federal Housing Administration debentures;

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     (c) obligations of the following United States government sponsored
agencies: Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit
System (consolidated systemwide bonds and notes), the Federal Home Loan Banks
(consolidated debt obligations), the Federal National Mortgage Association (debt
obligations), the Financing Corp. (debt obligations), and the Resolution Funding
Corp. (debt obligations); provided, however, that the investments described in
this clause must (i) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (iii) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (iv) such investments must not be subject to liquidation prior to
their maturity;
     (d) federal funds, unsecured certificates of deposit, time deposits,
bankers’ acceptances and repurchase agreements with maturities of not more than
365 days of any bank, the short term obligations of which at all times are rated
in the highest short term rating category by each Rating Agency (or, if not
rated by all Rating Agencies, rated by at least one Rating Agency in the highest
short term rating category and otherwise acceptable to each other Rating Agency,
as confirmed in writing that such investment would not, in and of itself, result
in a downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities); provided, however, that the
investments described in this clause must (i) have a predetermined fixed dollar
of principal due at maturity that cannot vary or change, (ii) if rated by S&P,
must not have an “r” highlighter affixed to their rating, (iii) if such
investments have a variable rate of interest, such interest rate must be tied to
a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (iv) such investments must not be subject
to liquidation prior to their maturity;
     (e) fully Federal Deposit Insurance Corporation-insured demand and time
deposits in, or certificates of deposit of, or bankers’ acceptances issued by,
any bank or trust company, savings and loan association or savings bank, the
short term obligations of which at all times are rated in the highest short term
rating category by each Rating Agency (or, if not rated by all Rating Agencies,
rated by at least one Rating Agency in the highest short term rating category
and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities); provided, however, that the investments described
in this clause must (i) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (iii) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (iv) such investments must not be subject to liquidation prior to
their maturity;
     (f) debt obligations with maturities of not more than 365 days and at all
times rated by each Rating Agency (or, if not rated by all Rating Agencies,
rated by at least one Rating Agency and otherwise acceptable to each other
Rating Agency, as confirmed in writing that such investment would not, in and of
itself, result in a downgrade,

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qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities) in its highest long-term unsecured rating category;
provided, however, that the investments described in this clause must (i) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their
rating, (iii) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index, and (iv) such
investments must not be subject to liquidation prior to their maturity;
     (g) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than one year after the date of issuance thereof) with maturities
of not more than 365 days and that at all times is rated by each Rating Agency
(or, if not rated by all Rating Agencies, rated by at least one Rating Agency
and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities) in its highest short-term unsecured debt rating;
provided, however, that the investments described in this clause must (i) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their
rating, (iii) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index, and (iv) such
investments must not be subject to liquidation prior to their maturity;
     (h) units of taxable money market funds, which funds are regulated
investment companies, seek to maintain a constant net asset value per share and
invest solely in obligations backed by the full faith and credit of the United
States, which funds have the highest rating available from each Rating Agency
(or, if not rated by all Rating Agencies, rated by at least one Rating Agency
and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities) for money market funds; and
     (i) any other security, obligation or investment which has been approved as
a Permitted Investment in writing by (i) Lender and (ii) each Rating Agency, as
evidenced by a written confirmation that the designation of such security,
obligation or investment as a Permitted Investment will not, in and of itself,
result in a downgrade, qualification or withdrawal of the initial, or, if
higher, then current ratings assigned to the Securities by such Rating Agency;
provided, however, that no obligation or security shall be a Permitted
Investment if (A) such obligation or security evidences a right to receive only
interest payments, (B) the right to receive principal and interest payments on
such obligation or security are derived from an underlying investment that
provides a yield to maturity in excess of one hundred twenty percent (120%) of
the yield to maturity at par of such underlying investment or (C) such
obligation or security has a remaining term to maturity in excess of one
(1) year.

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          “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.
          “Physical Conditions Report” shall mean, the reports prepared in
connection with the Loan and upon which the Lender is entitled to rely,
regarding the physical condition of such Individual Property, satisfactory in
form and substance to Lender in its sole discretion.
          “Policies” shall have the meaning specified in Section 8.01(b) hereof.
          “Prepayment Calculation Date” shall mean, as applicable, the date on
which (a) Lender applies any prepayment to the reduction of the outstanding
principal amount of the Note, (b) Lender accelerates the Loan, in the case of a
prepayment resulting from acceleration, or (c) Lender applies funds held under
any Reserve Account upon the occurrence of an Event of Default, in the case of a
prepayment resulting from such an application (other than in connection with
acceleration of the Loan).
          “Prepayment Premium” shall mean an amount equal to the greater of
(a) 1% of the portion of the Loan being prepaid, and (b) the present value as of
the Prepayment Calculation Date of a series of monthly payments over the
remaining term of the Loan each equal to the amount of interest which would be
due on the portion of the Loan being prepaid assuming a per annum interest rate
equal to the excess of the Note Rate over the Reinvestment Yield, and discounted
at the Reinvestment Yield.
          “Prohibited Person” means any Person identified on the OFAC List or
any other Person with whom a U.S. Person may not conduct business or
transactions by prohibition of Federal law or Executive Order of the President
of the United States or America.
          “Prohibited Transfer” shall have the meaning set forth in Section 7.02
hereof.
          “Property” shall mean, collectively, each Individual Property.
          “Property Release” shall have the meaning set forth in Section 2.05(a)
hereof.
          “Provided Information” shall have the meaning set forth in
Section 13.05(a) hereof.
          “Purchase Agreement” shall mean that certain Purchase Agreement dated
on or about October 29, 2005, between The Bon-Ton Stores, Inc. and Saks
Incorporated, as amended.
          “Qualified Manager” shall mean a company approved by Lender, which
approval shall not have been unreasonably withheld, conditioned or delayed and
for which Lender shall have received (i) written confirmation from the Rating
Agencies that the employment of such manager will not result in a downgrade of
the initial, or if higher, then current ratings issued in connection with a
Securitization, or if a Securitization has not occurred, any ratings to be
assigned in connection with a Securitization, and (ii) with respect to any
Affiliated Manager, a

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           revised substantive non-consolidation opinion if one was delivered in
connection with the closing of the Loan.
          “Rating Agencies” shall mean each of S&P, Moody’s and Fitch, or any
other nationally-recognized statistical rating agency which has been approved by
Lender.
          “REA” shall mean any “construction, operation and reciprocal easement
agreement” or similar agreement (including any “separate agreement” or other
agreement between Borrower and one or more other parties to an REA with respect
to such REA) affecting any Individual Property or portion thereof which by its
terms in the event of a breach thereof by Borrower permits a lien to be placed
upon an Individual Property which primes the Mortgage and such lien is greater
than $50,000 or which grants to any other Person an option to purchase the
applicable Individual Property or grants a right of first refusal to any other
Person with respect to the applicable Individual Property.
          “Reinvestment Yield” shall mean the yield calculated by the linear
interpolation of the yields, as reported in the Federal Reserve Statistical
Release H.15-Selected Interest Rates under the heading “U.S. government
securities” and the sub-heading “Treasury constant maturities” for the week
ending prior to the Prepayment Calculation Date, of the U.S. Treasury constant
maturities with maturity dates (one longer and one equal to or shorter) most
nearly approximating the Maturity Date, and converted to a monthly compounded
nominal yield. In the event Release H.15 is no longer published, Lender shall
select a comparable publication to determine the Reinvestment Yield.
          “Related Loan” shall have the meaning set forth in Section 13.04
hereof.
          “Related Property” shall have the meaning set forth in Section 13.04
hereof.
          “Release” shall have the meaning set forth in Section 12.05 hereof.
          “Release Amount” shall mean with respect to any Individual Property as
of the date of the proposed Property Release of such Individual Property
pursuant to Section 2.05(a) hereof, the product of the Allocated Loan Amount and
(a) one hundred and ten percent (110%) if the applicable Allocated Loan Amount
of such Individual Property when added to the Allocated Loan Amounts of all
Properties released prior to or simultaneously with such Individual Property is
equal to twenty-five percent (25%) or less of the original principal amount of
the Loan as of the Closing Date and (b) one hundred and fifteen percent (115%)
if the applicable Allocated Loan Amount when added to the Allocated Loan Amounts
of all Properties released prior to or simultaneously with such Individual
Property is greater than twenty-five percent (25%) and less than or equal to
fifty percent (50%) inclusively of the original principal amount of the Loan as
of the Closing Date. If the applicable Allocated Loan Amount when added to the
Allocated Loan Amounts of all Properties released prior to or simultaneously
with such Individual Property is greater than fifty percent (50%) inclusively of
the original principal amount of the Loan as of the Closing Date, no Property
Release shall be permitted.
          “REMIC Trust” shall mean a “real estate mortgage investment conduit”
(within the meaning of Section 860D, or applicable successor provisions, of the
Code) that holds the Note.

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          “Rent Roll” shall have the meaning set forth in Section 4.25 hereof.
          “Rents” shall mean the Operating Lease Rent and any rents due under
any Lease.
          “Replacement Reserve Account” shall have the meaning set forth in
Section 9.02(b) hereof.
          “Replacement Reserve Funds” shall have the meaning set forth in
Section 9.02(b) hereof.
          “Replacement Reserve L/C” shall have the meaning set forth in
Section 9.02(c) hereof.
          “Replacement Reserve Monthly Deposit” shall have the meaning set forth
in Section 9.02(b) hereof.
          “Replacements” shall have the meaning set forth in Section 9.02(a)
hereof.
          “Required Repairs” shall have the meaning set forth in Section 9.01(a)
hereof.
          “Required Work” shall have the meaning set forth in Section 9.04
hereof.
          “Reserve Accounts” shall mean the Tax and Insurance Reserve Account,
the Replacement Reserve Account, the Required Repair Account, the Excess Cash
Reserve Account, the Lease Shortfall Reserve Account or any other escrow account
established by the Loan Documents. The Reserve Accounts are sub-accounts of the
Cash Management Account.
          “Reserve Funds” shall mean the Tax and Insurance Reserve Funds, the
Replacement Reserve Funds, the Required Repair Funds, the Excess Cash Reserve
Funds, the Lease Shortfall Reserve or any other escrow funds established by the
Loan Documents.
          “Restoration” shall mean, following the occurrence of a Casualty or a
Condemnation which is of a type necessitating the repair of an Individual
Property, the completion of the repair and restoration of the Property as nearly
as possible to the condition of such Individual Property was in immediately
prior to such Casualty or Condemnation, with such alterations as may be
reasonably approved by Lender.
          “Restoration Consultant” shall have the meaning set forth in Section
8.04(b)(iii) hereof.
          “Restoration Retainage” shall have the meaning set forth in Section
8.04(b)(iv) hereof.
          “Restricted Party” shall have the meaning set forth in Section 7.01
hereof.
          “Sale or Pledge” shall have the meaning set forth in Section 7.01
hereof.
          “Schedule 5.13 Leases” shall have the meaning set forth in
Section 5.13(a) hereof.

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          “Securities” shall have the meaning set forth in Section 13.01 hereof.
          “Securities Act” shall mean the Securities Act of 1933, as amended.
          “Securities Liabilities” shall have the meaning set forth in
Section 3.05 hereof.
          “Securitization” shall have the meaning set forth in Section 13.01
hereof.
          “Securitization Closing Date” shall mean a date selected by Lender in
its sole discretion by providing not less than three (3) Business Days’ prior
notice to Borrower.
          “Senior Credit Facility” shall mean that certain Loan and Security
Agreement dated as of March 6, 2006 by and among BTDS, Herberger’s Department
Stores, LLC, Parisian, Inc., and The Elder-Beerman Stores Corp. as borrower,
certain Lenders thereunder and Bank of America, N.A., as Agent.
          “Significant Obligor” shall have the meaning set forth in
Section 13.04(a) hereof.
          “SPE Component Entity” shall have the meaning set forth in
Section 6.01(b) hereof.
          “Special Member” shall have the meaning set forth in Section 6.01(d).
          “S&P” shall mean Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc.
          “State” shall mean the state or states in which the Property or any
part thereof is located.
          “Substitute Property” shall have the meaning set forth in Section 2.06
hereof.
          “Substituted Property” shall have the meaning set forth in
Section 2.06 hereof.
          “Tax and Insurance Reserve Funds” shall have the meaning set forth in
Section 9.06 hereof.
          “Tax and Insurance Reserve Account” shall have the meaning set forth
in Section 9.06 hereof.
          “Taxes” shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents, now or hereafter levied or assessed or
imposed against any Individual Property or part thereof.
          “Tenant” shall mean any Operating Lessee and/or any other Person
leasing or otherwise occupying any portion of any Individual Property under an
agreement with Borrower.
          “Title Insurance Policy” shall mean, with respect to each Individual
Property, that certain ALTA mortgagee title insurance policy issued with respect
to such Individual Property and insuring the lien of the Mortgage.

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          “Transferee” shall have the meaning set forth in Section 7.05 hereof.
          “Tribunal” shall mean any state, commonwealth, federal, foreign,
territorial or other court or governmental department, commission, board,
bureau, district, authority, agency, central bank, or instrumentality, or any
arbitration authority.
          “UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial
Code as in effect in the State where the applicable Property is located.
          “Underwriter Group” shall have the meaning set forth in
Section 13.06(b) hereof.
          Section 1.02 Principles of Construction.
          All references to sections and schedules are to sections and schedules
in or to this Agreement unless otherwise specified. All uses of the word
“including” shall mean “including, without limitation” unless the context shall
indicate otherwise. Unless otherwise specified, the words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all meanings attributed to defined terms
herein shall be equally applicable to both the singular and plural forms of the
terms so defined.
ARTICLE II
GENERAL TERMS
          Section 2.01 Loan Commitment; Disbursement to Borrower.
          (a) Subject to and upon the terms and conditions set forth herein,
Lender hereby agrees to make and Borrower hereby agrees to accept the Loan on
the Closing Date.
          (b) Borrower may request and receive only one borrowing in respect of
the Loan and any amount borrowed and repaid in respect of the Loan may not be
reborrowed.
          (c) The Loan shall be evidenced by the Note and secured by the
Mortgages and the other Loan Documents.
          (d) Borrower shall use the proceeds of the Loan to (i) pay costs and
expenses in connection with the financing of the Property and the closing of the
Loan, (ii) make deposits into the Reserve Funds on the Closing Date in the
amounts provided herein, and (iii) distribute the balance, if any, to Borrower’s
members.
          Section 2.02 Interest Rate.
          (a) Note Rate. The outstanding principal amount of the Loan shall bear
interest at the Note Rate. Except as otherwise set forth in this Agreement,
interest shall be paid in arrears.

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          (b) Computations and Determinations. All interest shall be computed on
the basis of a year of 360 days and paid for the actual number of days elapsed
during an Interest Period. Lender shall determine in good faith each interest
rate applicable to the Debt in accordance with this Agreement and such
determination thereof shall be conclusive in the absence of manifest error. The
books and records of Lender shall be prima facie evidence of all sums owing to
Lender from time to time under this Agreement, but the failure to record any
such information shall not limit or affect the obligations of Borrower under the
Loan Documents.
          (c) Default Rate. Any principal of, and to the extent permitted by
applicable law, any interest on the Note, and any other sum payable hereunder,
which is not paid when due shall bear interest from the date due and payable
until paid, payable on demand, at the Default Rate.
          (d) Usury Savings. This Agreement and the Note are subject to the
express condition that at no time shall Borrower be obligated or required to pay
interest on the principal balance of the Loan at a rate which could subject
Lender to either civil or criminal liability as a result of being in excess of
the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan
Documents, Borrower is at any time required or obligated to pay interest on the
principal balance due hereunder at a rate in excess of the Maximum Legal Rate or
the Default Rate, as the case may be, shall be deemed to be immediately reduced
to the Maximum Legal Rate and all previous payments in excess of the Maximum
Legal Rate shall be deemed to have been payments in reduction of principal and
not on account of the interest due hereunder. All sums paid or agreed to be paid
to Lender for the use, forbearance, or detention of the sums due under the Loan,
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment
in full so that the rate or amount of interest on account of the Loan does not
exceed the Maximum Legal Rate of interest from time to time in effect and
applicable to the Loan for so long as the Loan is outstanding.
          Section 2.03 Loan Payments.
          (a) Payments. Borrower agrees to pay sums under the Note in
installments as follows:
          (i) a payment on the Closing Date of all interest that will accrue on
the principal amount of the Note during the Interim Interest Period;
          (ii) a payment on each Payment Date in the amount of $854,559.26 (the
“Monthly Payment Amount”); and
          (iii) the outstanding principal amount of the Loan and all interest
thereon shall be due and payable on the Maturity Date.
          (b) Payments After Default. Upon the occurrence and during the
continuance of an Event of Default, (i) interest on the outstanding principal
balance of the Loan and, to the extent permitted by applicable law, overdue
interest and other amounts due in respect of the Loan shall accrue at the
Default Rate, and (ii) Lender shall be entitled to receive and Borrower shall
pay or cause to be paid to Lender all cash flow from the Property, such amount
to be

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applied by Lender to the payment of the Debt in such order as Lender shall
determine in its sole discretion, including, without limitation, alternating
applications thereof between interest and principal. Interest at the Default
Rate shall be computed from the occurrence of the Event of Default until the
earlier of (x) the actual receipt and collection of the Debt (or that portion
thereof that is then due) and (y) the cure of such Event of Default. To the
extent permitted by applicable law, interest at the Default Rate shall be added
to the Debt, shall itself accrue interest at the same rate as the Loan and shall
be secured by the Mortgage. This paragraph shall not be construed as an
agreement or privilege to extend the date of the payment of the Debt, nor as a
waiver of any other right or remedy accruing to Lender by reason of the
occurrence of any Event of Default; the acceptance of any payment from Borrower
shall not be deemed to cure or constitute a waiver of any Event of Default; and
Lender retains its rights under this Agreement to accelerate and to continue to
demand payment of the Debt upon the happening of and during the continuance of
any Event of Default, despite any payment by Borrower to Lender.
          (c) Late Payment Charge. If any principal or interest payment is not
paid by Borrower on or before the date on which it is due, Borrower shall pay to
Lender upon demand an amount equal to the lesser of four percent (4%) of such
unpaid sum or the maximum amount permitted by applicable law (in either case,
the “Late Payment Charge”) in order to defray the expense incurred by Lender in
handling and processing such delinquent payment and to compensate Lender for the
loss of the use of such delinquent payment. Any such amount shall be secured by
the Mortgage and the other Loan Documents to the extent permitted by applicable
law. Notwithstanding the foregoing, the Late Payment Charge shall not be payable
on the outstanding principal due and payable on the Maturity Date unless and
until such final principal payment is ten (10) days delinquent, at which time
the Late Payment Charge shall be due and owing with respect to same (it being
understood and agreed to by Borrower that the foregoing is not limited to, and
in no way does, grant to Borrower a grace period with respect to such final
principal and interest payment due and owing on the Maturity Date and Lender
shall be entitled to all of its other rights and remedies (including, without
limitation, the right to charge interest at the Default Rate) in the event that
all principal, interest and other amounts outstanding hereunder and under the
other Loan Documents are not paid on or before the Maturity Date.
          (d) Method and Place of Payment. Each payment by Borrower hereunder or
under the Note shall be payable at Bank of America, P.O. Box 65585, Charlotte,
North Carolina 28265-0585, or at such other place as the Lender may designate
from time to time by written notice to Borrower, on the date such payment is
due, to Lender by deposit to such account as Lender may designate by written
notice to Borrower. Each payment by Borrower hereunder or under the Note shall
be made in funds settled through the New York Clearing House Interbank Payments
System or other funds immediately available to Lender by 12:00 p.m., New York
City time, on the date such payment is due, to Lender by deposit to such account
as Lender may designate by written notice to Borrower. Whenever any payment
hereunder or under the Note shall be stated to be due on a day which is not a
Business Day, such payment shall be made on the first Business Day preceding
such scheduled due date. Notwithstanding anything to the contrary contained in
this Agreement or in the other Loan Documents, Borrower shall not be deemed to
be in default hereunder or thereunder in the event funds sufficient for a
required transfer are held in an appropriate Eligible Account and Lender or
servicer fails to timely make any transfer from such Eligible Account as
contemplated by this Agreement unless due to the negligence or willful
misconduct of Borrower.

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          Section 2.04 Prepayments.
          (a) Voluntary Prepayments. Except as otherwise provided herein,
Borrower shall not have the right to prepay the Loan in whole or in part prior
to the Maturity Date. Any partial prepayment shall be applied to the last
payments of principal due under the Loan.
          (b) Lockout. The Loan shall only be prepayable commencing on the day
after the expiration of the Lockout Period.
          (c) Payments After the Lockout Period.
          (i) At any time after the expiration of the Lockout Period, Borrower
may prepay the Loan in whole, but not in part, upon not less than thirty
(30) days prior written notice to Lender. Any such prepayment shall include the
Prepayment Premium, if any, and all additional amounts required to be paid by
Borrower and all other amounts owing by Borrower to Lender under the Note and
the other Loan Documents.
          (ii) All payments and prepayments of the Loan (in whole but not in
part), whether voluntary, involuntary, at the Maturity Date or otherwise (but
exclusive of prepayments made pursuant to Section 2.04(e) hereof) shall include,
without duplication, (x) payment by Borrower to Lender of the Prepayment Premium
(as set forth in subsection (i) above), if any, and (y) interest on the
outstanding principal amount of the Loan through the end of the Interest Period
in which such payment or prepayment occurs. For purposes of this Agreement, an
involuntary prepayment shall be deemed to include, but not limited to, a
prepayment of the Loan in connection with or following the Lender’s acceleration
of the outstanding balance of the Loan, whether or not the Mortgage is satisfied
or released by foreclosure (whether by power of sale or judicial proceeding),
deed in lieu of foreclosure or by other means, including, without limitation,
repayment of the Loan by the Borrower or any other Person pursuant to any
statutory or common law right of redemption.
          (d) Prepayments During the Lockout Period. If, during the Lockout
Period, payment of all or any part of the Debt is tendered by Borrower or
otherwise recovered by Lender, such tender or recovery shall be (i) made on the
next occurring Payment Date together with the Monthly Debt Service Payment and
(ii) deemed a voluntary prepayment by Borrower in violation of the prohibition
against prepayment set forth in this Section 2.04 and Borrower shall pay, in
addition to the Debt, (x) an amount equal to the Lockout Yield Maintenance
Premium to the extent permitted by applicable law and (y) the accrued and unpaid
interest calculated for the full Interest Period in which such voluntary
prepayment occurs.
          (e) Insurance and Condemnation Proceeds; Excess Interest.
Notwithstanding any other provision herein to the contrary, and provided no
Event of Default exists, Borrower shall not be required to pay the Prepayment
Premium or Lockout Yield Maintenance Premium in connection with any prepayment
occurring solely as a result of (i) the application of Insurance Proceeds or
Condemnation Proceeds pursuant to the terms of the Loan Documents, or (ii) the
application of any interest in excess of the maximum rate permitted by
applicable law to the

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reduction of the outstanding principal amount of the Loan. Notwithstanding the
foregoing, the Borrower shall pay interest for the full final Interest Period in
which such prepayment occurs.
          (f) Mandatory Prepayment. Notwithstanding anything to the contrary
contained herein, in the event that any Individual Property is subject to a
Casualty or Condemnation and as a result of such Casualty or Condemnation the
applicable Operating Lessee terminates the applicable Operating Lease, Borrower
shall be required to effectuate a Property Release, and Borrower shall comply
with the terms and conditions of Section 2.05 hereof with respect to such
Individual Property. Borrower shall cause the affected Individual Property to be
released within thirty (30) days of the occurrence of such Casualty or
Condemnation, provided, that, with respect to any such Property Release, the
Release Amount shall be the Allocated Loan Amount for the affected Individual
Property without payment of any Prepayment Premium or Lockout Yield Maintenance
Premium.
          (g) Application of Payments. All voluntary and involuntary prepayments
on the Note shall be applied, to the extent thereof, in the following order:
(i) to all costs and expenses then due and payable to Lender hereunder or under
the other Loan Documents, (ii) to accrued but unpaid interest on the outstanding
principal amount prepaid, and (iii) to the outstanding principal amount.
Following the occurrence and during the continuance of an Event of Default, any
payment made on the Note shall be applied to accrued but unpaid interest, late
charges, accrued fees, the unpaid principal amount of the Note, and any other
sums due and unpaid to Lender in connection with the Loan, in such manner and
order as Lender may elect in its sole and absolute discretion.
          Section 2.05 Property Releases.
          After the Lockout Period and provided no Event of Default exists,
Borrower may obtain the release of an Individual Property from the lien (or at
Borrower’s option, an assignment thereof to one or more third parties) of the
Mortgage thereon (and the related Loan Documents) and the release of the
Borrower’s obligations under the Loan Documents with respect to such Individual
Property (other than those expressly stated to survive) (each such release or
assignment a “Property Release”), upon the satisfaction of each of the following
conditions in a manner satisfactory to a prudent mortgage lender:
          (a) Borrower shall pay the Release Amount for the applicable
Individual Property, and such payment shall be deemed a voluntary prepayment of
a portion of the Loan for all purposes hereunder;
          (b) Borrower shall pay to Lender any applicable Prepayment Premium
plus, without duplication, interest on such prepaid amount of the Loan through
the end of the Interest Period in which such payment or prepayment occurs;
          (c) Borrower shall submit to Lender, not less than seven (7) Business
Days prior to the Payment Date on which the Property Release shall be made, a
release (or assignment) of the lien of the Mortgage (and related Loan Documents)
for such Individual Property for execution by Lender. Such release (or
assignment) shall be in a form appropriate in the jurisdiction in which the
Individual Property is located and that contains standard provisions,

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if any, protecting the rights of the releasing lender. In addition, Borrower
shall provide all other documentation Lender reasonably requires to be delivered
by Borrower in connection with the Release, together with a certificate from an
officer of Borrower certifying that such documentation (i) is in compliance with
all Legal Requirements, and (ii) will not impair or otherwise adversely affect
the Liens, security interests and other rights of Lender under the Loan
Documents not being released or assigned (or as to the parties to the Loan
Documents and Properties subject to the Loan Documents not being released);
          (d) After giving effect to such Property Release, the Debt Service
Coverage Ratio for the Properties then remaining subject to the lien of the
Mortgage shall be equal to or exceed the greater of (i) the Debt Service
Coverage Ratio as of the Closing Date or (ii) the Debt Service Coverage Ratio
immediately prior to the Property Release;
          (e) Concurrently with the payment of the Release Amount, New Mezzanine
Borrower, if any, shall make a partial prepayment of the related New Mezzanine
Loan, if any, equal to the related release amount (as defined in the applicable
New Mezzanine Loan Documents), if any, applicable to such Individual Property,
together with any related interest, fees, prepayment premiums or other amounts
payable under the related New Mezzanine Loan Documents, if any, in connection
with such prepayment, including, to the extent such prepayment is made on a date
other than a Payment Date, interest which would have accrued on the outstanding
principal balance of the related New Mezzanine Loan, if any, pursuant to the New
Mezzanine Loan Documents;
          (f) Borrower shall execute and deliver to Lender any amendments to the
Loan Documents reasonably deemed necessary by Lender to affect the Property
Release, including adjustments to reserve and escrow accounts which lower the
amounts required to be held by Lender as a result of the Property Release;
          (g) All reasonable costs and expenses incurred by Lender in connection
with such Property Release shall be paid by Borrower. Any assignments made by
Lender shall be without recourse, representation or warranty by Lender and shall
comply with all applicable law;
          (h) the Allocated Loan Amount for the applicable Individual Property,
when combined with the Allocated Loan Amount attributable to the other
Individual Properties that have been released pursuant to this Section 2.05,
shall not represent more than (x) 15% of the original principal amount of the
Loan in any given twelve (12) consecutive month period, and (y) in the
aggregate, 40% of the original principal amount of the Loan over the entire term
of the Loan;
          (i) Borrower shall have provided evidence reasonably acceptable to
Lender, that it has terminated the applicable Operating Lease with respect to
such Individual Property in accordance with the terms of such Operating Lease
including, without limitation, the payment by Borrower to the applicable Tenant
of any compensation owing by Borrower to such Tenant under such Operating Lease
with respect to the Individual Property being released.

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          Section 2.06 Substitution of Properties.
          Subject to the terms and conditions set forth in this Section,
Borrower may obtain a release of the Lien of a Mortgage (and the related Loan
Documents) encumbering an Individual Property (a “Substituted Property”) by
substituting therefor its interest in one or more properties of like kind and
quality acquired by Borrower (individually, a “Substitute Property” and
collectively, the “Substitute Properties”), provided that no such substitution
may occur after the date that is three (3) months prior to the Maturity Date. In
addition, any such substitution shall be subject, in each case, to the
satisfaction of the following conditions precedent:
          (a) The Substitute Property must be a property as to which Borrower
will hold indefeasible fee or ground leasehold title free and clear of any lien
or other encumbrance except for Permitted Encumbrances, Leases and easements,
restrictive covenants and other title exceptions which do not have an MAE (as
would be determined by a prudent mortgage lender) on the utility or value of
such property for its current use. In the event the Borrower’s interest in any
Substitute Property is a ground leasehold interest, the ground lease must comply
with all then-applicable Rating Agency requirements and the ground lessor must
issue an estoppel certificate satisfying Rating Agency requirements and
otherwise confirming the absence of any defaults under the applicable ground
lease, the term of the ground lease and an acknowledgement of Lender’s lien on
the leasehold estate and its address for notices, in addition to such other
commercially reasonable statements required by prudent mortgage lenders.
          (b) Lender and Rating Agencies shall have received (A) a copy of a
deed conveying all of Borrower’s right, title and interest in and to the
Substituted Property (x) to an entity other than Borrower or its manager, sole
member, general partner or managing member (as applicable) in an arms’ length
transaction or (y) to any other Affiliate of Borrower or Borrower Principal and
(B) a letter from Borrower countersigned by a title insurance company
acknowledging receipt of such deed and agreeing to record such deed in the real
estate records for the county in which the Substituted Property is located.
          (c) Lender and the applicable Rating Agencies shall have received an
MAI appraisal of the Substitute Property dated no more than ninety (90) days
prior to the substitution by a nationally recognized and independent appraiser,
indicating an appraised value of the Substitute Property that is at least equal
or greater than the appraised value of the Substituted Property determined by
Lender as of the Closing Date.
          (d) Except with respect to a substitution whereby the Borrower will
cause the retail operations of the Individual Property located in Vernon Hills,
Illinois to be relocated to a new location at the same shopping center at which
such Vernon Hills, Illinois Individual Property is currently operating, Borrower
has delivered to Lender historical calculations of EBITDA and proforma
calculations of EBITDA, each of which shall be certified by an officer of
Borrower, reflecting that the proforma annualized EBITDA for the Substitute
Property is equal to or greater than the higher of (i) EBITDA (for the trailing
12 month period) for the Substituted Property as of the Closing Date and
(ii) EBITDA (for the trailing 12 month period) for the Substituted Property
immediately prior to the substitution thereof.

