Exhibit 10.1
 
 
LOAN AGREEMENT
Dated as of March 1, 2006
Between
TRIZECHAHN ONE NY PLAZA LLC
as Borrower
and
GOLDMAN SACHS COMMERCIAL MORTGAGE CAPITAL and
LEHMAN BROTHERS BANK FSB
collectively, as Lender
 
 

 

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

 

TABLE OF CONTENTS

                      Page   ARTICLE I
 
            PRINCIPLES OF CONSTRUCTION
 
           
Section 1.1
  Definitions     1  
Section 1.2
  Principles of Construction     20  
 
            ARTICLE II
 
            THE LOAN
 
           
Section 2.1
  The Loan     20  
Section 2.2
  Interest Rate     21  
Section 2.3
  Loan Payments     22  
Section 2.4
  Prepayments     23  
Section 2.5
  Defeasance     24  
Section 2.6
  Release on Payment in Full     27  
 
            ARTICLE III
 
            REPRESENTATIONS AND WARRANTIES
 
           
Section 3.1
  Borrower Representations     27  
Section 3.2
  Survival of Representations     38  
 
           
 
  ARTICLE IV        
 
           
 
  BORROWER COVENANTS        
 
           
Section 4.1
  Borrower Affirmative Covenants     38  
Section 4.2
  Borrower Negative Covenants     49  
 
            ARTICLE V
 
            INSURANCE, CASUALTY AND CONDEMNATION.
 
           
Section 5.1
  Insurance     51  
Section 5.2
  Casualty and Condemnation     57  
Section 5.3
  Delivery of Net Proceeds     58  

-i-

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

 

                      Page   ARTICLE VI
 
            RESERVE FUNDS
 
           
Section 6.1
  Intentionally Omitted     62  
Section 6.2
  Tax Funds     62  
Section 6.3
  Insurance Funds     63  
Section 6.4
  Capital Expenditure Funds     64  
Section 6.5
  Rollover Funds     66  
Section 6.6
  Unfunded Obligations Account     68  
Section 6.7
  Release of Reserve Funds upon Termination of Cash Sweep Period     69  
Section 6.8
  Security Interest in Reserve Funds     69  
 
            ARTICLE VII
 
            PROPERTY MANAGEMENT.
 
           
Section 7.1
  The Management Agreement     70  
Section 7.2
  Prohibition Against Termination or Modification     70  
Section 7.3
  Replacement of Manager     71  
 
            ARTICLE VIII
 
            TRANSFERS
 
           
Section 8.1
  Transfer or Encumbrance of Property     71  
Section 8.2
  Transfer of Equity Interests     73  
 
            ARTICLE IX
 
            SALE AND SECURITIZATION OF MORTGAGE
 
           
Section 9.1
  Sale of Mortgage and Securitization     74  
Section 9.2
  Securitization Indemnification     77  
Section 9.3
  Mezzanine Loans     79  
 
            ARTICLE X
 
            DEFAULTS
 
           
Section 10.1
  Event of Default     80  
Section 10.2
  Remedies     82  
Section 10.3
  Right to Cure Defaults     83  
Section 10.4
  Remedies Cumulative     84  

-ii-

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

 

                      Page  
 
  ARTICLE XI        
 
           
 
  MISCELLANEOUS        
 
           
Section 11.1
  Successors and Assigns     84  
Section 11.2
  Lender’s Discretion     84  
Section 11.3
  Governing Law     84  
Section 11.4
  Modification, Waiver in Writing     86  
Section 11.5
  Delay Not a Waiver     86  
Section 11.6
  Notices     86  
Section 11.7
  Trial by Jury     87  
Section 11.8
  Headings     88  
Section 11.9
  Severability     88  
Section 11.10
  Preferences     88  
Section 11.11
  Waiver of Notice     88  
Section 11.12
  Remedies of Borrower     88  
Section 11.13
  Expenses; Indemnity     88  
Section 11.14
  Schedules Incorporated     90  
Section 11.15
  Offsets, Counterclaims and Defenses     90  
Section 11.16
  No Joint Venture or Partnership; No Third Party Beneficiaries     90  
Section 11.17
  Publicity     90  
Section 11.18
  Waiver of Marshalling of Assets     90  
Section 11.19
  Waiver of Offsets/Defenses/Counterclaims     91  
Section 11.20
  Conflict; Construction of Documents; Reliance     91  
Section 11.21
  Brokers and Financial Advisors     91  
Section 11.22
  Exculpation     91  
Section 11.23
  Prior Agreements     94  
Section 11.24
  Servicer     94  
Section 11.25
  Joint and Several Liability     94  
Section 11.26
  Creation of Security Interest     94  
Section 11.27
  Assignments and Participations     95  
Section 11.28
  Set-Off     95  
Section 11.29
  Component Notes     95  
Section 11.30
  Approvals; Third Parties; Conditions     96  
Section 11.31
  Limitation on Liability of Lender’s Officers, Employees, etc     96  

-iii-

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

 

         
SCHEDULES
       
 
       
Schedule I
  —   Rent Roll
Schedule II
  —   Form of Qualified Guaranty
Schedule III
  —   Organizational Chart
Schedule IV
  —   Form of Subordination, Non-Disturbance and Attornment Agreement
Schedule V
  —   Amortization Schedule
Schedule VI
  —   Unfunded Obligations
Schedule VII
  —   Form of Subordination of Management Agreement
Schedule VII
  —   Form of Alteration Indemnity

-iv-

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

 

LOAN AGREEMENT
     THIS LOAN AGREEMENT, dated as of March 1, 2006 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this
“Agreement”), by and between GOLDMAN SACHS COMMERCIAL MORTGAGE CAPITAL, a
Delaware limited partnership, having an address at 85 Broad Street, New York,
New York 10004 (“Goldman”) and LEHMAN BROTHERS BANK FSB, a federal stock savings
bank, having an address at 1000 West Street, Suite 200, Wilmington, Delaware
19801 (“Lehman”; and together with Goldman, collectively, “Lender”), and
TRIZECHAHN ONE NY PLAZA LLC, a Delaware limited liability company, having an
address at 10 South Riverside Plaza, Suite 1100 Chicago, Illinois 60606
(“Borrower”).
     All capitalized terms used herein shall have the respective meanings set
forth in Article I hereof.
WITNESSETH:
     WHEREAS, Borrower desires to obtain the Loan from Lender; and
     WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in
accordance with the conditions and terms of this Agreement and the other Loan
Documents.
     NOW, THEREFORE, in consideration of the covenants set forth in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree,
represent and warrant as follows:
ARTICLE I
PRINCIPLES OF CONSTRUCTION
     Section 1.1 Definitions. For all purposes of this Agreement, except as
otherwise expressly provided:
     “Acceptable Indemnitor” shall mean a Qualified Equityholder, provided, that
such indemnitor has a minimum cash liquidity capacity on its balance sheet equal
to 2:1 of the amount being guaranteed.
     “Access Laws” shall have the meaning set forth in Section 4.1.16(a).
     “Actual Debt Service Coverage Ratio” shall mean a ratio for the applicable
period in which:
     (a) the numerator is the Actual Net Cash Flow for such period as set forth
in the financial statements required in accordance with this Agreement; and

 

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

 

     (b) the denominator is the aggregate amount of principal and interest due
and payable on the Loan for such period.
     “Actual Net Cash Flow” shall mean, for any period, the amount obtained by
subtracting Actual Operating Expenses for such period from Gross Income from
Operations for such period; provided, however, that for purposes of determining
whether or not a NOI Trigger Event has occurred (a) the Rents from the Property
will be annualized based upon Leases in existence as of the date immediately
following the applicable Actual NOI Determination Date, based upon the rent roll
delivered to Lender by Borrower under Section 4.16 hereof and (b) Actual
Operating Expenses and Gross Income from Operations (other than Rents) will each
be based upon the trailing 12-month period preceding the Actual NOI
Determination Date.
     “Actual NOI Determination Date” shall mean the last day of each calendar
quarter that Lender determines the Actual Net Cash Flow in accordance with this
Agreement.
     “Actual Operating Expenses” shall mean for any period, the total of all
costs and expenses, computed in accordance with GAAP, of whatever kind during
such period relating to the operation, maintenance and management of the
Property that are actually incurred, including without limitation, utilities,
ordinary repairs and maintenance, insurance, license fees, property taxes and
assessments, advertising expenses, management fees (if any), payroll and related
taxes, computer processing charges, operational equipment, lease payments, “bad
debt” expenses and other similar costs, but excluding depreciation, tenant
improvements and leasing commissions, Debt Service, Capital Expenditures, and
contributions to the Capital Expenditure Funds, the Tax Funds, Insurance Funds,
the Rollover Funds and any other reserves required under the Loan Documents.
     “Affiliate” shall mean, as to any Person, any other Person that, directly
or indirectly, owns more than forty percent (40%) of, is in Control of, is
Controlled by or is under common ownership or Control with such Person or is a
director or officer of such Person or of an Affiliate of such Person.
     “ALTA” shall mean American Land Title Association, or any successor
thereto.
     “Alteration Final Notice” shall have the meaning specified in Section
4.1.10(b).
     “Alteration Indemnity” shall mean an indemnity agreement in the form
attached hereto as Schedule VIII from an Acceptable Indemnitor and otherwise
satisfying the requirements of Section 4.1.10.
     “Alteration Request” shall have the meaning specified in Section 4.1.10(b).
     “Alteration Response” shall have the meaning specified in
Section 4.1.10(b).
     “Alteration Threshold” shall mean Twenty Million and No/100 Dollars
($20,000,000.00).

-2-

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

 

     “Annual Budget” shall mean the operating and capital budget for the
Property setting forth Borrower’s good faith estimate of Gross Income from
Operations, Operating Expenses, and Capital Expenditures for the applicable
Fiscal Year.
     “Appraisal” shall mean an appraisal of the Property in its then “as is”
condition, prepared not more than ninety (90) days prior to the Closing Date (or
other relevant date with respect to an updated Appraisal or an Appraisal with
respect to the Property) by a member of the American Institute of Real Estate
Appraisers selected by Lender, which appraisal (i) shall meet the minimum
appraisal standards for national banks promulgated by the Comptroller of the
Currency pursuant to Title XI of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989, as amended (FIRREA), and (ii) otherwise shall be in
both form and substance satisfactory to Lender in its sole and absolute
discretion.
     “Approved Annual Budget” shall have the meaning set forth in
Section 4.1.6(i).
     “Approved Bank” shall mean a bank or other financial institution which has
a minimum long term unsecured debt rating of at least (a) ”AA” by S&P and Fitch
and “Aa2” by Moody’s for any Qualified Letter of Credit issued in an amount
equal to or greater than $20,000,000 and (b) ”A” by S&P and Fitch and “A2” by
Moody’s for any Qualified Letter of Credit issued in an amount less than
$20,000,000.
     “Assignment of Leases” shall mean that certain first priority Assignment of
Leases and Rents, dated as of the date hereof, from Borrower, as assignor, to
Lender, as assignee, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
     “Assignment of Management Agreement” shall mean that any Assignment of
Management Agreement and Subordination of Management Fees in the form attached
hereto as Schedule VII to be entered into any time after the date hereof among
Borrower, Manager and Lender in accordance with the provisions of Section 7.2
hereof, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
     “Award” shall mean any compensation paid by any Governmental Authority in
connection with a Condemnation in respect of all or any part of the Property.
     “Bankruptcy Action” shall mean with respect to any Person (i) such Person
filing a voluntary petition under the Bankruptcy Code or any other Federal or
state bankruptcy or insolvency law; (ii) the filing of an involuntary petition
against such Person under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law, or soliciting or causing to be solicited
petitioning creditors for any involuntary petition against such Person;
(iii) such Person filing an answer consenting to or otherwise acquiescing in or
joining in any involuntary petition filed against it, by any other Person under
the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law,
or soliciting or causing to be solicited petitioning creditors for any
involuntary petition from any Person; (iv) such Person consenting to or
acquiescing in or joining in an application for the appointment of a custodian,
receiver, trustee, or examiner for such Person or any portion of the Property or
(v) such Person making an

-3-

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

 

assignment for the benefit of creditors, or admitting, in writing or in any
legal proceeding, its insolvency or inability to pay its debts as they become
due.
     “Bankruptcy Code” shall mean Title 11 of the United States Code entitled
“Bankruptcy”, as amended from time to time, and any successor statute or
statutes and all rules and regulations from time to time promulgated thereunder,
and any comparable foreign laws relating to bankruptcy, insolvency or creditors’
rights.
     “Basic Carrying Costs” shall mean the sum of the following costs associated
with the Property for the relevant Fiscal Year or payment period: (i) Taxes and
(ii) Insurance Premiums.
     “Borrower” shall mean Trizechahn One NY Plaza LLC, a Delaware limited
liability company together with its permitted successors and permitted assigns.
     “Business Day” shall mean any day other than a Saturday, a Sunday or a
legal holiday on which national banks are not open for general business in
(i) the State of New York, (ii) the state where the corporate trust office of
the Trustee is located, or (iii) the state where the servicing offices of the
Servicer are located.
     “Capital Expenditures” shall mean, for any period, amounts expended for
repairs, replacements and alterations to the Property and required to be
capitalized according to GAAP.
     “Capital Expenditure Funds” shall have the meaning set forth in
Section 6.4.1.
     “Capital Expenditures Work” shall mean any labor performed or materials
installed in connection with any Capital Expenditure.
     “Cash Management Agreement” shall mean that certain Cash Management
Agreement of even date herewith between Lender and Borrower.
     “Cash Sweep Cure” shall mean any one of the following: (a) if the Cash
Sweep Event is caused solely by the occurrence of the Event of Default that such
Event of Default has been cured or no longer exists or has been waived in
writing by Lender or (b) if the Cash Sweep Event is caused solely by the
occurrence of a NOI Trigger Event (defined below), the Actual Net Cash Flow for
two (2) consecutive calendar quarters is equal to or greater than
$35,000,000.00, as set forth in the financial statements required under this
Agreement; provided, that, no new Cash Sweep Event shall have occurred and be
continuing under this Agreement.
     “Cash Sweep Event” shall mean any one of the following: (a) the occurrence
of an Event of Default or (b) as of any Actual NOI Determination Date, the
Actual Net Cash Flow, as determined in the manner described in the definition of
Actual Net Cash Flow is less than $35,000,000.00 (a “NOI Trigger Event”).
     “Cash Sweep Period” shall mean the period from and after a Cash Sweep Event
until a Cash Sweep Cure has occurred.