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          (e) The Person transferring the Substitute Property is solvent and the
Substitute Property was transferred to Borrower in an arm’s length transaction.
          (f) If the Loan is part of a Securitization, Lender shall have
received evidence in writing from the Rating Agencies to the effect that such
substitution will not result in a withdrawal, qualification or downgrade of the
respective ratings in effect immediately prior to such substitution for the
Securities issued in connection with the Securitization that are then
outstanding.
          (g) No Event of Default shall have occurred and be continuing. Lender
and the Rating Agencies shall have received a certificate from Borrower
confirming the foregoing.
          (h) Borrower shall have executed, acknowledged and delivered to Lender
(A) a Mortgage, and authorized the filing of UCC financing statements with
respect to the Substitute Property, together with a letter from Borrower
countersigned by a title insurance company acknowledging receipt of such
Mortgage and UCC financing statements and agreeing to record or file, as
applicable, such Mortgage and one of the UCC financing statements in the real
estate records for the county in which the Substitute Property is located and to
file one of the UCC financing statements in the office of the Secretary of State
of the state in which the Borrower is organized, so as to effectively create
upon such recording and filing valid and enforceable liens upon the Substitute
Property, of the requisite priority, in favor of Lender (or such other trustee
as may be desired under local law), subject only to the Permitted Encumbrances
and such other liens as are permitted pursuant to the Loan Documents, (B) an
Environmental Indemnity Agreement with respect to the Substitute Property,
(C) an Exceptions to Non-Recourse Guaranty with respect to the Substitute
Property, and (D) written confirmation of indemnity obligations from each
indemnitor and Borrower Principal regarding such substitution. The Mortgage, UCC
financing statements, Exceptions to Non-Recourse Guaranty and Environmental
Indemnity Agreement shall be the same in form and substance as the counterparts
of such documents executed and delivered with respect to the related Substituted
Property subject to modifications reflecting the Substitute Property as the
Individual Property that is the subject of such documents and such modifications
reflecting the laws of the state in which the Substitute Property is located as
shall be recommended by the counsel admitted to practice in such state and
delivering the opinion as to the enforceability of such documents required
pursuant to clause (n) below. The Mortgage encumbering the Substitute Property
shall secure all amounts evidenced by the Note, provided that in the event that
the jurisdiction in which the Substitute Property is located imposes a mortgage
recording, intangibles or similar tax and does not permit the allocation of
indebtedness for the purpose of determining the amount of such tax payable, the
principal amount secured by such Mortgage shall be equal to one hundred twenty
five percent (125%) of the amount of the Loan allocated to the Substitute
Property. The amount of the Loan allocated to the Substitute Property (such
amount being hereinafter referred to as the “Substitute Release Amount”) shall
equal the Allocated Loan Amount of the related Substituted Property.
          (i) Lender shall have received (A) any “tie in” or similar endorsement
to each Title Insurance Policy insuring the lien of an existing Mortgage as of
the date of the substitution available with respect to the Title Insurance
Policy insuring the lien of the Mortgage with respect to the Substitute Property
and (B) a Title Insurance Policy (or a marked, signed and redated commitment to
issue such Title Insurance Policy) insuring the lien of the Mortgage encumbering

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the Substitute Property, issued by the title company that issued the Title
Insurance Policies insuring the lien of the existing Mortgage and dated as of
the date of the substitution, with reinsurance and direct access agreements that
replace such agreements issued in connection with the Title Insurance Policy
insuring the lien of the Mortgage encumbering the Substituted Property, to the
extent such agreements are available in the jurisdiction in which the Substitute
Property is located. The Title Insurance Policy issued with respect to the
Substitute Property shall (1) provide coverage in the amount of the Allocated
Loan Amount if the “tie in” or similar endorsement described above is available
or, if such endorsement is not available, in an amount equal to one hundred
twenty five percent (125%) of the Allocated Loan Amount, (2) insure Lender that
the relevant Mortgage creates a valid first lien on the Substitute Property
encumbered thereby, free and clear of all exceptions from coverage other than
Permitted Encumbrances and standard exceptions and exclusions from coverage (as
modified by the terms of any endorsements), (3) contain such endorsements and
affirmative coverages as are contained in the Title Insurance Policies insuring
the liens of the existing Mortgage, to the extent available in the jurisdiction
in which the Substitute Property is located and (4) name Lender as the insured.
Lender also shall have received copies of paid receipts showing that all
premiums in respect of such endorsements and Title Insurance Policies have been
paid.
          (j) Lender shall have received a current title survey for each
Substitute Property, certified to the title company and Lender and their
successors and assigns, in the same form and having the same content as the
certification of the Survey of the Substituted Property prepared by a
professional land surveyor licensed in the state in which the Substitute
Property is located and acceptable to the Rating Agencies in accordance with the
2005 Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys,
including items 1, 2, 3, 4, 6, 8, 9, 10, 11(a) (as to utilities, surface matters
only) and 13 from Table A. Such survey shall reflect the same legal description
contained in the Title Insurance Policy relating to such Substitute Property and
shall include, among other things, a metes and bounds description of the real
property comprising part of such Substitute Property. The surveyor’s seal shall
be affixed to each survey and each survey shall certify that the surveyed
property is not located in a “one hundred year flood hazard area.”
          (k) Lender shall have received valid certificates of insurance
indicating that the requirements for the Policies of insurance required for an
Individual Property hereunder have been satisfied with respect to the Substitute
Property and evidence of the payment of all premiums payable for the existing
policy period.
          (l) Lender shall have received a Phase I environmental report and, if
recommended under the Phase I environmental report, a Phase II environmental
report from a nationally recognized environmental consultant approved by the
Rating Agencies (if applicable), not less than forty five (45) days prior to
such release and substitution, which conclude that the Substitute Property does
not contain any Hazardous Materials (except for cleaning and other products used
in connection with the routine maintenance or repair of the Substitute Property
or the operation thereof as a hotel, in full compliance with Environmental Law)
and is not subject to any risk of contamination from any off site Hazardous
Materials. If any such report discloses the presence of any Hazardous Materials
(except for cleaning and other products used in connection with the routine
maintenance or repair of the Substitute Property or the operation thereof as a
hotel, in full compliance with Environmental Law) or the risk of contamination
from any off site

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Hazardous Materials, such report shall include an estimate of the cost of any
related remediation and Borrower shall deposit with Lender an amount equal to
one hundred twenty five percent (125%) of such estimated cost, which deposit
shall constitute additional security for the Loan and shall be released to
Borrower upon the delivery to Lender of (i) an update to such report indicating
that there is no longer any Hazardous Materials (except for cleaning and other
products used in connection with the routine maintenance or repair of the
Substitute Property or the operation thereof as a hotel, in full compliance with
Environmental Law) on the Substitute Property or any danger of contamination
from any off site Hazardous Materials that has not been fully remediated in
accordance with all applicable laws and (ii) paid receipts indicating that the
costs of all such remediation work have been paid. Such report shall also state
the amount of time that will be necessary to complete such remediation, as may
be required by law. Borrower covenants to undertake any repairs, cleanup or
remediation indicated.
          (m) Borrower shall deliver or cause to be delivered to Lender
(i) updates certified by Borrower of all organizational documentation related to
Borrower and/or the formation, structure, existence, good standing and/or
qualification to do business delivered to Lender in connection with the Closing
Date; (ii) good standing certificates, certificates of qualification to do
business in the jurisdiction in which the Substitute Property is located (if
required in such jurisdiction) and (iii) resolutions of the managing member of
Borrower authorizing the substitution and any actions taken in connection with
such substitution.
          (n) Lender shall have received the following opinions of Borrower’s
counsel (which opinions, with respect to the opinions set forth in clauses (i),
(ii) and (iii) below, shall be in form similar to the corresponding opinions
delivered in connection with the closing of the Loan): (i) an opinion or
opinions of counsel admitted to practice under the laws of the state in which
the Substitute Property is located stating that the Loan Documents delivered
with respect to the Substitute Property pursuant to clause (h) above are valid
and enforceable in accordance with their terms, subject to the laws applicable
to creditors’ rights and equitable principles, and that Borrower is qualified to
do business and in good standing under the laws of the jurisdiction where the
Substitute Property is located or that Borrower is not required by applicable
law to qualify to do business in such jurisdiction; (ii) an opinion of counsel
stating that the Loan Documents delivered with respect to the Substitute
Property pursuant to clause (h) above were duly authorized, executed and
delivered by Borrower and that, to the best of Borrower’s counsel’s knowledge,
the execution and delivery of such Loan Documents and the performance by
Borrower of its obligations thereunder will not cause a breach of, or a default
under, any agreement, document or instrument to which Borrower is a party or to
which it or its properties are bound; (iii) an opinion of counsel stating that
subjecting the Substitute Property to the lien of the related Mortgage and the
execution and delivery of the related Loan Documents does not and will not
affect or impair the ability of Lender to enforce its remedies under all of the
Loan Documents or to realize the benefits of the cross collateralization
provided for thereunder; (iv) an update of the substantive consolidation opinion
delivered to Lender on the Closing Date indicating that the substitution does
not affect the opinions set forth therein; (v) an opinion of counsel acceptable
to the applicable Rating Agencies stating that the substitution and the related
transactions do not constitute a fraudulent conveyance under applicable
bankruptcy and insolvency laws and (vi) an opinion of counsel acceptable to the
applicable Rating Agencies that the substitution does not constitute a
“significant modification” of the Loan under Section 1001 of the Code or
otherwise cause a tax to be imposed on a “prohibited transaction” by any REMIC.

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          (o) To the extent then currently due and payable, Borrower shall have
paid or caused to be paid all Taxes and Insurance Premiums relating to each of
the Individual Properties and the Substitute Property, including, without
limitation, (i) accrued but unpaid i Insurance Premiums relating to each of the
Individual Properties and the Substitute Property, (ii) currently due Taxes
(including any in arrears) relating to each of the Individual Properties and the
Substitute Property and (iii) any other charges relating to each of the
Individual Properties and Substitute Property which are currently due.
          (p) Borrower shall have paid or reimbursed Lender for all third party
out of pocket costs and expenses incurred by Lender (including, without
limitation, reasonable attorneys fees and disbursements) in connection with the
substitution and Borrower shall have paid all recording charges, filing fees,
taxes or other expenses (including, without limitation, mortgage and intangibles
taxes and documentary stamp taxes) payable in connection with the substitution.
Borrower shall have paid all costs and expenses of the Rating Agencies incurred
in connection with the substitution.
          (q) Except with respect to a substitution whereby the Borrower will
cause the retail operations of the Individual Property located in Vernon Hills,
Illinois to be relocated to a new location at the same shopping center at which
such Vernon Hills, Illinois Individual Property is currently operating, Lender
shall have received annual operating statements and occupancy statements for the
Substitute Property for the three (3) most recently completed fiscal years and a
current operating statement for the Substituted Property or, if information is
not available for a three (3) year period or if the Substituted Property has
been substantially renovated within such three (3) year period, such lesser
period as is available, but in no event less than twelve (12) months. Each of
the statements required under this clause (q) shall be certified to Lender as
being true and correct and a certificate from Borrower certifying that there has
been no adverse change in the financial condition of the Substitute Property
since the date of such operating statements.
          (r) Borrower shall have delivered to Lender estoppel certificates from
any Operating Lessees and other tenants of the Substitute Property. All such
estoppel certificates shall be in the form attached hereto as Exhibit A and
shall indicate, among other things, that (1) the subject lease is a valid and
binding obligation of the tenant thereunder, (2) there are no defaults under
such lease on the part of the landlord or tenant thereunder, (3) the tenant
thereunder has no defense or offset to the payment of rent under such leases,
(4) no rent under such lease has been paid more than one (1) month in advance,
(5) the tenant thereunder has no option or right of first refusal under such
lease to purchase all or any portion of the Substitute Property and (6) all
tenant improvement work required under such lease has been completed and the
tenant under such lease is in actual occupancy of its leased premises. If an
estoppel certificate indicates that all tenant improvement work required under
the subject lease has not yet been completed, Borrower shall, if required by the
Rating Agencies, deliver to Lender financial statements indicating that Borrower
has adequate funds to pay all costs related to such tenant improvement work as
required under such lease.
          (s) Lender shall have received copies of all Leases affecting the
Substitute Property certified by Borrower as being true and correct. Lender
shall have received a current Rent Roll of the Substitute Property certified by
Borrower as being true and correct.

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          (t) Intentionally omitted.
          (u) Lender shall have received (A) an endorsement to the Title
Insurance Policy insuring the lien of the Mortgage encumbering the Substitute
Property insuring that the Substitute Property constitutes a separate tax lot
or, if such an endorsement is not available in the state in which the Substitute
Property is located, a letter from the title insurance company issuing such
Title Insurance Policy stating that the Substitute Property constitutes a
separate tax lot or (B) a letter from the appropriate taxing authority stating
that the Substitute Property constitutes a separate tax lot or other reasonable
evidence including a copy of the latest tax bill or tax lot endorsement to Title
Insurance Policy.
          (v) Lender shall have received a physical conditions report with
respect to the Substitute Property from a nationally recognized structural
consultant approved by the Rating Agencies (if applicable) in a form recognized
and approved by such Rating Agencies not less than forty-five (45) days prior to
such release and substitution stating that the Substitute Property and its use
comply in all material respects with all applicable Legal Requirements
(including, without limitation, zoning, subdivision and building laws) and that
the Substitute Property is in good condition and repair and free of damage or
waste. If compliance with any Legal Requirements are not addressed by the
physical conditions report, such compliance shall be confirmed by delivery to
Lender of a certificate of an architect licensed in the state in which the
Substitute Property is located, a letter from the municipality in which such
Substitute Property is located, a certificate of a surveyor that is licensed in
the state in which the Substitute Property is located (with respect to zoning
and subdivision laws), an ALTA 3.1 zoning endorsement to the Title Insurance
Policy delivered pursuant to clause (i) above (with respect to zoning laws) or a
subdivision endorsement to the Title Insurance Policy delivered pursuant to
clause (i) above (with respect to subdivision laws) to the extent such
endorsements are available in the jurisdiction in which the Substitute Property
is located. If the physical conditions report recommends that any repairs be
made with respect to the Substitute Property, such physical conditions report
shall either (i) include an estimate of the cost of such recommended repairs (in
which case Borrower shall deposit into the Required Repair Account an amount
equal to one hundred twenty five percent (125%) of such estimated cost), or
(ii) state the specific amounts that need to be reserved over time in order to
meet the requirements of such replacement (in which case Borrower shall deposit
such reserves into the Replacement Reserve Account on a monthly basis to the
extent that Borrower is required to otherwise be making such deposits pursuant
to Section 9.02 hereof). Any such deposits shall constitute additional security
for the Loan pursuant to Section 9.08 and shall be released to Borrower pursuant
to Section 9.05. Borrower covenants to undertake any repairs, cleanup or
remediation indicated in the physical conditions report before the earlier of
(A) the time required by applicable law or (B) the time recommended in the
physical conditions report.
          (w) Borrower shall (i) have in effect an Operating Lease with respect
to the Substitute Property which is in the same form and substance as the
Operating Lease in effect on the date hereof; (ii) deliver evidence to Lender
that the Operating Lease Guaranty applies to, and is in effect with respect to,
the Substitute Property on the same terms and conditions set forth in the
Operating Lease Guaranty as of the date hereof; and (iii) have provided evidence
that it has terminated the applicable Operating Lease with respect to the
Substituted Property including, without limitation, the payment by Borrower to
the applicable Tenant of any compensation

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          owing by Borrower to such Tenant under such Operating Lease with
respect to the Substituted Property.
          (x) Lender shall have received such other and further approvals,
opinions, documents and information in connection with the substitution as the
Rating Agencies may have requested.
          (y) Lender shall have received copies of all contracts and agreements
relating to the leasing and operation of the Substitute Property together with a
certification of Borrower attached to each such contract or agreement certifying
that the attached copy is a true and correct copy of such contract or agreement
and all amendments thereto.
          (z) Lender shall have a received a certification of Borrower that each
of the representations and warranties with respect to the Property as a whole,
the Substitute Property and the Borrower set forth in the Loan Documents are
true and correct in all material respects as of the date of closing of the
proposed substitution.
          (aa) Borrower shall submit to Lender, not less than thirty (30) days
prior to the date of such substitution, a release of lien (and related Loan
Documents) for the Substituted Property for execution by Lender. Such release
shall be in a form appropriate for the jurisdiction in which the Substituted
Property is located. Borrower shall deliver an Officer’s Certificate certifying
that the requirements set forth in this Section 2.06 have been satisfied.
          (bb) The total Allocated Loan Amount, in the aggregate, for all prior
Substituted Properties (including the current Substituted Property) is (i) for
any consecutive twelve (12) month period, less than fifteen percent (15%) of the
original principal amount of the Loan and (ii) for the entire term of the Loan,
less than twenty-five percent (25%) of the original principal amount of the
Loan, provided, that, the foregoing aggregate caps on substitutions shall not
take into effect a substitution whereby the Borrower will cause the retail
operations of the Individual Property located in Vernon Hills, Illinois to be
relocated to a new location at the same shopping center at which such Vernon
Hills, Illinois Individual Property is currently operating.
          (cc) The Substitute Property shall be subject to the lien of the
related Mortgage and subject to the cross-collateralization and cross-default
provisions of this Agreement and the Mortgage.
          (dd) Borrower shall have delivered to Lender not less than sixty
(60) days prior written notice of the proposed substitution and Lender shall
have received the information and documentation with respect to the Borrower and
the Substitute Property required to be delivered hereunder not less than thirty
(30) days prior to the date of the proposed substitution.
          (ee) Borrower shall have paid to Lender (i) a non-refundable
processing fee of $5,000 for each request for a substitution (provided, that,
Borrower shall not be required to pay any such fee in connection with the first
request for a substitution hereunder).
          (ff) Any Management Agreement relating to the Substitute Property
shall be satisfactory to a prudent lender.

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          Upon the satisfaction of the foregoing conditions precedent, Lender
will release its lien from the Substituted Property to be released and the
Substitute Property shall be deemed to be an Individual Property for purposes of
this Loan Agreement and the Substitute Release Amount with respect to such
Substitute Property shall be deemed to be the Allocated Loan Amount with respect
to such Substitute Property for all purposes hereunder.
ARTICLE III
CONDITIONS PRECEDENT
          The obligation of Lender to make the Loan hereunder is subject to the
fulfillment by Borrower or waiver by Lender of the following conditions
precedent no later than the Closing Date:
          Section 3.01 Representations and Warranties; Compliance with
Conditions.
          The representations and warranties of Borrower contained in this
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the Closing Date, and Lender shall have determined that no
Default or Event of Default shall have occurred and is continuing on the Closing
Date; and Borrower shall be in compliance in all material respects with all
terms and conditions set forth in this Agreement and in each other Loan Document
on its part to be observed or performed.
          Section 3.02 Delivery of Loan Documents; Title Insurance; Reports;
Leases.
          (a) Mortgage, Loan Agreement and Note. Lender shall have received from
Borrower a fully executed and acknowledged Mortgage with respect to each
Individual Property and evidence reasonably acceptable to Lender that each
Mortgage and Uniform Commercial Code financing statement has been delivered to
the title company issuing the Title Insurance Policy for recording so as to
effectively create upon such recording valid and enforceable Liens upon each
Individual Property, of the requisite priority, in favor of Lender (or such
other trustee as may be required under local law), subject only to the Permitted
Encumbrances and such other Liens as are permitted pursuant to the Loan
Documents. Lender shall have also received from Borrower fully executed
counterparts of the Environmental Indemnity, this Agreement, the Note and all
other Loan Documents.
          (b) Title Insurance. Lender shall have received each Title Insurance
Policy dated as of the Closing Date, with reinsurance reasonably acceptable to
Lender. Each Title Insurance Policy shall (i) provide coverage with respect to
the applicable Individual Property in an amount acceptable to Lender,
(ii) insure Lender that the Mortgage creates a valid lien on each Individual
Property of the requisite priority subject only to Permitted Encumbrances and
standard exceptions and exclusions from coverage (as modified by the terms of
any endorsements), (iii) contain such endorsements and affirmative coverages as
Lender may reasonably request to the extent available in the states and
jurisdictions where the applicable Individual Property is located, and (iv) name
Lender as the insured. The Title Insurance Policy

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shall be assignable. Lender also shall have received evidence that all premiums
in respect of each such Title Insurance Policy have been paid.
          (c) Survey. Lender shall have received a current title survey for each
Individual Property, certified to the title company issuing the Title Insurance
Policy and Lender and their successors and assigns, in form and content
satisfactory to Lender and prepared by a professional and properly licensed land
surveyor satisfactory to Lender in accordance with the 2005 Minimum Standard
Detail Requirements for ALTA/ACSM Land Title Surveys. The survey shall meet the
classification of an “Urban Survey” and the following additional items from the
list of “Optional Survey Responsibilities and Specifications” (Table A) should
be added to each survey: 1, 2, 3, 4, 6, 8, 9, 10, 11(a) (as to utilities,
surface matters only) and 13. Such survey shall reflect the same legal
description contained in the Title Insurance Policy referred to in subsection
(b) above and shall include, among other things, a metes and bounds description
of the real property comprising part of each Individual Property reasonably
satisfactory to Lender. The surveyor’s seal shall be affixed to the survey and
the surveyor shall provide a certification for each survey in form and substance
acceptable to Lender.
          (d) Insurance. Lender shall have received copies of the Policies
required hereunder, satisfactory to Lender in its reasonable discretion, and
evidence of the payment of all Insurance Premiums payable for the existing
policy period.
          (e) Environmental Reports. Lender shall have received an Environmental
Report in respect of each Individual Property reasonably satisfactory to Lender.
          (f) Zoning/Building Code. Lender shall have received evidence of
compliance with zoning and building ordinances and codes, including, without
limitation, required certificates of occupancy, reasonably acceptable to Lender
with respect to each Individual Property.
          (g) Encumbrances. Borrower shall have taken or caused to be taken such
actions in such a manner so that Lender has a valid and perfected first Lien as
of the Closing Date on each Individual Property, subject only to applicable
Permitted Encumbrances and such other Liens as are permitted pursuant to the
Loan Documents, and Lender shall have received satisfactory evidence thereof.
          (h) Lien Searches. Borrower shall have delivered to Lender certified
search results pertaining to the Borrower, Borrower Principal and such other
Persons or any SPE Component Entity as reasonably required by Lender for state
and federal tax liens, bankruptcy, judgment, litigation and state and local UCC
filings.
          Section 3.03 Related Documents.
          Each additional document not specifically referenced herein, but
relating to the transactions contemplated herein, shall have been duly
authorized, executed and delivered by all parties thereto and at Lender’s
written request, Lender shall have received and approved certified copies
thereof.

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          Section 3.04 Organizational Documents.
          On or before the Closing Date, Borrower shall deliver or cause to be
delivered to Lender (a) copies certified by Borrower of all organizational
documentation related to Borrower, each SPE Component Entity and Borrower
Principal which shall be reasonably acceptable to Lender, and (b) such other
evidence of the formation, structure, existence, good standing and/or
qualification to do business of the Borrower, each SPE Component Entity and
Borrower Principal, as Lender may reasonably request, including, without
limitation, good standing or existence certificates, qualifications to do
business in the appropriate jurisdictions, resolutions authorizing the entering
into of the Loan and incumbency certificates as may be requested by Lender.
          Section 3.05 Opinions of Borrower’s Counsel.
          Lender shall have received opinions of counsel (a) with respect to
non-consolidation issues, (b) with respect to due execution, authority and
enforceability of the Loan Documents, and (c) with respect to Delaware single
member limited liability company issues and Delaware authority to file
bankruptcy petition issues, each of which shall be in form and substance
reasonably satisfactory to Lender and Lender’s counsel.
          Section 3.06 Annual Budget.
          Borrower shall have delivered to Lender, for Lender’s review and
approval, the Annual Budget for the current fiscal year. Any proposed
modifications to such Annual Budget shall be delivered to Lender for its review,
but not approval.
          Section 3.07 Taxes and Other Charges.
          Borrower shall have paid all Taxes and Other Charges (including any in
arrears) relating to the Property, except to the extent the same are not yet
delinquent or are being contested in accordance with the terms and conditions of
Section 5.04(b) hereof), which amounts may be funded with proceeds of the Loan.
          Section 3.08 Completion of Proceedings.
          All limited liability company and other proceedings taken by Borrower
in connection with the transactions contemplated by this Agreement and other
Loan Documents and all documents incidental thereto shall be reasonably
satisfactory in form and substance to Lender, and Lender shall have received all
such counterpart originals or certified copies of such authority documents as
Lender may reasonably request.
          Section 3.09 Payments.
          All payments, deposits or escrows required to be made or established
by Borrower under this Agreement, the Note and the other Loan Documents on or
before the Closing Date shall have been made in accordance with the terms and
conditions hereof and thereof.

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          Section 3.10 Transaction Costs.
          Except as otherwise expressly provided herein, Borrower shall have
paid or reimbursed Lender for all actual, reasonable out of pocket expenses in
connection with the underwriting, negotiation and closing of the Loan, including
title insurance premiums and other title company charges; recording,
registration, filing and similar fees, taxes and charges; transfer, mortgage,
deed, stamp or documentary taxes or similar fees or charges; costs of
third-party reports, including without limitation, environmental studies, credit
reports, seismic reports, engineer’s reports, appraisals and surveys;
underwriting and origination expenses; and all actual, reasonable legal fees and
expenses charged by counsel to Lender.
          Section 3.11 No Material Adverse Change.
          There shall have been no material adverse change in the financial
condition or business condition of the Property, Borrower, Lease Guarantor,
Borrower Principal, BTDS, any SPE Component Entity or any other person or party
contributing to the operating income and operations of the Property since the
date of the most recent financial statements and/or other information delivered
to Lender. The income and expenses of the Property, the occupancy and leases
thereof, and all other features of the transaction shall be as represented to
Lender without material adverse change. None of Borrower, BTDS, Lease Guarantor,
Borrower Principal nor any SPE Component Entity shall be the subject of any
bankruptcy, reorganization, or insolvency proceeding.
          Section 3.12 Leases and Rent Roll.
          Lender shall have received copies of all Leases affecting the
Property, which shall be reasonably satisfactory in form and substance to
Lender. Lender shall have received a current certified rent roll setting forth
the Rents for each Individual Property, reasonably satisfactory in form and
substance to Lender. Lender shall have received a copy of the Operating Lease
Guaranty affecting the Property, which shall be reasonably satisfactory in form
and substance to Lender.
          Section 3.13 Tenant Estoppels.
          Borrower shall have delivered to Lender an executed tenant estoppel
letter, which shall be in form and substance reasonably satisfactory to Lender,
from each Operating Lessee with respect to the applicable Operating Lease.
          Section 3.14 REA Estoppels.
          Borrower shall have delivered to Lender an executed REA estoppel
letter, which shall be in form and substance reasonably satisfactory to Lender,
from each party to any REA for the Property.

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          Section 3.15 Subordination and Attornment.
          Borrower shall have delivered to Lender executed instruments
acceptable to Lender subordinating to the Mortgage all of the Operating Leases
affecting the Property designated by Lender.
          Section 3.16 Tax Lot.
          Lender shall have received evidence that each Individual Property
constitutes one (1) or more separate tax lots, which evidence shall be
reasonably satisfactory in form and substance to Lender.
          Section 3.17 Physical Conditions Report.
          Lender shall have received a Physical Conditions Report with respect
to each Individual Property, which report shall be reasonably satisfactory in
form and substance to Lender.
          Section 3.18 Appraisal.
          Lender shall have received an appraisal of each Individual Property,
which shall be satisfactory in form and substance to Lender, which supports the
Operating Lease Rent payable by the applicable Operating Lessee with respect to
each Individual Property.
          Section 3.19 Financial Statements.
          Lender shall have received the most recently produced certified and,
as applicable, audited financial statements and related information in form and
substance reasonably satisfactory to Lender, including, without limitation, a
balance sheet, income and expense statement and statement of cash flows with
respect to Lease Guarantor, a projected operating statement with respect to each
Individual Property for the current year-to-date and for such prior years as
reasonably required by Lender, and an annual budget, all in form and substance
and from professionals reasonably satisfactory to Lender.
          Section 3.20 Intentionally Deleted.
          Section 3.21 Purchase Agreement.
          The transactions contemplated by the Purchase Agreement shall have
been consummated or shall be consummated contemporaneously with the closing.
          Section 3.22 Further Documents.
          Lender or its counsel shall have received such other and further
approvals, opinions, documents and information as Lender or its counsel may have
reasonably requested including the Loan Documents in form and substance
satisfactory to Lender and its counsel.

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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
          Borrower and, where specifically indicated, Borrower Principal
represents and warrants to Lender as of the Closing Date that:
          Section 4.01 Organization.
          Each of the Borrower and Borrower Principal (a) has been duly
organized and is validly existing and in good standing with requisite power and
authority to own its properties and to transact the businesses in which it is
now engaged, (b) is duly qualified to do business and is in good standing in
each jurisdiction where it is required to be so qualified in connection with its
properties, businesses and operations, (c) possesses all rights, licenses,
permits and authorizations, governmental or otherwise, necessary to entitle it
to own its properties and to transact the businesses in which it is now engaged
except to the extent the failure could not reasonably be expected to cause a
MAE, and the sole business of Borrower is the ownership of the Property, and
(d) in the case of Borrower, has full power, authority and legal right to
mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey, as
applicable, all of its right, title and interest in the Property pursuant to the
terms of the Loan Documents. Each of the Borrower and Borrower Principal, has
full power, authority and legal right to execute and deliver the Loan Documents
to which it is a party. Each of Borrower and Borrower Principal represent and
warrant that the chart attached hereto as Exhibit B sets forth an accurate
listing of the direct and indirect owners of the equity interests in Borrower,
each SPE Component Entity (if any) and each Borrower Principal.
          Section 4.02 Status of Borrower.
          Borrower’s exact legal name is correctly set forth on the first page
of this Agreement, on each Mortgage and on any UCC-1 financing statements filed
in connection with the Loan. Borrower is an organization of the type specified
on the first page of this Agreement. Borrower is incorporated in or organized
under the laws of the State of Delaware. Borrower’s principal place of business
and chief executive office, and the place where Borrower keeps its books and
records, including recorded data of any kind or nature, regardless of the medium
of recording, including software, writings, plans, specifications and
schematics, has been for the preceding four months (or, if less, the entire
period of the existence of Borrower) the address of Borrower set forth on the
first page of this Agreement. Borrower’s organizational identification number is
4104735.
          Section 4.03 Validity of Documents.
          Each of Borrower and Borrower Principal has taken all necessary action
to authorize the execution, delivery and performance of this Agreement and the
other Loan Documents to which they are parties. This Agreement and such other
Loan Documents have been duly executed and delivered by or on behalf of Borrower
and Borrower Principal and constitute the legal, valid and binding obligations
of Borrower and Borrower Principal enforceable against Borrower and Borrower
Principal, as applicable, in accordance with their

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respective terms, subject only to applicable bankruptcy, insolvency and similar
laws affecting rights of creditors generally, and subject, as to enforceability,
to general principles of equity (regardless of whether enforcement is sought in
a proceeding in equity or at law).
          Section 4.04 No Conflicts.
          The execution, delivery and performance of this Agreement and the
other Loan Documents by Borrower and Borrower Principal will not conflict with
or result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the property
or assets of Borrower and Borrower Principal pursuant to the terms of any
agreement or instrument to which Borrower and Borrower Principal is a party or
by which any of Borrower’s and Borrower Principal’s property or assets is
subject, nor will such action result in any violation of the provisions of any
statute or any order, rule or regulation of any Governmental Authority having
jurisdiction over Borrower and Borrower Principal or any of Borrower’s and
Borrower Principal’s properties or assets which, in each case, could reasonably
be expected to cause a MAE. Any consent, approval, authorization, order,
registration or qualification of or with any Governmental Authority required for
the execution, delivery and performance by Borrower and Borrower Principal of
this Agreement or any of the other Loan Documents has been obtained and is in
full force and effect, except for any violation that could not, individually or
in the aggregate, reasonably be expected to result in a MAE.
          Section 4.05 Litigation.
          There are no actions, suits or proceedings at law or in equity by or
before any Governmental Authority or other agency now pending or, to Borrower’s
and Borrower Principal’s knowledge, threatened against or affecting Borrower,
Borrower Principal or any Individual Property, which actions, suits or
proceedings, if adversely determined against Borrower, Borrower Principal or any
Individual Property could reasonably be expected to cause a MAE.
          Section 4.06 Agreements.
          Borrower is not a party to any agreement or instrument or subject to
any restriction which could reasonably be expected to materially and adversely
affect Borrower or any Individual Property, or Borrower’s business, properties
or assets, operations or condition, financial or otherwise. Borrower is not in
default in any material respect in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party or by which Borrower or any Individual
Property is bound which is reasonably likely to cause a MAE. Borrower has no
material financial obligation under any agreement or instrument to which
Borrower is a party or by which Borrower is otherwise bound, other than
(a) obligations incurred in the ordinary course of the operation of the
Property, and (b) obligations under the Loan Documents.
          Section 4.07 Solvency.
          Borrower and Borrower Principal have (a) not entered into the
transaction or executed the Note, this Agreement or any other Loan Documents
with the actual intent to hinder,

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delay or defraud any creditor and (b) received reasonably equivalent value in
exchange for their obligations under such Loan Documents. Giving effect to the
Loan, the fair saleable value of the assets of Borrower and each Borrower
Principal exceeds and will, immediately following the making of the Loan, exceed
the total liabilities of Borrower and each Borrower Principal, including,
without limitation, subordinated, unliquidated, disputed and contingent
liabilities. No petition in bankruptcy has been filed against Borrower, Borrower
Principal, any SPE Component Entity (if any) in the last ten (10) years, and
neither Borrower nor Borrower Principal or any SPE Component Entity (if any) in
the last ten (10) years has made an assignment for the benefit of creditors or
taken advantage of any Creditors Rights Laws. Neither Borrower nor Borrower
Principal or any SPE Component Entity (if any) is contemplating either the
filing of a petition by it under any Creditors Rights Laws or the liquidation of
all or a major portion of Borrower’s assets or property, and Borrower has no
knowledge of any Person contemplating the filing of any such petition against
Borrower, Borrower Principal or any SPE Component Entity (if any).
          Section 4.08 Intentionally Deleted.
          Section 4.09 No Plan Assets.
          Borrower is not an “employee benefit plan,” as defined in Section 3(3)
of ERISA, subject to Title I of ERISA, and none of the assets of Borrower
constitutes or will constitute “plan assets” of one or more such plans within
the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) Borrower is not a
“governmental plan” within the meaning of Section 3(32) of ERISA and (b)
transactions by or with Borrower are not subject to state statutes regulating
investment of, and fiduciary obligations with respect to, governmental plans
similar to the provisions of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code currently in effect, which prohibit or otherwise restrict
the transactions contemplated by this Agreement.
          Section 4.10 Not a Foreign Person.
          Borrower is not a “foreign person” within the meaning of Sections 1445
or 7701 of the Code.
          Section 4.11 Enforceability.
          The Loan Documents are not subject to any right of rescission,
set-off, counterclaim or defense by Borrower, including the defense of usury,
nor would the operation of any of the terms of the Loan Documents, or the
exercise of any right thereunder, render the Loan Documents unenforceable
(subject to applicable bankruptcy, insolvency and similar laws affecting rights
of creditors generally, and subject as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding in equity
or at law)), and neither Borrower nor Borrower Principal has asserted any right
of rescission, set-off, counterclaim or defense with respect thereto.
          Section 4.12 Business Purposes.
          The Loan is solely for the business purpose of Borrower, and is not
for personal, family, household, or agricultural purposes.

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          Section 4.13 Compliance.
          Borrower and each Individual Property, and the use and operation
thereof, comply with all Legal Requirements, including, without limitation,
building and zoning ordinances and codes and the Americans with Disabilities
Act, except for any non-compliance that individually or in the aggregate could
not reasonably be expected to cause a MAE with respect to an Individual
Property. To Borrower’s knowledge, Borrower is not in default or violation of
any order, writ, injunction, decree or demand of any Governmental Authority
which could reasonably be expected to cause a MAE and Borrower has received no
written notice of any such default or violation. There has not been committed by
Borrower or, to Borrower’s knowledge, any other Person in occupancy of or
involved with the operation or use of any Individual Property any act or
omission affording any Governmental Authority the right of forfeiture as against
any Individual Property or any part thereof or any monies paid in performance of
Borrower’s obligations under any of the Loan Documents.
          Section 4.14 Financial Information.
          All financial data, including, without limitation, the balance sheets,
statements of cash flow, statements of income and operating expense and rent
rolls, that have been delivered to Lender in respect of Borrower, any Borrower
Principal and/or the Property (a) are true, complete and correct in all material
respects, (b) accurately represent the financial condition of Borrower, Borrower
Principal or the Property, as applicable, as of the date of such reports, and
(c) to the extent prepared or audited by an independent certified public
accounting firm, have been prepared in accordance with GAAP throughout the
periods covered, except as disclosed therein. Borrower does not have any
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable commitments
that are known to Borrower and could reasonably be expected to cause a MAE,
except as referred to or reflected in said financial statements. Since the date
of such financial statements, to Borrower’s knowledge, there has been no
materially adverse change in the financial condition, operations or business of
Borrower or Borrower Principal from that set forth in said financial statements
that could reasonably be expected to have a MAE.
          Section 4.15 Condemnation.
          No Condemnation or other proceeding has been commenced or, to
Borrower’s knowledge, is threatened or contemplated with respect to all or any
portion of any Individual Property or for the relocation of roadways providing
access to the related Individual Property that individually or in the aggregate
could reasonably be expected to cause a MAE.
          Section 4.16 Utilities and Public Access; Parking.
          Each Individual Property has adequate rights of access to public ways
and is served by water, sewer, sanitary sewer and storm drain facilities
adequate to service each Individual Property for full utilization of the
Property for its intended uses except to the extent any such failure
individually or in the aggregate could not reasonably be expected to cause a
MAE. All public utilities necessary to the use of each Individual Property as
currently used are located either in the public right-of-way abutting the
Property (which are connected so as to

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serve the related Individual Property without passing over other property) or in
recorded easements serving each Individual Property and such easements are set
forth in and insured by the Title Insurance Policy. All roads necessary for the
use of the Property for its current purposes have been completed and dedicated
to public use and accepted by all Governmental Authorities. Each Individual
Property has, or is served by, parking to the extent required to comply with all
Legal Requirements.
          Section 4.17 Separate Lots.
          Each Individual Property is comprised of one (1) or more parcels which
constitute separate tax lots and do not constitute a portion of any other tax
lot not a part of such Individual Property.
          Section 4.18 Assessments.
          To Borrower’s knowledge, there are no pending or proposed special or
other assessments for public improvements or otherwise affecting any Individual
Property, nor are there any contemplated improvements to any Individual Property
that may result in such special or other assessments, in each case that
individually or in the aggregate could reasonably be expected to cause a MAE.
          Section 4.19 Insurance.
          Borrower has obtained and has delivered to Lender certified copies of
all Policies or certificates of insurance with respect to all such Policies
reflecting the insurance coverages, amounts and other requirements set forth in
this Agreement. To Borrower’s knowledge, no Person, including Borrower, has
done, by act or omission, anything which would impair in any material respect
the coverage of any of the Policies.
          Section 4.20 Use of Property.
          Each Individual Property is used exclusively for the purposes set
forth with respect to each Individual Property on Schedule III attached hereto
and other appurtenant and related uses.
          Section 4.21 Certificate of Occupancy; Licenses.
          All material certifications, permits and licenses, including, without
limitation, certificates of completion or occupancy and any applicable liquor
license required for the legal use, occupancy and operation of each Individual
Property for its current use as stated herein, have been obtained and are valid
and in full force and effect, except to the extent any such failure could
reasonably be expected individually or in the aggregate to cause a MAE. Borrower
shall keep and maintain all licenses necessary for the operation of each
Individual Property for the purpose intended herein, except to the extent any
such failure could not reasonably be expected individually or in the aggregate
to cause a MAE. The use being made of each Individual Property is in conformity
with the certificate of occupancy and any permits or licenses issued for the
related Individual Property, except to the extent any such failure could not
reasonably be expected individually or in the aggregate to cause a MAE.

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          Section 4.22 Flood Zone.
          None of the Improvements on any Individual Property are located in an
area identified by the Federal Emergency Management Agency as an area having
special flood hazards, or, if any portion of the Improvements is located within
such area, Borrower has obtained the insurance prescribed in Section 8.01(a)(i).
          Section 4.23 Physical Condition.
          Except as set forth in each Physical Conditions Report, to Borrower’s
knowledge, (i) each Individual Property, including, without limitation, all
buildings, improvements, parking facilities, sidewalks, storm drainage systems,
roofs, plumbing systems, HVAC systems, fire protection systems, electrical
systems, equipment, elevators, exterior sidings and doors, landscaping,
irrigation systems and all structural components, are in good condition, order
and repair in all material respects, subject to ordinary wear and tear, and
(ii) there exists no structural or other material defects or damages in any
Individual Property, as a result of a Casualty or otherwise, and whether latent
or otherwise. Borrower has not received written notice from any insurance
company or bonding company of any defects or inadequacies in any Individual
Property, or any part thereof, which would materially adversely affect the
insurability of the same or cause the imposition of extraordinary premiums or
charges thereon or of any termination or threatened termination of any policy of
insurance or bond and, in each case, which defects or inadequacies remain
outstanding or otherwise uncured.
          Section 4.24 Boundaries.
          Except as set forth in, and insured pursuant to, the Title Insurance
Policies, (a) none of the Improvements which were included in determining the
appraised value of each Individual Property lie outside the boundaries and
building restriction lines of the related Individual Property to any material
extent, and (b) no improvements on adjoining properties encroach upon any
Individual Property and no easements or other encumbrances upon any Individual
Property encroach upon any of the Improvements in a manner that could reasonably
be expected to cause a MAE with respect to an Individual Property.
          Section 4.25 Leases and Rent Roll.
          Borrower has delivered to Lender a true, correct and complete rent
roll for the Property as of the Closing Date (a “Rent Roll”) which includes a
listing of (i) all Leases affecting each Individual Property and (ii) all
subleases or other agreements (whether written or oral) pursuant to which any
Operating Lessee subleases or otherwise permits a third party to sublease,
occupy or otherwise use all or any portion of any Individual Property (including
schedules for all executed agreements with third parties not yet in occupancy or
under which the rent commencement date has not occurred). Except as set forth in
the Rent Roll or estoppel certificates delivered to Lender on or prior to the
Closing Date: (a) each Lease (including each Operating Lease) is in full force
and effect; (b) the Tenants under the Leases have accepted possession of and are
in occupancy of all of their respective demised premises; (c) all Rents due and
payable under the Leases (including under the Operating Leases) have been paid
and no portion thereof has been paid for any period more than thirty (30) days
in advance; (d) no Tenant

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has made any written claim of a material default against the landlord under any
Lease which remains outstanding; (g) to Borrower’s knowledge there is no present
material default by any Tenant under any Lease (including under any Operating
Lease); (h) all security deposits under the Leases, if any, have been collected
by Borrower; (i) Borrower is the sole owner of the entire landlord’s interest in
each Lease (including each Operating Lease); (j) each Lease is the valid,
binding and enforceable obligation of Borrower and the applicable Tenant
thereunder (subject to applicable bankruptcy, insolvency and similar laws
affecting rights of creditors generally, and subject as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law)) and there are no agreements with the Tenants
under the Leases other than as expressly set forth in the Leases; (k) no Person
has any possessory interest in, or right to occupy, any Individual Property or
any portion thereof as of the date hereof except as specifically disclosed in
the Rent Roll; (l) none of the Leases (including the Operating Leases) contains
any option or offer to purchase or right of first refusal to purchase the
related Individual Property or any part thereof; and (m) neither the Leases
(including the Operating Leases), nor the Rents have been assigned, pledged or
hypothecated except to Lender, and no other Person has any interest therein
except each Tenant as to Properties subject to the applicable Operating Lease.
          Section 4.26 Filing and Recording Taxes.
          All mortgage, mortgage recording, stamp, intangible or other similar
tax required to be paid by any Person under applicable Legal Requirements
currently in effect in connection with the execution, delivery, recordation,
filing, registration, perfection or enforcement of any of the Loan Documents,
including, without limitation, any Mortgage, have been paid or will be paid,
and, under current Legal Requirements, the Mortgage is enforceable in accordance
with its terms by Lender (or any subsequent holder thereof) (subject to
applicable bankruptcy, insolvency and similar laws affecting rights of creditors
generally, and subject as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law)).
          Section 4.27 Management Agreement.
          There is no Management Agreement in effect with respect to any
Individual Property.
          Section 4.28 Illegal Activity.
          No portion of any Individual Property has been or will be purchased
with proceeds of any illegal activity, and no part of the proceeds of the Loan
will be used in connection with any illegal activity.
          Section 4.29 Construction Expenses.
          To Borrower’s knowledge after due inquiry, there are no claims for
payment for work, labor or materials affecting any Individual Property which are
or may become a lien prior to, or of equal priority with, the Liens created by
the Loan Documents that individually or in the aggregate could reasonably be
expected to cause a MAE.

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          Section 4.30 Collateral Property.
          Borrower has paid in full for, and is the owner of, all Collateral
Property (other than tenants’ property) used in connection with the operation of
each Individual Property, free and clear of any and all security interests,
liens or encumbrances, except for Permitted Encumbrances and the Lien and
security interest created by the Loan Documents.
          Section 4.31 Taxes.
          Borrower and Borrower Principal have filed (or have filed extensions
for filing) all federal, state, county, municipal, and city income, personal
property and other tax returns required to have been filed by them and have paid
(or made adequate provision for the payment of) the taxes payable by Borrower
and Borrower Principal, as applicable.
          Section 4.32 Permitted Encumbrances.
          None of the Permitted Encumbrances, individually or in the aggregate,
materially and adversely affects the fair market value of the Individual
Property, materially impairs the use or the operation of the related Individual
Property, materially impairs Borrower’s ability to pay its obligations as and
when due.
          Section 4.33 Federal Reserve Regulations.
          Borrower will use the proceeds of the Loan for the purposes set forth
in Section 2.01(d) hereof and not for any illegal activity. No part of the
proceeds of the Loan will be used for the purpose of purchasing or acquiring any
“margin stock” within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System or for any other purpose which would be in violation
of such Regulation U.
          Section 4.34 Investment Company Act.
          Borrower is not (a) an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended; (b) a “holding company” or a “subsidiary company” of a
“holding company” or an “affiliate” of either a “holding company” or a
“subsidiary company” within the meaning of the Public Utility Holding Company
Act of 1935, as amended; or (c) subject to any other federal or state law or
regulation which purports to restrict or regulate its ability to borrow money.
          Section 4.35 Reciprocal Easement Agreements.
          Neither Borrower nor, to Borrower’s knowledge, any other party to such
agreement is currently in material default (nor has any written notice been
given or received with respect to an alleged or current material default) under
any of the terms and conditions of any REA which individually or in the
aggregate could reasonably be expected to cause a MAE.

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          Section 4.36 No Change in Facts or Circumstances; Disclosure.
          All information submitted by Borrower or its agents to Lender and in
all financial statements, rent rolls, reports, certificates and other documents
submitted in connection with the Loan or in satisfaction of the terms thereof
and all statements of fact made by Borrower in this Agreement or in any other
Loan Document, are accurate, complete and correct in all material respects,
except to the extent that such failure to be accurate, complete and current in
all material respects could not reasonably be expected to cause a MAE. There has
been no material adverse change in any condition, fact, circumstance or event
that would make any such information inaccurate, incomplete or otherwise
misleading in any material respect, except to the extent that such failure to be
accurate, complete or otherwise not misleading in any material respect could not
reasonably be expected to cause a MAE.
          Section 4.37 Intellectual Property.
          All trademarks, trade names and service marks necessary to the
business of Borrower as presently conducted or as Borrower contemplates
conducting its business are in good standing and, to the extent of Borrower’s
actual knowledge, uncontested. Borrower has not infringed, is not infringing,
and has not received notice of infringement with respect to asserted trademarks,
trade names and service marks of others. To Borrower’s knowledge, there is no
infringement by others of trademarks, trade names and service marks of Borrower.
          Section 4.38 Survey.
          The surveys for each Individual Property delivered to Lender in
connection with this Agreement has been prepared in accordance with the
provisions of Section 3.02(c) hereof, and to the knowledge of Borrower does not
fail to reflect any material matter affecting the Property or the title thereto.
          Section 4.39 Intentionally omitted.
          Section 4.40 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. Each of Borrower and
Borrower Principal hereby represents and warrants that Borrower and Borrower
Principal and each and every Person affiliated with Borrower or Borrower
Principal 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 Agreement or in any Individual 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,

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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 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 Principal or Borrower (or any of its
beneficial owners or 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, Borrower Principal or any other party
(other than Lender) to any Loan Document becomes 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.
          Section 4.41 Assumptions.
          Each of the assumptions contained in the opinion attached hereto as
Exhibit C related to issues of substantive consolidation issued by Wolf, Block,
Schorr & Solis-Cohen LLP to Lender on the date hereof are true and correct in
all material respects.
          Section 4.42 Survival.
          Each of Borrower and Borrower Principal agree that, unless expressly
provided otherwise, all of the representations and warranties of Borrower and
Borrower Principal set forth in this Agreement and in the other Loan Documents
shall survive for so long as any portion of the Debt remains owing to Lender.
All representations, warranties, covenants and agreements made in this Agreement
or in the other Loan Documents by Borrower and Borrower Principal shall be
deemed to have been relied upon by Lender notwithstanding any investigation
heretofore or hereafter made by Lender or on its behalf.
ARTICLE V
BORROWER COVENANTS
          From the date hereof and until repayment of the Debt in full and
performance in full of all obligations of Borrower under the Loan Documents or
the earlier release of the Lien of the Mortgage (and all related obligations
(with respect to one or more of the Individual

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Properties)) in accordance with the terms of this Agreement and the other Loan
Documents, Borrower hereby covenants and agrees with Lender that:
          Section 5.01 Existence; Compliance with Legal Requirements.
          (a) Borrower shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its existence, rights,
licenses, permits and franchises and comply in all material respects with all
Legal Requirements applicable to it and the related Individual Property.
Borrower hereby covenants and agrees not to commit, permit or suffer to exist
any act or omission affording any Governmental Authority the right of forfeiture
as against any Individual Property or any material part thereof or any monies
paid in performance of Borrower’s obligations under any of the Loan Documents.
Borrower shall at all times maintain, preserve and protect all franchises and
trade names to the extent necessary in connection with the operation of each
Individual Property.
          (b) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceedings, promptly initiated and
conducted in good faith and with due diligence, any Legal Requirement affecting
the related Individual Property, provided that (i) no Event of Default has
occurred and is continuing; (ii) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any other material instrument to
which Borrower or the related Individual Property is subject and shall not
constitute a default thereunder; (iii) neither such Individual Property, nor
Borrower shall be affected in any material adverse way as a result of such
proceeding; (iv) non-compliance with the Legal Requirements shall not impose
civil (other than monetary damages which are anticipated to be less than
$250,000 in the aggregate) or criminal liability on Borrower or Lender; and
(v) Borrower shall have furnished the security as may be required in the
proceeding to ensure compliance by Borrower with the Legal Requirements.
          Section 5.02 Maintenance and Use of Property.
          Borrower shall cause each Individual Property to be maintained in a
good and safe condition and repair, ordinary wear and tear excepted and subject
to Excusable Delay and the provisions of this Agreement with respect to any
Casualty or Condemnation. The Improvements and the Collateral Property shall not
be removed, demolished or, other than in accordance with the provisions of
Section 5.21, materially altered (except for normal replacement of the
Collateral Property) without the prior written consent of Lender, which consent
shall not be unreasonably withheld, conditioned or delayed, provided, however,
Lender’s consent shall be deemed granted under this Section 5.02 if not
disapproved by Lender in writing within fifteen (15) days of Lender’s receipt of
the Borrower’s request pursuant to this Section in an envelope marked “LENDER’S
RESPONSE IS REQUIRED WITHIN FIFTEEN (15) DAYS OF RECEIPT OF THIS NOTICE PURSUANT
TO THE TERMS OF SECTION 5.02 OF THE LOAN AGREEMENT” together with all other
information and documentation related thereto that is reasonably requested by
Lender in connection with its analysis of the request hereunder. Borrower shall
cause each Individual Property not to be used other than for retail purposes and
related ancillary uses, in each case consistent in all material respects with
the manner in which any such Individual Property is currently being used. If
under applicable zoning provisions the use of all or any portion of any
Individual Property is or shall become a nonconforming use,

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Borrower will not cause or permit the nonconforming use to be discontinued or
the nonconforming Improvement to be abandoned without the express written
consent of Lender.
          Section 5.03 Waste.
          Borrower shall not commit or suffer any waste of any Individual
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 any Individual Property, or take any action that could reasonably
be expected to invalidate or give cause for cancellation of any Policy, or do or
permit to be done thereon anything that could reasonably be expected to have an
MAE. 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 any Individual Property,
regardless of the depth thereof or the method of mining or extraction thereof.
          Section 5.04 Taxes and Other Charges; Contests.
          (a) Subject to its right to contest any Taxes as set forth in
Section 5.04(b) hereof, Borrower shall pay or cause to be paid all Taxes and
Other Charges now or hereafter levied or assessed or imposed against each
Individual Property or any part thereof prior to the time the same shall become
delinquent; provided, however, Borrower’s obligation to directly pay Taxes shall
be suspended for so long as Borrower complies with the terms and provisions of
Section 9.06 hereof. Borrower shall, upon written request of Lender, furnish to
Lender receipts for the payment of the Taxes and the Other Charges (provided,
however, that Borrower is not required to furnish such receipts for payment of
Taxes in the event that such Taxes have been paid by Lender pursuant to
Section 9.06 hereof). Subject to its right to contest any such amounts as set
forth in Section 5.04(b) hereof, Borrower shall not suffer and shall promptly
cause to be paid and discharged or bonded over any Lien or charge whatsoever
which may be or become a Lien or charge against any Individual Property, and
shall promptly pay for all utility services provided to each Individual
Property.
          (b) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the amount or validity or
application in whole or in part of any Lien or any Taxes or Other Charges,
provided that (i) no Event of Default has occurred and remains uncured;
(ii) such proceeding shall be permitted under and be conducted in accordance
with the provisions of any other material instrument to which Borrower is
subject and shall not constitute a default thereunder and such proceeding shall
be conducted in accordance in all material respects with all applicable Legal
Requirements; (iii) neither the related Individual Property nor any part thereof
or interest therein will be in danger of being sold, forfeited, terminated,
canceled or lost; (iv) Borrower shall promptly upon final determination thereof
pay the amount of such Lien or such Taxes or Other Charges, together with all
costs, interest and penalties which may be payable in connection therewith;
(v) such proceeding shall suspend the collection of such contested Lien, Taxes
or Other Charges from the related Individual Property; and (vi) after taking
into account the funds then on deposit in the applicable Reserve Account
available for use in the payment of any such contested Taxes or Other Charges,
Borrower shall furnish such security as may be required in the proceeding, or
deliver to Lender such reserve deposits as may be reasonably

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requested by Lender, to insure the payment of any such Taxes or Other Charges,
together with all interest and penalties thereon (unless Borrower has paid all
of the Taxes or Other Charges under protest). Lender may pay over any such cash
deposit or part thereof held by Lender to the claimant entitled thereto at any
time when, in the reasonable judgment of Lender, the entitlement of such
claimant is established or the related Individual Property (or part thereof or
interest therein) shall be in danger of being sold, forfeited, terminated,
canceled or lost or there shall be any danger of the Lien of the Mortgage being
primed by any related Lien.
          Section 5.05 Litigation.
          Borrower shall give prompt written notice to Lender of any litigation
or governmental proceedings pending or threatened in writing against Borrower
which, if adversely determined, could reasonably be expected to result in a MAE.
          Section 5.06 Access to Property.
          Borrower shall permit agents, representatives and employees of Lender
to inspect each Individual Property or any part thereof at reasonable hours upon
reasonable advance written notice and in accordance with Borrower’s reasonable
requirements.
          Section 5.07 Notice of Default.
          Borrower shall promptly advise Lender of the occurrence of any Default
or Event of Default, in each case to the extent Borrower has knowledge thereof.
          Section 5.08 Cooperate in Legal Proceedings.
          Borrower shall at Borrower’s reasonable expense cooperate fully with
Lender with respect to any proceedings before any court, board or other
Governmental Authority which could reasonably be expected to in any material
adverse way affect the rights of Lender hereunder or any rights obtained by
Lender under any of the other Loan Documents and, in connection therewith,
permit Lender, at its election, to participate in any such proceedings.
          Section 5.09 Performance by Borrower.
          Borrower shall in a timely manner observe, perform and fulfill in all
material respects each and every covenant, term and provision to be observed and
performed by Borrower under this Agreement and the other Loan Documents and any
amendments, modifications or changes thereto.
          Section 5.10 Awards; Insurance Proceeds.
          Subject to the terms and conditions of Article VIII hereof, Borrower
shall cooperate with Lender in obtaining for Lender the benefits of any Awards
or Insurance Proceeds lawfully or equitably payable in connection with any
Individual Property, and Lender shall be reimbursed for any actual reasonable
out of pocket expenses incurred in connection therewith (including reasonable,
actual attorneys’ fees and disbursements, and the payment by Borrower of

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the expense of an appraisal on behalf of Lender in case of a Casualty or
Condemnation affecting any Individual Property or any part thereof) out of such
Awards or Insurance Proceeds.
          Section 5.11 Financial Reporting.
          (a) Borrower shall, and shall cause, Borrower Principal to, keep
adequate books and records of account in accordance with GAAP, or in accordance
with other methods reasonably acceptable to Lender in its sole discretion,
consistently applied and shall furnish to Lender:
     (i) prior to a Securitization, monthly (commencing in March, 2006), and
following a Securitization, quarterly and annual certified rent rolls signed and
dated by Borrower, detailing the names of all Tenants of the Improvements, the
portion of Improvements (in terms of square footage) occupied by each Tenant,
the base rent, additional rent and any other charges payable under each Lease
(including annual store sales required to be reported by Tenant under any
Lease), and the term of each Lease, including the commencement and expiration
dates and any tenant extension, expansion or renewal options, the extent to
which any Tenant is in default under any Lease, and any other information as is
reasonably required by Lender, within thirty (30) days after the end of each
fiscal month, forty-five (45) days after the end of each fiscal quarter or
ninety (90) days after the close of each fiscal year of Borrower;
     (ii) prior to a Securitization, monthly (commencing in March, 2006), and
following a Securitization, quarterly, so-called “four walls” operating
statements for each Individual Property and for the Property in the aggregate,
including calculations of EBITDA, which shall be prepared and certified by
Borrower, within thirty (30) days after the end of each fiscal month or
forty-five (45) days after the end of each fiscal quarter, as applicable;
     (iii) prior to a Securitization, monthly (commencing in March, 2006), and
following a Securitization, quarterly, unaudited financial statements of
Borrower and Borrower Principal, which shall be prepared and certified by
Borrower, within thirty (30) days after the end of each fiscal month or
forty-five (45) days after the end of each fiscal quarter, as applicable;
     (iv) annual balance sheets, profit and loss statements, statements of cash
flows, and statements of change in financial position of Borrower and Borrower
Principal audited by an Acceptable Accountant, within ninety (90) days after the
close of each fiscal year of Borrower;
     (v) an Annual Budget of Borrower not later than forty-five (45) days after
the commencement of each fiscal year of Borrower in form reasonably satisfactory
to Lender. In the event that Lender reasonably objects to a proposed Annual
Budget submitted by Borrower, Lender shall advise Borrower of such reasonable
objections within fifteen (15) days after receipt thereof (and deliver to
Borrower a reasonably detailed description of such objections) and Borrower
shall promptly revise such Annual Budget and resubmit the same to Lender. Lender
shall advise Borrower of any

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reasonable objections to such revised Annual Budget within ten (10) days after
receipt thereof (and deliver to Borrower a reasonably detailed description of
such objections) and Borrower shall promptly revise the same in accordance with
the process described in this subsection until Lender reasonably approves the
Annual Budget. Until such time that Lender approves a proposed Annual Budget,
which approval shall not be unreasonably withheld, conditioned or delayed, the
most recent Annual Budget shall apply; provided that, such most recent Annual
Budget shall be adjusted to reflect actual increases in Taxes and Insurance
Premiums. Any failure by Lender to object to a proposed Annual Budget within the
time periods provided herein shall be deemed approval by Lender of such proposed
Annual Budget; and
     (vi) (A) annual audited financial statements of Lease Guarantor within
ninety (90) days after the close of each fiscal year of Lease Guarantor and
(B) quarterly unaudited financial statements of Lease Guarantor within
forty-five (45) days after the end of each fiscal quarter.
     (b) Upon request from Lender, Borrower shall promptly furnish to Lender:
     (i) a property management report for each Individual Property, showing the
number of inquiries made and/or rental applications received from tenants or
prospective tenants and deposits received from tenants and any other information
requested by Lender, in reasonable detail and certified by Borrower under
penalty of perjury to be true and complete in all material respects, but no more
frequently than each fiscal quarter;
     (ii) an accounting of all security deposits held in connection with any
Lease of any part of each Individual Property, including the name and
identification number of the accounts in which such security deposits are held,
the name and address of the financial institutions in which such security
deposits are held and the name of the Person to contact at such financial
institution, along with any authority or release necessary for Lender to obtain
information regarding such accounts directly from such financial institutions;
and
     (iii) a report of all letters of credit provided by any Tenant in
connection with any Lease of any part of each Individual Property, including the
account numbers of such letters of credit, the names and addresses of the
financial institutions that issued such letters of credit and the names of the
Persons to contact at such financial institutions, along with any authority or
release necessary for Lender to obtain information regarding such letters of
credit directly from such financial institutions.
     (c) Borrower shall comply in all material respects with the following:
     (i) Borrower shall deliver the information required to be delivered
pursuant to Section 13.04(a) hereof.
     (ii) Intentionally omitted.
     (iii) All financial statements provided by Borrower hereunder pursuant to
Section 5.11(c)(i) hereof shall be prepared in accordance with GAAP, and shall
meet the requirements of Regulation S-X and other applicable legal requirements
provided the

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same shall, subject to Section 5.11(f) below, be required with respect to the
Properties on an aggregate basis only. All financial statements referred to in
Section 5.11(c)(i) shall be audited by Acceptable Accountants in accordance with
Regulation S-X and all other applicable legal requirements, shall be accompanied
by the manually executed report of the independent accountants thereon, which
report shall meet the requirements of Regulation S-X and all other applicable
legal requirements, and shall be further accompanied by a manually executed
written consent of the Acceptable Accountants, in form and substance reasonably
acceptable to Lender, to the inclusion of such financial statements in any
Disclosure Document and any Exchange Act Filing and to the use of the name of
such Acceptable Accountants and the reference to such Acceptable Accountants as
“experts” in any Disclosure Document and Exchange Act Filing (as defined below),
all of which shall be provided at the same time as the related financial
statements are required to be provided. All financial statements (audited or
unaudited) provided by Borrower under this Section 5.11 shall be certified by
the chief financial officer or administrative member of Borrower, which
certification shall state that such financial statements meet the requirements
set forth in the first sentence of this Section 5.11(c)(iii).
     (iv) If requested by Lender, Borrower shall provide Lender, promptly upon
request, with any other or additional financial statements, or financial,
statistical or operating information, as Lender shall determine to be required
pursuant to Regulation S-X or any amendment, modification or replacement thereto
or other legal requirements in connection with any Disclosure Document or any
filing under or pursuant to the Exchange Act in connection with or relating to a
Securitization (hereinafter an “Exchange Act Filing”) or as shall otherwise be
reasonably requested by Lender subject to Section 5.11(f).
     (v) In the event Lender determines, in connection with a Securitization,
that the financial statements required in order to comply with Regulation S-X or
other legal requirements are other than as provided herein, then notwithstanding
the provisions of Section 5.11(c) hereof, Lender may request, and Borrower shall
promptly provide, such combination of Acquired Property Statement and/or
Standard Statements or such other financial statements as Lender determines to
be necessary or appropriate for such compliance.
     (vi) Any reports, statements or other information required to be delivered
under this Agreement shall be delivered in paper form and in the event that
Lender requires financial statements in connection with subsection (c) above
because the Loan when combined with the principal amount of any Affiliated Loans
equals or exceeds 20% of the aggregate principal amount of all mortgage loans
included in a Securitization (defined below), Borrower shall deliver such
reports, statements and other information (A) on a diskette, and (B) 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 WordPerfect for Windows files (which files may be
prepared using a spreadsheet program and saved as word processing files).