-4-

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

 

     “Casualty” shall mean the occurrence of any casualty, damage or injury, by
fire or otherwise, to the Property or any part thereof.
     “Casualty Consultant” shall have the meaning set forth in Section 5.3.2(c).
     “Casualty Retainage” shall have the meaning set forth in Section 5.3.2(d).
     “Chilled Water Agreement” shall mean that certain Chilled Water Agreement
dated as of July 1, 1974 by and among New York Plaza Building Company, American
Express Company and Chase and recorded in the Office of the City Register, New
York County on July 2, 1974 in Reel 318, Page 432, as modified by (i) that
certain Assignment of Chilled Water Agreement dated as of March 7, 1983 from
American Express International Banking Corporation to Olympia & York 125 Broad
Street Company and recorded in the Office of the City Register, New York County
on June 17, 1983 in Reel 695, Page 1316, (ii) that certain Assignment and
Assumption of Chilled Water Agreement dated October 19, 1989 between New York
Plaza Building Company and Chase, and (iii) that certain Assignment and
Assumption of Chilled Water Agreement dated as of April 30, 1999.
     “Clearing Account” shall mean that certain collection account established
by Borrower with Clearing Account Bank into which Borrower shall cause all Rents
to be deposited in accordance with the terms and conditions of the Clearing
Account Agreement.
     “Clearing Account Agreement” shall mean that certain Multi-Party Agreement
Relating to Lockbox Services dated as of the date hereof, among Borrower, Lender
and Clearing Account Bank.
     “Clearing Account Bank” shall mean JPMorgan Chase Bank, a New York banking
corporation together with its permitted successors and assigns.
     “Closing Date” shall mean the date of funding the Loan.
     “Code” shall mean the Internal Revenue Code of 1986, as amended, and as it
may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
     “Condemnation” shall mean a temporary or permanent taking by any
Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of condemnation or eminent domain, of all or any part of
the Property, or any interest therein or right accruing thereto, including any
right of access thereto or any change of grade affecting the Property or any
part thereof.
     “Condominium Assessments” shall mean all Common Charges and Unit Expenses
(as such terms are defined in the Declaration) and all other assessments for
common charges against any of the Condominium Units.
     “Condominium Documents” shall mean the Declaration, the By-Laws attached
thereto, and all other constituent documents establishing or governing the
condominium regime at the Property.

-5-

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

 

     “Condominium Unit” shall have the meaning set forth in the Mortgage.
     “Control” shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of management, policies or activities of a
Person, whether through ownership of voting securities, by contract or
otherwise. “Controlled” and “ Controlling” shall have correlative meanings.
     “Debt” shall mean the outstanding principal amount of the Loan together
with all interest accrued and unpaid thereon and all other sums (including any
Yield Maintenance Premium payable pursuant to the terms of this Agreement) due
to Lender in respect of the Loan under the Note, this Agreement, the Mortgage,
the Environmental Indemnity or any other Loan Document.
     “Debt Service” shall mean, with respect to any particular period of time,
scheduled principal (as applicable) and interest payments under the Note.
     “Declaration” shall mean that certain Declaration dated as of February 16,
1993 and recorded in the Office of the City Register, New York County, on
March 4, 1993 in Reel 1951, Page 758, as amended by that certain First Amendment
to Declaration of Condominium dated as of March 29, 1993 and recorded in the
Office of the City Register, New York County, on May 5, 1993 in Reel 1968, Page
539, and as amended by that certain Second Amendment to Declaration of
Condominium dated as of April 30, 1999, as the same may be further amended from
time to time.
     “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 (i) the maximum rate permitted by applicable law, or (ii) five
percent (5%) above the Interest Rate.
     “Defeasance Collateral” shall mean U.S. Obligations, which provide payments
(i) on or prior to, but as close as possible to, the Business Day immediately
preceding all Monthly Payment Dates and other scheduled payment dates, if any,
under the Note after the Defeasance Date and up to and including the Permitted
Prepayment Date, and (ii) in amounts equal to or greater than the Scheduled
Defeasance Payments relating to such Monthly Payment Dates and other scheduled
payment dates.
     “Defeasance Collateral Account” shall have the meaning set forth in Section
2.5.3.
     “Defeasance Date” shall have the meaning set forth in Section 2.5.1(a)(i).
     “Defeasance Event” shall have the meaning set forth in Section 2.5.1(a).
     “Disclosure Document” shall have the meaning set forth in Section 9.2(a).

-6-

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

 

     “East River Franchise Agreement” shall mean that certain New York City
Revocable Consent Agreement regarding, among other things, the use and
maintenance of pipes and equipment in connection with the intake and discharge
of water from the East River.
     “Eligible Account” shall mean an identifiable account separate from all
other funds held by the holding institution that is either (i) 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
(ii) 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 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 and
P-1 by Moody’s or F-1+ by Fitch in the case of accounts in which funds are held
for thirty (30) days or less or, in the case of Letters of Credit or accounts in
which funds are held for more than thirty (30) days, the long term unsecured
debt obligations of which are rated at least “AA” by Fitch and S&P and “Aa2” by
Moody’s.
     “Environmental Indemnity” shall mean that certain Environmental Indemnity
Agreement, dated as of the date hereof, executed by Borrower in connection with
the Loan for the benefit of Lender.
     “Environmental Report” shall mean that certain Phase I Environmental
Assessment of One New York Plaza, dated as of February 22, 2006, prepared by EMG
in connection with the making of the Loan.
     “Equipment” shall have the meaning set forth in the granting clause of the
Mortgage.
     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.
     “Event of Default” shall have the meaning set forth in Section 10.1.
     “Exchange Act” shall have the meaning set forth in Section 9.2(a).
     “Exchange Act Filing” shall have the meaning set forth in
Section 9.1(c)(vi).
     “Executive Order” shall have the meaning set forth in the definition of
“Prohibited Person”.
     “Fiscal Year” shall mean each twelve month period commencing on January 1
and ending on December 31 during each year of the term of the Loan.

-7-

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

 

     “Fitch” shall mean Fitch, Inc.
     “GAAP” shall mean generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or in such
other statements by such entity as may be in general use by significant segments
of the U.S. accounting profession.
     “Goldman Lease” shall mean Lease dated April 5, 1994 between Borrower and
Goldman Tenant, as the same is in effect on the date hereof and as amended,
restated or modified in accordance with the terms of this Agreement.
     “Goldman Note” shall mean that certain Promissory Note, dated the date
hereof, made by Borrower to Goldman in the original principal amount of Two
Hundred Million and No/100 Dollars ($200,000,000.00).
     “Goldman Reserve Funds” shall have the meaning set forth in Section 6.5.1.
     “Goldman Tenant” shall mean The Goldman Sachs Group, Inc.
     “Governmental Authority” shall mean any court, board, agency, commission,
office or authority of any nature whatsoever or any governmental unit (federal,
state, county, district, municipal, city or otherwise) whether now or hereafter
in existence.
     “Gross Income from Operations” shall mean, for any period, all revenues,
computed in accordance with GAAP (excluding straight lining of Rents and items
of “Extraordinary Gain” as determined in accordance with GAAP), derived from the
ownership and operation of the Property from whatever source during such period,
including, but not limited to, Rents and income under the Chilled Water
Agreement, service fees or charges, license fees, parking fees and other
pass-through or reimbursements paid by tenants under the Leases of any nature,
but excluding rent concessions or credits, rent abatements, 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, Net Proceeds (other than from business
interruption or other loss of income insurance and Awards for temporary
takings), and any disbursements to Borrower from the Tax Funds, Insurance Funds,
the Capital Expenditure Funds, the Rollover Funds, or any other escrow fund
established by the Loan Documents.
     “Ground Lease” shall mean that certain Lease dated as of December 31, 1966
between Sol G. Atlas and John P. McGrath, as lessor, and New York Plaza Building
Company, as lessee, a memorandum of which was recorded in the Office of the City
Register, New York County, on April 18, 1967 in Record Liber 172, Page 10, as
modified by (i) that certain Agreement Modifying Lease dated June 14, 1968, a
memorandum of which was recorded in the Office of the City Register, New York
County, on July 2, 1968 in Record Liber 323, Page 162, (ii) that certain
Assignment and Assumption of Ground Lease dated October 19, 1989 and recorded in
the Office of the City Register, New York County, on October 24, 1989 in Reel
1631, Page 1561, (iii) that certain Amendment to Ground Lease dated April 30,
1993, a

-8-

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

 

memorandum of which was recorded in the Office of the City Register, New York
County, on May 5, 1993 in Reel 1968, Page 547, (iv) that certain Second
Amendment to Ground Lease dated as of January 3, 1995 and recorded in the Office
of the City Register, New York County, on January 31, 1995 in Reel 2179, Page
397, (v) that certain Assignment and Assumption of Ground Lease dated as of
April 30, 1999, and recorded on May 6, 1999 in Reel 2870, Page 1291 in the
Office of the City Register, New York County, and (vi) that certain Third
Amendment to Ground Lease dated as of April 30, 1999, a memorandum of which was
recorded on May 6, 1999 in Reel 2870, Page 1338 in the Office of the City
Register, New York County, and all estates, privileges and rights of Borrower as
both lessee and lessor thereunder
     “Improvements” shall have the meaning set forth in the granting clause of
the Mortgage.
     “Indebtedness” shall mean, for any Person, without duplication: (i) all
indebtedness of such Person for borrowed money, for amounts drawn under a letter
of credit, or for the deferred purchase price of property for which such Person
or its assets is liable, (ii) all unfunded amounts under a loan agreement,
letter of credit, or other credit facility for which such Person would be liable
if such amounts were advanced thereunder, (iii) all amounts required to be paid
by such Person as a guaranteed payment to partners or a preferred or special
dividend, including any mandatory redemption of shares or interests, (iv) all
indebtedness guaranteed by such Person, directly or indirectly, (v) all
obligations under leases that constitute capital leases for which such Person is
liable, and (vi) all obligations of such Person under interest rate swaps, caps,
floors, collars and other interest hedge agreements, in each case whether such
Person is liable contingently or otherwise, as obligor, guarantor or otherwise,
or in respect of which obligations such Person otherwise assures a creditor
against loss.
     “Indemnified Liabilities” shall have the meaning set forth in Section
11.13(b).
     “Independent Manager” shall have the meaning set forth in
Section 3.1.24(p).
     “Insolvency Opinion” shall mean that certain bankruptcy nonconsolidation
opinion letter, dated the date hereof, rendered by DLA Piper Rudnick Gray Cary
US LLP in connection with the Loan.
     “Insurance Funds” shall have the meaning set forth in Section 6.3.1.
     “Insurance Premiums” shall have the meaning set forth in Section 5.1.1(b).
     “Interest Rate” shall mean 5.4995%.
     “Lease” shall mean any lease, sublease or subsublease, letting, license,
concession or other agreement (whether written or oral and whether now or
hereafter in effect) pursuant to which Borrower or any of its predecessors in
interest grants or has granted to any Person a possessory interest in, or right
to use or occupy all or any portion of any space in the Property, and every
modification, amendment or other agreement relating to such lease, sublease,
subsublease, or other agreement entered into in connection with such lease,
sublease, subsublease, or other agreement and every guarantee of the performance
and observance of the covenants, conditions and agreements to be performed and
observed by the other party thereto.