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          (d) Borrower shall furnish Lender with such other additional financial
or management information with respect to Borrower and Borrower Principal
(including applicable state and federal tax returns to the extent applicable or
filed) as may, from time to time, be reasonably required by Lender in form and
substance reasonably satisfactory to Lender (including, without limitation, any
financial reports required to be delivered by any Tenant or any guarantor of any
Lease and actually delivered to Borrower pursuant to the terms of such Lease),
and shall furnish to Lender and its agents facilities for the examination and
audit of any such books and records.
          (e) All items requiring the certification of Borrower shall, except
where Borrower is an individual, require a certificate executed by the general
partner, managing member, chief executive officer or chief financial officer of
Borrower (and the same rules shall apply to any sole shareholder, general
partner or managing member which is not an individual).
          (f) Notwithstanding any other provision of this Section 5.11, Borrower
shall not be required to provide any financial statements with respect to any
Person or property other than the Property and Borrower, Borrower Principal and
Lease Guarantor. In no event shall Borrower be required under this Section 5.11
to deliver any financial statements or other information with respect to any
Tenant or BTDS.
          Section 5.12 Estoppel Statement.
          (a) After request by Lender at reasonable intervals (but not more than
once annually except to the extent the request is being made by Lender in
connection with a potential Securitization in which the Loan is intended to be
included), Borrower shall within fifteen (15) Business Days furnish Lender with
a statement, duly acknowledged and certified, setting forth (i) the amount of
the original principal amount of the Note, (ii) the rate of interest on the
Note, (iii) the unpaid principal amount of the Note, (iv) the date installments
of interest and/or principal were last paid, (v) any offsets or defenses to the
payment of the Debt, if any, and (vi) that the Note, this Agreement, the
Mortgage and the other Loan Documents are valid, legal and binding obligations
and have not been modified or if modified, giving particulars of such
modification.
          (b) After Lender’s receipt of written request by Borrower (but not
more often than once annually unless the Borrower is transferring the Property
in accordance with the terms hereof), Lender shall within a reasonable period of
time, but not more than thirty (30) days after such request, furnish Borrower
with a statement, duly acknowledged and certified, setting forth that the Note,
this Agreement, the Mortgage and the other Loan Documents are in full force and
effect and have not been modified or if modified, giving particulars of such
modification. Lender shall use reasonable efforts to comply with any request
Borrower makes pursuant to the preceding; provided, however, that the failure of
Lender to comply will not constitute a default hereunder by Lender.
          (c) Borrower shall use commercially reasonable efforts to deliver to
Lender, promptly upon request, duly executed estoppel certificates from any one
or more Tenants, as required by Lender, at reasonable intervals with respect to
each Tenant (but not more than once annually except to the extent the request is
being made by Lender in connection with a potential Securitization in which the
Loan is intended to be included), attesting to such facts regarding the

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related Lease as Lender may require, including, but not limited to attestations
that each Lease covered thereby is in full force and effect with no defaults
thereunder on the part of any party, that none of the Rents have been paid more
than one month in advance, except as security, and that the Tenant claims no
defense or offset against the full and timely performance of its obligations
under the Lease.
          Section 5.13 Leasing Matters.
          (a) Borrower may permit Operating Lessee to enter into a proposed
Lease (including the renewal or extension of an existing Lease (a “Renewal
Lease”)) without the prior written consent of Lender, provided such proposed
Lease or Renewal Lease (i) provides for rental rates and terms comparable to
existing local market rates and terms (taking into account the type and quality
of the tenant) as of the date such Lease is executed by Borrower (unless, in the
case of a Renewal Lease, the rent payable during such renewal, or a formula or
other method to compute such rent, is provided for in the original Lease),
(ii) is an arm’s-length transaction with a bona fide, independent third party
tenant, (iii) does not have a materially adverse effect on the value of the
related Individual Property taken as a whole, (iv) is subject and subordinate to
the Mortgage and the Tenant thereunder agrees to attorn to Lender, (v) does not
contain any option, offer, right of first refusal, or other similar right to
acquire all or any portion of the related Individual Property, (vi) has a base
term of less than the term of the applicable Operating Lease, (vii) has no rent,
credits, free rents or concessions granted thereunder that Lender deems
unacceptable in its reasonable discretion, (viii) is written on a form of lease
reasonably acceptable to Lender, and (ix) when taken together with the square
footage leased or subleased under any other Lease or Renewal Lease at the same
Individual Property does not exceed 10,000 square feet of such Individual
Property, provided, that, to the extent that a Lease or Renewal Lease is a
license agreement to a Licensed Vendor (as defined in Section 28.4 of the
Operating Lease) that complies with the provisions of Section 28.4 of the
Operating Lease, such space licensed to the Licensed Vendor shall not, when
combined with any other Lease or Renewal at the same Individual Property, exceed
20,000 square feet of such Individual Property. All proposed Leases or Renewals
(including Renewals of Schedule 5.13 Leases) which do not satisfy the
requirements set forth in this subsection shall be subject to the prior approval
of Lender and its counsel, which consent shall not be unreasonably withheld and
Borrower shall reimburse Lender for its actual reasonable out of pocket costs
and expenses (including reasonable attorneys’ fees) incurred by Lender in
connection with such proposed Lease. Borrower shall promptly deliver to Lender
copies of all Leases which are entered into pursuant to this subsection together
with Borrower’s certification that it has satisfied all of the conditions of
this Section. Lender hereby acknowledges the existence of the Leases in effect
on the date hereof which are more particularly described on Schedule 5.13
attached hereto (the “Schedule 5.13 Leases”) and that the existence of such
Schedule 5.13 Leases shall not be a default under this Agreement, provided,
that, any Renewal of a Schedule 5.13 Lease shall be subject to the provisions of
this Section 5.13.
          (b) Borrower (i) shall observe and perform or cause Operating Lessee
to observe and perform, as applicable, in all material respects all the
obligations imposed upon the landlord under the Leases and shall not do or
permit to be done anything to impair the value of any of the Leases as security
for the Debt in any manner which could reasonably be expected to cause a
material adverse effect with respect to an Individual Property; (ii) shall
promptly send or

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cause Operating Lessee to send copies to Lender of all notices of default which
Borrower shall send or receive thereunder; (iii) shall enforce or cause
Operating Lessee to enforce all of the material terms, covenants and conditions
contained in the Leases upon the part of the tenant thereunder to be observed or
performed; (iv) shall not collect any of the Rents more than one (1) month in
advance (except security deposits shall not be deemed Rents collected in
advance); (v) with the exception of the Loan Documents, shall not execute any
other assignment of the landlord’s interest in any of the Leases or the Rents;
and (vi) shall not consent to any assignment of or subletting under any Leases
not in accordance with their terms, without the prior written consent of Lender,
provided that, in no event shall Borrower permit, nor shall Lender be obligated
to consent to, any assignment of or subletting under any Operating Lease to
(x) the Borrower Principal and/or (y) any Affiliate of Borrower Principal or any
Affiliate of Operating Lessee.
          (c) Borrower may, without the prior written consent of Lender, amend,
modify or waive the provisions of any Lease or terminate, reduce Rents under,
accept a surrender of space under, or shorten the term of, any Lease (including
any guaranty, letter of credit or other credit support with respect thereto)
provided that such action (taking into account, in the case of a termination,
reduction in rent, surrender of space or shortening of term, the planned
alternative use of the affected space) does not cause a material adverse effect
with respect to an Individual Property, and provided that such Lease, as
amended, modified or waived, is otherwise in compliance with the requirements of
this Agreement and any subordination agreement binding upon Lender with respect
to such Lease. A termination of a Lease with a Tenant who is in default beyond
applicable notice and grace periods shall not be considered an action which
could cause a material adverse effect with respect to an Individual Property.
Any amendment, modification, waiver, termination, rent reduction, space
surrender or term shortening which does not satisfy the requirements set forth
in this subsection shall be subject to the prior approval of Lender and its
counsel, which consent shall not be unreasonably withheld, conditioned or
delayed, and Borrower shall reimburse Lender for its actual reasonable out of
pocket costs and expenses (including reasonable attorneys’ fees) incurred by
Lender in connection with such action. Borrower shall promptly deliver to Lender
copies of amendments, modifications and waivers which are entered into pursuant
to this subsection together with Borrower’s certification that it has satisfied
all of the conditions of this subsection.
          (d) Notwithstanding anything contained herein to the contrary,
Borrower shall not, without the prior written consent of Lender, enter into,
renew, extend, amend, modify, waive any provisions of, terminate, reduce Rents
under, accept a surrender of space under, or shorten the term of any Operating
Lease except (i) in connection with a release of an Individual Property in
accordance with the terms and conditions of this Agreement or (ii) to the extent
specifically permitted pursuant to Section 5.22 hereof.
          Section 5.14 Property Management.
          At any time during the term of the Loan a Management Agreement exists
with respect to any Individual Property:
          (a) (i) Borrower shall promptly perform and observe all of the
covenants required to be performed and observed by it under the Management
Agreement and do all things

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necessary to preserve and to keep unimpaired its material rights thereunder;
(ii) Borrower shall promptly notify Lender of any default under any Management
Agreement of which it is aware; (iii) Borrower shall promptly deliver to Lender
a copy of any written notice of default or other material written notice
received by Borrower under any Management Agreement; (iv) Borrower shall
promptly give notice to Lender of any written notice or other written
information that Borrower receives which indicates that Manager is terminating
any Management Agreement or that Manager is otherwise discontinuing its
management of any Individual Property; and (v) Borrower shall promptly enforce
the performance and observance of all of the material covenants required to be
performed and observed by Manager under the Management Agreement, including,
without limitation, causing the Property to be operated, maintained and managed
at all times in a manner consistent with the standards for the operation,
management and maintenance of the Property as set forth in the Management
Agreement.
          (b) If at any time, (i) Manager shall become insolvent or a debtor in
a bankruptcy proceeding, (ii) an Event of Default has occurred and is
continuing; or (iii) a material default by Manager has occurred and is
continuing under any Management Agreement, at the written direction of Lender,
Borrower shall terminate such Management Agreement upon thirty (30) days prior
notice to Manager and replace Manager with a Qualified Manager approved by
Lender on terms and conditions reasonably satisfactory to Lender, it being
understood and agreed that the management fee for such replacement manager shall
not exceed then prevailing market rates.
          (c) Borrower shall not take the following actions: (i) surrender,
terminate or cancel any Management Agreement or otherwise replace Manager or
enter into any other management agreement with respect to the related Individual
Property except as permitted by the terms of this Loan Agreement or any other
Loan Document; (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 any Management Agreement in any material respect. Borrower shall not
replace the Manager at any time during the term of the Loan pursuant to this
subsection with any Person that is not a Qualified Manager.
          (d) Borrower shall not pledge, transfer, assign, mortgage, encumber or
allow to be encumbered, its interest in the Management Agreement or any interest
therein except to Lender as provided in the Loan Documents. Without limiting the
foregoing, and except to the extent permitted or required under this Agreement,
Borrower shall not consent to any assignment by the Manager of the Manager’s
interest in the Management Agreement or its rights and interests thereunder.
          (e) If during the term of the Loan Borrower replaces Manager with a
new property manager that is an Affiliated Manager, Borrower shall cause to be
delivered to Lender an opinion as to non-consolidation issues between Borrower
and such Affiliated Manager, such opinion to be reasonably acceptable to Lender
and the Rating Agencies.
          (f) Borrower shall obtain Lender’s approval of any Management
Agreement prior to Borrower entering into any such agreement, it being
understood and agreed that the

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management fee for such replacement manager shall not exceed then prevailing
market rates. Borrower shall cause any Management Agreement to be assigned to
Lender and subordinated to the Mortgage and the other Loan Documents pursuant to
an assignment and subordination of management agreement substantially in the
form attached hereto as Exhibit D.
          Section 5.15 Liens.
          Subject to Borrower’s right to contest any Lien as set forth in
Section 5.04(b) hereof, Borrower shall not, without the prior written consent of
Lender, create, incur, assume or suffer to exist any Lien on any portion of any
Individual Property or permit any such action to be taken, except Permitted
Encumbrances and any other liens specifically permitted by the Loan Documents.
          Section 5.16 Debt Cancellation.
          Borrower shall not cancel or otherwise forgive or release any material
claim or debt (other than termination of Leases in accordance herewith) owed to
Borrower by any Person, except for adequate consideration or in the ordinary
course of Borrower’s business.
          Section 5.17 Zoning.
          Borrower shall not initiate or consent to any zoning reclassification
of any portion of any Individual Property or seek any variance under any
existing zoning ordinance or use or permit the use of any portion of any
Individual Property in any manner that could reasonably be expected to result in
such use becoming a non-conforming use under any zoning ordinance or any other
applicable land use law, rule or regulation, without the prior written consent
of Lender.
          Section 5.18 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 Agreement or the other Loan Documents)
to be a non-exempt (under a statutory or administrative class exemption)
prohibited transaction under ERISA.
          (b) Borrower further covenants and agrees to deliver to Lender such
certifications or other evidence from time to time throughout the term of the
Loan, as requested by Lender in its sole discretion, that (i) Borrower is not
and does not maintain an “employee benefit plan” as defined in Section 3(3) of
ERISA, which is subject to Title I of ERISA, or a “governmental plan” within the
meaning of Section 3(3) of ERISA; (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 twenty-five percent (25%) of each outstanding class of equity
interests in Borrower are held by “benefit plan investors” within the meaning of
29 C.F.R. §2510.3-101(f)(2); or

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     (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).
          Section 5.19 No Joint Assessment.
          Borrower shall not suffer, permit or initiate the joint assessment of
any Individual Property with (a) any other real property constituting a tax lot
separate from the related Individual Property, or (b) any portion of the related
Individual Property which may be deemed to constitute personal property, or any
other procedure whereby the Lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to the related
Individual Property.
          Section 5.20 Reciprocal Easement Agreements.
          Borrower shall not enter into, terminate or modify in any material
respect any REA without Lender’s prior written consent, which consent shall not
be unreasonably withheld, conditioned or delayed. Borrower shall comply in all
material respects with all of the material economic terms and conditions
contained in the REA and Borrower shall use reasonable efforts to enforce,
comply with, and cause (in each case, in all material respects) each of the
parties to any REA to comply in all material respects with all of the material
economic terms and conditions which run to the benefit of Borrower contained in
the REA. Borrower shall deliver to Lender copies of all notices of default by
Borrower under any REA.
          Section 5.21 Alterations.
          Lender’s prior approval shall be required in connection with any
alterations to any Improvements, exclusive of alterations to tenant spaces
required under any Lease, (a) that may have a material adverse effect on any
Individual Property, (b) that are structural in nature or (c) that, together
with any other alterations undertaken at the same time (including any related
alterations, improvements or replacements), are reasonably anticipated to have a
cost with respect to each Individual Property in excess of the Alteration
Threshold. If the total unpaid amounts incurred and to be incurred with respect
to such alterations to the Improvements shall at any time exceed the Alteration
Threshold, Borrower shall promptly deliver to Lender as security for the payment
of such amounts and as additional security for Borrower’s obligations under the
Loan Documents any of the following: (i) cash, (ii) direct non-callable
obligations of the United States of America or other obligations which are
“government securities” within the meaning of Section 2(a)(16) of the Investment
Company Act of 1940, to the extent acceptable to the applicable Rating Agencies,
(iii) other securities acceptable to Lender and the Rating Agencies, or (iv) a
completion bond, provided that such completion bond is acceptable to the Lender
and the Rating Agencies. Such security shall be in an amount equal to the excess
of the total unpaid amounts incurred and to be incurred with respect to such
alterations to the Improvements over the Alteration Threshold.
          Section 5.22 Operating Leases.
          (a) Each Individual Property shall at all times be leased directly and
exclusively by the Borrower to the applicable Tenant under the applicable
Operating Lease (and not to any other Person under such Operating Lease or any
replacement operating lease), and

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each Operating Lease shall be made subordinate to the Mortgage. Neither Borrower
nor the Tenant thereunder shall terminate any Operating Lease or consent to the
termination of any Operating Lease unless the following conditions are met:
(i) prior to such termination of the Operating Lease, all of the Tenant’s
rights, obligations, contracts or other agreements related to each Individual
Property are assigned to Borrower, including, without limitation if applicable,
all of the Tenant’s right, title and interest in and to the applicable
Management Agreement, if any, and the Manager has agreed in writing to such
assignment, (ii) written notice of the termination of the Operating Lease is
delivered to Lender, and (iii) such termination of the Operating Lease shall not
materially adversely affect the continuous operation of each Individual Property
consistent with single tenant retail stores of similar quality nor affect the
validity and enforceability of the applicable Management Agreement, if any;
provided, however, that the Operating Lease shall be terminated or with respect
to any Individual Property which has been released from the lien of the Mortgage
pursuant to the terms of Section 2.05 hereof or substituted pursuant to
Section 2.06 hereof.
          (b) Borrower shall not, and shall cause Tenant not to, pledge,
transfer, sublease, assign, mortgage, encumber, or allow to be encumbered its
interest in the Operating Lease or any interest therein without the prior
written consent of the Lender, except for any sublease, license or other
occupancy agreement entered into by the Tenant in the ordinary course of
business to the extent such sublease, license or other occupancy agreement is
permitted by the terms of the Operating Lease. Borrower shall not, and shall
cause the Tenant not to, consent to any assignment by any assignee or sublessee
of such assignee’s or sublessee’s interest in the Operating Lease or its rights
and interests thereunder.
          (c) Borrower shall not, and shall cause Tenant under any Operating
Lease not to, without the prior written consent of Lender (not to be
unreasonably withheld, conditioned or delayed) renew, extend, amend, modify,
waive any provisions of, terminate, reduce rents payable under, accept a
surrender of, or shorten the term of, the Operating Lease, except with respect
to the termination of the Operating Lease applicable to any Individual Property
which has been released from the lien of the Mortgage pursuant to the terms of
Section 2.05 hereof or substituted pursuant to Section 2.06 hereof.
ARTICLE VI
ENTITY COVENANTS
          Section 6.01 Single Purpose Entity/Separateness.
          Until the Debt has been paid in full, Borrower represents, warrants
and covenants as follows:
          (a) Borrower has not and will not:
     (i) engage in any business or activity other than the leasing, ownership,
operation and maintenance of the Property, and activities incidental thereto as
more particularly set forth in Section 7 of Borrower’s limited liability company
agreement;

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     (ii) acquire or own any assets other than (A) the Property, (B) such
incidental Collateral Property as may be necessary for the ownership or
operation of the Property and (C) cash deposits disbursed to Borrower pursuant
to Section 10.02(c)(x) or Section 9.07 hereof and not yet distributed to its
members;
     (iii) merge into or consolidate with any Person, or, to the fullest extent
permitted by law, dissolve, terminate, liquidate in whole or in part, transfer
or otherwise dispose of all or substantially all of its assets or change its
legal structure;
     (iv) fail to observe all necessary, appropriate and customary
organizational formalities, or fail to preserve its existence (including its
separate existence) as an entity duly formed, validly existing and in good
standing under the applicable Legal Requirements of the jurisdiction of its
organization or formation, or amend, modify, terminate or fail to comply, in all
material respects, with the provisions of its organizational documents;
     (v) form acquire or hold any subsidiary (whether corporate, limited
liability, partnership or other) or own any equity interest in, or make any
investment in, any Person;
     (vi) commingle its assets with the assets of any other Person;
     (vii) incur any debt, 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 (other than mechanics’ liens or
other liens being properly contested in accordance with Section 5.04(b)),
(2) not evidenced by a note, (3) on commercially reasonable terms and
conditions, and (4) paid not more than sixty (60) days past the date incurred
(except to the extent such amounts are being contested in accordance with the
terms of Section 5.04(b) hereof), and/or (C) financing leases and purchase money
indebtedness incurred in the ordinary course of business relating to Collateral
Property; provided however, the aggregate amount of the indebtedness of Borrower
described in (B) and (C) shall not exceed at any time three percent (3%) of the
outstanding principal amount of the Note as of the Closing Date;
     (viii) fail to maintain its records, books of account, bank accounts,
financial statements, accounting records and other entity documents separate and
apart from those of any other Person and fail to represent its assets and
liabilities separate and apart from those of any other Person; except that
Borrower’s financial position, assets, liabilities, net worth and operating
results may be included in the consolidated financial statements of an
Affiliate, provided that such consolidated financial statements contain a
footnote indicating that Borrower is a separate legal entity and that it
maintains separate books and records;
     (ix) enter into any transaction, contract or agreement with any general
partner, member, shareholder, principal, guarantor of the obligations of
Borrower or Operating Lessee, or any Affiliate of the foregoing, except upon
terms and conditions that are

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intrinsically fair, commercially reasonable and, except for capital
contributions and distributions, substantially similar to those that would be
available on an arm’s-length basis with unaffiliated third parties;
     (x) maintain its assets in such a manner that it will be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any other Person;
     (xi) assume or guaranty the debts of any other Person, hold itself out to
be responsible for the debts of any other Person, or otherwise pledge its assets
to secure the obligations of any other Person or hold out its credit as being
available to satisfy the obligations of any other Person;
     (xii) make or permit to remain outstanding any loans or advances to, or own
or acquire any stock or securities of, any Person;
     (xiii) except to the extent treated as a division of the sole member of
Borrower, fail to file its own tax returns or file a consolidated federal income
tax return with any Person (unless prohibited or required, as the case may be,
by applicable Legal Requirements), and fail to pay any taxes (other than Taxes
required to be paid by Lender hereunder) required to be paid under applicable
law;
     (xiv) fail either to hold itself out to the public as a legal entity
separate and distinct from any other Person or to conduct its business in its
own name or fail to correct any known misunderstanding regarding its separate
identity or identify itself as a department or division of any other Person;
     (xv) fail to maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations, transactions and liabilities; provided,
that, the foregoing shall not require Borrower’s sole member to make additional
capital contributions to Borrower;
     (xvi) without the unanimous written consent of its members and the written
consent of 100% of the board of directors of Borrower including, without
limitation, each Independent Director, (a) file or consent to the filing of any
petition, either voluntary or involuntary, to take advantage of any Creditors
Rights Laws, (b) seek or consent to the appointment of a receiver, liquidator or
any similar official, (c) take any action that might cause such entity to become
insolvent, or (d) make an assignment for the benefit of creditors;
     (xvii) 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 to use separate stationery or invoices in
blank or bearing its own name and checks bearing its own name;
     (xviii) fail to remain solvent or pay its own liabilities and expenses
(including, without limitation, salaries of its own employees) only from its own
funds;

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     (xix) acquire obligations or securities of its partners, members,
shareholders or other affiliates, as applicable;
     (xx) violate or cause to be violated the assumptions made with respect to
Borrower and its principals in any opinion letter pertaining to substantive
consolidation delivered to Lender in connection with the Loan;
     (xxi) fail to maintain a sufficient number of employees in light of its
contemplated business operations (it being understood that in light of
Borrower’s contemplated business operations, Borrower may determine that no
employees are required);
     (xxii) hold out its credit or assets as being available to satisfy the
obligations of any other entity, pledge its assets to secure the obligations of
any other entity;
     (xxiii) fail to have its own board of directors; or
     (xxiv) fail to cause its board of directors to observe all other Delaware
limited liability company formalities.
          (b) If Borrower is a partnership or limited liability company (and not
a single member limited liability company), 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 shall be a corporation whose sole
asset is its interest in Borrower. Each SPE Component Entity (i) will at all
times comply with each of the covenants, terms and provisions contained in
Section 6.01(a)(iii) - (vi) and (viii) — (xxiv), as if such representation,
warranty or covenant was made directly by such SPE Component Entity; (ii) will
not engage in any business or activity other than owning an interest in
Borrower; (iii) will not acquire or own any assets other than its partnership,
membership, or other equity interest in Borrower; (iv) will not incur any debt,
secured or unsecured, direct or contingent (including guaranteeing any
obligation) other than in the ordinary course of business; and (v) will cause
Borrower to comply with the provisions of this Section 6.01 and Section 6.04.
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, if an opinion letter pertaining to substantive
consolidation was required at closing, deliver a new opinion letter in the form
acceptable 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 single member Delaware limited liability company, so long
as Borrower maintains such formation status, no SPE Component Entity shall be
required for such single member Delaware limited liability company.
          (c) In the event Borrower is a single-member Delaware limited
liability company (the “SMLLC”), the limited liability company agreement of such
SMLLC (the “LLC Agreement”) shall provide that (i) upon the occurrence of any
event that causes the sole member of such SMLLC (any such sole member, the
“Member”) to cease to be the member of such SMLLC (other than (A) upon an
assignment by Member of all of its limited liability company

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interest in such SMLLC and the admission of the transferee, or (B) the
resignation of Member and the admission of an additional member in either case
in accordance with the terms of the Loan Documents and the LLC Agreement), any
Person acting as Independent Director of such SMLLC shall without any action of
any other Person and simultaneously with the Member ceasing to be the member of
such SMLLC, automatically be admitted to such SMLLC (“Special Member”) and shall
continue such SMLLC without dissolution and (ii) Special Member may not resign
from such SMLLC or transfer its rights as Special Member unless (A) a successor
Special Member has been admitted to such SMLLC 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 such SMLLC upon the admission to such SMLLC of a substitute Member,
(ii) Special Member shall be a member of such SMLLC that has no interest in the
profits, losses and capital of such SMLLC and has no right to receive any
distributions of such SMLLC 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 such SMLLC and shall not receive a
limited liability company interest in such SMLLC, (iv) Special Member, in its
capacity as Special Member, may not bind such SMLLC, and (v) except as required
by any mandatory provision of the Act, Special Member, in its capacity as
Special Member, shall have no right to vote on, approve or otherwise consent to
any action by, or matter relating to, such SMLLC, including, without limitation,
the merger, consolidation or conversion of such SMLLC; 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. In order to implement the admission to such SMLLC of
Special Member, Special Member shall execute a counterpart to the LLC Agreement.
Prior to its admission to such SMLLC as Special Member, Special Member shall not
be a member of such SMLLC.
          (d) Upon the occurrence of any event that causes the Member to cease
to be a member of such SMLLC, to the fullest extent permitted by applicable 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
such SMLLC, agree in writing (i) to continue such SMLLC and (ii) to the
admission of the personal representative or its nominee or designee, as the case
may be, as a substitute member of such SMLLC, effective as of the occurrence of
the event that terminated the continued membership of Member of such SMLLC in
such SMLLC. To the extent permitted by applicable law, any action initiated by
or brought against Member or Special Member under any Creditors Rights Laws
shall not cause Member or Special Member to cease to be a member of such SMLLC
and upon the occurrence of such an event, the business of such SMLLC shall
continue without dissolution. To the extent permitted by applicable law, the LLC
Agreement shall provide that each of Member and Special Member waives any right
it might have to agree in writing to dissolve such SMLLC upon the occurrence of
any action initiated by or brought against Member or Special Member under any
Creditors Rights Laws, or the occurrence of an event that causes Member or
Special Member to cease to be a member of such SMLLC.

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          Section 6.02 Change of Name, Identity or Structure.
          Borrower shall not change or permit to be changed (a) its name,
(b) its identity (including its trade name or names), (c) its principal place of
business, (d) the corporate, partnership or other organizational structure of
Borrower, each SPE Component Entity (if any), or Borrower Principal,
(e) Borrower’s state of organization, or (f) 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 structure, without first obtaining
the prior written consent of Lender. 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 violate the covenants set forth
in Section 6.01 and Section 6.04 hereof. Borrower authorizes Lender to file any
financing statement or financing statement amendment reasonably required by
Lender to establish or maintain the validity, perfection and priority of the
security interest granted herein. At the reasonable request of Lender, Borrower
shall execute a certificate in form reasonably satisfactory to Lender listing
the trade names under which Borrower intends to operate each Individual
Property, and representing and warranting that Borrower does business under no
other trade name with respect to the Individual 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.
          Section 6.03 Business and Operations.
          Borrower will qualify to do business and will remain in good standing
under the laws of the State as and to the extent the same are required for the
ownership, maintenance, leasing and operation of the Property.
          Section 6.04 Independent Director.
          (a) The organizational documents of each SMLLC and each SPE Component
Entity (if any) shall provide that at all times there shall be, and Borrower
shall cause there to be, at least two (2) members of the board of directors
(each an “Independent Director”) of each such SMLLC and each SPE Component
Entity (if any) reasonably satisfactory to Lender each of whom 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, either (i) a shareholder (or
other equity holder in Borrower) of, or an officer, director, partner, manager,
member (other than as a Special Member in the case of an SMLLC), employee,
attorney or counsel of, Borrower, such SPE Component Entity or any of their
respective shareholders, partners, members, subsidiaries or affiliates; (ii) a
customer (not including a customer of any Individual Property) 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; (iii) a Person who Controls or is under common Control with any
such shareholder, officer, director, partner, manager, member, employee,
supplier, creditor or customer; or (iv) a member of the immediate family of any
such shareholder, officer, director, partner, manager, member, employee,
supplier, creditor or customer.

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          (b) The organizational documents of each SPE Component Entity (if any)
shall provide that the board of directors of such SPE Component Entity 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
a unanimous vote of the board of directors of such SPE Component Entity of
Borrower unless at the time of such action there shall be at least two
(2) members of the board of directors who are Independent Directors. Such SPE
Component Entity will not, without the unanimous written consent of its board of
directors including the Independent Directors, on behalf of itself or Borrower
(i) file or consent to the filing of any petition, either voluntary or
involuntary, to take advantage of any applicable Creditors Rights Laws;
(ii) seek or consent to the appointment of a receiver, liquidator or any similar
official; (iii) take any action that is reasonably likely to cause such entity
to become insolvent; or (iv) make an assignment for the benefit of creditors.
ARTICLE VII
NO SALE OR ENCUMBRANCE
          Section 7.01 Transfer Definitions.
          For purposes of this Article VII an “Affiliated Manager” shall mean
any manager of the Property in which Borrower, Borrower Principal any SPE
Component Entity (if any) or any affiliate of such entities has, directly or
indirectly, any legal, beneficial or economic interest; “Control” shall mean the
power to direct the management and policies of a Restricted Party, directly or
indirectly, whether through the ownership of voting securities or other
beneficial interests, by contract or otherwise; “Restricted Party” shall mean
Borrower, Borrower Principal, any New Mezzanine Borrower, any SPE Component
Entity (if any), any Affiliated Manager (if any), BTDS or any shareholder,
partner, member or non-member manager of any of the foregoing, or any direct or
indirect legal or beneficial owner of Borrower, Borrower Principal, BTDS, any
SPE Component Entity (if any) or any Affiliated Manager (if any), provided,
that, in no event shall Lease Guarantor or any of its shareholders be deemed to
be a “Restricted Party” for purposes of this Article VII; and a “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.
          Section 7.02 No Sale/Encumbrance.
          (a) Subject to Borrower’s right to effect a release or substitution of
an Individual Property pursuant to Sections 2.05 and 2.06 hereof, Borrower shall
not, without the prior written consent of Lender, cause or permit a Sale or
Pledge of the Property, any Individual 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 (except for (i) a pledge by BTDS of the stock or equity
interests in Borrower Principal, (ii) a pledge by The Bon-Ton Corp. of the stock
in BTDS and (iii) a pledge by Lease Guarantor of the stock in The Bon-Ton Corp.
(which are hereinafter collectively referred to as the “Credit Facility Pledge”)
pursuant to the terms of the Senior Credit Facility) (in each case, a
“Prohibited Transfer”) other than in connection with an exercise of

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remedies by a New Mezzanine Lender under a New Mezzanine Loan pursuant to the
applicable New Mezzanine Loan Documents and pursuant to Leases of space in the
Improvements to Tenants or any other sublease or license of all or any portion
of any Individual Property in accordance with the provisions of Section 5.13.
          (b) A Prohibited Transfer shall include, but not be limited to, (i) an
installment sales agreement wherein Borrower agrees to sell the Property, any
Individual 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 any
Individual Property for other than actual occupancy by a space tenant thereunder
or a sale, assignment or other transfer of, or the grant of a security interest
in, Borrower’s right, title and interest in and to any Leases or any Rents;
(iii) 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; (iv) 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; (v) 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; (vi) 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 Party or the
creation or issuance of new legal or beneficial interests; or (vii) the removal
or the resignation of Manager (including, without limitation, an Affiliated
Manager) other than in accordance with Section 5.14; and (viii) the termination,
assignment or any Sale or Pledge of any Operating Lease or the Borrower’s or
Operating Lessee’s interests thereunder.
          (c) Notwithstanding that a Credit Facility Pledge is excluded from the
restrictions on a Sale or Pledge of the interests in a Restricted Party set
forth in this Article VII, Borrower hereby agrees that in the event that the
pledgee of the Credit Facility Pledge exercises its remedies under the Senior
Credit Facility and forecloses on the Credit Facility Pledge and such
foreclosure (or other exercise of remedies) results in any Person and its
Affiliates owning in excess of forty-nine percent (49%) of the ownership
interests in a Restricted Party, Borrower shall, prior to such transfer, deliver
a revised substantive non-consolidation opinion to Lender and New Mezzanine
Lender, if any, reflecting such transfer, which opinion shall be in form, scope
and substance reasonably acceptable in all respects to Lender and New Mezzanine
Lender, if any, and acceptable in all respects to the Rating Agencies.
          Section 7.03 Permitted Transfers.
          Notwithstanding the provisions of Section 7.02, the following
transfers shall not be deemed to be a Prohibited Transfer provided no Event of
Default exists (each, a “Permitted Transfer”): (a) a transfer by devise or
descent or by operation of law upon the death of a member, partner or
shareholder of a Restricted Party; and (b) the transfer, in one or a series of
transactions, of not more than forty-nine percent (49%) of the stock, limited
partnership interests or non-managing membership interests (as the case may be)
in a Restricted Party; provided,

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however, with respect to transfers pursuant to clause (a) and (b), (i) no such
transfer shall result in a change of control in the Restricted Party or a change
of control of the day-to-day operations of the Property, (ii) as a condition to
each such transfer under clause (b), Lender shall receive not less than thirty
(30) days prior written notice of such proposed transfer, (iii) Borrower shall
deliver evidence reasonably acceptable to Lender that there has not been and
will not be any breach of the representations and covenants set forth in
Article VI hereof and (iv) no such transfer shall result in the transferee
owning more than forty-nine percent (49%) of the direct or indirect interests in
the Borrower if such transferee did not own forty-nine percent (49%) or more of
the direct or indirect interests in the Borrower as of the date hereof.
Notwithstanding the foregoing, if any transfer permitted under this Section 7.03
results in any Person owning in excess of forty-nine percent (49%) of the
ownership interest in a Restricted Party, Borrower shall, prior to such
transfer, deliver a revised substantive non-consolidation opinion to Lender
reflecting such transfer, which opinion shall be in form, scope and substance
reasonably acceptable in all respects to Lender and acceptable in all respects
to the Rating Agencies. Notwithstanding the foregoing, in the event that
Borrower is a single member limited liability company, no transfer shall be
permitted which results in the Borrower having more than one (1) member.
          Section 7.04 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 by the proposed transferee
and a modification of the Loan Documents to the extent reasonably necessary to
reflect the 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 written confirmation from the Rating Agencies that the Prohibited
Transfer will not result in a downgrade, withdrawal or qualification of the
initial, or if higher, then current ratings issued in connection with a
Securitization, or if a Securitization has not occurred, any ratings to be
assigned in connection with a Securitization, (d) the proposed transferee’s
continued compliance with the covenants set forth in this Agreement (including,
without limitation, the covenants in Article VI) and the other Loan Documents,
(e) a Qualified Manager for each Individual Property and a Management Agreement
reasonably satisfactory to Lender, and (f) the satisfaction of such other
conditions and/or legal opinions as Lender shall reasonably require. All
reasonable actual out-of-pocket 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. Notwithstanding
anything to the contrary contained in this Section 7.04, if any Sale or Pledge
permitted under this Article VII results in any Person and its Affiliates owning
in excess of forty-nine percent (49%) of the ownership interests in a Restricted
Party, Borrower shall, prior to such transfer, and in addition to any other
requirement for Lender consent contained herein, deliver a revised substantive
non-consolidation opinion to Lender reflecting such Prohibited Transfer, which
opinion shall be in form, scope and substance reasonably acceptable in all
respects to Lender and acceptable in all respects to the Rating Agencies.

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          Section 7.05 Assumption.
          Notwithstanding the foregoing provisions of this Article VII,
following the date which is six (6) months from the Closing Date, Lender shall
not unreasonably withhold consent to a transfer of the Property in its entirety
to, and the related assumption of the Loan by, any Person (a “Transferee”)
provided that each of the following terms and conditions are satisfied:
          (a) no Default or Event of Default is continuing;
          (b) Borrower shall have (i) delivered written notice to Lender of the
terms of such prospective transfer not less than sixty (60) days before the date
on which such transfer is scheduled to close and, concurrently therewith, all
such information concerning the proposed Transferee as Lender shall reasonably
require and (ii) paid to Lender a non-refundable processing fee in the amount of
$5,000 (provided, that, Borrower shall not be required to pay any processing fee
in connection with the first request for approval of a Loan assumption pursuant
to this Section 7.05).
          (c) Borrower shall have obtained Lender’s prior written approval, such
approval not to be unreasonably withheld, provided, that, Lender shall have the
right to approve or disapprove the proposed transfer based on its then current
underwriting and credit requirements for similar loans secured by similar
properties which loans are sold in the secondary market, such approval not to be
unreasonably withheld. In determining whether to give or withhold its approval
of the proposed transfer, Lender shall consider the experience and track record
of Transferee and its principals in owning and operating facilities similar to
the Property, the financial strength of Transferee and its principals, the
general business and credit standing of Transferee and its principals and
Transferee’s and its principals’ relationships and experience with contractors,
vendors, tenants, lenders and other business entities; provided, however, that,
notwithstanding Lender’s agreement to consider the foregoing factors in
determining whether to give or withhold such approval, such approval shall be
given or withheld based on what Lender determines to be commercially reasonable
and, if given, may be given subject to such conditions as Lender may deem
reasonably appropriate. Lender may withhold its consent to any proposed transfer
occurring prior to a Securitization if the consideration to be paid by the
Transferee, as determined by Lender, is less than the appraised value of the
Property (as adjusted as a result of any Property Releases), as determined by
Lender in connection with Lender’s underwriting of the Loan.
          (d) Borrower shall have paid to Lender (i) upon Lender’s approval of
the assumption of the Loan by the then-proposed Transferee, a non-refundable
assumption fee in an amount equal to one half of one percent (0.5%) of the then
outstanding principal amount of the Loan and (ii) concurrently with the closing
of the assumption of the Loan and the related sale of the Property, all
reasonable, actual out-of-pocket costs and expenses, including reasonable
attorneys’ fees, incurred by Lender in connection with the transfer;
          (e) Transferee assumes and agrees to pay the Debt as and when due
subject to the provisions of Article XV hereof and, prior to or concurrently
with the closing of such transfer, Transferee and its constituent partners,
members or shareholders as Lender may

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reasonably require, shall execute, without any cost or expense to Lender, such
documents and agreements as Lender shall reasonably require to evidence and
effectuate said assumption;
          (f) Borrower and Transferee, without any cost to Lender, shall furnish
any information requested by Lender for the preparation of, and shall authorize
Lender to file, new financing statements and financing statement amendments and
other documents to the fullest extent permitted by applicable law and shall
execute any additional documents reasonably requested by Lender;
          (g) Borrower shall have delivered to Lender, without any cost or
expense to Lender, such endorsements to Lender’s Title Insurance Policy insuring
that fee simple title to the Property, as applicable, is vested in Transferee
(subject to Permitted Encumbrances), hazard insurance endorsements or
certificates and other similar materials as Lender may reasonably deem necessary
at the time of the transfer, all in form and substance reasonably satisfactory
to Lender;
          (h) Transferee shall have furnished to Lender the organizational
documents of Transferee and evidence of its good standing, and the qualification
of the signers to execute the assumption of the Debt, which papers shall include
certified copies of all documents relating to the organization and formation of
Transferee and of the entities, if any, which are partners or members of
Transferee. Transferee and such constituent partners, members or shareholders of
Transferee (as the case may be), as Lender shall reasonably require, shall
comply with the covenants set forth in Article VI hereof;
          (i) The Manager shall be a Qualified Manager;
          (j) Transferee shall furnish an opinion of counsel satisfactory to
Lender and its counsel (A) that Transferee’s formation documents provide for the
matters described in subparagraph (h) above, (B) that the assumption of the Debt
has been duly authorized, executed and delivered, and that the Note, the
Mortgage, this Agreement, the assumption agreement and the other Loan Documents
are valid, binding and enforceable against Transferee in accordance with their
terms, (C) 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, and (D) with respect to such other matters as
Lender may reasonably request;
          (k) if required by Lender, Lender shall have received confirmation in
writing from the Rating Agencies that rate the Securities to the effect that the
transfer will not result in a qualification, downgrade or withdrawal of any
rating initially assigned or to be assigned to the Securities;
          (l) 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 7.05;
          (m) Transferee shall, prior to such transfer, deliver a substantive
non-consolidation opinion to Lender, which opinion shall be in form, scope and
substance acceptable in all respects to Lender and the Rating Agencies; and

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          (n) Simultaneously with any such transfer permitted hereunder, any New
Mezzanine Loan shall have been paid in full or the assumption of the Loan and
the Transferee shall have been approved by any New Mezzanine Lender and the New
Mezzanine Loan shall have been assumed by an entity related to Transferee
pursuant to the terms of the New Mezzanine Loan Documents.
          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 7.05 shall not be construed to be a waiver of the right of Lender
to consent to any subsequent transfer of the Property.
          Section 7.06 Immaterial Transfers.
          Borrower may, without the consent of Lender, (i) make immaterial
transfers of portions of the Property to Governmental Authorities for dedication
or public use (subject to the provisions of Section 8.03), and (ii) grant
easements, restrictions, covenants, reservations and rights of way in the
ordinary course of business for access, water and sewer lines, telephone and
telegraph lines, electric lines or other utilities or for other similar
purposes, provided that no such transfer, conveyance or encumbrance set forth in
the foregoing clauses (i) and (ii) shall materially impair the utility,
operation or value of the applicable Individual Property. In connection with any
such transfer permitted pursuant to this Section 7.06, Lender, upon receipt of
written request from Borrower, shall execute and deliver any instrument
reasonably necessary or appropriate, in the case of any transfer referred to in
clause (i) above, to release the portion of the Property affected by such
transfer from the Lien of the applicable Mortgage or, in the case of clause
(ii) above, to subordinate the Lien of the applicable Mortgage to such
easements, restrictions, covenants, reservations and rights of way or other
similar grants upon receipt by Lender of:
          (a) thirty (30) days prior written notice thereof;
          (b) a copy of the instrument or instruments of transfer;
          (c) an Officer’s Certificate stating (i) with respect to any such
transfer, the consideration, if any, being paid for the transfer and (ii) that
such transfer does not materially impair the utility, operation or value of the
applicable Individual Property; and
          (d) reimbursement of all of Lender’s actual reasonable out-of-pocket
costs and expenses incurred in connection with such transfer.
ARTICLE VIII
INSURANCE; CASUALTY; CONDEMNATION; RESTORATION
          Section 8.01 Insurance.
          (a) Borrower shall obtain and maintain, or cause to be maintained, at
all times insurance for Borrower and each Individual Property providing at least
the following coverages:

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     (i) comprehensive “all risk” insurance on the Improvements and the
Collateral Property, in each case (A) in an amount equal to one hundred percent
(100%) of the “Full Replacement Cost,” which for purposes of this Agreement
shall mean actual replacement value (exclusive of costs of excavations,
foundations, underground utilities and footings) with a waiver of depreciation;
(B) containing an agreed amount endorsement with respect to the Improvements and
Collateral Property waiving all co-insurance provisions; (C) providing for no
deductible in excess of $250,000 for all such insurance coverage; and (D) if any
of the Improvements or the use of any Individual Property shall at any time
constitute legal non-conforming structures or uses, providing coverage for
contingent liability from Operation of Building Laws, Demolition Costs and
Increased Cost of Construction Endorsements and containing an “Ordinance or Law
Coverage” or “Enforcement” endorsement. In addition, Borrower shall obtain:
(y) if any portion of the Improvements is currently or at any time in the future
located in a “special flood hazard area” designated by the Federal Emergency
Management Agency, flood hazard insurance in an amount equal to 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; and (z) earthquake insurance in
amounts and in form and substance reasonably satisfactory to Lender in the event
any Individual Property is located in an area with a high degree of seismic
risk, provided that the insurance pursuant to clauses (y) and (z) hereof shall
be on terms consistent with the comprehensive all risk insurance policy required
under this subsection (i);
     (ii) Commercial General Liability insurance against claims for personal
injury, bodily injury, death or property damage occurring upon, in or about any
Individual Property, with such insurance (A) to be on the so-called “occurrence”
form with a general aggregate limit of not less than $2,000,000 and a per
occurrence limit of not less than $1,000,000; (B) to continue at not less than
the aforesaid limit until required to be changed by Lender in writing by reason
of changed economic conditions making such protection inadequate; and (C) to
cover at least the following hazards: (1) premises and operations; (2) products
and completed operations exposure, if applicable; (3) independent contractors;
(4) blanket contractual liability; and (5) contractual liability covering the
indemnities contained in Article XII and Article XIV hereof to the extent the
same is available;
     (iii) loss of rents insurance or business income insurance, as applicable,
(A) with loss payable to Lender; (B) covering all risks required to be covered
by the insurance provided for in subsection (i) above; and (C) which provides
that after the physical loss to the Improvements and Collateral Property occurs,
the loss of rents or income, as applicable, will be insured until such rents or
income, as applicable, either return to the same level that existed prior to the
loss, or the expiration of eighteen (18) months, whichever first occurs, and
notwithstanding that the policy may expire prior to the end of such period; and
(D) which contains an extended period of indemnity endorsement which provides
that after the physical loss to the Improvements and Personal Property has been
repaired, the continued loss of income will be insured until such income either
returns to the same level it was at prior to the loss, or the expiration of six
(6) months from the date that the related Individual Property is repaired or
replaced

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and operations are resumed, whichever first occurs, and notwithstanding that the
policy may expire prior to the end of such period. The amount of such loss of
rents or business income insurance, as applicable, 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 related Individual Property for
the succeeding period of coverage required above. All proceeds payable to Lender
pursuant to this subsection shall be held by Lender in an Eligible Account and
shall be applied to the obligations secured by the Loan Documents from time to
time due and payable hereunder and under the Note; provided, however, that
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, this Agreement and the other Loan Documents
except to the extent such amounts are actually paid out of the proceeds of such
loss of rents or business income insurance, as applicable;
     (iv) at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements, and only if the
related Individual Property coverage form does not otherwise apply, (A) owner’s
contingent or protective liability insurance covering claims not covered by or
under the terms or provisions of the above mentioned commercial general
liability insurance policy; 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 related Individual
Property, and (4) with an agreed amount endorsement waiving co-insurance
provisions or coverage provided without a co-insurance provision;
     (v) workers’ compensation, subject to the statutory limits of the State,
and employer’s liability insurance in respect of any work or operations on or
about the related Individual Property, or in connection with such Individual
Property or its operation (if applicable);
     (vi) comprehensive boiler and machinery insurance, if applicable, in
amounts as shall be reasonably required by Lender on terms consistent with the
commercial property insurance policy required under subsection (i) above;
     (vii) excess liability insurance in an amount not less than $75,000,000 per
occurrence on terms consistent with the commercial general liability insurance
required under subsection (ii) above; and
     (viii) upon sixty (60) days’ written notice, such other reasonable
insurance and 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 each Individual Property
located in or around the region in which the applicable Individual Property is
located.
          With respect to the Policies required to be maintained pursuant to
clauses (i) through (viii) above, Borrower shall use commercially reasonable
efforts, consistent with those

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of prudent owners of institutional quality commercial real estate, to maintain
insurance coverage against Losses resulting from acts of terrorism.
          (b) All insurance provided for in Section 8.01(a) shall be obtained
under valid and enforceable policies (collectively, the “Policies” or in the
singular, the “Policy”), and shall be subject to the approval of Lender as to
insurance companies, amounts, deductibles, loss payees and insureds. The
Policies shall be issued by financially sound and responsible insurance
companies authorized to do business in the State and having a claims paying
ability rating of “A” or better by at least two Rating Agencies, one of which
must be S&P or such other Rating Agencies approved by Lender. The Policies
described in Section 8.01(a) shall designate Lender and its successors and
assigns as additional insureds, mortgagees and/or loss payee as deemed
appropriate by Lender. Borrower shall deliver abstracts of the Policies and
insurance certificates to the Lender prior to the Closing Date. Not less than
ten (10) days prior to the expiration dates of the Policies required to be
maintained hereunder, Borrower shall deliver to Lender certificates for such
Policies which shall be satisfactory to Lender and shall be accompanied by
evidence satisfactory to Lender of payment of the premiums due thereunder (the
“Insurance Premiums”). Borrower shall deliver abstracts of the Policies (in
substance acceptable to Lender) that are evidenced by the certificates delivered
pursuant to the immediately preceding sentence. Further, upon request of Lender,
Borrower shall promptly, or cause Operating Lessee to promptly (but in no event
more than five (5) Business Days after Lender’s request) (i) permit Lender, or
its insurance consultant acting on Lender’s behalf, access to the full blanket
insurance policy at such location that the Borrower or Operating Lessee, as
applicable, maintains such policy (which includes the Policies) for purposes of
reading and duplicating such blanket insurance policy (or the relevant portions
thereof as determined by Lender) and (ii) deliver to Lender copies of all
applicable excerpts from the Policies (or full copies of the Policies in the
event the same are required by court order to be produced by Lender or Borrower
in connection with any proceeding or action or claim thereunder or relating
thereto) promptly upon request therefor by Lender, which excerpts shall include
(but not be limited to) the insurance companies providing coverage, the actual
coverage provided thereunder, the limits of coverage, applicable endorsements,
and all provisions of the Policies required by Lender to make a determination of
loss or otherwise defend, file, respond or process a claim under or relating to
such Policies.
          (c) Any blanket insurance Policy shall specifically allocate to each
Individual Property the amount of coverage from time to time required hereunder
in compliance with the provisions of Section 8.01(a).
          (d) All Policies provided for or contemplated by Section 8.01(a),
except for the Policy referenced in Section 8.01(a)(v), shall name Operating
Lessee as the insured and Borrower and Lender as the additional insureds, as
their respective interests may appear, and in the case of property damage,
boiler and machinery, flood and earthquake insurance, shall contain a so-called
New York standard non-contributing mortgagee clause in favor of Lender providing
that the loss thereunder shall be payable to Lender.
          (e) All Policies provided for in Section 8.01(a) shall contain clauses
or endorsements to the effect that:

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     (i) 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;
     (ii) the Policies shall not be materially changed (other than to increase
the coverage provided thereby) or canceled without at least thirty (30) days’
prior written notice to Lender and any other party named therein as an
additional insured;
     (iii) the issuers thereof shall give written notice to Lender if the
Policies have not been renewed thirty (30) days prior to its expiration; and
     (iv) Lender shall not be liable for any Insurance Premiums thereon or
subject to any assessments thereunder.
          (f) If at any time Lender is not in receipt of written evidence that
all insurance required hereunder is in full force and effect, Lender shall have
the right, without notice to Borrower, to take such action as Lender deems
necessary to protect its interest in any Individual Property, including, without
limitation, obtaining some or all of such insurance coverage as is required in
this Article VIII. All premiums incurred by Lender in connection with such
action or in obtaining such insurance and keeping it in effect shall be paid by
Borrower to Lender upon demand and, until paid, shall be secured by the Mortgage
and shall bear interest at the Default Rate.
          Section 8.02 Casualty.
          (a) If an Individual Property shall be damaged or destroyed, in whole
or in part, by fire or other casualty (a “Casualty”), Borrower shall give prompt
notice of such damage to Lender and shall promptly commence and diligently
prosecute the Restoration of the related Individual Property in accordance with
Section 8.04, provided Lender shall make all Net Proceeds available pursuant to
Section 8.04. Borrower shall pay all costs of such Restoration whether or not
such costs are covered by insurance. Lender may, but shall not be obligated to,
make proof of loss if not made promptly by Borrower. Borrower shall adjust all
claims for Insurance Proceeds which are reasonably anticipated to be in excess
of $500,000 in consultation with, and reasonable approval of, Lender; provided,
however, if an Event of Default has occurred and is continuing, Lender shall
have the exclusive right to participate in the adjustment of all claims for
Insurance Proceeds.
          (b) Notwithstanding anything to the contrary contained herein,
Borrower shall be obligated to rebuild or restore the Improvements of the
applicable Individual Property following a Casualty to the extent that the
Operating Lessee is obligated to rebuild or restore pursuant to the terms of its
Operating Lease.
          Section 8.03 Condemnation.
          (a) Borrower shall promptly give Lender notice of the actual or
threatened commencement of any proceeding for the Condemnation of any Individual
Property of which

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Borrower has knowledge and shall deliver to Lender copies of any and all papers
served in connection with such proceedings. Lender may participate in any such
proceedings, and Borrower shall from time to time deliver to Lender all
applicable documents in its possession reasonably requested by it to permit such
participation. Borrower shall, at its expense, diligently prosecute any such
proceedings, and shall consult with Lender, its attorneys and experts, and
cooperate with them in the carrying on or defense of any such proceedings.
Notwithstanding any taking by any public or quasi-public authority through
Condemnation 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 Agreement and the Debt shall not be reduced until any
Award shall have been actually received and applied by Lender, after the
deduction of expenses of collection, to the reduction or discharge of the Debt.
Lender shall not be limited to the interest paid on the Award by the condemning
authority but shall be entitled to receive out of the Award interest at the rate
or rates provided herein or in the Note. If an Individual Property or any
portion thereof is taken by a condemning authority, Borrower shall promptly
commence and diligently prosecute the Restoration of the related Individual
Property and otherwise comply with the provisions of Section 8.04, provided
Lender shall make all Net Proceeds available pursuant to Section 8.04. If any
Individual Property is sold, through foreclosure or otherwise, prior to the
receipt by Lender of the Award, Lender shall have the right, whether or not a
deficiency judgment on the Note shall have been sought, recovered or denied, to
receive the Award, or a portion thereof sufficient to pay the Debt.
          (b) Notwithstanding anything to the contrary contained herein,
Borrower shall be obligated to rebuild or restore the Improvements of the
applicable Individual Property following a Condemnation to the extent that the
Operating Lessee is obligated to rebuild or restore pursuant to the terms and
conditions of Article XVII of the applicable Operating Lease. In the event a
Total Loss (as defined in the applicable Operating Lease) related to a
Condemnation has occurred with respect to any Individual Property and the
Operating Lessee elects not to restore or rebuild in accordance with
Article XVII of the applicable Operating Lease, Borrower shall pay to Lender the
Award (such Award being paid to Lender shall equal the portion of the Award paid
to Borrower and the Award paid to Operating Lessee under the applicable
Operating Lease which has been assigned to Borrower, as landlord, in connection
with Operating Lessee’s termination of the Operating Lease as to the Individual
Property that suffered a Total Loss).
          Section 8.04 Restoration.
          The following provisions shall apply in connection with the
Restoration of an Individual Property:
          (a) Provided that 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 Agreement, the Net Proceeds
shall be disbursed by Lender to Borrower upon receipt subject to the prior
satisfaction of the requirements set forth in clause (c) below. Borrower hereby
covenants and agrees that it shall not waive, pursuant to Section 17.3(d) of the
Operating Lease, the requirement that Operating Lessee restore in all
circumstances other than a Total Loss (as defined in the applicable Operating
Lease).

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          (b) The term “Net Proceeds” for purposes of this Section 8.04 shall
mean: (i) the net amount of all insurance proceeds received by Lender pursuant
to Section 8.01(a)(i), (iv), (vi) and (vii) as a result of a Casualty, after
deduction of its reasonable costs and expenses (including, but not limited to,
reasonable counsel fees), if any, in collecting the same (“Insurance Proceeds”),
or (ii) the net amount of the Award as a result of a Condemnation, after
deduction of its reasonable costs and expenses (including, but not limited to,
reasonable counsel fees), if any, in collecting the same (“Condemnation
Proceeds”), whichever the case may be.
          (c) The Net Proceeds shall be made available to Borrower for
Restoration provided that each of the following conditions are met:
     (A) no Event of Default shall have occurred and be continuing;
     (B) the Operating Lease applicable to the Individual Property that suffered
a Casualty or Condemnation shall remain in full force and effect during and
after the completion of the Restoration without abatement of rent beyond the
time required for Restoration;
     (C) Borrower shall commence the Restoration as soon as reasonably
practicable (but in no event later than 90 days after such Casualty or
Condemnation, whichever the case may be, occurs) and shall diligently pursue the
same to satisfactory completion;
     (D) Lender shall be satisfied that the Restoration will be completed on or
before the earliest to occur of (1) six (6) months prior to the Maturity Date or
(2) such time as may be required under applicable zoning law, ordinance, rule or
regulation, or (3) the expiration of the insurance coverage referred to in
Section 8.01(a)(iii);
     (E) such Individual Property and the use thereof after the Restoration will
be in compliance with and permitted under all Legal Requirements;
     (F) the Restoration shall be done and completed by Borrower in an
expeditious and diligent fashion and in compliance with all applicable Legal
Requirements;
     (G) such Casualty or Condemnation, as applicable, does not result in the
loss of access to such Individual Property or the Improvements; and
     (H) the Net Proceeds together with any cash or cash equivalent deposited by
Borrower with Lender are sufficient in Lender’s reasonable judgment to cover the
cost of the Restoration.
     (ii) The Net Proceeds shall be held by Lender, and, until disbursed in
accordance with the provisions of this Section 8.04, shall constitute additional
security for the Debt and other obligations under the Loan Documents. The Net
Proceeds shall be disbursed by Lender to, or as directed by, Borrower from time
to time during the course of the Restoration, upon receipt of evidence
satisfactory to Lender that (A) all the

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conditions precedent to such advance, including those set forth in Section
8.04(b)(i), have been satisfied, (B) all materials installed and work and labor
performed (except to the extent that they are to be paid for out of the
requested disbursement) in connection with the related Restoration item have
been paid for in full, and (C) 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 related Individual
Property which have not either been fully bonded to the satisfaction of Lender
and discharged of record or in the alternative fully insured to the satisfaction
of Lender by the title company issuing the Title Insurance Policy.
Notwithstanding the foregoing, Insurance Proceeds from the Policies required to
be maintained by Borrower pursuant to Section 8.01(a)(iii) shall be held and
disbursed in accordance with Section 8.01(a)(iii).
     (iii) All plans and specifications required in connection with the
Restoration shall be subject to prior review and acceptance by an independent
consulting engineer selected by Lender (the “Restoration 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
pursuant to the contracts in excess of $250,000 under which they have been
engaged, shall be subject to prior review and acceptance by the Restoration
Consultant. All costs and expenses incurred by Lender in connection with making
the Net Proceeds available for the Restoration, including, without limitation,
reasonable counsel fees and disbursements and the Restoration Consultant’s fees,
shall be paid by Borrower.
     (iv) In no event shall Lender be obligated to make disbursements of the Net
Proceeds in excess of an amount equal to the costs actually incurred from time
to time for work in place as part of the Restoration, as certified by the
Restoration Consultant, minus the Restoration Retainage. The term “Restoration
Retainage” shall mean an amount equal to ten percent (10%) of the costs actually
incurred for work in place as part of the Restoration, as certified by the
Restoration Consultant, until the Restoration has been completed. The
Restoration Retainage shall be reduced to five percent (5%) of the costs
incurred upon receipt by Lender of satisfactory evidence that fifty percent
(50%) of the Restoration has been completed. The Restoration Retainage shall in
no event, and notwithstanding anything to the contrary set forth above in this
Section 8.04(b), be less than the amount actually held back by Borrower from
contractors, subcontractors and materialmen engaged in the Restoration. The
Restoration Retainage shall not be released until the Restoration Consultant
certifies to Lender that the Restoration has been completed in accordance with
the provisions of this Section 8.04(b) and that all approvals necessary for the
re-occupancy and use of the related Individual Property have been obtained from
all appropriate Governmental Authorities, and Lender receives evidence
satisfactory to Lender that the costs of the Restoration have been paid in full
or will be paid in full out of the Restoration Retainage; provided, however,
that Lender will release the portion of the Restoration Retainage being held
with respect to any contractor, subcontractor or materialmen engaged in the
Restoration as of the date upon which the Restoration 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

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contract, the contractor, subcontractor or materialman delivers the lien waivers
and evidence of payment in full of all sums due to the contractor, subcontractor
or materialman as may be reasonably requested by Lender or by the title company
issuing the Title Insurance Policy, and Lender receives an endorsement to the
Title Insurance Policy insuring the continued priority of the lien of the
Mortgage and evidence of payment of any premium payable for such endorsement. If
required by Lender, the release of any such portion of the Restoration 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 the Restoration Consultant, be
sufficient to pay in full the balance of the costs which are estimated by the
Restoration Consultant to be incurred in connection with the completion of the
Restoration, Borrower shall deposit the deficiency (the “Net Proceeds
Deficiency”) with Lender 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 Net
Proceeds, and until so disbursed pursuant to this Section 8.04(b) shall
constitute additional security for the Debt and other obligations under the Loan
Documents.
     (vii) The excess, if any, of the Net Proceeds and the remaining balance, if
any, of the Net Proceeds Deficiency deposited with Lender after the Restoration
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Section 8.04(b), and the receipt by
Lender of evidence 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 have occurred and shall be
continuing under the Note, this Agreement or any of the other Loan Documents.
          (d) 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 Section 8.04(b)(vii) may (x) be retained and applied by Lender toward the
payment of the Debt whether or not then due and payable in such order, priority
and proportions as Lender in its sole discretion shall deem proper, or, (y) at
the sole discretion of Lender, the same may be paid, either in whole or in part,
to Borrower for such purposes and upon such conditions as Lender shall
designate.
          (e) In the event of foreclosure of the Mortgage, or other transfer of
title to the Property in extinguishment in whole or in part of the Debt, all
right, title and interest of Borrower in and to the Policies then in force
concerning the Property and all proceeds payable thereunder shall thereupon vest
in the purchaser at such foreclosure, Lender or other transferee in the event of
such other transfer of title.

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ARTICLE IX
RESERVE FUNDS
          Section 9.01 Required Repairs.
          Borrower shall make the repairs and improvements to the Property set
forth on Schedule I (the repairs and improvements that are Required Repairs
hereunder are identified as such if there is a cost for completion set forth in
the “Immediate” column of the applicable schedule for each Individual Property
attached hereto as Schedule I) and as such repair or improvement is more
particularly described in the Physical Conditions Report prepared in connection
with the closing of the Loan and delivered by Lender to Borrower prior to the
date hereof (such repairs hereinafter referred to as “Required Repairs”).
Borrower shall complete the Required Repairs in a good and workmanlike manner on
or before the date that is twelve (12) months from the date hereof or within
such other time frame for completion, if any, specifically set forth on
Schedule I.
          Section 9.02 Replacements.
          (a) On an ongoing basis throughout the term of the Loan, Borrower
shall make capital repairs, replacements and improvements necessary to keep each
Individual Property in a good and safe condition and repair consistent with past
practice, ordinary wear and tear excepted (and subject to Excusable Delay and
the provisions of this Agreement with respect to any Casualty or Condemnation)
including, but not limited to, those repairs, replacements and improvements
described in the Physical Conditions Report for the applicable Individual
Property or such other repairs, replacements and improvements approved by Lender
(collectively, the “Replacements”). Borrower shall complete all Replacements in
a good and workmanlike manner as soon as commercially reasonable after
commencing to make each such Replacement.
          (b) Borrower shall establish on the date hereof an Eligible Account
(which shall be a sub-account of the Cash Management Account in Lender’s
election) with Lender or Lender’s agent to fund the Replacements (the
“Replacement Reserve Account”) into which Borrower shall deposit on the date
hereof $0.00. In addition, Borrower shall deposit $31,518.33 (the “Replacement
Reserve Monthly Deposit”) into the Replacement Reserve Account on each Payment
Date, provided, however, for such time that no Low EBITDA Period or Event of
Default exists, the Replacement Reserve Monthly Deposit shall be waived. Amounts
so deposited shall hereinafter be referred to as “Replacement Reserve Funds”.
          (c) In lieu of making the deposits pursuant to Section 9.02(b) in
cash, Borrower may deliver to Lender a Letter of Credit in an amount equal to
the Required Deposit (the “Replacement Reserve L/C”). Each Letter of Credit
delivered under this Agreement shall be additional security for the payment of
the Debt. Upon the occurrence of, and during the continuation of, an Event of
Default, Lender shall have the right, at its option, to draw on any Letter of
Credit and to apply all or any part thereof to the payment of the items for
which such Letter of Credit was established or to apply such Letter of Credit to
payment of the Debt in such order, proportion or priority as Lender may
determine. Any such application to the Debt shall require Borrower to pay any
applicable Prepayment Premium. On the Maturity Date, any such

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Letter of Credit may be applied to reduce the Debt. In addition to any other
right Lender may have to draw upon a Letter of Credit pursuant to the terms and
conditions of this Agreement, Lender shall have the additional rights to draw in
full any Letter of Credit: (i) with respect to any evergreen Letter of Credit,
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
thirty (30) days prior to the date on which the outstanding Letter of Credit is
scheduled to expire; (ii) with respect to any Letter of Credit with a stated
expiration date, if Lender has not received a notice from the issuing bank that
it has renewed the Letter of Credit at least thirty (30) days prior to the date
on which such Letter of Credit is scheduled to expire and a substitute Letter of
Credit is not provided at least thirty (30) days prior to the date on which the
outstanding Letter of Credit is scheduled to expire; (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 of this Agreement or a substitute Letter of Credit is
provided); or (iv) if Lender has received notice that the bank issuing the
Letter of Credit shall cease to be an Eligible Institution. Notwithstanding
anything to the contrary contained in the above, Lender is not obligated to draw
any Letter of Credit upon the happening of an event specified in (i), (ii),
(iii) or (iv) above and shall not be liable for any losses sustained by Borrower
due to the insolvency of the bank issuing the Letter of Credit if Lender has not
drawn the Letter of Credit.
          (d) Upon the occurrence of a Property Release, provided no Event of
Default has occurred and is continuing, Lender shall (i) promptly cause to be
returned to Borrower that portion of the balance, if any, of the Required Repair
Funds and the Replacement Reserve Funds attributable to the Individual Property
that has been released pursuant to Section 2.05, or (ii) promptly reduce the
amount of the Replacement Reserve L/C, in the amount of such Letter of Credit
attributable to the Individual Property that has been released pursuant to
Section 2.05.
          Section 9.03 Lease Shortfall Reserve Account.
          Borrower shall establish on the date hereof a sub-account of the Cash
Management Account for the deposit of funds in connection with a Low EBITDA
Period (the “Lease Shortfall Reserve Account”). During the existence of a Level
1 EBITDA Period, Borrower shall deposit fifty percent (50%) of all Excess Cash
into the Lease Shortfall Reserve Account and during the existence of a Level 2
EBITDA Period, Borrower shall deposit one hundred percent (100%) of all Excess
Cash into the Lease Shortfall Reserve Account (amounts on deposit in the Lease
Shortfall Reserve Account are referred to as the “Lease Shortfall Reserve
Funds”). All Lease Shortfall Reserve Funds shall be, and remain, collateral for
the Loan until such time that the Debt is paid in full. Borrower shall not be
entitled to any disbursement of the Lease Shortfall Reserve Funds
notwithstanding that the applicable Low EBITDA Period may no longer exist. Upon
payment in full of the Debt, all amounts remaining on deposit, if any, in the
Lease Shortfall Reserve Account shall be returned to Borrower and no other party
shall have any right or claim thereto.
          Section 9.04 Required Work.
          Borrower shall diligently pursue all Required Repairs and Replacements
(collectively, the “Required Work”) to completion in accordance with the
following requirements:

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          (a) Lender reserves the right, at its option, to approve all contracts
or work orders with materialmen, mechanics, suppliers, subcontractors,
contractors or other parties providing labor or materials in connection with the
Required Work to the extent any such contract or work order exceeds $250,000.
Upon Lender’s request, Borrower shall assign any contract or subcontract to
Lender.
          (b) In the event Lender determines in its reasonable discretion that
any Required Work is not being or has not been performed in a workmanlike or
timely manner and such failure could reasonably be expected to cause a MAE with
respect to an Individual Property, and Borrower fails to cure such deficiency
within ten (10) Business Days after written notice thereof, provided, that, if
such deficiency cannot, by its nature, be cured within such ten (10) Business
Day period, Borrower must initiate and diligently pursue a cure within such ten
(10) Business Day period (and thereafter conduct such cure to completion) then
Lender shall have the option to withhold disbursement for such unsatisfactory
Required Work and to proceed under existing contracts or, if the contractor
under the existing contract is in default thereof, to contract with other third
parties to complete such Required Work and to apply the Required Repair Funds or
the Replacement Reserve Funds, as applicable, toward the labor and materials
necessary to complete such Required Work, after providing prior written notice
to Borrower.
          (c) In order to facilitate Lender’s completion of the Required Work as
permitted by subsection (b) above, Borrower grants Lender the right to enter
onto the applicable Individual Property and perform any and all work and labor
necessary to complete the Required Work and/or employ watchmen to protect each
Individual Property from damage. All sums so expended by Lender, to the extent
not from the Reserve Funds, shall be deemed to have been advanced under the Loan
to Borrower and secured by the Mortgage. For this purpose Borrower constitutes
and appoints Lender its true and lawful attorney-in-fact with full power of
substitution to complete or undertake the Required Work in the name of Borrower
upon Borrower’s failure to do so in a workmanlike and timely manner. Such power
of attorney shall be deemed to be a power coupled with an interest and cannot be
revoked. Borrower empowers said attorney-in-fact as follows: (i) to use any of
the Reserve Funds for the purpose of making or completing the Required Work;
(ii) to make such additions, changes and corrections to the Required Work as
shall be reasonably necessary or desirable to complete the Required Work in
accordance with the terms and conditions of this Article IX; (iii) to employ
such contractors, subcontractors, agents, architects and inspectors as shall be
reasonably required for such purposes; (iv) to pay, settle or compromise all
existing bills and claims which in Lender’s reasonable judgment are validly due
and payable and which are or may become Liens against such Individual Property,
or as may be necessary or desirable for the completion of the Required Work, or
for clearance of title; (v) to execute all applications and certificates in the
name of Borrower which may be reasonably required by any of the contract
documents; (vi) to prosecute and defend all actions or proceedings in connection
with any Individual Property or the rehabilitation and repair of any Individual
Property; and (vii) to do any and every act which Borrower could reasonably be
expected to do on its own behalf to comply with the terms of this Agreement.
          (d) Nothing in this Section 9.04 shall: (i) make Lender responsible
for making or completing the Required Work; (ii) require Lender to expend funds
in addition to the applicable Reserve Funds to make or complete any Required
Work, (iii) obligate Lender to

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proceed with the Required Work; or (iv) obligate Lender to demand from Borrower
additional sums to make or complete any Required Work.
          (e) Borrower shall permit Lender and Lender’s agents and
representatives (including, without limitation, Lender’s engineer, architect, or
inspector) or third parties performing Required Work pursuant to this
Section 9.04 to enter onto the applicable Individual Property during normal
business hours (subject to the rights of tenants under their Leases) to inspect
the progress of any Required Work and all materials being used in connection
therewith, to examine all plans and shop drawings relating to such Required Work
which are or may be kept at such Individual Property, and to complete any
Required Work to the extent Lender is permitted to perform and complete any
Required Work pursuant to this Section 9.04. Borrower shall cause all
contractors and subcontractors to cooperate with Lender and Lender’s
representatives or such other persons described above in connection with
inspections described in this Section 9.04 or the completion of Required Work
pursuant to this Section 9.04.
          (f) Lender may, to the extent any Required Work would reasonably
require an inspection of any Individual Property, inspect such Individual
Property at Borrower’s expense prior to making a disbursement of the Reserve
Funds in order to verify completion of the Required Work for which reimbursement
is sought; provided, however, in no event shall the Lender have the right to
require an inspection for Required Work (taking into consideration the project
as a whole) estimated to cost in the aggregate less than $250,000. Borrower
shall pay Lender a reasonable inspection fee not exceeding $1,000 for each such
inspection. Lender may require that (at no additional cost to Borrower) such
inspection be conducted by an appropriate independent qualified professional
reasonably selected by Lender and/or may require a copy of a certificate of
completion by an independent qualified professional reasonably acceptable to
Lender prior to the disbursement of the Reserve Funds. Borrower shall pay the
expense of the inspection as required hereunder, whether such inspection is
conducted by Lender or by an independent qualified professional.
          (g) The Required Work and all materials, equipment, fixtures, or any
other item comprising a part of any Required Work shall be constructed,
installed or completed, as applicable, free and clear of all mechanic’s,
materialman’s or other Liens (except for Permitted Encumbrances and subject to
Borrower’s right to contest any lien in accordance with Section 5.04(b)
hereof.).
          (h) Before each disbursement of the Reserve Funds for Required Work
estimated to cost in excess of $250,000, Lender may require Borrower to provide
Lender with a search of title to the related Individual Property effective to
the date of the disbursement, which search shows that no mechanic’s or
materialmen’s or other Liens of any nature have been placed against the related
Individual Property since the date of recordation of the Mortgage and that title
to the related Individual Property is free and clear of all Liens (except for
Permitted Encumbrances).
          (i) All Required Work shall comply in all material respects with all
Legal Requirements and applicable insurance requirements including, without
limitation, applicable building codes, special use permits, environmental
regulations, and requirements of insurance underwriters.