-9-

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

 

     “Legal Requirements” shall mean all federal, state, county, municipal and
other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of Governmental Authorities affecting
Borrower or the Property or any part thereof or the construction, use,
alteration or operation thereof, or any part thereof, whether now or hereafter
enacted and in force, including, without limitation, the Americans with
Disabilities Act of 1990, and all permits, licenses and authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments, either of record or known to
Borrower, at any time in force affecting the Property or any part thereof,
including, without limitation, any which may (i) require repairs, modifications
or alterations in or to the Property or any part thereof, or (ii) in any way
limit the use and enjoyment thereof.
     “Lehman Note” shall mean collectively, the Lehman Note A-1 and the Lehman
Note A-2.
     “Lehman Note A-1” shall mean that certain Promissory Note, dated the date
hereof, made by Borrower to Lehman in the original amount of One Hundred Eighty
Million and No/100 Dollars ($180,000,000.00).
     “Lehman Note A-2” shall mean that certain Promissory Note, dated the date
hereof, made by Borrower to Lehman in the original amount of Twenty Million and
No/100 Dollars ($20,000,000.00).
     “Lender” shall mean, collectively, Goldman Sachs Commercial Mortgage
Capital, a Delaware limited partnership, and Lehman Brothers Bank FSB, a federal
stock savings bank, together with their respective successors and assigns.
     “Lender Group” shall have the meaning set forth in Section 9.2(b).
     “Lender Indemnitees” shall have the meaning set forth in Section 11.13(b).
     “Letter of Credit” shall mean an irrevocable, unconditional, transferable
(without cost or fee), clean sight draft letter of credit acceptable to Lender
and the Rating Agencies (either an evergreen letter of credit or one which does
not expire until at least thirty (30) Business Days after the Maturity Date) in
favor of Lender and entitling Lender to draw thereon in New York, New York,
issued by a domestic Eligible Institution or the U.S. agency or branch of a
foreign Eligible Institution. If at any time the bank issuing any such Letter of
Credit shall cease to be an Eligible Institution, Lender shall have the right
immediately to draw down the same in full and hold the proceeds of such draw in
accordance with the applicable provisions hereof.
     “Liabilities” shall have the meaning set forth in Section 9.2(b).
     “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 the Property or any portion thereof or Borrower, 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.

-10-

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

 

     “Loan” shall mean the loan in the original principal amount of Four Hundred
Million and No/100 Dollars ($400,000,000.00) made by Lender to Borrower pursuant
to this Agreement evidenced by the Note and secured by the Mortgage, together
with all sums due or to become due thereunder.
     “Loan Documents” shall mean, collectively, this Agreement, the Note, the
Mortgage, the Assignment of Leases, the Cash Management Agreement, the Clearing
Account Agreement, the Environmental Indemnity and any other document pertaining
to the Property as well as all other documents now or hereafter executed and/or
delivered in connection with the Loan.
     “Loan-to-Value Ratio” shall mean the ratio, as of a particular date, in
which the numerator is equal to the outstanding principal balance of the Debt
and the denominator is equal to the appraised value of the Property as
determined by an appraisal prepared in accordance with the requirements for the
Appraisal.
     “Major Lease” shall mean any Lease (i) demising 200,000 square feet or more
at the Property, (ii) made with a Tenant that is a Tenant under another Lease at
the Property, if the Leases together cover 200,000 square feet or more at the
Property (assuming the exercise of all expansion rights and all preferential
rights to lease additional space contained in such lease, is expected to cover
more than 200,000 rentable square feet), (iii) containing an option or
preferential right to purchase all or any portion of the Property, (iv) with an
Affiliate of Borrower or (v) entered into during the continuance of an Event of
Default.
     “Management Agreement” shall mean any management agreement with respect to
the Property entered into by Borrower in accordance with the terms and
conditions of the Loan Documents pursuant to which the Manager is to provide
management and other services with respect to the Property.
     “Manager” shall mean any manager of the Property approved in accordance
with the terms and conditions of the Loan Documents.
     “Material Adverse Effect” shall mean any material adverse effect upon
(i) the business operations, economic performance or financial condition of
Borrower or the Property, (ii) the ability of Borrower to perform, in all
material respects, its obligations under each of the Loan Documents or (iii) the
enforceability or validity of any Loan Document, the perfection or priority of
any Lien created under any Loan Document or the remedies of the Lender under any
Loan Document.
     “Material Agreements” shall mean each contract and agreement relating to
the ownership, management, development, use, operation, leasing, maintenance,
repair or improvement of the Property, (other than the Management Agreement, the
Leases and cleaning and security service contracts) which (i) require Borrower
to pay more than $2,000,000 per annum and (ii) has a term that exceeds one year,
and cannot be terminated by Borrower without cause upon 90 days’ notice or less
without payment of a termination fee.
     “Material Alteration” shall have the meaning set forth in Section 4.1.10.

-11-

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

 

     “Maturity Date” shall mean March 6, 2016 or such other date on which the
final payment of principal of the Note becomes due and payable as therein or
herein provided, whether at such stated maturity date, by declaration of
acceleration, or otherwise.
     “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.
     “Minimum Disbursement Amount” shall mean Twenty-Five Thousand and No/100
Dollars ($25,000).
     “Monthly Debt Service Payment Amount” shall mean from the first Monthly
Payment Date through and including April 6, 2009 a monthly payment of interest
only and thereafter a constant monthly payment of $2,456,230.53 as more
particularly described on Schedule V attached hereto.
     “Monthly Payment Date” shall mean the sixth (6th) day of every calendar
month occurring during the term of the Loan, provided, however, that, prior to a
Securitization, Lender shall have the right to change the Monthly Payment Date
to any other day (or such other day of a calendar month selected by Lender, in
its sole and absolute discretion, to collect debt service payments under loans
which it makes and securitizes) upon at least ten (10) days prior written notice
to Borrower (in which event such change shall then be deemed effective) and, if
requested by Lender, Borrower shall promptly execute an amendment to this
Agreement to evidence such change.
     “Moody’s” shall mean Moody’s Investors Service, Inc.
     “Mortgage” shall mean that certain first priority Consolidated, Amended and
Restated Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Filing, dated the date hereof, executed and delivered by Borrower as
security for the Loan and encumbering the Property, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
     “Net Proceeds” shall mean: (i) the net amount of all insurance proceeds
payable as a result of a Casualty to the Property, after deduction of reasonable
costs and expenses (including, but not limited to, reasonable attorneys’ fees),
if any, in collecting such insurance proceeds, or (ii) the net amount of the
Award, after deduction of reasonable costs and expenses (including, but not
limited to, reasonable attorneys’ fees), if any, in collecting such Award.
     “Net Proceeds Deficiency” shall have the meaning set forth in Section
5.3.2(f).
     “New Mezzanine Borrower” shall have the meaning set forth in Section 9.3.
     “New Mezzanine Loan” shall have the meaning set forth in Section 9.3.

-12-

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

 

     “Non-Material Lease Modification” shall mean with respect to a Major Lease,
any modification or amendment thereto which (i) does not reduce the rental rate
payable thereunder or adversely affect in any manner any of the other economic
terms thereunder, (ii) does not shorten the term of such Major Lease, (iii) does
not involve the expansion or addition of more than 200,000 square feet of space
to such Major Lease, and (iv) does not otherwise have a material adverse effect
with respect to such Major Lease.
     “Note” shall mean, collectively the Goldman Note and the Lehman Note.
     “Notice” shall have the meaning set forth in Section 11.6.
     “Officer’s Certificate” shall mean a certificate delivered to Lender by
Borrower which is signed by an authorized officer of Borrower.
     “Operating Agreements” shall mean any material covenants, restrictions or
agreements of record relating to the construction, operation or use of the
Property.
     “Other Charges” shall mean all Condominium Assessments, ground rents,
maintenance charges, impositions other than Taxes, and any other charges,
including, without limitation, vault charges and license fees for the use of
vaults, chutes and similar areas adjoining the Property, now or hereafter levied
or assessed or imposed against the Property or any part thereof.
     “Patriot Act” shall mean collectively all laws of the United States federal
government relating to terrorism or money laundering, including Executive Order
No. 13224 on Terrorist Financing (effective September 24, 2001) and the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (Public Law 107 56).
     “Permitted Encumbrances” shall mean, collectively, (i) the Liens and
security interests created by the Loan Documents, (ii) all Liens, encumbrances
and other matters expressly set forth in the Title Insurance Policy,
(iii) Liens, if any, for Taxes imposed by any Governmental Authority not yet due
or delinquent, (iv) mechanics’, materialmen’s or similar Liens for delinquent
taxes, if being contested by Borrower in accordance with the terms of this
Agreement, (v) Liens on personal property securing financing leases, (vi) rights
of tenants, as tenants only, under Leases in existence on the Closing Date and
any Leases entered into thereafter in accordance with the requirements of this
Agreement, (vii) the Ground Lease, (viii) easements, rights-of-way,
restrictions, minor encroachments, or other similar encumbrances not impairing
the marketability of the Property and not interfering with the use of the
Property for uses permitted under this Agreement or in the ordinary conduct of
the business of Borrower, and (ix) such other title and survey exceptions as
Lender has approved or may approve in writing in Lender’s reasonable discretion.
     “Permitted Investments” shall have the meaning set forth in the Cash
Management Agreement.
     “Permitted Prepayment Date” shall have the meaning set forth in
Section 2.4.1.

-13-

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

 

     “Permitted Transfer” shall have the meaning set forth in Section 8.2.
     “Permitted Transferee” shall mean a Qualified Equityholder (i) which is
not, and the principals of which are not, (a) in default on any indebtedness or
loan from Lender, (b) the subject of any Bankruptcy Action, (c) the subject of
any criminal charges or proceedings which is deemed significant as reasonably
determined by Lender, (d) involved, or whose parent or Affiliates are involved,
in litigation which would impair its ability to own, manage or lease the
Property as reasonably determined by Lender, (e) on any list maintained by the
Office of Foreign Assets Control or (f) in violation of the Patriot Act,
(ii) that qualifies as a single purpose, bankruptcy remote entity under criteria
established by the Rating Agencies; and (iii) whose counsel has delivered to
Lender a non-consolidation opinion reasonably acceptable to Lender and
acceptable to the Rating Agencies in their sole discretion.
     “Person” shall mean any individual, corporation, partnership, limited
liability company, joint venture, estate, trust, unincorporated association, any
other entity, 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.
     “Policy” shall have the meaning specified in Section 5.1.1(b).
     “Principal” shall mean, TH One NY Plaza LLC, a Delaware limited liability
company.
     “Prohibited Person” shall mean any Person:
     (a) listed in the Annex to, or is otherwise subject to the provisions of,
the Executive Order No. 13224 on Terrorist Financing, effective September 24,
2001, and relating to Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (the “Executive
Order”);
     (b) that is owned or Controlled by, or acting for or on behalf of, any
person or entity that is listed in the Annex to, or is otherwise subject to the
provisions of the Executive Order;
     (c) with whom Lender is prohibited from dealing or otherwise engaging in
any transaction by the Patriot Act;
     (d) who commits, threatens or conspires to commit or supports “terrorism”
as defined in the Executive Order;
     (e) that is named as a “specially designated national and blocked person”
on the most current list published by the U.S. Treasury Department Office of
Foreign Assets Control at its official website or at any replacement website or
other replacement official publication of such list; or
     (f) who is an Affiliate of a Person listed above.