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          (j) Borrower hereby assigns to Lender all rights and claims Borrower
may have against all Persons supplying labor or materials in connection with the
Required Work; provided, however, that Lender may not pursue any such rights or
claims unless an Event of Default has occurred and remains uncured.
          Section 9.05 Release of Reserve Funds.
          (a) Upon written request from Borrower and satisfaction of the
requirements set forth in this Agreement, Lender shall disburse to Borrower
amounts from (i) the Required Repair Account to the extent necessary to
reimburse Borrower for the actual costs of each Required Repair (but not
exceeding 125% of the original estimated cost of such Required Repair as set
forth on Schedule I, unless Lender has agreed to reimburse Borrower for such
excess cost pursuant to Section 9.05(f)) or (ii) the Replacement Reserve Account
to the extent necessary to reimburse Borrower for the actual costs of any
approved Replacements. Notwithstanding the preceding sentence, in no event shall
Lender be required to (x) disburse any amounts which would cause the amount of
funds remaining in the Required Repair Account after any disbursement (other
than with respect to the final disbursement) to be less than 125% of the then
current estimated cost of completing all remaining Required Repairs for the
Property, (y) disburse funds from any of the Reserve Accounts if an Event of
Default exists, or (z) disburse funds from the Replacement Reserve Account to
reimburse Borrower for the costs of routine repairs or maintenance to the
Property or for costs which are to be reimbursed from funds held in the Required
Repair Account.
          (b) Each request for disbursement from any of the Reserve Accounts
shall be on a form provided or otherwise reasonably approved by Lender and shall
(i) include copies of invoices for all items or materials purchased and all
labor or services provided and (ii) specify (A) the Required Work for which the
disbursement is requested, (B) the quantity and price of each item purchased, if
the Required Work includes the purchase or replacement of specific items,
(C) the price of all materials (grouped by type or category) used in any
Required Work other than the purchase or replacement of specific items, and
(D) the cost of all contracted labor or other services applicable to each
Required Work for which such request for disbursement is made. With each request
Borrower shall certify that all Required Work has been performed in compliance
in all material respects with all Legal Requirements. Except as provided in
Section 9.05(d), each request for disbursement shall be made only after
completion of the Required Repair, Replacement (or the portion thereof completed
in accordance with Section 9.05(d)), as applicable, for which disbursement is
requested. Borrower shall provide Lender evidence reasonably satisfactory to
Lender of such completion or performance.
          (c) Borrower shall pay all invoices in connection with the Required
Work with respect to which a disbursement is requested prior to submitting such
request for disbursement from the Reserve Accounts or, at the request of
Borrower, Lender will issue joint checks, payable to Borrower and the
contractor, supplier, materialman, mechanic, subcontractor or other party to
whom payment is due in connection with the Required Work. In the case of
payments made by joint check, Lender may require a waiver of lien from each
Person receiving payment prior to Lender’s disbursement of the Reserve Funds. In
addition, as a condition to any disbursement, Lender may require Borrower to
obtain lien waivers from each contractor, supplier, materialman, mechanic or
subcontractor who receives payment in an amount equal to

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or greater than $100,000 for completion of its work or delivery of its
materials. Any lien waiver delivered hereunder shall conform to all Legal
Requirements and shall cover all work performed and materials supplied
(including equipment and fixtures) for the related Individual Property by that
contractor, supplier, subcontractor, mechanic or materialman through the date
covered by the current disbursement request (or, in the event that payment to
such contractor, supplier, subcontractor, mechanic or materialmen is to be made
by a joint check, the release of lien shall be effective through the date
covered by the previous release of funds request).
          (d) If (i) the cost of any item of Required Work exceeds $50,000 and
(ii) the contractor performing such Required Work requires periodic payments
pursuant to terms of a written contract, a request for disbursement from the
Reserve Accounts may be made after completion of a portion of the work under
such contract, provided (A) such contract requires payment upon completion of
such portion of work, (B) the materials for which the request is made are on
site at the related Individual Property and are properly secured or have been
installed in the related Individual Property, (C) all other conditions in this
Agreement for disbursement have been satisfied, and (D) in the case of a
Replacement, funds remaining in the Replacement Reserve Account are, in Lender’s
reasonable judgment, sufficient to complete such Replacement and the other
Replacements specified in Schedule II (and which have not yet been completed and
paid in full).
          (e) Borrower shall not make a request for, nor shall Lender have any
obligation to make, any disbursement from any Reserve Account more frequently
than once in any calendar month and (except in connection with the final
disbursement) in any amount less than the lesser of (i) $10,000 or (ii) the
total cost of the Required Work for which the disbursement is requested.
          (f) In the event any Borrower requests a disbursement from the
Required Repair Account to reimburse Borrower for the actual cost of labor or
materials used in connection with repairs or improvements other than the
Required Repairs specified on Schedule I, or for a Required Repair to the extent
the cost of such Required Repair exceeds 125% of the estimated cost of such
Required Repair as set forth on Schedule I (in either case, an “Additional
Required Repair”), Borrower shall disclose in writing to Lender the reason why
funds in the Required Repair Account should be used to pay for such Additional
Required Repair. If Lender reasonably determines that (i) such Additional
Required Repair is of the type intended to be covered by the Required Repair
Account, (ii) such Additional Required Repair is not covered or is not of the
type intended to be covered by the Replacement Reserve Account, (iii) costs for
such Additional Required Repair are reasonable, (iv) the funds in the Required
Repair Account are sufficient to pay for such Additional Required Repair and all
other Required Repairs for the related Individual Property specified on
Schedule I, and (v) all other conditions for disbursement under this Agreement
have been met, Lender shall disburse funds from the Required Repair Account in
accordance with the terms and conditions of this Section 9.05.
          (g) In the event any Borrower requests a disbursement from the
Replacement Reserve Account to reimburse Borrower for the actual cost of labor
or materials used in connection with repairs or improvements other than the
Replacements specified in the Physical Conditions Report prepared in connection
with the closing of the Loan (an “Additional Replacement”), Borrower shall
disclose in writing to Lender the reason why funds in the

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Replacement Reserve Account should be used to pay for such Additional
Replacement. If Lender reasonably determines that (i) such Additional
Replacement is of the type intended to be covered by the Replacement Reserve
Account, (ii) such Additional Replacement is not covered or is not of the type
intended to be covered by the Required Repair Account, (iii) costs for such
Additional Replacement are reasonable, (iv) the funds in the Replacement Reserve
Account are sufficient to pay for such Additional Replacement and all other
Replacements for the Property specified in Schedule II (and which have not yet
been completed and paid in full), and (v) all other conditions for disbursement
under this Agreement have been met, Lender may disburse funds from the
Replacement Reserve Account in accordance with this Section 9.05.
          (h) Lender’s disbursement of any Reserve Funds or other acknowledgment
of completion of any Required Work in a manner reasonably satisfactory to Lender
shall not be deemed a certification or warranty by Lender to any Person that the
Required Work has been completed in accordance with Legal Requirements.
          (i) If the funds in any Reserve Account should exceed the amount of
payments actually applied by Lender for the purposes of the account, Lender
shall, at Borrower’s option, promptly either return any excess to Borrower or
credit such excess against future payments to be made to that Reserve Account.
If at any time Lender reasonably determines that the Reserve Funds are not or
will not be sufficient to make the required payments, Lender shall notify
Borrower of such determination and Borrower shall pay to Lender any amount
necessary to make up the deficiency within ten (10) days after written notice
from Lender to Borrower requesting payment thereof.
          (j) The insufficiency of any balance in any of the Reserve Accounts
shall not relieve Borrower from its obligation to fulfill all preservation and
maintenance covenants in the Loan Documents.
          (k) Upon the earlier to occur of (i) the timely completion of all
Required Repairs and any Additional Required Repairs, if any, in accordance with
the requirements of this Agreement, as verified by Lender in its reasonable
discretion, or (ii) the payment in full of the Debt, all amounts remaining on
deposit, if any, in the Required Repair Account shall be returned to Borrower
and no other party shall have any right or claim thereto.
          (l) Upon payment in full of the Debt, all amounts remaining on
deposit, if any, in the Replacement Reserve Account shall be returned to
Borrower and no other party shall have any right or claim thereto.
          Section 9.06 Tax and Insurance Reserve Funds.
          Borrower shall establish on the date hereof an Eligible Account with
Lender or Lender’s agent sufficient to discharge Borrower’s obligations for the
payment of Taxes and Insurance Premiums pursuant to Section 5.04 and
Section 8.01 hereof, respectively (the “Tax and Insurance Reserve Account”) into
which Borrower shall deposit on the date hereof $0, which amount, when added to
the required monthly deposits set forth in the next sentence, is sufficient to
make the payments of Taxes and Insurance Premiums as required herein, provided,
however, for such time that no Low EBITDA Period or Event of Default exists,
deposits required to be

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made into the Tax and Insurance Reserve Account pursuant to this Section 9.06
shall be waived. During the existence of an Event of Default or a Low EBITDA
Period, Borrower shall deposit into the Tax and Insurance Reserve Account on
each Payment Date (a) one-twelfth of the Taxes that Lender reasonably estimates
will be payable during the next ensuing twelve (12) months or such higher amount
necessary to accumulate with Lender sufficient funds to pay all such Taxes at
least thirty (30) days prior to the earlier of (i) the date that the same will
become delinquent and (ii) the date that additional charges or interest will
accrue due to the non-payment thereof, and (b) except to the extent Lender has
waived the insurance escrow because the insurance required hereunder is
maintained under a blanket insurance Policy reasonably acceptable to Lender in
accordance with Section 8.01(c), one-twelfth of the Insurance Premiums that
Lender reasonably estimates will be payable during the next ensuing twelve
(12) months for the renewal of the coverage afforded by the Policies upon the
expiration thereof or such higher amount necessary to accumulate with Lender
sufficient funds to pay all such Insurance Premiums at least thirty (30) days
prior to the expiration of the Policies (said amounts in (a) and (b) above
hereinafter called the “Tax and Insurance Reserve Funds”). Lender will apply the
Tax and Insurance Reserve Funds to payments of Taxes and Insurance Premiums
required to be made by Borrower pursuant to Section 5.04 and Section 8.01
hereof, respectively. In making any disbursement from the Tax and Insurance
Reserve Account, Lender may do so in good faith according to any bill, statement
or estimate procured from the appropriate public office or tax lien service
(with respect to Taxes) or insurer or agent (with respect to Insurance
Premiums), without inquiry into the accuracy of such bill, statement or estimate
or into the validity of any tax, assessment, sale, forfeiture, tax lien or title
or claim thereof. If the amount of the Tax and Insurance Reserve Funds shall
exceed the amounts due for Taxes and Insurance Premiums pursuant to Section 5.04
and Section 8.01 hereof, respectively, Lender shall, at Borrower’s option,
promptly return any excess to Borrower or credit such excess against future
payments to be made to the Tax and Insurance Reserve Account. In allocating any
such excess, Lender may deal with the person shown on Lender’s records as being
the owner of the related Individual Property. Any amount remaining in the Tax
and Insurance Reserve Account after the Debt has been paid in full shall be
returned to Borrower and no other party shall have any right or claim thereto.
If at any time Lender reasonably determines that the Tax and Insurance Reserve
Funds are not or will not be sufficient to pay Taxes and Insurance Premiums by
the dates set forth in (a) and (b) above, Lender shall notify Borrower of such
determination and Borrower shall pay to Lender any amount necessary to make up
the deficiency within ten (10) days after written notice from Lender to Borrower
requesting payment thereof.
          Section 9.07 Excess Cash Reserve Account.
          Borrower shall establish on the date hereof an Eligible Account into
which Borrower shall deposit all Excess Cash After Lease Shortfall Deposits on
each Payment Date during the continuance of any default under a New Mezzanine
Loan, if any, or Event of Default (the “Excess Cash Reserve Account”). Amounts
so deposited shall hereinafter be referred to as the “Excess Cash Reserve Funds”
and shall be collateral for the Loan. Sums from the Excess Cash Reserve Account
shall be disbursed to Borrower upon the earlier to occur of (a) payment in full
of the Debt or (b) the cure of all Events of Default to the satisfaction of
Lender.

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          Section 9.08 Reserve Funds Generally.
          (a) (i) No earnings or interest on the Tax and Insurance Reserve
Account shall be payable to Borrower. Neither Lender nor any loan servicer that
at any time holds or maintains the Tax and Insurance Reserve Account shall have
any obligation to keep or maintain the Tax and Insurance Reserve Account or any
funds deposited therein in interest-bearing accounts. If Lender or any such loan
servicer elects in its sole and absolute discretion to keep or maintain the Tax
and Insurance Reserve Account or any funds deposited therein in an
interest-bearing account, the account shall be an Eligible Account and (A) such
funds shall not be invested except in Permitted Investments, and (B) all
interest earned or accrued thereon shall be for the account of and be retained
by Lender or such loan servicer.
     (ii) Funds deposited in the other Reserve Accounts except for the Tax and
Insurance Reserve Account, shall be held in an interest-bearing business savings
account and interest shall be credited to Borrower. In no event shall Lender or
any loan servicer that at any time holds or maintains such Reserve Accounts be
required to select any particular interest-bearing account or the account that
yields the highest rate of interest, provided that selection of the account
shall be consistent with the general standards at the time being utilized by
Lender or the loan servicer, as applicable, in establishing similar accounts for
loans of comparable type. All such interest shall be and become part of the such
Reserve Account and shall be disbursed in accordance with Section 9.05 above;
provided, however, that Lender may, at its election, apply toward the repayment
of the Debt any such interest during the occurrence and continuance of an Event
of Default. Borrower agrees that it shall include all interest on Reserve Funds
as the income of Borrower (and, if Borrower is a partnership or other
pass-through entity, the partners, members or beneficiaries of Borrower, as the
case may be), and shall be the owner of the funds in the Reserve Accounts for
federal and applicable state and local tax purposes.
          (b) Borrower grants to Lender a first priority security interest in,
and assigns and pledges to Lender, each of the Reserve Accounts and any and all
Reserve Funds now or hereafter deposited in the Reserve Accounts as additional
security for payment of the Debt. Until expended or applied in accordance
herewith, the Reserve Accounts and the Reserve Funds shall constitute additional
security for the Debt. The provisions of this Section 9.08 are intended to give
Lender or any subsequent holder of the Loan “control” of the Reserve Accounts
within the meaning of the UCC.
          (c) The Reserve Accounts and any and all Reserve Funds now or
hereafter deposited in the Reserve Accounts shall be subject to the exclusive
dominion and control of Lender, which shall hold the Reserve Accounts and any or
all Reserve Funds now or hereafter deposited in the Reserve Accounts subject to
the terms and conditions of this Agreement. Borrower shall have no right of
withdrawal from the Reserve Accounts or any other right or power with respect to
the Reserve Accounts or any or all of the Reserve Funds now or hereafter
deposited in the Reserve Accounts, except as expressly provided in this
Agreement.
          (d) Lender shall furnish or cause to be furnished to Borrower, without
charge, an annual accounting of each Reserve Account in the normal format of
Lender or its loan

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servicer, showing credits and debits to such Reserve Account and the purpose for
which each credit or debit to each Reserve Account was made.
          (e) As long as no Event of Default has occurred and is continuing,
Lender shall make disbursements from the Reserve Accounts in accordance with
this Agreement. All such disbursements contemplated by Section 9.05 hereof shall
be deemed to have been expressly pre-authorized by Borrower, and shall not be
deemed to constitute the exercise by Lender of any remedies against Borrower
unless an Event of Default has occurred and is continuing and Lender has
expressly stated in writing its intent to proceed to exercise its remedies as a
secured party, pledgee or lienholder with respect to the Reserve Accounts.
          (f) If any Event of Default occurs and is continuing, Borrower shall
immediately lose all of its rights to receive disbursements from the Reserve
Accounts until the earlier to occur of (i) the date on which such Event of
Default is cured to Lender’s satisfaction, or (ii) the payment in full of the
Debt. In addition, at Lender’s election, Borrower shall lose all of its rights
to receive interest on the Replacement Reserve Account during the occurrence and
continuance of an Event of Default. Upon the occurrence and during the
continuance of any Event of Default, Lender may exercise any or all of its
rights and remedies as a secured party, pledgee and lienholder with respect to
the Reserve Accounts. Without limitation of the foregoing, upon the occurrence
and during the continuance of any Event of Default, Lender may use and disburse
the Reserve Funds (or any portion thereof) for any of the following purposes:
(A) repayment of the Debt, including, but not limited to, principal prepayments
and the prepayment premium applicable to such full or partial prepayment (as
applicable); (B) reimbursement of Lender for all losses, fees, costs and
expenses (including, without limitation, reasonable legal fees) suffered or
incurred by Lender as a result of such Event of Default; (C) payment of any
amount expended in exercising any or all rights and remedies available to Lender
at law or in equity or under this Agreement or under any of the other Loan
Documents; (D) payment of any item from any of the Reserve Accounts as required
or permitted under this Agreement; or (E) any other purpose permitted by
applicable law; provided, however, that any such application of funds shall not
cure or be deemed to cure any Event of Default. Without limiting any other
provisions hereof, each of the remedial actions described in the immediately
preceding sentence shall be deemed to be a commercially reasonable exercise of
Lender’s rights and remedies as a secured party with respect to the Reserve
Funds and shall not in any event be deemed to constitute a setoff or a
foreclosure of a statutory banker’s lien. Nothing in this Agreement shall
obligate Lender to apply all or any portion of the Reserve Funds to effect a
cure of any Event of Default, or to pay the Debt in any specific order of
priority. The exercise of any or all of Lender’s rights and remedies under this
Agreement or under any of the other Loan Documents shall not in any way
prejudice or affect Lender’s right to initiate and complete a foreclosure under
the Mortgage.
          (g) The Reserve Funds shall not constitute escrow or trust funds and
may be commingled with other monies held by Lender. Notwithstanding anything
else herein to the contrary, Lender may commingle in one or more Eligible
Accounts any and all funds controlled by Lender, including, without limitation,
funds pledged in favor of Lender by other borrowers, whether for the same
purposes as the Reserve Accounts or otherwise. Without limiting any other
provisions of this Agreement or any other Loan Document, the Reserve Accounts
may be established and held in such name or names as Lender or its loan
servicer, as agent for Lender,

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shall deem appropriate, including, without limitation, in the name of Lender or
such loan servicer, as agent for Lender. In the case of any Reserve Account
which is held in a commingled account, Lender or its loan servicer, as
applicable, shall maintain records sufficient to enable it to determine at all
times which portion of such account is related to the Loan. The Reserve Accounts
are solely for the protection of Lender. With respect to the Reserve Accounts,
Lender shall have no responsibility beyond the allowance of due credit for the
sums actually received by Lender or beyond the reimbursement or payment of the
costs and expenses for which such accounts were established in accordance with
their terms. Upon assignment of the Loan by Lender, any Reserve Funds shall be
turned over to the assignee and any responsibility of Lender as assignor shall
terminate. The requirements of this Agreement concerning Reserve Accounts in no
way supersede, limit or waive any other rights or obligations of the parties
under any of the Loan Documents or under applicable law.
          (h) Borrower shall not, without obtaining the prior written consent of
Lender, further pledge, assign or grant any security interest in the Reserve
Accounts or the Reserve Funds deposited therein or permit any Lien to attach
thereto, except for the security interest granted in this Section 9.08, or any
levy to be made thereon, or any UCC financing statements, except those naming
Lender as the secured party, to be filed with respect thereto.
          (i) Borrower will maintain the security interest created by this
Section 9.08 as a first priority perfected security interest and will defend the
right, title and interest of Lender in and to the Reserve Accounts and the
Reserve Funds against the claims and demands of all Persons whomsoever. At any
time and from time to time, upon the reasonable request of Lender in writing,
and at the sole expense of Borrower, Borrower will promptly and duly execute and
deliver such further instruments and documents and will take such further
actions as Lender reasonably may request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted.
          (j) Borrower hereby authorizes the filing of any financing statements
or continuation statements, and amendments to financing statements, in any
jurisdictions and with any filing offices as Lender may determine, in its sole
discretion, are necessary or advisable to perfect the security interests granted
to Lender in connection herewith. Such financing statements may describe the
collateral in the same manner as described in this Agreement or may contain an
indication or description of collateral that describes such property in any
other manner as Lender may determine, in its sole discretion, is necessary or
prudent to ensure the perfection of the security interest in the collateral
granted to Lender in connection herewith. Borrower shall promptly reimburse
Lender for any reasonable out-of-pocket costs and expenses (including, without
limitation, reasonable attorneys’ fees) incurred by Lender in connection with
the foregoing.

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ARTICLE X
CASH MANAGEMENT
          Section 10.01 Cash Management Account.
          (a) Borrower acknowledges and confirms that Borrower has established,
and Borrower covenants that it shall maintain an interest bearing Eligible
Account into which Borrower shall deposit or cause to be deposited, all Rents
and other revenue from the Property to which Borrower is entitled, including all
proceeds of any sale of an Individual Property but excluding any Insurance
Proceeds (except for the monthly allocation of proceeds paid pursuant to the
insurance policy required to be maintained pursuant to Section 8.01(a)(iii)
hereof) and Awards (such account and the sub-accounts thereof, and any
replacements or substitutions of such account are referred to herein as the
“Cash Management Account”). The Cash Management Account is currently established
with Bank of America, N.A., is in the name of Bonstores Realty Two, LLC and
bears account number 1235865674.
          (b) The Cash Management Account shall be in the name of Borrower for
the benefit of Lender, provided that Borrower shall be the owner of all funds on
deposit in such account for federal and applicable state and local tax purposes.
Sums on deposit in the Cash Management Account shall be invested only in such
Permitted Investments as determined and directed by Lender and all income earned
thereon shall be the income of Borrower and be applied to and become part of the
Cash Management Account, to be disbursed in accordance with this Article X.
Lender shall have no liability for any loss resulting from the investment of
funds in Permitted Investments in accordance with the terms and conditions of
this Agreement.
          (c) The Cash Management Account shall be subject to the exclusive
dominion and control of Lender and, except as otherwise expressly provided
herein, neither Borrower nor any other party claiming on behalf of, or through,
Borrower shall have any right of withdrawal therefrom or any other right or
power with respect thereto.
          (d) Lender shall be responsible for the performance only of such
duties with respect to the Cash Management Account as are specifically set forth
herein, and no duty shall be implied from any provision hereof. Lender shall not
be under any obligation or duty to perform any act which would involve it in
expense or liability or to institute or defend any suit in respect hereof, or to
advance any of its own monies, except in connection with its gross negligence or
willful misconduct. Borrower shall indemnify and hold Lender and its directors,
employees, officers and agents harmless from and against any loss, cost or
damage (including, without limitation, reasonable attorneys’ fees and
disbursements) incurred by such parties in connection with the Cash Management
Account other than such as result from the gross negligence or willful
misconduct of Lender or its officers, employees and/or agents or intentional
nonperformance by Lender of its obligations under this Agreement.
          Section 10.02 Deposits and Withdrawals.
          (a) Borrower represents, warrants and covenants that:

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     (i) All Rents from the Property shall (A) be deemed additional security for
payment of the Debt and shall be held in trust for the benefit, and as the
property, of Lender, (B) not be commingled with any other funds or property of
Borrower, and (C) if received by Borrower notwithstanding the instructions to
Operating Lessee, be deposited in the Cash Management Account promptly upon
receipt; and
     (ii) Except as is otherwise specifically provided hereunder, so long as any
portion of the Debt remains outstanding, neither Borrower nor any other Person
shall open or maintain any accounts other than the Cash Management Account into
which Rents and revenues from the sale or release of any Individual Property or
any portion thereof are deposited. The foregoing shall not prohibit Borrower
from utilizing one or more separate accounts for the disbursement or retention
of any other funds relating to the ownership and/or operation of the Property or
that have been transferred to Borrower pursuant to the express terms of this
Agreement.
          (b) Reserved.
          (c) On each Payment Date (and if such day is not a Business Day, then
the immediately preceding day which is a Business Day) commencing the month
during which the first Payment Date occurs, Borrower hereby irrevocably
authorizes Lender to withdraw or allocate to the sub-accounts of the Cash
Management Account, as the case may be, amounts received in the Cash Management
Account, in each case to the extent that sufficient funds remain therefor:
     (i) in connection with the sale of an Individual Property and the release
thereof pursuant to Section 2.05 of this Agreement, an amount equal to the
Release Amount shall be paid to Lender in repayment of the principal balance of
the Loan;
     (ii) during the existence of an Event of Default or Low EBITDA Period,
funds sufficient to pay the monthly deposits to the Tax and Insurance Reserve
Account shall be allocated to the Tax and Insurance Reserve Account to be held
and disbursed in accordance with Section 9.06;
     (iii) funds sufficient to pay the Monthly Payment Amount shall be withdrawn
and paid to Lender;
     (iv) during the existence of an Event of Default or Low EBITDA Period,
funds sufficient to pay the Replacement Reserve Monthly Deposit shall be
allocated to the Replacement Reserve Account to be held and disbursed in
accordance with Section 9.05;
     (v) to the extent applicable, funds sufficient to pay any interest accrued
or accruing at the Default Rate, late payment charges, if any, and any other
sums due and payable to Lender under any of the Loan Documents, shall be
withdrawn and paid to Lender and applied against such items;
     (vi) provided no Event of Default or Low EBITDA Period is continuing and
the New Mezzanine Loan, if any, has not been paid in full, all amounts remaining
on

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deposit shall be disbursed to the to the New Mezzanine Lender as a distribution
from Borrower to New Mezzanine Borrower;
     (vii) during the existence of a Low EBITDA Period but provided no Event of
Default is continuing and the New Mezzanine Loan, if any, has not been paid in
full, funds sufficient to pay the debt service due and payable under the New
Mezzanine Loan Documents together with such other amounts as New Mezzanine
Lender notifies Lender are due and payable under the New Mezzanine Loan, if any
at such time shall be deposited with the New Mezzanine Lender;
     (viii) during the existence of a Low EBITDA Period but provided no Event of
Default exists, funds shall be allocated to the Lease Shortfall Reserve Account
in amounts required under, and to be held in accordance with, Section 9.03;
     (ix) during the existence of any Event of Default hereunder, funds in an
amount equal to the Excess Cash After Lease Shortfall Deposits shall be
deposited in the Excess Cash Reserve Account to be held and disbursed in
accordance with Section 9.07;
     (x) provided no Event of Default exists, funds in an amount equal to the
Excess Cash After Lease Shortfall Deposits shall be disbursed to Borrower, at
Borrower’s direction.
          (d) Notwithstanding anything to the contrary herein, Borrower
acknowledges that Borrower is responsible for monitoring the sufficiency of
funds deposited in the Cash Management Account and that Borrower is liable for
any deficiency in available funds, irrespective of whether Borrower has received
any account statement, notice or demand from Lender or Lender’s servicer. If the
amount on deposit in the Cash Management Account is insufficient to make all of
the withdrawals and allocations described in Section 10.02(c)(i) through (iv)
above, Borrower shall deposit such deficiency into the Cash Management Account
within five (5) days (provided that such five day period shall not constitute a
grace period for any default or Event of Default under this Agreement or any
other Loan Document based on a failure to satisfy any monetary obligation
provided in any Loan Document).
          (e) If an Event of Default shall have occurred and is continuing,
Borrower hereby irrevocably authorizes Lender to make any and all withdrawals
from the Cash Management Account and transfers between any of the Reserve
Accounts as Lender shall determine in Lender’s sole and absolute discretion and
Lender may use all funds contained in any such accounts for any purpose in
accordance with applicable law, including but not limited to repayment of the
Debt in such order, proportion and priority as Lender may determine in its sole
and absolute discretion. Lender’s right to withdraw and apply funds as stated
herein shall be in addition to all other rights and remedies provided to Lender
under this Agreement, the Note, the Mortgage and the other Loan Documents.
          Section 10.03 Security Interest.
          (a) To secure the full and punctual payment of the Debt and
performance of all obligations of Borrower now or hereafter existing under this
Agreement and the other Loan Documents, Borrower hereby grants to Lender a
security interest in the Cash Management

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Account, all interest, cash, checks, drafts, certificates and instruments, if
any, from time to time deposited or held therein, any and all amounts invested
in Permitted Investments, and all “proceeds” (as defined in the UCC as in effect
in the state in which the Cash Management Account is located or maintained) of
any or all of the foregoing. Furthermore, Borrower shall not, without obtaining
the prior written consent of Lender, further pledge, assign or grant any
security interest in any of the foregoing or permit any Lien to attach thereto
or any levy to be made thereon or any UCC Financing Statements to be filed with
respect thereto. Borrower will maintain the security interest created by this
Section 10.03(a) as a first priority perfected security interest and will defend
the right, title and interest of Lender in and to the Cash Management Account
against the claims and demands of all Persons whomsoever.
          (b) Borrower authorizes Lender to file any financing statement or
statements required by Lender to establish or maintain the validity, perfection
and priority of the security interest granted herein in connection with the Cash
Management Account. Borrower agrees that at any time and from time to time, at
the expense of Borrower, Borrower will promptly and duly execute and deliver all
further instruments and documents, and take all further action, that may be
reasonably necessary or desirable, or that Lender may reasonably request, in
order to perfect and protect any security interest granted or purported to be
granted hereby (including, without limitation, any security interest in and to
any Permitted Investments) or to enable Lender to exercise and enforce its
rights and remedies hereunder.
          (c) Upon the occurrence and during the continuance of an Event of
Default, Lender may exercise any or all of its rights and remedies as a secured
party, pledgee and lienholder with respect to the Cash Management Account.
Without limitation of the foregoing, upon the occurrence and during the
continuance of any Event of Default, Lender may use the Cash Management Account
for any of the following purposes: (i) repayment of the Debt, including, but not
limited to, principal prepayments and the prepayment premium applicable to such
full or partial prepayment (as applicable); (ii) reimbursement of Lender for all
losses, fees, costs and expenses (including, without limitation, reasonable
legal fees) suffered or incurred by Lender as a result of such Event of Default;
(iii) payment of any amount expended in exercising any or all rights and
remedies available to Lender at law or in equity or under this Agreement or
under any of the other Loan Documents; (iv) payment of any item as required or
permitted under this Agreement; or (v) any other purpose permitted by applicable
law; provided, however, that any such application of funds shall not cure or be
deemed to cure any Event of Default. Without limiting any other provisions
hereof, each of the remedial actions described in the immediately preceding
sentence shall be deemed to be a commercially reasonable exercise of Lender’s
rights and remedies as a secured party with respect to the Cash Management
Account and shall not in any event be deemed to constitute a setoff or a
foreclosure of a statutory banker’s lien. Nothing in this Agreement shall
obligate Lender to apply all or any portion of the Cash Management Account to
effect a cure of any Event of Default, or to pay the Debt in any specific order
of priority. The exercise of any or all of Lender’s rights and remedies under
this Agreement or under any of the other Loan Documents shall not in any way
prejudice or affect Lender’s right to initiate and complete a foreclosure under
the Mortgage.

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          Section 10.04 Definitions.
          Notwithstanding anything to the contrary contained herein, for
purposes of this Article X only, Business Day shall mean a day on which Lender
is open for the conduct of substantially all of its banking business at the
office in the city in which the Note is payable (excluding Saturdays and Sundays
and U.S. legal holidays).
ARTICLE XI
EVENTS OF DEFAULT; REMEDIES
          Section 11.01 Event of Default.
          The occurrence of any one or more of the following events shall
constitute an “Event of Default”:
          (a) if any portion of the Debt is not paid on or prior to the date the
same is due or if the entire Debt is not paid on or before the Maturity Date;
          (b) except as otherwise expressly provided in the Loan Documents, if
any of the Taxes or Other Charges are not paid when the same are due and
payable, unless there is sufficient money in the Tax and Insurance Reserve
Account for payment of amounts then due and payable and Lender’s access to such
money has not been constrained or restricted in any manner;
          (c) if the Policies are not kept in full force and effect, or if the
abstracts, copies of the Policies or certificates, as the case may be, are not
delivered to Lender pursuant to Section 8.01 within five (5) Business Days
following Lender’s delivery of written notice to Borrower of such failure to
deliver such abstracts, copies of the Policies or certificates, as provided in
Section 8.01;
          (d) if Borrower breaches any covenant with respect to itself or any
SPE Component Entity (if any) contained in Article VI or there is any breach of
any covenant contained in Article VII hereof;
          (e) if any material representation or warranty of, or with respect to,
Borrower, Borrower Principal, any SPE Component Entity, or any member, general
partner, principal or beneficial Borrower of any of the foregoing, made herein,
in any other Loan Document, or in any certificate, report, financial statement
or other instrument or document furnished to Lender at the time of the closing
of the Loan or during the term of the Loan shall have been false or misleading
in any material respect when made; provided, however, that if such
representation or warranty which was false or misleading in any material respect
is, by its nature, curable and is not reasonably likely to cause a MAE, and such
representation or warranty was not false or misleading in any material respect
to the knowledge of the party making such representation when made, then same
shall not constitute an Event of Default unless Borrower, Borrower Principal, or
SPE Component Entity, as applicable, has not cured same so as to make it true
and

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correct as and when made within ten (10) days after receipt by Borrower of
notice from Lender in writing of such breach;
          (f) if (i) Borrower, Operating Lessee, Lease Guarantor or any managing
member or general partner of Borrower, Borrower Principal, Lease Guarantor or
any SPE Component Entity (if any) shall commence any case, proceeding or other
action (A) under any Creditors Rights Laws, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent,
or seeking reorganization, 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 Borrower, any managing member or general
partner of Borrower, Borrower Principal, Lease Guarantor or any SPE Component
Entity (if any) shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Borrower, any managing
member or general partner of Borrower, Borrower Principal, Lease Guarantor or
any SPE Component Entity (if any) any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry of a
final, non-appealable order for relief or any such adjudication or appointment
or (B) remains undismissed, undischarged or unbonded for a period of ninety
(90) days; or (iii) there shall be commenced against Borrower, any managing
member or general partner of Borrower, Borrower Principal, Lease Guarantor or
any SPE Component Entity (if any) 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 (iv) Borrower, any managing member or general partner of Borrower, Borrower
Principal, Lease Guarantor or any SPE Component Entity (if any) shall have
consented to, or approved, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) Borrower, any managing member or general partner of
Borrower, Borrower Principal, Lease Guarantor or any SPE Component Entity (if
any) shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due, provided, that, the Lender shall
not be obligated to declare that any of the foregoing actions or events with
respect to the Lease Guarantor is an Event of Default under the Loan Documents;
          (g) if Borrower shall be in default beyond applicable notice and grace
periods under any other mortgage, deed of trust, deed to secure debt or other
security agreement covering any part of any Individual Property, whether it be
superior or junior in lien to the Mortgage;
          (h) subject to Borrower’s right to contest as provided in
Section 5.04(b) hereof, if any Individual Property becomes subject to any
mechanic’s, materialman’s or other Lien other than a Lien for any Taxes or Other
Charges not then due and payable and the Lien shall remain undischarged of
record (by payment, bonding or otherwise) for a period of thirty (30) days;
          (i) subject to Borrower’s right to contest as provided in
Section 5.04(b) hereof, if any federal tax lien is filed against Borrower or
Borrower Principal, any member or general partner of Borrower or Borrower
Principal or any SPE Component Entity (if any) or any Individual Property and
same is not discharged of record within sixty (60) days after same is filed;

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          (j) if a judgment is filed against the Borrower in excess of $250,000
which is uninsured and is not vacated or discharged within sixty (60) days, and
the same could reasonably be expected to cause a MAE;
          (k) if any default occurs under any guaranty or indemnity executed in
connection herewith and such default continues after the expiration of
applicable grace periods, if any;
          (l) if Borrower shall permit any event within its control to occur
that would cause any REA to terminate without notice or action by any party
thereto or would entitle any party to terminate any REA and the term thereof by
giving notice to Borrower; or any REA shall be surrendered, terminated or
canceled for any reason or under any circumstance whatsoever except as provided
for in such REA; or any material term of any REA shall be modified or
supplemented without Lender’s prior written consent; or Borrower shall fail,
within ten (10) Business Days after demand by Lender, to exercise its option to
renew or extend the term of any REA or shall fail or neglect to pursue
diligently all actions necessary to exercise such renewal rights pursuant to
such REA except as provided for in such REA, in each case if such action could
reasonably be expected to cause a MAE with respect to an Individual Property;
          (m) if Borrower shall continue to be in default under any other term,
covenant or condition of this Agreement or any of the Loan Documents for more
than twenty (20) days after notice from Lender in the case of any default which
can be cured by the payment of a sum of money or for thirty (30) days after
notice from Lender in the case of any other default, provided that if such
default cannot reasonably be cured within such thirty (30) day period and
Borrower or Operating Lessee shall have commenced to cure such default within
such thirty (30) day period and thereafter diligently and expeditiously proceeds
to cure the same, such thirty (30) day period shall be extended for so long as
it shall require Borrower or Operating Lessee 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;
          (n) if a material default shall occur under any Management Agreement
or the related assignment of management agreement and any such default shall
continue beyond the applicable grace period, if any, provided for therein;
          (o) if any of the assumptions contained in any opinion relating to
issues of substantive consolidation delivered to the Lender in connection with
the Loan, or in any other opinion relating to substantive consolidation
delivered subsequent to the closing of the Loan, is or shall become untrue in
any material respect;
          (p) any Operating Lease or the Operating Lease Guaranty shall at any
time cease to be in full force and effect with respect to any Individual
Property that is subject to the Lien of a Mortgage;
          (q) if Borrower or Operating Lessee shall be in default in any of its
obligations under the Operating Lease and any such default shall continue beyond
the applicable grace period, if any, provided for therein;

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          (r) if Lease Guarantor shall be in default in any of its obligations
under the Operating Lease Guaranty and any such default shall continue beyond
the applicable grace period, if any, provided for therein; or
          (s) if any Letter of Credit delivered pursuant to this Agreement which
is required to be maintained hereunder is not renewed or replaced and delivered
to Lender within thirty (30) days prior to the expiration date thereof or the
applicable required reserve deposit (for which the Letter of Credit originally
was delivered in lieu of) has not been deposited with Lender on or before the
date which is thirty (30) days prior to the expiration date of such Letter of
Credit.
          Section 11.02 Remedies.
          (a) Upon the occurrence and during the continuance of an Event of
Default (other than an Event of Default described in Section 11.01(f) above)
Lender may, in addition to any other rights or remedies available to it pursuant
to this Agreement and the other Loan Documents or at law or in equity, take such
action, without notice or demand, that Lender deems advisable to protect and
enforce its rights against Borrower and in any Individual Property, including,
without limitation, declaring the Debt to be immediately due and payable, and
Lender may enforce or avail itself of any or all rights or remedies provided in
the Loan Documents against Borrower and any Individual Property, including,
without limitation, all rights or remedies available at law or in equity; and
upon the occurrence and during the continuance of any Event of Default described
in Section 11.01(f) above, the Debt and all other obligations of Borrower
hereunder and under the other Loan Documents shall immediately and automatically
become due and payable, without notice or demand, and Borrower hereby expressly
waives any such notice or demand, anything contained herein or in any other Loan
Document to the contrary notwithstanding.
          (b) Upon the occurrence and during the continuance of an Event of
Default, all or any one or more of the rights, powers, privileges and other
remedies available to Lender against Borrower under this Agreement or any of the
other Loan Documents executed and delivered by, or applicable to, Borrower or at
law or in equity may be exercised by Lender at any time and from time to time,
whether or not all or any of the Debt shall be declared due and payable, and
whether or not Lender shall have commenced any foreclosure proceeding or other
action for the enforcement of its rights and remedies under any of the Loan
Documents with respect to any Individual Property. Any such actions taken by
Lender shall be cumulative and concurrent and may be pursued independently,
singularly, successively, together or otherwise, at such time and in such order
as Lender may determine in its sole discretion, to the fullest extent permitted
by law, without impairing or otherwise affecting the other rights and remedies
of Lender permitted by applicable law, equity or contract or as set forth herein
or in the other Loan Documents.

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ARTICLE XII
ENVIRONMENTAL PROVISIONS
          Section 12.01 Environmental Representations and Warranties.
          Borrower represents and warrants, except to the extent disclosed in
any Environmental Report of any Individual Property or as would not reasonably
be expected to cause a MAE with respect to an Individual Property: (a) there are
no Hazardous Materials or underground storage tanks in, on, or under any
Individual Property, except those that are in compliance in all material
respects with Environmental Laws and with permits issued pursuant thereto (if
such permits are required), if any; (b) there are no present or currently
threatened or, to Borrower’s knowledge, past Releases of Hazardous Materials in
violation of any Environmental Law; (c) there is, to Borrower’s knowledge, no
threat of any Release of Hazardous Materials migrating to any Individual
Property; (d) there is no past or present non-compliance with Environmental
Laws, or with permits issued pursuant thereto, in connection with any Individual
Property except to the extent that any non-compliance matter has been fully
resolved with the applicable Governmental Authority; (e) Borrower does not know
of, and has not received, any written notice from any Person relating to
Hazardous Materials in, on, under or from any Individual Property; (f) each
Individual Property is free of Mold; and (g) Borrower has truthfully and fully
provided to Lender, in writing, any and all reports, audits, investigations and
assessments relating to environmental conditions in, on, under or from each
Individual Property contained in Borrower’s files and records or in Borrower’s
control, including but not limited to any reports relating to Hazardous
Materials in, on, under or migrating to or from each Individual Property and/or
to the environmental condition of or the presence of Mold at each Individual
Property.
          Section 12.02 Environmental Covenants.
          Borrower covenants and agrees that so long as Borrower owns, manages,
is in possession of, or otherwise controls the operation of any Individual
Property: (a) all uses and operations on or of each Individual Property, whether
by Borrower or any other Person, shall be in material compliance with the
substantive requirements of all Environmental Laws and permits issued pursuant
thereto; (b) there shall be no Releases of Hazardous Materials in, on, under or
from any Individual Property that would be reasonably likely to result in a
material violation of Environmental Law; (c) there shall be no Hazardous
Materials in, on, or under any Individual Property, except those that are both
(i) in compliance with all Environmental Laws and with permits issued pursuant
thereto, if and to the extent required, and (ii) (A) in amounts not in excess of
that necessary to operate the related Individual Property for the purposes set
forth herein; (B) fully disclosed to Lender in writing; or (C) with respect to
Mold, not in a condition, location, or of a type which would be reasonably
likely to pose a material risk to human health or safety or the environment or
which may result in damage to or would adversely affect or impair the value or
marketability of the related Individual Property; (d) Borrower shall keep each
Individual Property free and clear of all Environmental Liens; (e) Borrower
shall, at its sole cost and expense, cooperate in all activities pursuant to
Section 12.04 below; (f) Borrower shall, at its sole cost and expense, perform
any investigation of environmental conditions in connection with each Individual
Property, pursuant to any reasonable written request of Lender, upon Lender’s

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reasonable belief that such condition at any Individual Property is not in
material compliance with all applicable Environmental Laws, and share with
Lender the reports and other results thereof, and Lender and other Indemnified
Parties shall be entitled to rely on such reports and other results thereof;
(g) Borrower shall, at its sole cost and expense, comply with all reasonable
written requests of Lender to (i) reasonably effectuate remediation of any
Hazardous Materials in, on, under or from each Individual Property as required
by applicable Environmental Law; and (ii) comply with any applicable
Environmental Law; (h) Borrower shall not allow any tenant or other user of any
Individual Property to violate any Environmental Law; and (i) Borrower shall
immediately notify Lender in writing after it has become aware of (A) any
material Release or threatened Release of Hazardous Materials in, on, under,
from or migrating towards any Individual Property and presence of Hazardous
Materials other than as permitted by this Section 12.02; (B) any material
non-compliance with any Environmental Laws related in any way to any Individual
Property; (C) any actual or potential Environmental Lien against any Individual
Property; (D) any required or proposed action by any Governmental Authority of
environmental conditions relating to any Individual Property; and (E) any
written notice of which Borrower becomes aware from any source whatsoever
(including but not limited to a Governmental Authority) relating to violations
of, or non-compliance with, Environmental Laws by Borrower. Any failure of
Borrower to perform its obligations pursuant to this Section 12.02 shall
constitute bad faith waste with respect to the Property.
          Section 12.03 Lender’s Rights.
          Lender and any other Person designated by Lender, including but not
limited to any duly authorized representative of a Governmental Authority, and
any environmental consultant, and any receiver appointed by any court of
competent jurisdiction, shall have the right, but not the obligation, to enter
upon any Individual Property at all reasonable times to assess any and all
aspects of the environmental condition of the related Individual Property and
its use, including but not limited to conducting any environmental assessment or
audit (the scope of which shall be determined in Lender’s sole discretion).
Pursuant to Section 12.02(f) of this Agreement, Lender may require Borrower to
collect samples of soil, groundwater or other water, air, or building materials,
and conduct other invasive testing. If within 60 days of such written request
from Lender, Borrower has failed to provide to Lender the results of such
sampling, Borrower shall cooperate with and provide access to Lender and any
such person or entity designated by Lender, to perform such sampling.
          Section 12.04 Operations and Maintenance Programs.
          If recommended by the Environmental Report and if required by
applicable Environmental Law with respect to any Individual Property, Borrower
shall establish and comply with an operations and maintenance program with
respect to such Individual Property, in form and substance reasonably acceptable
to Lender, prepared by an environmental consultant reasonably acceptable to
Lender. Without limiting the generality of the preceding sentence, Lender may
require (a) periodic notices or reports regarding matters addressed by the
operation and maintenance program to Lender in form, substance and at such
intervals as Lender may reasonably require, (b) an amendment to such operations
and maintenance program reasonably required to address changing circumstances or
applicable laws, (c) access to such Individual Property by Lender, its agents or
servicer, subject to Section 5.06 of the Loan Agreement, to

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review and assess the environmental condition of such Individual Property and
Borrower’s compliance with such operations and maintenance program, and
(d) variation of the operations and maintenance program reasonably required in
response to the reports provided by any such consultants, as required by
applicable Environmental Law.
          Section 12.05 Environmental Definitions.
          “Environmental Law” means any present and future federal, state and
local laws, statutes, ordinances, rules, regulations, standards, and other
legally enforceable government directives or requirements, as well as common
law, including but not limited to the Comprehensive Environmental Response,
Compensation and Liability Act and the Resource Conservation and Recovery Act,
that apply to Borrower or any Individual Property and relate to Hazardous
Materials or protection of human health or the environment applicable to
Borrower or any Individual Property. “Environmental Liens” means all Liens and
other encumbrances imposed pursuant to any Environmental Law, whether due to any
act or omission of Borrower or any other Person (but excluding any intentional
act or omission of Lender). “Environmental Report” means, with respect to each
Individual Property, the written report prepared by EMG as the result of the
environmental site assessments of such Individual Property and which was
delivered to Lender in connection with the Loan. “Hazardous Materials” shall
mean petroleum and petroleum products and compounds containing them, including
gasoline, diesel fuel and oil; explosives, flammable materials; radioactive
materials; polychlorinated biphenyls and compounds containing them; lead and
lead-based paint; asbestos or asbestos-containing materials in any form that is
or could become friable; underground or above-ground storage tanks, whether
empty or containing any substance; any substance the presence of which on any
Individual Property is prohibited by any Environmental Law; and any other
material or substance defined as a “hazardous substance,” “hazardous material”,
“hazardous waste”, “toxic substance”, “toxic pollutant”, “contaminant”, or
“pollutant” within the meaning of any Environmental Law. “Mold” shall mean any
toxic mold, fungi, bacterial or microbial matter present at or in any Individual
Property, including, without limitation, building materials which is in a
condition, location or a type which may pose a material risk to human health or
safety or the environment, may result in material damage to or would adversely
affect or impair the material value or marketability of any Individual Property.
“Release” of any Hazardous Materials includes but is not limited to any release,
deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting,
pumping, pouring, emptying, escaping, dumping, disposing or other movement of
Hazardous Materials.
ARTICLE XIII
SECONDARY MARKET
          Section 13.01 Transfer of Loan.
          Lender may, at any time, sell, transfer or assign the Loan Documents,
or grant participations therein (“Participations”) or syndicate the Loan
(“Syndication”) or issue mortgage pass-through certificates or other securities
evidencing a beneficial interest in a rated or unrated public offering or
private placement (“Securities”) (a Syndication or the issuance of
Participations and/or Securities, a “Securitization”).

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          Section 13.02 Delegation of Servicing.
          At the option of Lender, the Loan may be serviced by a
servicer/trustee selected by Lender and Lender may delegate all or any portion
of its responsibilities under this Agreement and the other Loan Documents to
such servicer/trustee pursuant to a servicing agreement between Lender and such
servicer/trustee; provided, however, Lender shall give Borrower notice of
Lender’s selection of any such servicer within a reasonable period of time
thereafter.
          Section 13.03 Dissemination of Information.
          Lender may forward to each purchaser, transferee, assignee, or
servicer of, and each participant, or investor in, the Loan, or any
Participations and/or Securities or any of their respective successors
(collectively, the “Investor”) or any Rating Agency rating the Loan, or any
Participations and/or Securities, each prospective Investor, and any
organization maintaining databases on the underwriting and performance of
commercial mortgage loans, all documents and information which Lender now has or
may hereafter acquire relating to the Debt and to Borrower, Operating Lessee,
any managing member or general partner thereof, Borrower Principal, Lease
Guarantor, BTDS, any SPE Component Entity (if any) and each Individual Property,
including financial statements, whether furnished by Borrower or otherwise, as
Lender reasonably determines necessary or desirable, but subject to the
condition that such information is confidential and is to be used only in
connection with the Securitization. Subject to the foregoing, Borrower
irrevocably waives any and all rights it may have under applicable Legal
Requirements to prohibit such disclosure, including but not limited to any right
of privacy.
          Section 13.04 Regulation A/B Information.
          (a) If, at the time one or more Disclosure Documents (as defined
below) are being prepared for a securitization, Lender expects that Borrower
alone or Borrower and one or more affiliates of Borrower collectively, or the
Property alone or the Property and any other parcel(s) of real property,
together with improvements thereon and personal property related thereto, that
is “related”, within the meaning of the definition of Significant Obligor (as
defined below), to the Property (a “Related Property”) collectively, will be a
Significant Obligor, Borrower shall furnish to Lender upon request (i) the
selected financial data or, if applicable, net operating income, required under
Item 1112(b)(1) of Regulation AB and meeting the requirements thereof, if Lender
expects that the principal amount of the Loan, together with any loans made to
an affiliate of Borrower or secured by a Related Property that is included in a
securitization with the Loan (a “Related Loan”), as of the cut-off date for such
securitization may, or if the principal amount of the Loan together with any
Related Loans as of the cut-off date for such securitization and at any time
during which the Loan and any Related Loans are included in a securitization
does, equal or exceed ten percent (10%) (but less than twenty percent (20%)) of
the aggregate principal amount of all mortgage loans included or expected to be
included, as applicable, in the securitization or (ii) the financial statements
required under Item 1112(b)(2) of Regulation AB and meeting the requirements
thereof, if Lender expects that the principal amount of the Loan together with
any Related Loans as of the cut-off date for such securitization may, or if the
principal amount of the Loan together with any Related Loans as of the cut-off
date for such securitization and at any time during which the Loan and any
Related

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Loans are included in a securitization does, equal or exceed twenty percent
(20%) of the aggregate principal amount of all mortgage loans included or
expected to be included, as applicable, in the securitization. Such financial
data or financial statements shall be furnished to Lender (A) within ten
(10) Business Days after notice from Lender in connection with the preparation
of Disclosure Documents for the securitization, (B) not later than
forty-five(45) days after the end of each fiscal quarter of Borrower and (C) not
later than ninety (90) days after the end of each fiscal year of Borrower;
provided, however, that Borrower shall not be obligated to furnish financial
data or financial statements pursuant to clauses (B) or (C) of this sentence
with respect to any period for which an Exchange Act Filing is not required. As
used herein, “Regulation AB” shall mean Regulation AB under the Securities Act
of 1933 and the Securities Exchange Act of 1934 (as amended). As used herein,
“Disclosure Document” shall mean a prospectus, prospectus supplement, private
placement memorandum, or similar offering memorandum or offering circular, in
each case in preliminary or final form, used to offer securities in connection
with a securitization. As used herein, “Significant Obligor” shall have the
meaning set forth in Item 1101(k) of Regulation AB.
          (b) In no event shall Borrower be required to deliver information or
financial statements pursuant to Section 13.04(a) with respect to any Tenant or
BTDS.
          Section 13.05 Cooperation.
          At the request of the holder of the Note and, to the extent not
already required to be provided by Borrower under this Agreement, Borrower,
Manager and Borrower Principal shall use reasonable efforts to provide
information not in the possession of the holder of the Note in order to satisfy
the market standards to which the holder of the Note customarily adheres or
which may be reasonably required in the marketplace or by the Rating Agencies in
connection with such sales or transfers, including, without limitation, to:
          (a) provide updated financial, budget and other information with
respect to each Individual Property, Borrower, Operating Lessee, Borrower
Principal, Lease Guarantor, BTDS and Manager and provide modifications and/or
updates to the appraisals, market studies, environmental reviews and reports
(Phase I reports and, if appropriate, Phase II reports) and engineering reports
of each Individual Property obtained in connection with the making of the Loan
(all of the foregoing, together with the information required to be provided
pursuant to Section 13.04, being referred to as the “Provided Information”),
together, if customary, with appropriate verification and/or consents of the
Provided Information through letters of auditors or opinions of counsel of
independent attorneys reasonably acceptable to Lender and the Rating Agencies;
          (b) make changes to the organizational documents of Borrower, any SPE
Component Entity and their respective principals;
          (c) cause counsel to render or update existing opinion letters as to
enforceability and non-consolidation which may be relied upon by the holder of
the Note, the Rating Agencies and their respective counsel, which shall be dated
as of the closing date of the Securitization;

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          (d) permit site inspections, appraisals, market studies and other due
diligence investigations of each Individual Property, as may be reasonably
requested by the holder of the Note or the Rating Agencies or as may be
necessary or appropriate in connection with the Securitization;
          (e) make the representations and warranties with respect to each
Individual Property, Operating Lease, Borrower, Borrower Principal and the Loan
Documents as are made in the Loan Documents and such other representations and
warranties as may be reasonably requested by the holder of the Note or the
Rating Agencies;
          (f) execute such amendments to the Loan Documents as may be reasonably
requested by the holder of the Note or the Rating Agencies or otherwise to
effect the Securitization including, without limitation, bifurcation of the Loan
into two or more components and/or separate notes and/or creating a
senior/subordinate note structure; provided, however, that Borrower shall not be
required to modify or amend any Loan Document if such modification or amendment
would (i) change the interest rate or the stated maturity, except in connection
with a bifurcation of the Loan which may result in varying Note Rates for each
component thereof, but which shall have the same initial weighted average coupon
of the Note Rate on the Closing Date, or (ii) in the reasonable judgment of
Borrower, modify or amend the loan term or amortization term or any other
economic term of the Loan, except in a de minimis way, (iii) in the reasonable
judgment of Borrower, materially increase Borrower’s obligations and liabilities
or decrease Borrower’s rights under the Loan Documents, except in a de minimis
way; (iv) cause the Borrower to incur expenses in excess of the $50,000
threshold set forth below in Section 13.02 and the Lender has not agreed to pay
such expenses in excess of $50,000; or (v) affect Borrower’s rights to
substitute the Property or prepay the Loan hereunder;
          (g) deliver to Lender and/or any Rating Agency, (i) one or more
certificates executed by an officer of the Borrower certifying as to the
accuracy, as of the closing date of the Securitization, of all representations
made by Borrower in the Loan Documents as of the Closing Date in all relevant
jurisdictions or, if such representations are no longer accurate, certifying as
to what modifications to the representations would be required to make such
representations accurate as of the closing date of the Securitization, and
(ii) certificates of the relevant Governmental Authorities in all relevant
jurisdictions indicating the good standing and qualification of Borrower as of
the date of the closing date of the Securitization;
          (h) have reasonably appropriate personnel participate in a bank
meeting and/or presentation for the Rating Agencies or Investors; and
          (i) cooperate with and assist Lender in obtaining ratings of the
Securities from two (2) or more of the Rating Agencies.
          Notwithstanding anything to the contrary set forth herein, Borrower
covenants and agrees that after the Closing Date and prior to a Securitization,
Lender shall have the right to create a mezzanine loan (the “New Mezzanine
Loan”), to establish different interest rates and to reallocate the amortization
and principal balances of each of the Loan and the New Mezzanine Loan between
each other and to require the payment of the Loan and the New Mezzanine Loan in
such order of priority as may be designated by Lender; provided, that in no
event shall the

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weighted average coupon of the Loan and the New Mezzanine Loan following any
such reallocation or modification at any time change from the weighted average
coupon for all in effect immediately preceding such reallocation, modification
or creation of the New Mezzanine Loan. Borrower shall execute and deliver, and
cause to be executed and delivered, such documents as shall reasonably be
required by Lender in connection with this Section, all in form and substance
reasonably satisfactory to Lender and the Rating Agencies, including, without
limitation, in connection with the creation of the New Mezzanine Loan, a
promissory note and loan documents necessary to evidence the New Mezzanine Loan
(collectively, the “New Mezzanine Loan Documents”), and Borrower shall execute
such amendments to the Loan Documents as are necessary in connection with the
creation of the New Mezzanine Loan. In addition, Borrower shall cause the
formation of one or more special purpose, bankruptcy remote entities as required
by Lender in order to serve as the borrowers under each New Mezzanine Loan
(each, a “New Mezzanine Borrower”) and the applicable organizational documents
of Borrower shall be amended and modified as necessary or required in the
formation of any New Mezzanine Borrower. Further, in connection with the New
Mezzanine Loan, Borrower shall deliver to Lender opinions of legal counsel with
respect to due execution, authority and enforceability of the New Mezzanine Loan
and the Loan Documents, as amended and an updated substantive non-consolidation
opinion for the Loan and a substantive non-consolidation opinion with respect to
the New Mezzanine Loan, each as reasonably acceptable to Lender, prospective
investors and/or the Rating Agencies. In connection with the New Mezzanine Loan,
Lender shall require, among other things, (i) the formation of one or more
special purpose, bankruptcy remote entities, which shall own all of the direct
legal and beneficial ownership interests in Borrower, (ii) that such New
Mezzanine Borrower execute a promissory note with respect to the New Mezzanine
Loan to be evidenced thereby and (iii) that such New Mezzanine Borrower execute
and deliver such other agreements, documents and instruments (including, without
limitation, a pledge agreement pursuant to which each such New Mezzanine
Borrower pledge all of its right, title and interest in and to the legal and
beneficial ownership interests in Borrower as collateral for the New Mezzanine
Loan) as Lender may reasonably request to achieve optimum pricing for the New
Mezzanine Loan.
          In connection with the foregoing, in the event Borrower fails to
execute and deliver any documents reasonably required by Lender within ten
(10) Business Days, time being of the essence, following request therefor,
Borrower hereby absolutely and irrevocably appoints Lender as its true and
lawful attorney, coupled with an interest, in its name and stead to make and
execute all documents necessary or desirable to effect such transactions,
Borrower ratifying all that such attorney shall do by virtue thereof. It shall
be an Event of Default under this Agreement, the Note, the Mortgage and the
other Loan Documents if Borrower fails to promptly comply with any of the terms,
covenants or conditions of this Section.
          All costs and expenses incurred by Borrower (including, without
limitation, legal fees and expenses and any costs associated with creating one
or more New Mezzanine Loans and obtaining UCC insurance and mezzanine
endorsements to the Borrower’s title policy(ies), in each case, for the benefit
of Lender or any existing or future mezzanine lender) in connection with
Borrower’s complying with the requests and requirements made under this
Section 13.05 shall be paid by Borrower, provided, that, Lender shall be
required to pay any reasonable expenses of Borrower that exceed $50,000. All
third party report costs (excluding opinion letters required hereunder) and
Rating Agency expenses shall be paid by Lender.

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          In the event that Borrower requests any consent or approval hereunder
and the provisions of this Agreement or any Loan Documents require the receipt
of written confirmation from each Rating Agency with respect to the rating on
the Securities, or, in accordance with the terms of the transaction documents
relating to a Securitization, such a rating confirmation is required in order
for the consent of Lender to be given, Borrower shall pay all actual reasonable
out-of-pocket costs and expenses of Lender, Lender’s servicer and each Rating
Agency in connection therewith, and, if applicable, shall pay any fees imposed
by any Rating Agency as a condition to the delivery of such confirmation.
          Section 13.06 Securitization Indemnification.
          (a) Borrower and Borrower Principal understand that certain of the
Provided Information may be included in Disclosure Documents in connection with
the Securitization and may also be included in filings with the Securities and
Exchange Commission pursuant to the Securities Act or the Exchange Act, or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, Borrower and Borrower Principal
will cooperate with the holder of the Note in updating the Disclosure Document
by providing all current information necessary to keep the Disclosure Document
accurate and complete in all material respects.
          (b) Borrower and Borrower Principal agree to provide in connection
with each of (i) a preliminary and a final offering memorandum or private
placement memorandum or similar document (including any Investor or Rating
Agency “term sheets” or presentations relating to the Property and/or the Loan)
or (ii) a preliminary and final prospectus or prospectus supplement, as
applicable, an indemnification certificate (A) certifying that Borrower and
Borrower Principal have examined certain portions of such memorandum or
prospectus or other document (including any Investor or Rating Agency “term
sheets” or presentations relating to the Property and/or the Loan), as
applicable, including without limitation, the sections entitled “Special
Considerations,” and/or “Risk Factors,” and “Certain Legal Aspects of the
Mortgage Loan,” or similar sections, and all sections relating to Borrower,
Operating Lessee, Borrower Principal, the Manager, their Affiliates, the Loan,
the Loan Documents, any Operating Lease and the Property, and any risks or
special considerations relating thereto, and that, to the knowledge of Borrower,
such sections do not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading (any of
the foregoing actions by Borrower and/or Borrower Principal, in each case,
determined as of the date such information or statement is provided, a “Borrower
Misstatement”), (B) indemnifying Lender (and for purposes of this Section 13.06,
Lender hereunder shall include its officers and directors) and the Affiliate of
Lender that (i) has filed the registration statement, if any, relating to the
Securitization and/or (ii) which is acting as issuer, depositor, sponsor and/or
a similar capacity with respect to the Securitization (any Person described in
(i) or (ii), an “Issuer Person”), and each director and officer of any Issuer
Person, and each Person or entity who controls any Issuer Person within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(collectively, the “Issuer Group”), and each Person which is acting as an
underwriter, manager, placement agent, initial purchaser or similar capacity
with respect to the Securitization, each of its directors and officers and each
Person who controls any such Person within the meaning of Section 15 of the

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Securities Act and Section 20 of the Exchange Act (collectively, the
“Underwriter Group”) for any Losses to which Lender or the Issuer Group may
become subject insofar as the Losses arise out of any Borrower Misstatement
contained in such sections (including any Investor or Rating Agency “term
sheets” or presentations relating to the Property and/or the Loan) or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated in such sections (including any Investor or
Rating Agency “term sheets” or presentations relating to the Property and/or the
Loan) or necessary in order to make the statements in such sections (including
any Investor or Rating Agency “term sheets” or presentations relating to the
Property and/or the Loan) or in light of the circumstances under which they were
made, not misleading (collectively the “Securities Liabilities”) and
(C) agreeing to reimburse Lender, the Issuer Group and the Underwriter Group for
any legal or other expenses reasonably incurred by Lender and Issuer Group in
connection with investigating or defending the Securities Liabilities; provided,
however, that Borrower will be liable in any such case under clauses (B) or
(C) above only to the extent that any such Securities Liabilities arise out of
or are based upon any such untrue statement or omission made therein, as of the
date such information or statement is provided, in reliance upon and in
conformity with information furnished to Lender or any member of the Issuer
Group or Underwriter Group by or on behalf of Borrower or Borrower Principal in
connection with the preparation of the memorandum or prospectus or other
document (including any Investor or Rating Agency “term sheets” or presentations
relating to the Property and/or the Loan) or in connection with the underwriting
of the Loan, including, without limitation, financial statements of Borrower or
Borrower Principal, operating statements, rent rolls, environmental site
assessment reports and property condition reports with respect to each
Individual Property. This indemnity agreement will be in addition to any
liability which Borrower and Borrower Principal may otherwise have. Moreover,
the indemnification provided for in Clauses (B) and (C) above shall be effective
whether or not an indemnification certificate described in (A) above is provided
and shall be applicable based on information previously provided by Borrower and
Borrower Principal or their Affiliates if Borrower or Borrower Principal do not
provide the indemnification certificate.
          (c) In connection with filings under the Exchange Act or any
information provided to holders of Securities on an ongoing basis, Borrower and
Borrower Principal agree to indemnify (i) Lender, the Issuer Group and the
Underwriter Group for Losses to which Lender, the Issuer Group or the
Underwriter Group may become subject insofar as the Securities Liabilities arise
out of or are based upon the omission or alleged omission to state in the
Provided Information a material fact required to be stated in the Provided
Information in order to make the statements in the Provided Information, in
light of the circumstances under which they were made not misleading and (ii)
reimburse Lender, the Issuer Group or the Underwriter Group for any legal or
other expenses reasonably incurred by Lender, the Issuer Group or the
Underwriter Group in connection with defending or investigating the Securities
Liabilities.
          (d) Promptly after receipt by an indemnified party under this
Section 13.06 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 13.06, notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability which the indemnifying
party may have to any indemnified party hereunder except to the extent that
failure to notify causes prejudice to the indemnifying party. In the event that
any action is brought

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against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled, jointly with any
other indemnifying party, to participate therein and, to the extent that it (or
they) may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party.
After notice from the indemnifying party to such indemnified party under this
Section 13.06 the indemnifying party shall be responsible for any reasonable
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there are any legal defenses available to
it and/or other indemnified parties that are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. The indemnifying party shall not be liable for the
expenses of more than one such separate counsel unless counsel for an
indemnified party shall have reasonably concluded that there may be legal
defenses available to its client that are different from or additional to those
available to another indemnified party.
          (e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreements provided for in Section 13.06(c)
or Section 13.06(d) is or are for any reason held to be unenforceable by an
indemnified party in respect of any losses, claims, damages or liabilities (or
action in respect thereof) referred to therein which would otherwise be
indemnifiable under Section 13.06(c) or Section 13.06(d), the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages or liabilities (or action in respect
thereof); provided, however, that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. In determining the amount of contribution to which
the respective parties are entitled, the following factors shall be considered:
(i) the indemnified party’s, Borrower’s and Borrower Principal’s relative
knowledge and access to information concerning the matter with respect to which
claim was asserted; (ii) the opportunity to correct and prevent any statement or
omission; and (iii) any other equitable considerations appropriate in the
circumstances. Lender, Borrower and Borrower Principal hereby agree that it
would not be equitable if the amount of such contribution were determined by pro
rata or per capita allocation.
          (f) The liabilities and obligations of Borrower, Borrower Principal
and Lender under this Section 13.06 shall survive the satisfaction of this
Agreement and the satisfaction and discharge of the Debt.
          Section 13.07 Servicer.
          At the option of Lender, the Loan may be serviced by a
servicer/trustee selected by Lender and Lender may delegate all or any portion
of its responsibilities under this Agreement and the other Loan Documents to
such servicer/trustee pursuant to a servicing agreement between Lender and such
servicer/trustee.