-14-

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

 

     “Property” shall mean the parcel of real property, the Improvements thereon
and all personal property owned by Borrower and encumbered, from time to time,
by the Mortgage, together with all rights of Borrower pertaining to such
property and Improvements, all as more particularly described in the granting
clauses of the Mortgage.
     “Property Condition Report” shall mean that certain Property Condition
Assessment, dated as of February 22, 2006, prepared by EMG in connection with
the making of the Loan.
     “Proposed Alterations” shall have the meaning specified in
Section 4.1.10(b).
     “Qualified Equityholder” shall mean (i) TPI, THL or THO and (ii) any bank,
savings and loan association, investment bank, insurance company, trust company,
commercial credit corporation, pension plan, pension fund, pension advisory
firm, mutual fund, government entity or plan, real estate company, investment
fund or institution substantially similar to any of the foregoing, provided in
each case that such institution or its wholly-owned Affiliates have total assets
(in name or under management) in excess of $2,000,000,000 and (except with
respect to a pension advisory firm or similar fiduciary) capital/statutory
surplus or shareholder’s equity in excess of $1,000,000,000, in each case
excluding the Property, and is regularly engaged in the business of owning and
operating properties similar to the Property in major metropolitan areas, and
(iii) any entity with respect to which Rating Agency Confirmation is received.
     “Qualified Guaranty” shall have the meaning set forth in Section 6.5.
     “Qualified Letter of Credit” means a clean, irrevocable, unconditional,
transferable sight draft letter of credit (either an evergreen letter of credit
or a letter of credit which does not expire until at least ten (10) Business
Days after the Maturity Date or such other date reasonably acceptable to Lender)
in form reasonably satisfactory to Lender with respect to which Borrower has no
reimbursement obligation, in favor of Lender and entitling Lender to draw
thereon in New York, New York, based solely on a statement executed by an
officer of Lender stating that it has the right to draw thereon, issued by a
domestic Approved Bank or the U.S. agency or branch of a foreign Approved Bank,
or if there is no domestic Approved Bank or U.S. agencies or branches of a
foreign Approved Bank 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 Agencies to a domestic
commercial bank. The following terms and conditions shall apply to each
Qualified Letter of Credit:
     (a) Each such Qualified Letter of Credit shall expressly provide that
partial draws are permitted thereunder.
     (b) Each such Qualified Letter of Credit shall expressly provide that it is
freely transferable to any successor or assign of Lender.
     (c) Lender shall be entitled to draw on any Qualified Letter of Credit
immediately and without further notice (i) upon the occurrence and during the
continuance of any Event of Default, (ii) if such Letter of Credit shall not
have been automatically renewed in accordance with the evergreen provisions
thereof not less than thirty days prior to the expiration of such Qualified
Letter of Credit (including any

-15-

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

 

renewal or extension thereof) and Borrower shall not have delivered to Lender,
no less than 30 days prior to the expiration date of such Qualified Letter of
Credit (including any renewal or extension thereof), a renewal or extension of
such Qualified Letter of Credit or a replacement Qualified Letter of Credit for
a term of not less than one year (or through the date that is ten (10) Business
Days beyond the Maturity Date, whichever is earlier), or (iii) if the credit
rating of the issuing bank falls below the ratings set forth in definition
Approved Bank and Borrower fails to satisfy its obligations under Section 6.5.1.
     “Qualified Manager” shall mean any of the following provided such Person is
not the subject of any Bankruptcy Action: (a) any Trizec Affiliate or (b) a
reputable and experienced professional management organization which manages,
together with its Affiliates, exclusive of the Property, at least 6,000,000
square feet of office buildings comparable to the Property 3,000,000 square feet
of which shall be with respect to office buildings comparable to the Property
located in New York City on a national basis; provided, however, that Borrower
shall have delivered to Lender (i) in the case of (b) above, a Rating Agency
Confirmation (or, if a Securitization shall not have occurred and
notwithstanding Section 7.2 hereof, Borrower shall have obtained the prior
written consent of Lender not to be unreasonably withheld or delayed) and
(ii) in the case of (a) above, a new and/or updated Insolvency Opinion which
shall be in form, scope and substance reasonably acceptable in all respects to
Lender and acceptable in all respects to the Rating Agencies.
     “Rating Agencies” shall mean, prior to the final Securitization of the
Loan, each of S&P, Moody’s and Fitch, or any other nationally-recognized
statistical rating agency which has been designated by Lender and, after the
final Securitization of the Loan, shall mean any of the foregoing that have
rated any of the Securities.
     “Rating Agency Confirmation” shall mean a written affirmation from each of
the Rating Agencies that the credit rating of the Securities by such Rating
Agency immediately prior to the occurrence of the event with respect to which
such Rating Agency Confirmation is sought will not be qualified, downgraded or
withdrawn as a result of the occurrence of such event, which affirmation may be
granted or withheld in such Rating Agency’s sole and absolute discretion.
     “Registration Statement” shall have the meaning set forth in
Section 9.2(b).
     “Regulation AB” has the meaning set forth in Section 9.1(c) hereof.
     “Related Loan” has the meaning set forth in Section 9.1(c) hereof.
     “Related Property” has the meaning set forth in Section 9.1(c) hereof.
     “Release Date” shall mean the earlier to occur of (i) the third (3rd)
anniversary of the Closing Date and (ii) the date that is two (2) years from the
“startup day” (within the meaning of Section 860G(a)(9) of the Code) of the
REMIC Trust established in connection with the last Securitization involving any
portion of this Loan.

-16-

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

 

     “REMIC Trust” shall mean a “real estate mortgage investment conduit” within
the meaning of Section 860D of the Code that holds the Note.
     “Rents” shall mean all rents (including, without limitation, percentage
rents), rent equivalents, moneys payable as damages or in lieu of rent or rent
equivalents, royalties (including, without limitation, all oil and gas or other
mineral royalties and bonuses), income, receivables, receipts, revenues,
deposits (including, without limitation, security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and other
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Borrower or its agents or employees from any and all
sources arising from or attributable to the Property, and proceeds, if any, from
business interruption or other loss of income insurance.
     “Reserve Funds” shall mean, collectively, the Capital Expenditure Funds,
the Insurance Funds, the Tax Funds, the Unassessed Tax Funds, the Rollover
Funds, the Goldman Reserve Funds, the Wachovia Reserve Funds and the Unfunded
Obligations Funds.
     “Restoration” shall have the meaning set forth in Section 5.2.1.
     “Restoration Threshold” shall mean Twenty Million and No/100 Dollars
($20,000,000).
     “Rollover Funds” shall have the meaning set forth in Section 6.5.1.
     “S&P” shall mean Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc.
     “Scheduled Defeasance Payments” shall mean all scheduled payments of
interest and principal under the Note for all Monthly Payment Dates occurring
after the Defeasance Date and up to and including the Permitted Prepayment Date
(including, the outstanding principal balance on the Note as of the Permitted
Prepayment Date).
     “Secondary Market Transaction” shall have the meaning set forth in Section
9.1(a).
     “Securities” shall have the meaning set forth in Section 9.1(a).
     “Securities Act” shall have the meaning set forth in Section 9.2(a).
     “Securitization” shall have the meaning set forth in Section 9.1(a).
     “Security Agreement” shall mean a security agreement in form and substance
that would be satisfactory to a prudent lender pursuant to which Borrower grants
Lender a perfected, first priority security interest in the Defeasance
Collateral.
     “Servicer” shall have the meaning set forth in Section 11.24(a).
     “Servicing Agreement” shall have the meaning set forth in Section 11.24(a).

-17-

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

 

     “Severed Loan Documents” shall have the meaning set forth in
Section 10.2(c).
     “Significant Obligor” has the meaning set forth in Section 9.1(c) hereof.
     “SPC Party” shall have the meaning set forth in Section 3.1.24(o).
     “Specified Decisions” shall mean, with respect to the Borrower or any SPC
Party, decisions to (a) refinance, (b) amend the organizational documents of
Borrower or any SPC Party, (c) alter voting rights of the owners of the Borrower
or any SPC Party, (d) merge with, consolidate with or acquire another entity,
(e) transfer ownership interests in such Person, (f) dissolve, (g) reorganize or
change or remove a managing member or general partner of such Person, as
applicable, or (h) similar decisions affecting such Person, as reasonably
determined by Lender; provided, however, in no event shall any decision with
respect to the day-to-day control, operation and/or management of Borrower or
the Property be deemed to constitute a Specified Decision for purposes hereof.
     “Standard Statements” shall have the meaning set forth in
Section 9.1(c)(i).
     “State” shall mean the State or Commonwealth in which the Property or any
part thereof is located.
     “Successor Borrower” shall have the meaning set forth in Section 2.5.4.
     “Survey” shall mean a land survey for the Property, certified to the title
company and Lender and its successors and assigns, in form and content
reasonably satisfactory to Lender.
     “Tax Funds” shall have the meaning set forth in Section 6.2.1.
     “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 the Property or part thereof, together with all interest and
penalties thereon.
     “Tenant” shall mean any Person obligated by contract or otherwise to pay
monies (including a percentage of gross income, revenue or profits) under any
Lease now or hereafter affecting all or any part of the Property.
     “Terrorism Losses” shall be those types of losses which result from perils
of terrorism and acts of terrorism as are currently “certified” under TRIA
whether or not TRIA is in effect excluding losses for nuclear, biological or
chemical acts.
     “Terrorism Premium Limit” shall mean an annual Insurance Premium equal to
$1,300,000.00.
     “THL” shall mean Trizec Holdings, LLC or any successor thereto by merger,
conversion, consolidation, reorganization or other form of business combination.
     “THO” shall mean Trizec Holdings Operating LLC, or any successor thereto by
merger, conversion, consolidation, reorganization or other form of business
combination.

-18-

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

 

     “Title Insurance Policy” shall mean an ALTA mortgagee title insurance
policy in the form reasonably acceptable to Lender issued with respect to the
Property and insuring the lien of the Mortgage together with such endorsements
and affirmative coverages as Lender may reasonably require.
     “TPI” shall mean Trizec Properties, Inc. or any successor thereto by
merger, conversion, consolidation, reorganization or other form of business
combination.
     “Transferee” shall have the meaning set forth in Section 8.1.1(f)(iii) .
     “TRIA” shall mean the Terrorism Risk Insurance Act of 2002, as amended, or
similar Federal statute.
     “Trizec Affiliate” shall mean (a) THL, (b) TPI, (c) THO or (d) any entity
which directly or indirectly has Control over, is Controlled by or is under
common Control with THL, TPI or THO.
     “Trustee” shall mean any trustee holding the Loan in a Securitization.
     “UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code
as in effect in the State.
     “Unassessed Tax Funds” has the meaning set forth in Section 6.2.2 hereof
     “Unassessed Property” has the meaning set forth in Section 6.2.2 hereof
     “Unfunded Obligations” means the items described in Schedule VI.
     “Unfunded Obligations Account” has the meaning set forth in Section 6.6
hereof.
     “Unfunded Obligations Amount” means $14,926,487.50.
     “Unfunded Obligations Funds” has the meaning set forth in Section 6.6
hereof.
     “Underwriter Group” shall have the meaning set forth in Section 9.2(b).
     “Updated Information” shall have the meaning set forth in
Section 9.1(b)(i).
     “U.S. Obligations” shall mean non redeemable securities evidencing an
obligation to timely pay principal and/or interest in a full and timely manner
that are (a) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged, (b) other non-callable
“government securities” as defined in Treasury Regulations Section
1.860G-2(a)(8)(i), as amended which will not result in a reduction, downgrade or
withdrawal of the ratings for the Securities or any class thereof issued in
connection with a Security and which are then outstanding or (c) other
instruments, which if a Securitization has occurred, the REMIC Trust formed
pursuant to such Securitization will not fail to maintain its status as a “real
estate mortgage investment conduit” within the meaning of Section 860D of the
Code and which will not result in a reduction, downgrade or withdrawal of the
ratings for the

-19-

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

 

Securities or any class thereof issued in connection with a Security and which
are then outstanding.
     “Wachovia” shall mean Wachovia Securities Financial Holdings, LLC.
     “Wachovia Lease” shall mean Lease dated March 29, 1993 between Borrower and
Wachovia, as the same is in effect on the date hereof and as amended, restated
or modified in accordance with the terms of this Agreement.
     “Wachovia Reserve Funds” shall have the meaning set forth in Section 6.5.1.
     “Yield Maintenance Premium” shall mean an amount equal to the greater of:
(i) three percent (3%) of the principal amount of the Loan being prepaid and
(ii) the present value as of the Prepayment Date of the Calculated Payments from
the Prepayment Date through the Permitted Prepayment Date determined by
discounting such payments at the Discount Rate. As used in this definition, the
term “Prepayment Date” shall mean the date on which prepayment is made. As used
in this definition, the term “Calculated Payments” shall mean the monthly
payments of interest only which would be due based on the principal amount of
the Loan being prepaid on the Prepayment Date and assuming an interest rate per
annum equal to the difference (if such difference is greater than zero) between
(y) the Interest Rate and (z) the Yield Maintenance Treasury Rate. As used in
this definition, the term “Discount Rate” shall mean the rate which, when
compounded monthly, is equivalent to the Yield Maintenance Treasury Rate, when
compounded semi-annually. As used in this definition, the term “Yield
Maintenance Treasury Rate” shall mean the yield calculated by Lender 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/Treasury Constant Maturities for the week ending prior to
the Prepayment Date, of U.S. Treasury Constant Maturities with maturity dates
(one longer or one shorter) most nearly approximating the Maturity Date. In the
event Release H.15 is no longer published, Lender shall select a comparable
publication to determine the Yield Maintenance Treasury Rate. In no event,
however, shall Lender be required to reinvest any prepayment proceeds in U.S.
Treasury obligations or otherwise.
     Section 1.2 Principles of Construction. All references to sections and
schedules are to sections and schedules in or to this Agreement unless otherwise
specified. 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
THE LOAN
     Section 2.1 The Loan.

-20-

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

 

        .
     2.1.1 Agreement to Lend and Borrow. Subject to and upon the terms and
conditions set forth herein, Lender shall make the Loan to Borrower and Borrower
shall accept the Loan from Lender on the Closing Date.
     2.1.2 Single Disbursement to Borrower. Borrower shall receive only one
(1) borrowing hereunder in respect of the Loan and any amount borrowed and
repaid hereunder in respect of the Loan may not be reborrowed.
     2.1.3 Note, Mortgage and Loan Documents. The Loan shall be evidenced by the
Note and secured by the Mortgage, the Assignment of Leases and the other Loan
Documents.
     2.1.4 Use of Proceeds. Borrower shall use proceeds of the Loan to (a) pay
and refinance any existing loans relating to the Property, (b) pay all past due
Basic Carrying Costs, if any, in respect of the Property, (c) deposit the
Reserve Funds, as applicable, (d) pay costs and expenses incurred in connection
with the closing of the Loan, (e) fund any working capital requirements of the
Property and (f) distribute the balance of the proceeds, if any to Borrower
which Borrower may then lend to its members or direct or indirect owners of
Borrower.
     Section 2.2 Interest Rate.
     2.2.1 Interest Rate. Interest on the outstanding principal balance of the
Loan shall accrue from the Closing Date up to and including the Maturity Date at
the Interest Rate.
     2.2.2 Default Rate. In the event that, and for so long as, any Event of
Default shall have occurred and be continuing, the outstanding principal balance
of the Loan and, to the extent permitted by law, overdue interest in respect of
the Loan, shall accrue interest at the Default Rate, calculated from the date
such payment was due without regard to any grace or cure periods contained
herein.
     2.2.3 Interest Calculation. Interest on the outstanding principal balance
of the Loan shall be calculated by multiplying (a) the actual number of days
elapsed in the period for which the calculation is being made by (b) a daily
rate based on a three hundred sixty (360) day year (that is, the Interest Rate
or the Default Rate, as then applicable, expressed as an annual rate divided by
360) by (c) the outstanding principal balance. The accrual period for
calculating interest due on each Monthly Payment Date shall commence on the
sixth (6th) day of the calendar month immediately prior to such Monthly Payment
Date and end on (and including) the fifth (5th) day of the calendar month in
which the Monthly Payment Date occurs.
     2.2.4 Usury Savings. This Agreement and the other Loan Documents are
subject to the express condition that at no time shall Borrower be 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,
the Interest Rate or the Default Rate, as the case may be, shall be deemed to be
immediately reduced to the Maximum Legal Rate and all previous payments in
excess of the Maximum Legal Rate shall be deemed to have been payments in
reduction of principal and not on account of the interest due hereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance, or

-21-

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

 

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 from time
to time in effect and applicable to the Loan for so long as the Loan is
outstanding.
     Section 2.3 Loan Payments.
     2.3.1 Payment Before Maturity Date. Borrower shall make a payment to Lender
of interest only on the Closing Date for the period from the Closing Date
through the fifth day of the month in which the Closing Date occurs (unless the
Closing Date is the sixth (6th) day of a calendar month, in which case no such
separate payment of interest shall be due). Borrower shall make a payment to
Lender in the amount of the Monthly Debt Service Payment Amount on the Monthly
Payment Date occurring on [April 6, 2006] and on each Monthly Payment Date
thereafter to and including the Maturity Date. Each payment shall be applied
first to accrued and unpaid interest and the balance to principal, as
applicable. The principal portion of the Monthly Debt Service Payment Amount
required hereunder is based upon a twenty-five (25) year amortization schedule.
     2.3.2 Payment on Maturity Date. Borrower shall pay to Lender on the
Maturity Date the outstanding principal balance of the Loan, all accrued and
unpaid interest and all other amounts due hereunder and under the Note, the
Mortgage and the other Loan Documents.
     2.3.3 Late Payment Charge. If any principal, interest or any other sum due
under the Loan Documents, other than the payment of principal due on the
Maturity Date, is not paid by Borrower on the date on which it is due, Borrower
shall pay to Lender upon demand an amount equal to the lesser of (a) five
percent (5%) of such unpaid sum or (b) the Maximum Legal Rate 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.
     2.3.4 Method and Place of Payment. (a) Except as otherwise specifically
provided herein, all payments and prepayments under this Agreement and the Note
shall be made to Lender not later than 2:00 P.M., New York City time, on the
date when due and shall be made in lawful money of the United States of America
in immediately available funds at Lender’s office, and any funds received by
Lender after such time shall, for all purposes hereof, be deemed to have been
paid on the next succeeding Business Day.
     (b) Whenever any payment to be made hereunder or under any other Loan
Document shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be the first Business Day that is immediately succeeding such
due date (notwithstanding such adjustment of due dates, Borrower shall not be
entitled to any deduction of interest due under the Note, this Agreement or any
of the other Loan Documents) and, with respect to payments of principal due on
the Maturity Date, interest shall be payable at the Interest Rate or the Default
Rate, as the case may be, during such extension.

-22-

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

 

     (c) All payments required to be made by Borrower hereunder or under the
Note or the other Loan Documents shall be made irrespective of, and without
deduction for, any setoff, claim or counterclaim and shall be made irrespective
of any defense thereto.
     Section 2.4 Prepayments.
     2.4.1 Voluntary Prepayments. Except as otherwise provided herein, Borrower
shall not have the right to prepay the Loan in whole or in part. On and after
December 6, 2015] (the “Permitted Prepayment Date”), Borrower may, at its option
and upon not less than fifteen (15) days (or such shorter period of time if
permitted by Lender in its reasonable discretion) prior notice to Lender, prepay
the Debt in whole but not in part, on any date without payment of the Yield
Maintenance Premium. Any prepayment received by Lender on a date other than a
Monthly Payment Date shall include interest which would have accrued thereon to
the next Monthly Payment Date. Any partial prepayment shall be applied to the
last payments of principal due under the Loan. Lender shall not be obligated to
accept such prepayment made pursuant to this Section 2.4.1 unless it is
accompanied with a payment of all interest which would have accrued on the
outstanding principal amount of such prepayment and remains unpaid through but
excluding the next succeeding Monthly Payment Date, together with other amounts
due under the Loan Documents. Borrower shall have the right to revoke any notice
of prepayment under this Section 2.4.1; provided that Borrower pays to Lender
any and all actual out-of-pocket third party costs and expenses incurred by
Lender arising as a result of any such revocation.
     2.4.2 Mandatory Prepayments. On each date on which Lender actually receives
a distribution of Net Proceeds, and if Lender does not make such Net Proceeds
available to Borrower for a Restoration, Borrower shall, at Lender’s option,
prepay the outstanding principal balance of the Note in an amount equal to one
hundred percent (100%) of such Net Proceeds together with interest that would
have accrued on such amounts through the next Monthly Payment Date. No Yield
Maintenance Premium shall be due in connection with any prepayment made pursuant
to this Section 2.4.2. Any prepayment of the Loan received by Lender pursuant to
the terms of this Section 2.4.2 shall be applied to reduction of the outstanding
principal balance, on a pari passu basis, the Goldman Note, the Lehman Note A-1
and the Lehman Note A-2.
     2.4.3 Prepayments After Default. If during the continuance of an Event of
Default, payment of all or any part of the principal of the Loan is tendered by
Borrower (which tender Lender may reject to the extent permitted under
applicable Legal Requirements), a purchaser at foreclosure or any other Person,
such tender shall be deemed an attempt to circumvent the prohibition against
prepayment set forth in Section 2.4.1 and Borrower, such purchaser at
foreclosure or other Person shall pay the Yield Maintenance Premium, in addition
to the outstanding principal balance, all accrued and unpaid interest and other
amounts payable under the Loan Documents. Any prepayment of the Loan received by
Lender pursuant to the terms of this Section 2.4.3 may be retained and applied
by Lender toward the payment of the Debt in such order, priority and proportions
as Lender in its sole discretion shall determine.

-23-

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

 

             Section 2.5 Defeasance.
             2.5.1 Defeasance. (a) Provided no Event of Default shall have
occurred and remain uncured, Borrower shall have the right at any time after the
Release Date to voluntarily defease the entire Loan and obtain a release of the
lien of the Mortgage by providing Lender with the Defeasance Collateral
(hereinafter, a “Defeasance Event”), subject to the satisfaction of the
following conditions precedent:
     (i) Borrower shall provide Lender not less than thirty (30) days prior
written notice (or such shorter period of time if permitted by Lender in its
reasonable discretion) specifying a date (the “Defeasance Date”) on which the
Defeasance Event is to occur;
     (ii) Borrower shall pay to Lender (A) all payments of principal and
interest due on the Loan to and including the Defeasance Date (including,
without limitation, interest accrued but not paid or payable through and
including the Defeasance Date, if any) and (B) all other sums, then due under
the Note, this Agreement, the Mortgage and the other Loan Documents;
     (iii) Borrower shall deposit the Defeasance Collateral into the Defeasance
Collateral Account and otherwise comply with the provisions of Section 2.5.3 and
2.5.4 hereof;
     (iv) Borrower shall execute and deliver to Lender a Security Agreement in
respect of the Defeasance Collateral Account and the Defeasance Collateral;
     (v) Borrower shall deliver to Lender an opinion of counsel for Borrower
that is standard in commercial lending transactions and subject only to
customary qualifications, assumptions and exceptions opining, among other
things, that (A) Lender has a legal and valid perfected first priority security
interest in the Defeasance Collateral Account and the Defeasance Collateral,
(B) if a Securitization has occurred, the REMIC Trust formed pursuant to such
Securitization will not fail to maintain its status as a “real estate mortgage
investment conduit” within the meaning of Section 860D of the Code as a result
of a Defeasance Event pursuant to this Section 2.5.1, and (C) if required by the
Rating Agencies, a non consolidation opinion with respect to the Successor
Borrower;
     (vi) Borrower shall deliver to Lender a Rating Agency Confirmation as to
the Defeasance Event;
     (vii) Borrower shall deliver an Officer’s Certificate certifying that the
requirements set forth in this Section 2.5.1 and in Section 2.5.3 and 2.5.4 have
been satisfied;
     (viii) Borrower shall deliver a certificate of Grant Thornton or a “big
four” or other nationally recognized public accounting firm reasonably
acceptable to Lender certifying that the Defeasance Collateral will generate
monthly amounts equal to or greater than the Scheduled Defeasance Payments;

-24-

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

 

     (ix) Borrower shall deliver such other certificates, opinions, documents
and instruments as Lender may reasonably request; and
     (x) Borrower shall pay all third-party, out-of-pocket costs and expenses of
Lender actually incurred in connection with the Defeasance Event, including
Lender’s reasonable attorneys’ fees and expenses and Rating Agency fees and
expenses.
     (b) If Borrower has elected to defease the Note and the requirements of
this Section 2.5 have been satisfied, the Property shall be released from the
lien of the Mortgage and the other Loan Documents and the Defeasance Collateral
pledged pursuant to the Security Agreement shall be the sole source of
collateral securing the Note. In connection with the release of the Lien,
Borrower shall submit to Lender, not less than fifteen (15) days prior to the
Defeasance Date (or such shorter time as is acceptable to Lender in its
reasonable discretion), a release of Lien (and related Loan Documents) for
execution by Lender. Such release shall be in a form appropriate in the
jurisdiction in which the Property is located. In addition, Borrower shall
provide all other documentation Lender reasonably requires to be delivered by
Borrower in connection with such release, together with an Officer’s Certificate
certifying that such documentation (i) is in compliance with all Legal
Requirements, and (ii) will effect such release in accordance with the terms of
this Agreement. Borrower shall pay all costs, taxes and expenses associated with
the release of the lien of the Mortgage, including Lender’s reasonable
attorneys’ fees actually incurred. Except as set forth in this Section 2.5 or
Section 11.33 hereof, no repayment, prepayment or defeasance of all or any
portion of the Note shall cause, give rise to a right to require, or otherwise
result in, the release of the Lien of the Mortgage on the Property.
     2.5.2 Intentionally Omitted.
     2.5.3 Defeasance Collateral Account. On or before the date on which
Borrower delivers the Defeasance Collateral, Borrower shall open at any Eligible
Institution the defeasance collateral account (the “Defeasance Collateral
Account”) which shall at all times be an Eligible Account. The Defeasance
Collateral Account shall contain only (a) Defeasance Collateral and (b) cash
from interest and principal paid on the Defeasance Collateral. All cash from
interest and principal payments paid on the Defeasance Collateral shall be paid
over to Lender on each Monthly Payment Date and applied first to accrued and
unpaid interest and then to principal. Any cash from interest and principal paid
on the Defeasance Collateral not needed to pay the Scheduled Defeasance Payments
shall be paid to Borrower. Borrower shall cause the Eligible Institution at
which the Defeasance Collateral is deposited to enter an agreement with Borrower
and Lender, satisfactory to Lender in its reasonable discretion, pursuant to
which such Eligible Institution shall agree to hold and distribute the
Defeasance Collateral in accordance with this Agreement. The Borrower or
Successor Borrower, as applicable, shall be the owner of the Defeasance
Collateral Account and shall report all income accrued on Defeasance Collateral
for federal, state and local income tax purposes in its income tax return.
Borrower shall prepay all cost and expenses associated with opening and
maintaining the Defeasance Collateral Account. Lender shall not in any way be
liable by reason of any insufficiency in the Defeasance Collateral Account.
     2.5.4 Successor Borrower. In connection with a Defeasance Event under this
Section 2.5, Borrower shall, if required by the Rating Agencies or if Borrower
elects to do so,