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ARTICLE XIV
INDEMNIFICATIONS
          Section 14.01 General Indemnification.
          Borrower shall indemnify, defend 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 one or more of the following: (a) any accident,
injury to or death of persons or loss of or damage to property occurring in, on
or about any Individual Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(b) any use, nonuse or condition in, on or about any Individual Property or any
part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (c) performance of any labor or services or the
furnishing of any materials or other property in respect of any Individual
Property or any part thereof; (d) any failure of any Individual Property to be
in compliance with any applicable Legal Requirements; (e) 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; (f) the holding or
investing of the Reserve Accounts or the performance of the Required Work,
Additional Required Repairs or Additional Replacements, or (g) the payment of
any commission, charge or brokerage fee to anyone which may be payable in
connection with the funding of the Loan (other than for fees imposed or charges
by any broker hired solely by Lender) (collectively, the “Indemnified
Liabilities”); provided, however, that Borrower shall not have any obligation to
Lender hereunder (i) to the extent that such Indemnified Liabilities arise from
the gross negligence, illegal acts, fraud or willful misconduct of Lender or its
agents or representatives or, (ii) with respect to clauses (a)-(e) above, to the
extent that the circumstances giving rise to any indemnification obligation
which Borrower may have under any of clauses (a)-(e) above occurs only after
(and not to any degree before) Lender has taken possession of the applicable
Individual Property and Borrower is no longer in possession of such Individual
Property. To the extent that the undertaking to indemnify, defend and hold
harmless set forth in the preceding sentence may be unenforceable because it
violates any applicable law or public policy, Borrower shall pay the maximum
portion that it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all Indemnified Liabilities incurred by Lender.
          Section 14.02 Mortgage and Intangible Tax 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 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 the Mortgage, the Note or
any of the other Loan Documents, but excluding any income, franchise or other
similar taxes.

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          Section 14.03 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, reasonable 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 Section 4.09 or
Section 5.18 of this Agreement.
          Section 14.04 Provided Information Indemnification.
          In addition to, but without duplication of, any indemnification
provided pursuant to Article XIII, 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 Provided Information.
          Section 14.05 Survival.
          The obligations and liabilities of Borrower under this Article XIV
shall fully survive indefinitely notwithstanding any termination, satisfaction,
assignment, entry of a judgment of foreclosure, exercise of any power of sale,
or delivery of a deed in lieu of foreclosure of the Mortgage.
ARTICLE XV
EXCULPATION
          Section 15.01 Exculpation.
          (a) Except as otherwise provided herein or in the other Loan
Documents, Lender shall not enforce the liability and obligation of Borrower or
Borrower Principal or any SPE Component Entity, as applicable, to perform and
observe the obligations contained herein or in the other Loan Documents by any
action or proceeding wherein a money judgment shall be sought against Borrower
or Borrower Principal or any SPE Component Entity, except that Lender may bring
a foreclosure action, action for specific performance or other appropriate
action or proceeding to enable Lender to enforce and realize upon this
Agreement, the Note, the Mortgage and the other Loan Documents, and the interest
in the Property, the Rents and any other collateral given to Lender created by
this Agreement, the Note, the Mortgage and the other Loan Documents; provided,
however, that any judgment in any such action or proceeding shall be enforceable
only to the extent of Borrower’s or Borrower Principal’s collective interest in
the Property, the Operating Leases, in the Rents and in any other collateral
given to Lender. Lender, by accepting this Agreement, the Note, the Mortgage and
the other Loan Documents, agrees that it shall not, except as otherwise provided
in this Section 15.01, sue for, seek or demand any deficiency judgment against
Borrower or Borrower Principal or any SPE Component Entity in any such action or
proceeding, under or by reason of or under or in connection with this

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Agreement, the Note, the Mortgage or the other Loan Documents. The provisions of
this Section 15.01 shall not, however, (i) constitute a waiver, release or
impairment of any obligation evidenced or secured by this Agreement, the Note,
the Mortgage or the other Loan Documents; (ii) impair the right of Lender to
name Borrower or Borrower Principal as a party defendant in any action or suit
for judicial foreclosure and sale under this Agreement and the Mortgage;
(iii) affect the validity or enforceability of any indemnity contained in
Articles XIII and XIV; (iv) impair Lender’s right to enforce its remedies under
the Environmental Indemnity and the Exceptions to Non-Recourse Guaranty;
(v) impair the right of Lender to obtain the appointment of a receiver;
(vi) impair the enforcement of the assignment of leases provisions contained in
the Mortgage; or (vii) impair the right of Lender to obtain a deficiency
judgment or other judgment on the Note against Borrower, Operating Lessee or
Borrower Principal if necessary to obtain any Insurance Proceeds or Awards to
which Lender would otherwise be entitled under this Agreement; provided,
however, Lender shall only enforce such judgment to the extent of the Insurance
Proceeds and/or Awards actually collected or received by Borrower.
          (b) Notwithstanding the provisions of this Section 15.01 to the
contrary, Borrower shall be personally liable to Lender for Losses due to (but
only to the extent such Losses were caused by):
   (i) fraud or intentional or willful material misrepresentation by Borrower,
Borrower Principal or any other Affiliate or agent of Borrower, any New
Mezzanine Borrower or Borrower Principal in connection with the execution and
the delivery of this Agreement, the Note, the Mortgage, any of the other Loan
Documents, or any certificate, report, financial statement or other instrument
or document furnished to Lender at the time of the closing of the Loan or during
the term of the Loan;
   (ii) Borrower’s or any Affiliate’s misapplication or misappropriation of
Rents received by Borrower and not applied or paid in accordance with the
requirements of the Loan Documents;
   (iii) Borrower’s or any Affiliate’s misapplication or misappropriation of
tenant security deposits or Rents collected in advance and not applied in
accordance with the terms of the Loan Documents;
   (iv) the misapplication or the misappropriation of Insurance Proceeds or
Awards by Borrower or any New Mezzanine Borrower;
   (v) Borrower’s willful refusal to pay Taxes, Other Charges (except to the
extent that sums sufficient to pay such amounts have been deposited in escrow
with Lender pursuant to the terms hereof and there exists no impediment to
Lender’s utilization thereof), charges for labor or materials or other charges
that can create liens on any Individual Property beyond any applicable notice
and cure periods specified herein;
   (vi) any act of intentional waste or arson by Borrower, any New Mezzanine
Borrower, any principal, Affiliate, agent, member or general partner thereof or
by Borrower Principal, any principal, Affiliate, agent, member or general
partner thereof;
   (vii) Borrower’s willful misconduct; or

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   (viii) Borrower’s, any New Mezzanine Borrower’s or any Affiliate’s, failure
following any Event of Default to deliver to Lender upon demand all Rents
received and books and records relating to any Individual Property.
          (c) Notwithstanding the foregoing, the agreement of Lender not to
pursue recourse liability as set forth in subsection (a) above SHALL BECOME NULL
AND VOID and shall be of no further force and effect and the Debt immediately
shall become fully recourse to Borrower and Borrower Principal, on a joint and
several basis in the event (i) of a breach by Borrower or any SPE Component
Entity of any of the covenants set forth in Article VI hereof (other than
Sections 6.01(a)(xv) and (xviii)), to the extent that such breach is
(A) material and (B) is not cured within fifteen (15) days of the earlier to
occur of notice from Lender or Borrower’s knowledge of such breach, (ii) of a
breach of any of the covenants set forth in Article VII hereof, (iii) any
Individual Property or any part thereof shall become an asset in a voluntary
bankruptcy or insolvency proceeding of Borrower, (iv) Borrower, Borrower
Principal or any Affiliate, officer, director, or representative which controls,
directly or indirectly, Borrower or Borrower Principal files, or joins in the
filing of, an involuntary petition against Borrower under any Creditors Rights
Laws, or solicits or causes to be solicited petitioning creditors for any
involuntary petition against Borrower from any Person; (v) Borrower files an
answer consenting to or otherwise acquiescing in or joining in any involuntary
petition filed against it, by any other Person under any Creditors Rights Laws,
or solicits or causes to be solicited petitioning creditors for any involuntary
petition from any Person; (vi) any Affiliate, officer, director, or
representative which controls Borrower consents to or acquiesces in or joins in
an application for the appointment of a custodian, receiver, trustee, or
examiner for Borrower or any portion of any Individual Property or
(vii) Borrower or Borrower Principal or any agent or Affiliate thereof
interferes in any way with Lender’s pursuit of any remedies, including any
actions taken consistent with the commencement of foreclosure proceedings,
following an Event of Default.
          (d) Nothing herein shall be deemed to be a waiver of any right which
Lender may have under Section 506(a), 506(b), 1111(b) or any other provision of
the U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness
secured by the Mortgage or to require that all collateral shall continue to
secure all of the indebtedness owing to Lender in accordance with this
Agreement, the Note, the Mortgage or the other Loan Documents.
ARTICLE XVI
NOTICES
          Section 16.01 Notices.
          All notices, consents, approvals and requests required or permitted
hereunder or under any other Loan Document shall be given in writing and shall
be effective for all purposes if hand delivered or sent by (a) certified or
registered United States mail, postage prepaid, return receipt requested,
(b) expedited prepaid overnight delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, or by (c) telecopier
(with answer back acknowledged provided an additional notice is given pursuant
to subsection (b) above), addressed as follows (or at such other address and
Person as shall be designated from time to

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time by any party hereto, as the case may be, in a written notice to the other
parties hereto in the manner provided for in this Section):

         
 
  If to Lender:   Bank of America, N.A.
 
      Capital Markets Servicing Group
 
      900 West Trade Street, Suite 650
 
      Mail Code: NC1-026-06-01
 
      Charlotte, North Carolina 28255
 
      Attn: Servicing Manager
 
      Telephone No: (866) 531-0957
 
      Facsimile No.: (704) 317-4501
 
       
 
  With a copy to:   Cadwalader, Wickersham & Taft LLP
 
      227 West Trade Street, Suite 2400
 
      Charlotte, North Carolina 28202
 
      Attention: Richard Madden, Esq.
 
      Telephone No.: (704) 348-5100
 
      Facsimile No.: (704) 348-5200
 
       
 
  If to Borrower:   Bonstores Realty One, LLC
 
      P.O. Box 2821
 
      York, Pennsylvania 17402
 
      Attention: General Counsel
 
      Facsimile No.: (717) 751-3008
 
       
 
  With a copy to:   Wolf, Block, Schorr & Solis-Cohen LLP
 
      1650 Arch Street, 22nd Floor
 
      Philadelphia, Pennsylvania 19103
 
      Attention: Henry F. Miller, Esq.
 
      Facsimile No.: (215) 977-2740
 
       
 
  If to Borrower    
 
  Principal:   Bonstores Holdings One, LLC
 
      P.O. Box 2821
 
      York, Pennsylvania 17402
 
      Attention: General Counsel
 
      Facsimile No.: (717) 751-3008
 
       
 
  With a copy to:   Wolf, Block, Schorr & Solis-Cohen LLP
 
      1650 Arch Street, 22nd Floor
 
      Philadelphia, Pennsylvania 19103
 
      Attention: Henry F. Miller, Esq.
 
      Facsimile No.: (215) 977-2740

A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery

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on a Business Day; or in the case of expedited prepaid delivery and telecopy,
upon the first attempted delivery on a Business Day.
ARTICLE XVII
FURTHER ASSURANCES
          Section 17.01 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, and, in the case of any such mutilation, upon surrender
and cancellation of such Note or other Loan Document, Borrower will issue, in
lieu thereof, a replacement Note or other Loan Document, dated the date of such
lost, stolen, destroyed or mutilated Note or other Loan Document in the same
principal amount thereof and otherwise of like tenor.
          Section 17.02 Recording of Mortgage, Etc.
          Borrower forthwith upon the execution and delivery of each Mortgage
and thereafter, from time to time, will cause each Mortgage and any of the other
Loan Documents creating a lien or security interest or evidencing the lien
hereof upon each Individual 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 interest hereof upon, and the interest
of Lender in, each Individual Property. Borrower will pay all taxes, filing,
registration or recording fees, and all expenses incident to the preparation,
execution, acknowledgment and/or recording of the Note, the Mortgage, the other
Loan Documents, any note, deed of trust or mortgage supplemental hereto, any
security instrument with respect to each Individual 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 the Mortgage, any deed of trust or mortgage supplemental hereto, any
security instrument with respect to each Individual Property or any instrument
of further assurance, and any modification or amendment of the foregoing
documents, except where prohibited by applicable law so to do, but excluding any
income, franchise or other similar taxes.
          Section 17.03 Further Acts, Etc.
          Borrower will, at the cost of Borrower, and without expense to Lender,
do, execute, acknowledge and deliver all and every further acts, deeds,
conveyances, deeds of trust, mortgages, assignments, security agreements,
control agreements, 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, deeded, granted, bargained, sold, conveyed, confirmed,
pledged, assigned, warranted and transferred or intended now or hereafter so to
be, 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 Agreement or for filing, registering or recording

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each Mortgage, or for complying in all material respects with Legal
Requirements. Borrower hereby authorizes the filing of one or more financing
statements and financing statement amendments to evidence more effectively,
perfect and maintain the priority of the security interest of Lender created by
the Loan Documents in each Individual 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 at
law and in equity, including without limitation, such rights and remedies
available to Lender pursuant to this Section 17.03 to the extent Borrower fails
to perform its obligations hereunder.
          Section 17.04 Changes in Tax, Debt, Credit and Documentary Stamp Laws.
          (a) If any law is enacted or adopted or amended after the date of this
Agreement which deducts the Debt from the value of any Individual Property for
the purpose of taxation or which imposes a tax, either directly or indirectly,
on the Debt or Lender’s interest in any Individual 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 one hundred
twenty (120) 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 any Individual Property, or any part thereof, and no deduction
shall otherwise be made or claimed from the assessed value of any Individual
Property, or any part thereof, for real estate tax purposes by reason of the
Mortgage or the Debt. If such claim, credit or deduction shall be required by
applicable law, Lender shall have the option, by written notice of not less than
one hundred twenty (120) days, to declare the Debt immediately due and payable.
          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, any Mortgage, 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.
          Section 17.05 Expenses.
          Borrower covenants and agrees to pay or, if Borrower fails to pay, to
reimburse, Lender upon receipt of written notice from Lender for all actual,
reasonable out-of-pocket costs and expenses (including reasonable, actual
attorneys’ fees and disbursements and the allocated costs of internal legal
services and all actual disbursements of internal counsel) reasonably incurred
by Lender in accordance with this Agreement in connection with (a) the
preparation, negotiation, execution and delivery of this Agreement and the other
Loan Documents and the consummation of the transactions contemplated hereby and
thereby and all the costs of furnishing all opinions by counsel required
hereunder (including without limitation any opinions requested by Lender as to
any legal matters arising under this Agreement or the other Loan Documents with
respect to any Individual Property); (b) Borrower’s ongoing performance of and
compliance with Borrower’s respective agreements and covenants contained in this
Agreement and the other Loan Documents on its part to be performed or complied
with after the Closing

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Date, including, without limitation, confirming compliance with environmental
and insurance requirements; (c) following a request by Borrower, Lender’s
ongoing performance and compliance with all agreements and conditions contained
in this Agreement and the other Loan Documents on its part to be performed or
complied with after the Closing Date; (d) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or
other modifications to this Agreement and the other Loan Documents and any other
documents or matters requested by Lender; (e) securing Borrower’s compliance
with any requests made pursuant to the provisions of this Agreement; (f) 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 Agreement and the other Loan Documents; (g) enforcing or
preserving any rights, in response to third party claims or the prosecuting or
defending of any action or proceeding or other litigation, in each case against,
under or affecting Borrower, this Agreement, the other Loan Documents, any
Individual Property, or any other security given for the Loan; and (h) enforcing
any obligations of or collecting any payments due from Borrower under this
Agreement, the other Loan Documents or with respect to any Individual Property
or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a “work-out” or of
any insolvency or bankruptcy proceedings; provided, however, that Borrower shall
not be liable for the payment of any such costs and expenses to the extent the
same arise by reason of the gross negligence, illegal acts, fraud or willful
misconduct of Lender. Notwithstanding anything to the contrary contained in this
Section 17.05, expenses relating to any Securitization shall be governed by
Section 13.05.
ARTICLE XVIII
WAIVERS
          Section 18.01 Remedies Cumulative; Waivers.
          The rights, powers and remedies of Lender under this Agreement shall
be cumulative and not exclusive of any other right, power or remedy which Lender
may have against Borrower or Borrower Principal pursuant to this Agreement or
the other Loan Documents, or existing at law or in equity or otherwise. Lender’s
rights, powers and remedies may be pursued singularly, concurrently or
otherwise, at such time and in such order as Lender may determine in Lender’s
sole discretion. No delay or omission to exercise any remedy, right or power
accruing upon an Event of Default shall impair any such remedy, right or power
or shall be construed as a waiver thereof, but any such remedy, right or power
may be exercised from time to time and as often as may be deemed expedient. A
waiver of one Default or Event of Default with respect to Borrower shall not be
construed to be a waiver of any subsequent Default or Event of Default by
Borrower or to impair any remedy, right or power consequent thereon.
          Section 18.02 Modification, Waiver in Writing.
          No modification, amendment, extension, discharge, termination or
waiver of any provision of this Agreement, or of the Note, or of any other Loan
Document, nor consent to any departure by Borrower therefrom, shall in any event
be effective unless the same shall be in a

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writing signed by the party against whom enforcement is sought, and then such
waiver or consent shall be effective only in the specific instance, and for the
purpose, for which given. Except as otherwise expressly provided herein, no
notice to, or demand on Borrower, shall entitle Borrower to any other or future
notice or demand in the same, similar or other circumstances.
          Section 18.03 Delay Not a Waiver.
          Neither any failure nor any delay on the part of Lender in insisting
upon strict performance of any term, condition, covenant or agreement, or
exercising any right, power, remedy or privilege hereunder, or under the Note or
under any other Loan Document, or any other instrument given as security
therefor, shall operate as or constitute a waiver thereof, nor shall a single or
partial exercise thereof preclude any other future exercise, or the exercise of
any other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under
this Agreement, the Note or any other Loan Document, Lender shall not be deemed
to have waived any right either to require prompt payment when due of all other
amounts due under this Agreement, the Note or the other Loan Documents, or to
declare a default for failure to effect prompt payment of any such other amount.
          Section 18.04 Trial by Jury.
          BORROWER, BORROWER PRINCIPAL AND LENDER EACH HEREBY AGREES NOT TO
ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR
OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, BORROWER PRINCIPAL AND
LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE
AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH OF LENDER,
BORROWER PRINCIPAL AND BORROWER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER,
BORROWER PRINCIPAL AND LENDER.
          Section 18.05 Waiver of Notice.
          Borrower shall not be entitled to any notices of any nature whatsoever
from Lender except with respect to matters for which this Agreement or the other
Loan Documents specifically and expressly provide for the giving of notice by
Lender to Borrower and except with respect to matters for which Borrower is not,
pursuant to applicable Legal Requirements, permitted to waive the giving of
notice. Borrower hereby expressly waives the right to receive any notice from
Lender with respect to any matter for which this Agreement or the other Loan
Documents do not specifically and expressly provide for the giving of notice by
Lender to Borrower.

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          Section 18.06 Remedies of Borrower.
          In the event that a claim or adjudication is made that Lender or its
agents have acted unreasonably or unreasonably delayed acting in any case where
by law or under this Agreement or the other Loan Documents, Lender or such
agent, as the case may be, has an obligation to act reasonably or promptly,
Borrower agrees that neither Lender nor its agents shall be liable for any
monetary damages, and Borrower’s sole remedies shall be limited to commencing an
action seeking injunctive relief or declaratory judgment. The parties hereto
agree that any action or proceeding to determine whether Lender has acted
reasonably shall be determined by an action seeking declaratory judgment. Lender
agrees that, in such event, it shall cooperate in expediting any action seeking
injunctive relief or declaratory judgment.
          Section 18.07 Waiver of Marshalling of Assets.
          To the fullest extent permitted by law, Borrower, for itself and its
successors and assigns, waives all rights to a marshalling of the assets of
Borrower, Borrower’s partners and others with interests in Borrower, and of each
Individual Property and the Property, and agrees not to assert any right under
any laws pertaining to the marshalling of assets, the sale in inverse order of
alienation, homestead exemption, the administration of estates of decedents, or
any other matters whatsoever to defeat, reduce or affect the right of Lender
under the Loan Documents to a sale of each Individual Property and the Property
for the collection of the Debt without any prior or different resort for
collection or of the right of Lender to the payment of the Debt out of the net
proceeds of each Individual Property and the Property in preference to every
other claimant whatsoever.
          Section 18.08 Waiver of Statute of Limitations.
          Borrower hereby expressly waives and releases, to the fullest extent
permitted by law, the pleading of any statute of limitations as a defense to
payment of the Debt or performance of its Other Obligations.
          Section 18.09 Waiver of Counterclaim.
          Borrower hereby waives the right to assert a counterclaim, other than
a compulsory counterclaim, in any action or proceeding brought against it by
Lender or its agents.
ARTICLE XIX
GOVERNING LAW
          Section 19.01 Choice of Law.
          This Agreement shall be deemed to be a contract entered into pursuant
to the laws of the State of New York and shall in all respects be governed,
construed, applied and enforced in accordance with the laws of the State of New
York, provided however, (a) that with respect to the creation, perfection,
priority and enforcement of any Lien created by the Loan Documents, and the
determination of deficiency judgments, the laws of the state where each
Individual

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Property is located shall apply, and (b) with respect to the security interest
in each of the Reserve Accounts and the Cash Management Account, the laws of the
state where each such account is located shall apply.
          Section 19.02 Severability.
          Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
          Section 19.03 Preferences.
          Lender shall have the continuing and exclusive right to apply or
reverse and reapply any and all payments by Borrower to any portion of the
obligations of Borrower hereunder. To the extent Borrower makes a payment or
payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
Creditors Rights Laws, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the obligations
hereunder or part thereof intended to be satisfied shall be revived and continue
in full force and effect, as if such payment or proceeds had not been received
by Lender.
ARTICLE XX
MISCELLANEOUS
          Section 20.01 Survival.
          This Agreement and all covenants, agreements, representations and
warranties made herein and in the certificates delivered pursuant hereto shall
survive the making by Lender of the Loan and the execution and delivery to
Lender of the Note, and shall continue in full force and effect so long as all
or any of the Debt is outstanding and unpaid unless a longer period is expressly
set forth herein or in the other Loan Documents. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the legal representatives, successors and assigns of such party. All covenants,
promises and agreements in this Agreement, by or on behalf of Borrower, shall
inure to the benefit of the legal representatives, successors and assigns of
Lender.
          Section 20.02 Lender’s Discretion.
          Whenever pursuant to this Agreement, Lender exercises any right given
to it to approve or disapprove, or any arrangement or term is to be satisfactory
to Lender, the decision of Lender to approve or disapprove or to decide whether
arrangements or terms are satisfactory or not satisfactory shall (except as is
otherwise specifically herein provided) be in the sole discretion of Lender and
shall be final and conclusive.

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          Section 20.03 Headings.
          The Article and/or Section headings and the Table of Contents in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
          Section 20.04 Cost of Enforcement.
          In the event (a) that the Mortgage is foreclosed in whole or in part,
(b) of the bankruptcy, insolvency, rehabilitation or other similar proceeding in
respect of Borrower or any of its constituent Persons or an assignment by
Borrower or any of its constituent Persons for the benefit of its creditors, or
(c) Lender exercises any of its other remedies under this Agreement or any of
the other Loan Documents, Borrower shall be chargeable with and agrees to pay
all costs of collection and defense, including attorneys’ fees and costs,
incurred by Lender or Borrower in connection therewith and in connection with
any appellate proceeding or post-judgment action involved therein, together with
all required service or use taxes.
          Section 20.05 Schedules Incorporated.
          The Schedules annexed hereto are hereby incorporated herein as a part
of this Agreement with the same effect as if set forth in the body hereof.
          Section 20.06 Offsets, Counterclaims and Defenses.
          Any assignee of Lender’s interest in and to this Agreement, the Note
and the other Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to such documents which Borrower
may otherwise have against any assignor of such documents, and no such unrelated
counterclaim or defense shall be interposed or asserted by Borrower in any
action or proceeding brought by any such assignee upon such documents and any
such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by Borrower.
          Section 20.07 No Joint Venture or Partnership; No Third Party
Beneficiaries.
          (a) Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between Borrower
and Lender or to grant Lender any interest in any Individual Property other than
that of mortgagee, beneficiary or lender.
          (b) This Agreement and the other Loan Documents are solely for the
benefit of Lender and Borrower and nothing contained in this Agreement or the
other Loan Documents shall be deemed to confer upon anyone other than Lender and
Borrower any right to insist upon or to enforce the performance or observance of
any of the obligations contained herein or therein. All conditions to the
obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of
strict compliance with any or all thereof

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and no other Person shall under any circumstances be deemed to be a beneficiary
of such conditions, any or all of which may be freely waived in whole or in part
by Lender if, in Lender’s sole discretion, Lender deems it advisable or
desirable to do so.
          (c) The general partners, members, principals and (if Borrower is a
trust) beneficial owners of Borrower are experienced in the ownership and
operation of properties similar to each Individual Property, and Borrower and
Lender are relying solely upon such expertise and business plan in connection
with the ownership and operation of each Individual Property. Borrower is not
relying on Lender’s expertise, business acumen or advice in connection with the
Property.
          (d) Notwithstanding anything to the contrary contained herein, 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.
          (e) By accepting or approving anything required to be observed,
performed or fulfilled or to be given to Lender pursuant to this Agreement, the
Mortgage, 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.
          (f) Borrower recognizes and acknowledges that in accepting this
Agreement, the Note, the Mortgage and the other Loan Documents, Lender is
expressly and primarily relying on the truth and accuracy of the representations
and warranties set forth in Article IV of this Agreement without any obligation
to investigate any Individual Property and notwithstanding any investigation of
any Individual 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 making the Loan; and that Lender would not be
willing to make the Loan and accept this Agreement, the Note, the Mortgage and
the other Loan Documents in the absence of the warranties and representations as
set forth in Article IV of this Agreement.
          Section 20.08 Publicity.
          All news releases, publicity or advertising by Borrower or its
Affiliates through any media intended to reach the general public which refers
to the Loan, Lender, Banc of America Securities LLC, or any of their Affiliates
shall be subject to the prior written approval of Lender, not to be unreasonably
withheld, conditioned or delayed. Lender shall be permitted to make any news,
releases, publicity or advertising by Lender or its Affiliates through any media
intended to reach the general public which refers to the Loan, the Property,
Borrower, Borrower Principal and their respective Affiliates subject to the
prior written approval of Borrower not to be unreasonably withheld, conditioned
or delayed. Notwithstanding the foregoing, Borrower agrees that Lender may share
any information pertaining to the Loan, the Properties, the Borrower, Operating
Lessee, Borrower Principal, BTDS and Lease Guarantor with Bank of America
Corporation, including its bank subsidiaries, Banc of America Securities LLC and
any

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other Affiliates of the foregoing, the Rating Agencies and Investors in
connection with the sale or transfer of the Loan or any Participations and/or
Securities created. In no event shall this Section 20.08 limit the rights of
Lender under Section 13.03 hereof.
          Section 20.09 Conflict; Construction of Documents; Reliance.
          In the event of any conflict between the provisions of this Agreement
and any of the other Loan Documents, the provisions of this Agreement shall
control. The parties hereto acknowledge that they were represented by competent
counsel in connection with the negotiation, drafting and execution of the Loan
Documents and that such Loan Documents shall not be subject to the principle of
construing their meaning against the party which drafted same. Borrower
acknowledges that, with respect to the Loan, Borrower shall rely solely on its
own judgment and advisors in entering into the Loan without relying in any
manner on any statements, representations or recommendations of Lender or any
parent, subsidiary or Affiliate of Lender. Lender shall not be subject to any
limitation whatsoever in the exercise of any rights or remedies available to it
under any of the Loan Documents or any other agreements or instruments which
govern the Loan by virtue of the ownership by it or any parent, subsidiary or
Affiliate of Lender of any equity interest any of them may acquire in Borrower,
and Borrower hereby irrevocably waives the right to raise any defense or take
any action on the basis of the foregoing with respect to Lender’s exercise of
any such rights or remedies. Borrower acknowledges that Lender engages in the
business of real estate financings and other real estate transactions and
investments which may be viewed as adverse to or competitive with the business
of Borrower or its Affiliates.
          Section 20.10 Entire Agreement.
          THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS CONTAIN THE ENTIRE
AGREEMENT OF THE PARTIES HERETO AND THERETO IN RESPECT OF THE TRANSACTIONS
CONTEMPLATED HEREBY, CONSTITUTE THE FULL, COMPLETE AND FINAL EXPRESSION OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND SUPERSEDE ALL PRIOR AGREEMENTS
BETWEEN THE PARTIES HERETO AND THERETO IN RESPECT OF THE TRANSACTIONS
CONTEMPLATED HEREBY, WHETHER ORAL OR WRITTEN. THE PROVISIONS OF THIS AGREEMENT
MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR ORAL AGREEMENT OR OF A
CONTEMPORANEOUS ORAL AGREEMENT BETWEEN THE PARTIES HERETO. THE PARTIES AFFIRM
THAT THERE IS NO UNWRITTEN ORAL AGREEMENT BETWEEN THE PARTIES. IF THERE ARE ANY
NON-STANDARD TERMS, THEY ARE REDUCED TO WRITING AS FOLLOWS: NONE .
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]

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

              BORROWER:
 
            BONSTORES REALTY TWO, LLC, a Delaware limited
liability company
 
       
 
  By:      /S/ JAMES H. BAIREUTHER
 
       
 
      Name: James H. Baireuther
 
      Title: Vice President
 
            BORROWER PRINCIPAL:
 
            Acknowledged and agreed to with respect to its obligations set forth
in Article IV, Article XIII and Article XVIII hereof:
 
            BONSTORES HOLDINGS TWO, LLC, a Delaware limited
liability company
 
       
 
  By:      /S/ JAMES H. BAIREUTHER
 
       
 
      Name: James H. Baireuther
 
      Title: Vice President
 
            LENDER:
 
            BANK OF AMERICA, N.A., a national banking association
 
       
 
  By:      /S/ LISA MCGEE
 
       
 
      Name: Lisa McGee
 
      Title: Vice President