-25-

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

 

establish or designate a successor entity (the “Successor Borrower”) which shall
be a single purpose bankruptcy remote entity and which shall be approved by the
Rating Agencies. Any such Successor Borrower may, at Borrower’s option, be an
Affiliate of Borrower unless the Rating Agencies shall require otherwise.
Borrower shall transfer and assign all obligations, rights and duties under and
to the Note together with the Defeasance Collateral to such Successor Borrower.
Such Successor Borrower shall assume the obligations under the Note and the
Security Agreement and Borrower shall be relieved of its obligations under such
documents and shall be relieved from all obligations accruing under this
Agreement and the other Loan Documents from and after the Defeasance Event
except for those obligations and indemnities which are expressly stated to
survive the payment in full of the Loan. Borrower shall pay a minimum of One
Thousand and No/100 ($1,000) to any such Successor Borrower as consideration for
assuming the obligations under the Note and the Security Agreement. Borrower
shall pay all out of pocket costs and expenses actually incurred by Lender,
including Lender’s reasonable attorney’s fees and expenses incurred in
connection therewith.
     2.5.5 Assignment upon Defeasance. If Borrower has advised Lender that it
desires to effectuate a Defeasance Event in a manner which will permit the
assignment of the Note and Mortgage to a new lender providing a portion of the
funds necessary to acquire the Defeasance Collateral in order to save mortgage
recording tax, Borrower and Lender shall cooperate to effect such proposed
assignment in the following manner: Lender shall assign the Note and the
Mortgage, each without recourse, covenant or warranty of any nature, express or
implied, (except as to representations as to due execution, delivery, authority,
and no transfer or encumbrance of the Note or Mortgage by Lender) to such new
lender designated by Borrower (other than Borrower or a nominee of Borrower)
provided that Borrower (a) has either prepaid the Debt or has executed and
delivered to such new lender a new note to be secured by the Defeasance
Collateral pursuant to the Security Agreement between Borrower and such new
lender (such new note to have the same term, interest rate, unpaid principal
balance and all other material terms and conditions of the Note), which new
note, together with the Security Agreement and the rights of such new lender in
and to the Defeasance Collateral, shall be assigned by such new lender to Lender
simultaneously with the assignment of the Note and Mortgage by Lender and
(b) has complied with all other provisions of Section 2.5 to the extent not
inconsistent with this Section 2.5.5. In addition, any such assignment shall be
conditioned on the following: (i) payment by Borrower of (x) Lender’s then
customary administrative fee for processing assignments of mortgage; (y) the
reasonable actual out-of-pocket expenses of Lender incurred in connection
therewith; and (z) Lender’s reasonable attorney’s fees for the preparation,
delivery and performance of such an assignment; (ii) Borrower shall have caused
the delivery of an executed Statement of Oath under Section 275 of the New York
Real Property Law; (iii) such new lender shall materially modify the Note such
that it shall be treated as a new loan for federal tax purposes; (iv) such an
assignment is not then prohibited by any federal, state or local law, rule,
regulation, order or by any other governmental authority; (v) such assignment
and the actions described above do not constitute a prohibited transaction for
any REMIC Trust formed pursuant to a Secondary Market Transaction and will not
disqualify such REMIC Trust as a “real estate mortgage investment conduit”
within the meaning of Section 860D of the Code as a result of such assignment
and the Defeasance, and, if required, an opinion of counsel to Borrower to that
effect is delivered to Lender in a form that would be reasonably satisfactory to
a prudent lender; and (vi) Borrower shall provide such other opinions, items,
information and documents which a prudent lender acting reasonably would require
to effectuate such assignment. Borrower

-26-

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

 

shall be responsible for all mortgage recording taxes, recording fees and other
charges payable in connection with any such assignment. Borrower and Lender
acknowledge and agree that the assignment of the Note and Mortgage to the new
lender and the assignment of the new note, the Defeasance Collateral and the
Security Agreement by the new lender to Lender shall be accomplished by an
escrow closing conducted through an escrow agent reasonably satisfactory to
Lender and pursuant to an escrow agreement reasonably satisfactory to Lender in
form and substance.
     Section 2.6 Release on Payment in Full. Lender shall, upon the written
request and at the expense of Borrower, upon payment in full of all principal
and interest due on the Loan and all other amounts due and payable under the
Loan Documents in accordance with the terms and provisions of the Note and this
Agreement, release the Lien of the Mortgage on the Property. Upon Borrower’s
request and at Borrower’s sole cost and expense, Lender agrees, in connection
with any release under this Section 2.6, to assign, without any recourse,
representation or warranty (except as to representations as to due execution,
delivery, authority and no transfer or encumbrance of the Note or Mortgage by
Lender), and deliver to the assignee the Mortgage and Note, as applicable, to
any such new lender in connection with any refinance of the Loan (or portion
thereof). In connection with any such the release or assignment of the Mortgage,
Borrower shall submit to Lender, not less than fifteen (15) days prior to the
date of such release, a release or assignment of Lien (and related Loan
Documents, including a replacement of the Note in the event that the Mortgage is
assigned to a new lender in connection with a refinance or defeasance) for the
Property or an assignment of the Note and Mortgage in form and substance
reasonably satisfactory to Lender for execution by Lender. Such release or
assignment shall be in a form appropriate in the jurisdiction in which the
Property is located and that would be reasonably satisfactory to a prudent
lender and contain standard provisions, if any, protecting the rights of the
releasing or assigning lender.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
     Section 3.1 Borrower Representations. Borrower represents and warrants
that:
     3.1.1 Organization. (a) Each of Borrower and each SPC Party is duly
organized, validly existing and in good standing with full power and authority
to own its assets and conduct its business, and is duly qualified in all
jurisdictions in which the ownership or lease of its property or the conduct of
its business requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on its ability to perform its
obligations hereunder, and Borrower has taken all necessary action to authorize
the execution, delivery and performance of this Agreement and the other Loan
Documents by it, and has the power and authority to execute, deliver and perform
under this Agreement, the other Loan Documents and all the transactions
contemplated hereby.
     (b) Borrower’s exact legal name is correctly set forth in the first
paragraph of this Agreement. Borrower is an organization of the type specified
in the first paragraph of this Agreement. Borrower is incorporated or organized
under the laws of the state specified in the first paragraph of this Agreement.
Borrower’s principal place of business and chief executive

-27-

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

 

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 (4) months (or, if less than four (4) months, the entire
period of the existence of Borrower) and will continue to be the address of
Borrower set forth in the first paragraph of this Agreement and/or the address
of the Property (unless Borrower notifies Lender in writing at least thirty
(30) days prior to the date of such change). Borrower’s organizational
identification number, if any, assigned by the state of its incorporation or
organization is 2984305. Borrower’s federal tax identification number is
13-4196875.
     3.1.2 Proceedings. This Agreement and the other Loan Documents have been
duly authorized, executed and delivered by Borrower and constitute a legal,
valid and binding obligation of Borrower, enforceable against Borrower in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally, and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
     3.1.3 No Conflicts. The execution and delivery of this Agreement and the
other Loan Documents by Borrower and the performance of its obligations
hereunder and thereunder will not conflict with any provision of any law or
regulation to which Borrower is subject, or conflict with, result in a breach
of, or constitute a default under, any of the terms, conditions or provisions of
any of Borrower’s organizational documents or any agreement or instrument to
which Borrower is a party or by which it is bound, or any order or decree
applicable to Borrower, or result in the creation or imposition of any lien on
any of Borrower’s assets or property (other than pursuant to the Loan
Documents).
     3.1.4 Litigation. There is no action, suit, proceeding or investigation
pending or, to Borrower’s knowledge, threatened against Borrower in any court or
by or before any other Governmental Authority that would have a Material Adverse
Effect.
     3.1.5 Agreements. Borrower is not in default with respect to any order or
decree of any court or any order, regulation or demand of any Governmental
Authority, which default might have a Material Adverse Effect.
     3.1.6 Consents. No consent, approval, authorization or order of any court
or Governmental Authority is required for the execution, delivery and
performance by Borrower of, or compliance by Borrower with, this Agreement or
the consummation of the transactions contemplated hereby, other than those which
have been obtained by Borrower.
     3.1.7 Title. Borrower has good, marketable and insurable fee simple title
to the real property comprising part of the Property and good title to the
balance of the Property owned by it, free and clear of all Liens whatsoever
except the Permitted Encumbrances. The Mortgage, when properly recorded in the
appropriate records, together with any UCC financing statements required to be
filed in connection therewith will create (a) a valid, first priority, perfected
lien on the Property, subject only to Permitted Encumbrances and (b) perfected
security interests in and to, and perfected collateral assignments of, all
personalty (including the Leases), all in

-28-

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

 

accordance with the terms thereof, in each case subject only to any Permitted
Encumbrances. Except as disclosed in the Title Insurance Policy, there are no
mechanics’, materialman’s or other similar liens or claims which have been filed
for work, labor or materials affecting the Property which are or may be liens
prior to, or equal or coordinate with, the lien of the Mortgage. None of the
Permitted Encumbrances, individually or in the aggregate, materially interfere
with the benefits of the security intended to be provided by the Mortgage and
this Loan Agreement, materially and adversely affect the value of the Property,
materially impair the use or operations of the Property or impair Borrower’s
ability to pay its obligations in a timely manner.
     3.1.8 No Plan Assets. As of the date hereof (a) Borrower is not an
“employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I
of ERISA, (b) none of the assets of Borrower constitutes “plan assets” of one or
more such plans within the meaning of 29 C.F.R. Section 2510.3-101, (c) Borrower
is not a “governmental plan” within the meaning of Section 3(32) of ERISA, and
(d) transactions by or with Borrower are not subject to any state statute
regulating investments of, or fiduciary obligations with respect to,
governmental plans.
     3.1.9 Compliance. Except as described in the Title Insurance Policy, the
Environmental Report or the Physical Condition Report delivered to Lender,
Borrower and the Property and the use thereof comply in all material respects
with all applicable Legal Requirements, including, without limitation, building
and zoning ordinances and codes, the noncompliance of which would have a
Material Adverse Effect. Borrower will comply with the Patriot Act and Borrower
is not in default or violation of any order, writ, injunction, decree or demand
of any Governmental Authority, the violation of which would have a Material
Adverse Effect. Borrower has not committed any act which may give any
Governmental Authority the right to cause Borrower to forfeit the Property or
any part thereof or any monies paid in performance of Borrower’s obligations
under any of the Loan Documents.
     3.1.10 Financial Information. All financial data, including, without
limitation, the statements of cash flow and income and operating expense, that
have been delivered by Borrower to Lender in respect of the Property (a) are
true, complete and correct in all material respects, (b) accurately represent
the financial condition of the Property in all material respects as of the date
of such reports, and (c) 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 reasonably likely to have a Material Adverse
Effect.
     3.1.11 Condemnation. No Condemnation or other proceeding has been commenced
or, to Borrower’s best knowledge, is contemplated with respect to all or any
portion of the Property or for the relocation of roadways providing access to
the Property.
     3.1.12 Utilities and Public Access. The Property has rights of access to
public ways and is served by water, sewer, sanitary sewer and storm drain
facilities adequate to service the Property for its intended uses.

-29-

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

 

     3.1.13 Separate Lots. The 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 the Property.
     3.1.14 Assessments. Borrower has not received any notice of any pending or
proposed special or other assessments for public improvements or otherwise
affecting the Property and there are no contemplated improvements to the
Property that may result in any such special or other assessments.
     3.1.15 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,
and Borrower has not asserted any right of rescission, set off, counterclaim or
defense with respect thereto.
     3.1.16 Assignment of Leases. The Assignment of Leases creates a valid
assignment of, or a valid security interest in, certain rights under the Leases,
subject only to a license granted to Borrower to exercise certain rights and to
perform certain obligations of the lessor under the Leases, as more particularly
set forth therein, including the right to operate the Property. No Person other
than Lender (and Borrower in its capacity as landlord under the Leases) has any
interest in or assignment of the Leases or any portion of the Rents due and
payable or to become due and payable thereunder.
     3.1.17 Insurance. Borrower has obtained and has delivered to Lender
original or certified copies of all of the Policies, with all premiums prepaid
thereunder, reflecting the insurance coverages, amounts and other requirements
set forth in this Agreement. No Person, including Borrower, has done, by act or
omission, anything which would impair the coverage of any of the Policies.
     3.1.18 Licenses. To the best of Borrower’s knowledge all material permits
and approvals, including, without limitation, certificates of occupancy required
by any Governmental Authority for the use, occupancy and operation of the
Property in the manner in which the Property is currently being used, occupied
and operated have been obtained and are in full force and effect.
     3.1.19 Flood Zone. The Improvements on the Property are located in an area
identified by the Federal Emergency Management Agency as Flood Zone A-7
(100 year flood area).
     3.1.20 Physical Condition. Except as set forth in the Property Condition
Report and the Environmental Report delivered to Lender, the Property,
including, without limitation, all buildings, improvements, parking facilities,
sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire
protection systems, electrical systems, equipment, elevators, exterior sidings
and doors, landscaping, irrigation systems and all structural components, are in
good condition, order and repair in all material respects; except as set forth
in the Property Condition Report and the Environmental Report, there exists no
structural or other material defects or damages in the Property, whether latent
(to Borrower’s knowledge) or

-30-

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

 

otherwise, and Borrower has not received notice from any insurance company or
bonding company of any defects or inadequacies in the Property, or any part
thereof, which would adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination or
threatened termination of any policy of insurance or bond.
     3.1.21 Boundaries. Except as set forth on the Survey, all of the
Improvements lie wholly within the boundaries and building restriction lines of
the Property, and no improvements on adjoining properties encroach upon the
Property, and no easements or other encumbrances affecting the Property encroach
upon any of the improvements, so as to affect the value or marketability of the
Property except those which are insured against by title insurance.
     3.1.22 Leases. Borrower represents and warrants to Lender with respect to
the Leases that: (a) the rent roll attached hereto as Schedule I is true,
complete and correct and the Property is not subject to any Leases other than
the Leases described in Schedule I, (b) except as set forth in the estoppel
letters to Lender or as set forth on Schedule I the Leases identified on
Schedule I are in full force and effect to Borrower’s knowledge and there are no
defaults thereunder by Borrower, or to the knowledge of Borrower, any Tenant,
(c) the copies of the Leases delivered to Lender are true and complete, and
there are no oral agreements with respect thereto, (d) except as otherwise
disclosed on Schedule I, no Rent (including security deposits) has been paid
more than one (1) month in advance of its due date, (e) except as otherwise
disclosed on Schedule I, any free rent or other allowances required to be given
by Borrower to any Tenant has already been received by such Tenant, (f) all
security deposits are being held in accordance with Legal Requirements,
(g) Borrower has no knowledge of any notice of termination or default with
respect to any Lease, (h) Borrower has not assigned or pledged any of the
Leases, the rents or any interests therein except to Lender, (i) no Tenant or
other party has an option or right of first refusal or offer, to purchase all or
any portion of the Property; and (j) except as otherwise disclosed on
Schedule I, no Tenant under any Lease that is not a Major Lease has the right to
terminate its Lease prior to expiration of the stated term of such Lease. For
purposes hereof, the term “Lease” shall not include any sublease or other
occupancy agreement to which Borrower is not a party.
     3.1.23 Filing and Recording Taxes. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid under applicable Legal Requirements in connection with the transfer of the
Property to Borrower have been paid or are being paid simultaneously herewith.
All mortgage, mortgage recording, stamp, intangible or other similar tax
required to be paid under applicable Legal Requirements in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Loan Documents, including, without limitation, the
Mortgage, have been paid or are being paid simultaneously herewith. All taxes
and governmental assessments due and owing in respect of the Property have been
paid, or an escrow of funds in an amount sufficient to cover such payments has
been established hereunder.
     3.1.24 Single Purpose. Borrower hereby represents and warrants to, and
covenants with, Lender that as of the date hereof and until such time as the
Debt shall be paid in full:

-31-

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

 

     (a) Borrower does not own and will not own any asset or property other than
(i) the Property, and (ii) incidental personal property necessary for the
ownership, operation, leasing, management and/or maintenance of the Property.
     (b) Borrower will not engage in any business other than the ownership,
financing, management, operation, leasing, maintenance and sale of the Property
and other activities incidental thereto (in each case in accordance with the
terms and provisions of this Agreement and the other Loan Documents).
     (c) Except for capital contributions or capital distributions (including
dividends) permitted under the terms and conditions of Borrower’s operating
agreement and properly reflected on the books and records of Borrower, Borrower
will not enter into any contract or agreement with any Affiliate of Borrower,
any constituent party of Borrower or any Affiliate of any constituent party,
except upon terms and conditions that are commercially reasonable and
substantially similar to those that would be available on an arms-length basis
with third parties other than any such party.
     (d) Borrower has not incurred and will not incur any Indebtedness other
than (i) the Debt, (ii) unsecured trade payables and operational debt not
evidenced by a note and (iii) Indebtedness incurred in the financing of
equipment and other personal property used on the Property; provided that
(A) any Indebtedness incurred pursuant to subclause (ii) shall be (x) not more
than sixty (60) days past the date incurred and (y) incurred in the ordinary
course of business, and (B) any Indebtedness incurred pursuant to subclauses
(ii) and (iii) in an aggregate amount not to exceed, at any one time, five
percent (5%) of the original principal balance of the Loan. No Indebtedness
other than the Debt may be secured (subordinate or pari passu) by the Property.
     (e) Borrower has not made and will not make any loans or advances to any
third party, and shall not acquire obligations or securities of its Affiliates
except as otherwise expressly permitted in this Agreement.
     (f) Borrower will not make any distributions so as to render Borrower
insolvent or cause Borrower to be unable to pay its debts and liabilities
(including, as applicable, shared personnel and overhead expenses) from its
assets as the same shall become due.
     (g) Borrower has done or caused to be done and will do all things necessary
to observe organizational formalities and preserve its existence, and Borrower
will not, nor will Borrower permit any constituent party to amend, modify or
otherwise change the partnership certificate, partnership agreement, articles of
incorporation and bylaws, operating agreement, trust or other organizational
documents of Borrower without the prior consent of Lender in any manner that (i)
violates the single purpose covenants set forth in this Section 3.1.24, or
(ii) amends, modifies or otherwise changes any provision thereof that by its
terms cannot be modified at any time when the Loan is outstanding or by its
terms cannot be modified without Lender’s consent.
     (h) Borrower will maintain all of its books, records, financial statements
and bank accounts separate from those of its Affiliates and any constituent
party. Borrower’s assets

-32-

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

 

will not be listed as assets on the financial statement of any other Person,
provided, however, that Borrower’s assets may be included in a consolidated
financial statement of its Affiliates (or its member’s Affiliates) provided that
(i) appropriate notation shall be made on such consolidated financial statements
to indicate the separateness of Borrower from such Affiliates and to indicate
that Borrower’s assets and credit are not available to satisfy the debts and
other obligations of such Affiliates or any other Person and (ii) such assets
shall be listed on Borrower’s own separate balance sheet. Borrower will file its
own tax returns, except to the extent that (i) Borrower is treated as a
disregarded entity for tax purposes and is not required to file tax returns
under applicable law, or (ii) Borrower is allowed to file consolidated tax
returns, in which case Borrower may include its taxable income, loss,
deductions, gains or other items as part of a consolidated tax return, provided
that each consolidated tax return will make clear that the assets of Borrower
are not available to satisfy the liabilities of any other Person or that the
assets of such Person are not available to satisfy the liabilities of Borrower.
Borrower shall observe organizational formalities with respect to its books,
records, resolutions and agreements.
     (i) Borrower will be, and at all times will hold itself out to the public
as, a legal entity separate and distinct from any other entity (including any
Affiliate of Borrower or any constituent party of Borrower), shall correct any
known misunderstanding regarding its status as a separate entity, shall conduct
business in its own name, shall not identify itself or any of its Affiliates as
a division or part of the other and shall maintain and utilize separate
stationery, invoices and checks bearing its own name.
     (j) Borrower will 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.
     (k) Neither Borrower nor any constituent party, to the fullest extent
permitted by law, will seek or effect the liquidation, termination, dissolution,
winding up, consolidation or merger, in whole or in part, of Borrower.
     (l) Borrower will not commingle the funds and other assets of Borrower with
those of any Affiliate or constituent party or any other Person, and will hold
all of its assets in its own name.
     (m) Borrower has and will maintain its assets in such a manner that it will
not be costly or difficult to segregate, ascertain or identify its individual
assets from those of any Affiliate or constituent party or any other Person.
     (n) Borrower will not guarantee or become obligated for the debts of any
other Person and does not and will not hold itself out to be responsible for or
have its credit available to satisfy the debts or obligations of any other
Person.
     (o) (i) If Borrower is a limited partnership or a limited liability company
(other than a single member Delaware limited liability company), each general
partner or managing member (each, an “SPC Party”) shall be a corporation or
limited liability company whose sole asset is its interest in Borrower and each
such SPC Party will at all times comply, and will cause Borrower to comply, with
each of the representations, warranties, and covenants

-33-

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

 

contained in this Section 3.1.24 as if such representation, warranty or covenant
was made directly by such SPC Party. Upon the withdrawal or the disassociation
of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC
Party whose organizational documents are substantially similar to those of such
SPC Party and deliver a new non-consolidation opinion to the Rating Agency or
Rating Agencies, as applicable, with respect to the new SPC Party and its equity
owners.
     (ii) If Borrower is a single member Delaware limited liability company,
Borrower shall have at least two (2) springing members, one of which, upon the
dissolution of such sole member or the withdrawal or the disassociation of the
sole member from Borrower, shall immediately become the sole member of Borrower.
            (p) SPC Party or Borrower shall at all times cause there to be at
least two duly appointed managers of SPC Party or Borrower (each, an
“Independent Manager”) who shall not have been at the time of such individual’s
appointment or at any time while serving as a manager of SPC Party or Borrower,
and may not have been at any time during the preceding five years (i) a
stockholder, director or manager (other than as an Independent Manager of SPC
Party or Borrower), officer, employee, trustee, partner, attorney or counsel of
Borrower or any Affiliate of Borrower, (ii) a customer, creditor, supplier or
other Person who derives any of its purchases or revenues from its activities
with Borrower or any Affiliate of Borrower, (iii) a Person or other entity
Controlling or under common Control with any such stockholder, partner,
customer, creditor, supplier or other Person, or (iv) a member of the immediate
family by blood or marriage of any such stockholder, director, officer,
employee, trustee, partner, customer, creditor, supplier or other Person. A
natural person who satisfies the foregoing definition other than subparagraph
(ii) shall not be disqualified from serving as an Independent Manager of the SPC
Party if such individual is an independent director or manager provided by a
nationally recognized company that provides professional independent directors
or managers and that also provides other corporate services in the ordinary
course of its business. A natural person who otherwise satisfies the foregoing
definition except for being the independent director or manager of a “special
purpose entity” affiliated with the Borrower that does not own a direct or
indirect equity interest in the Borrower or any co-borrower shall not be
disqualified from serving as an Independent Manager of the SPC Party or
Borrower, as applicable, if such individual is at the time of initial
appointment, or at any time while serving as an Independent Manager, provided by
a nationally recognized company that provides professional independent
directors/managers and other corporate services in the ordinary course of its
business. Notwithstanding the immediately preceding sentence, an Independent
Manager may not simultaneously serve as Independent Manager of Borrower and
independent manager or director of a special purpose entity that owns a direct
or indirect equity interest in Borrower or a direct or indirect interest in any
co-borrower with Borrower. As used in this paragraph, a “special purpose entity”
is an entity, whose organizational documents contain restrictions on its
activities and impose requirements intended to preserve its separateness that
are substantially similar to those of Borrower, and provide, inter alia, that it
(A) is organized for a limited purpose, (B) has restrictions on its ability to
incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets,
(C) may not file voluntarily a bankruptcy petition without the consent of the
Independent Manager and (D) shall conduct itself in accordance with certain
“separateness covenants,” including, but not limited to, the maintenance of its
books, records, bank accounts and assets separate from those of any other person
or entity.

-34-

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

 

     (q) Borrower shall not cause or permit the board of directors or managers
of any SPC Party and/or Borrower, as applicable, to 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 or under any organizational document
of Borrower or SPC Party (if any), as applicable, requires a vote of the board
of directors or board of managers of each SPC Party (if any) and Borrower, as
applicable, unless at the time of such action there shall be at least two
(2) members who are each an Independent Manager.
     (r) Borrower shall conduct its business so that the assumptions made with
respect to Borrower in the Insolvency Opinion shall be true and correct in all
respects. In connection with the foregoing, Borrower hereby covenants and agrees
that it will comply with or cause the compliance with, (i) all of the facts and
assumptions (whether regarding the Borrower or any other Affiliate) set forth in
the Insolvency Opinion except as otherwise provided in Article VIII herein,
(ii) all the representations, warranties and covenants in this Section 3.1.24,
and (iii) all the organizational documents of the Borrower and any SPC Party.
     (s) Borrower will not permit any Affiliate (other than a property manager
which is an Affiliate of Borrower or its members and then only in accordance
with the terms and provisions of the applicable Management Agreement and this
Agreement) or constituent party independent access to its bank accounts;
provided, however, that certain authorized employees of THI who perform
administrative duties with respect to the operation and management of bank
accounts and in such capacity identify themselves as Borrower’s agent, under the
supervision and direction of Borrower’s officers or members, may perform such
duties with respect to Borrower’s bank accounts.
     (t) Borrower shall pay the salaries of its own employees (if any) from its
own funds and maintain a sufficient number of employees (if any) in light of its
contemplated business operations.
     (u) Borrower shall not form, acquire or hold any subsidiary (whether
corporate, partnership, limited liability, company or others) or hold any equity
interest in any other entity.
     (v) Borrower hereby represents and warrants that since the date of its
formation to the date of its Amended and Restated Operating Agreement on
April 30, 1999, the Borrower conducted no business other than preparing to
acquire or acquiring the Property.
     (w) Borrower has, at all times, complied with the provisions of its
organizational documents then in effect in all respects material to the
separateness of Borrower, including all of those provisions set forth in
Section 11 of it’s Operating Agreement dated April 30, 1999.
     3.1.25 Tax Filings. To the extent required, Borrower has filed (or has
obtained effective extensions for filing) all federal, state and local tax
returns required to be filed and have paid or made adequate provision for the
payment of all federal, state and local taxes, charges and assessments payable
by Borrower. Borrower believes that its tax returns (if any) properly reflect
the income and taxes of Borrower for the periods covered thereby, subject only
to reasonable

-35-

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

 

adjustments required by the Internal Revenue Service or other applicable tax
authority upon audit.
     3.1.26 Solvency. Borrower (a) has not entered into the transaction or any
Loan Document with the actual intent to hinder, delay, or defraud any creditor
and (b) received reasonably equivalent value in exchange for its obligations
under the Loan Documents. Giving effect to the Loan, the fair saleable value of
Borrower’s assets exceeds and will, immediately following the making of the
Loan, exceed Borrower’s total liabilities, including, without limitation,
subordinated, unliquidated, disputed and contingent liabilities. The fair
saleable value of Borrower’s assets is and will, immediately following the
making of the Loan, be greater than Borrower’s probable liabilities, including
the maximum amount of its contingent liabilities on its debts as such debts
become absolute and matured. Borrower’s assets do not and, immediately following
the making of the Loan will not, constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted. Borrower does not
intend to, and does not believe that it will, incur Indebtedness and liabilities
(including contingent liabilities and other commitments) beyond its ability to
pay such Indebtedness and liabilities as they mature (taking into account the
timing and amounts of cash to be received by Borrower and the amounts to be
payable on or in respect of obligations of Borrower).
     3.1.27 Federal Reserve Regulations. 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 inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this
Agreement or the other Loan Documents.
     3.1.28 Organizational Chart. The organizational chart attached as Schedule
III hereto, relating to Borrower and certain Affiliates and other parties, is
true, complete and correct on and as of the date hereof.
     3.1.29 Bank Holding Company. Borrower is not a “bank holding company” or a
direct or indirect subsidiary of a “bank holding company” as defined in the Bank
Holding Company Act of 1956, as amended, and Regulation Y thereunder of the
Board of Governors of the Federal Reserve System.
     3.1.30 No Other Debt. Borrower has not borrowed or received debt financing
(other than permitted pursuant to this Agreement) that has not been heretofore
repaid or refinanced in full.
     3.1.31 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.

-36-

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

 

     3.1.32 Access/Utilities. All public utilities necessary to the continued
use and enjoyment of the Property as presently used and enjoyed are located in
the public right-of-way abutting the Property. All roads necessary for the full
utilization of the Property for its current purpose have been completed and
dedicated to public use and accepted by all governmental authorities or are the
subject of access easements for the benefit of the Property.
     3.1.33 No Bankruptcy Filing. Borrower is not contemplating either the
filing of a petition by it under any state or federal bankruptcy or insolvency
laws or the liquidation of its assets or property, and Borrower does not have
any knowledge of any Person contemplating the filing of any such petition
against it.
     3.1.34 Full and Accurate Disclosure. To the best of Borrower’s knowledge,
no information contained in this Agreement, the other Loan Documents, or any
written statement furnished by or on behalf of Borrower pursuant to the terms of
this Agreement contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.
There is no fact or circumstance presently known to Borrower which has not been
disclosed to Lender and which will have a Material Adverse Effect.
     3.1.35 Foreign Person. Borrower is not a “foreign person” within the
meaning of Section 1445(f)(3) of the Code.
     3.1.36 No Change in Facts or Circumstances; Disclosure. To the best of
Borrower’s knowledge, there has been no material adverse change in any
condition, fact, circumstance or event that would make the financial statements,
rent rolls, reports, certificates or other documents submitted in connection
with the Loan (taken as a whole) inaccurate, incomplete or otherwise misleading
in any material respect or that otherwise materially and adversely affects the
business operations or the financial condition of Borrower or the Property.
     3.1.37 Management Agreement. All of the representations and warranties with
respect to the Management Agreement set forth in Article VII of this Agreement
are true and correct in all respects.
     3.1.38 Perfection of Accounts. Borrower hereby represents and warrants to
Lender that:
     (a) This Agreement, together with the other Loan Documents, create a valid
and continuing security interest (as defined in the Uniform Commercial Code) in
the Accounts (as defined in the Cash Management Agreement) and the Clearing
Account in favor of Lender, which security interest is prior to all other Liens,
and is enforceable as such against creditors of and purchasers from Borrower.
Other than in connection with the Loan Documents, Borrower has not sold or
otherwise conveyed the Accounts or the Clearing Account;
     (b) The Accounts and the Clearing Account constitute “deposit accounts” and
the Accounts constitute “securities accounts” within the meaning of the Uniform
Commercial Code;

-37-

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

 

     (c) Pursuant and subject to the terms hereof and the Clearing Agreement,
Clearing Account Bank has agreed to comply with all instructions originated by
Lender, without further consent by Borrower, directing disposition of the
Clearing Account and all sums at any time held, deposited or invested therein,
together with any interest or other earnings thereon, and all proceeds thereof
(including proceeds of sales and other dispositions), whether accounts, general
intangibles, chattel paper, deposit accounts, instruments, documents or
securities; and
     (d) The Accounts and the Clearing Account are not in the name of any Person
other than Borrower, as pledgor, or Lender, as pledgee. Borrower has not
consented to Clearing Account Bank complying with instructions with respect to
the Clearing Account from any Person other than Lender.
     3.1.39 Condominium. Each individual Condominium Unit constituting a part of
the Property is a unit in a validly formed and existing condominium complying
with all applicable Legal Requirements governing the formation of a valid
condominium regime. The Condominium Documents are in full force and effect and
there are no defaults thereunder by any party and there are no conditions that,
with the passage of time or the giving of notice, or both, would constitute a
default thereunder. Borrower owns all of the Condominium Units.
     3.1.40 Patriot Act. (a) None of Borrower or any of its Affiliates is a
Prohibited Person.
     (b) Borrower covenants and agrees to deliver to Lender any certification or
other evidence requested from time to time by Lender in its reasonable
discretion, confirming Borrower’s compliance with the Patriot Act.
     3.1.41 East River Franchise and Chilled Water Agreements. The East River
Franchise Agreement and the Chilled Water Agreement are in full force and effect
and, to the best of Borrower’s knowledge, (a) there are no defaults thereunder
by Borrower and (b) there are no monetary defaults thereunder by any party.
     Section 3.2 Survival of Representations. The representations and warranties
set forth in Section 3.1 shall survive for so long as any amount remains payable
to Lender under this Agreement or any of the other Loan Documents.
ARTICLE IV
BORROWER COVENANTS
     Section 4.1 Borrower Affirmative Covenants. Borrower hereby covenants and
agrees with Lender that:
     4.1.1 Existence; Compliance with Legal Requirements. 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
with all Legal Requirements applicable to it and the Property to the extent
failure of same would result in a Material Adverse Effect. Borrower will not
commit any act which may give any Governmental Authority the right

-38-

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

 

to cause Borrower to forfeit the Property or any part thereof or any monies paid
in performance of Borrower’s obligations under any of the Loan Documents.
     4.1.2 Taxes and Other Charges. Borrower shall pay all Taxes and Other
Charges now or hereafter levied or assessed or imposed against the Property or
any part thereof as the same become due and payable; 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 6.2 hereof. Borrower
shall furnish to Lender receipts for the payment of the Taxes and the Other
Charges within five (5) Business Days after payment by Borrower provided such
payment shall in any event be made prior to the date such Taxes and/or Other
Charges shall become delinquent; 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 6.2 hereof. Borrower shall
not permit or suffer and shall promptly discharge any lien or charge against the
Property. Notwithstanding the foregoing, after prior notice to Lender, Borrower,
at its own expense, may contest by appropriate legal proceeding, conducted in
good faith and with due diligence, the amount or validity of any Taxes or Other
Charges, provided that (a) no Event of Default has occurred and remains uncured;
(b) such proceeding shall be permitted under and be conducted in accordance with
all applicable statutes, laws and ordinances; (c) neither the Property nor any
part thereof or interest therein will be in danger of being sold, forfeited,
terminated, canceled or lost; (d) Borrower shall promptly upon final
determination thereof pay the amount of any such Taxes or Other Charges,
together with all costs, interest and penalties which may be payable in
connection therewith; (e) such proceeding shall suspend the collection of Taxes
or Other Charges from the Property; (f) Borrower shall, if requested by Lender,
deposit with Lender cash, or other security as may be reasonably approved by
Lender, in an amount equal to one hundred twenty-five percent (125%) of the
contested amount, to insure the payment of any such Taxes or Other Charges,
together with all interest and penalties thereon; and (g) such contest by
Borrower is not in violation of Leases or Operating Agreements. Lender may pay
over any such cash or other security held by Lender to the claimant entitled
thereto at any time when, in the good faith judgment of Lender, the entitlement
of such claimant is established.
     4.1.3 Litigation. Borrower shall give prompt notice to Lender of any
litigation or governmental proceedings pending or threatened against Borrower
which if adversely determined would have a Material Adverse Effect.
     4.1.4 Access to Property. Borrower shall permit agents, representatives and
employees of Lender to inspect the Property or any part thereof at reasonable
hours upon reasonable advance notice, subject to the rights of Tenants under
their respective Leases.
     4.1.5 Reserved.
     4.1.6 Financial Reporting.
     (a) GAAP. Borrower shall keep and maintain or shall cause to be kept and
maintained, in accordance with GAAP proper and accurate books, records and
accounts reflecting all of the financial affairs of Borrower and all items of
income and expense in connection with the operation on an individual basis of
the Property. All financial statements delivered to Lender in accordance with
this Section 4.1.6 shall be prepared in accordance with

-39-

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

 

GAAP in the United States of America as in effect on the date so indicated and
consistently applied (or such other accounting basis reasonably acceptable for
Lender).
     (b) Monthly Reports. Prior to a Securitization and during any Cash Sweep
Period, within forty-five (45) days after the end of each calendar month (except
for the months of January and the last month of any fiscal quarter), Borrower
shall furnish to Lender a current balance sheet, a detailed operating statement
(showing monthly activity and year to date) and a rent roll for the subject
month.
     (c) Quarterly Reports. Within sixty (60) days after the end of each fiscal
quarter (except during the last fiscal quarter of each Fiscal Year), Borrower
shall furnish to Lender a detailed operating statement (showing quarterly
activity and year to date) stating Gross Income from Operations, Actual
Operating Expenses, Actual Net Cash Flow for such calendar quarter and a balance
sheet for such quarter for Borrower. Borrower’s quarterly statements shall be
accompanied by (i) a comparison of the budgeted income and expenses and the
actual income and expenses for such calendar quarter, (ii) a calculation
reflecting the Actual Debt Service Coverage Ratio as of the last day of such
quarter for such quarter; (iii) a current rent roll for the Property; and
(iv) an Officer’s Certificate stating that each such quarterly statement
presents fairly the financial condition and the results of operations of the
Borrower and the Property in all material respects and has been prepared in
accordance with GAAP.
     (d) Annual Reports. Within one hundred twenty (120) days after the end of
each calendar year of Borrower’s operation of the Property, Borrower will
furnish to Lender a complete copy of Borrower’s annual financial statements
audited by a “big four” accounting firm or other independent certified public
accountant reasonably acceptable to Lender in accordance with GAAP for such
calendar year which financial statements shall contain a balance sheet, a
detailed operating statement stating Gross Income from Operations, Actual
Operating Expenses and Actual Net Cash Flow for the Property. Borrower’s annual
financial statements shall be accompanied by (i) a comparison of the budgeted
income and expenses and the actual income and expenses for the prior calendar
year, (ii) an Officer’s Certificate stating that each such annual financial
statement presents fairly the financial condition and the results of operations
of Borrower and the Property in all material respects and has been prepared in
accordance with GAAP, and (iii) an unqualified opinion of a “big four”
accounting firm or other independent certified public accountant reasonably
acceptable to Lender.
     (e) Certification; Supporting Documentation. Each such financial statement
shall be in scope and detail reasonably satisfactory to Lender and certified by
an officer of Borrower.
     (f) Additional Reports. Borrower shall deliver to Lender as soon as
reasonably available but in no event later than thirty (30) days after such
items become available to Borrower in final form:
     (i) if requested by Lender, copies of any final engineering or
environmental reports prepared for Borrower with respect to the Property;

-40-

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

 

     (ii) a copy of any notice received by Borrower from any environmental
authority having jurisdiction over the Property with respect to a condition
existing or alleged to exist or emanate from or at the Property; and
     (iii) if requested by Lender, a summary report listing only Tenants and
square footage occupied by such Tenants.
     (g) Access. Lender shall have the right from time to time at all times
during normal business hours, upon reasonable prior written notice to Borrower,
to examine such books, records and accounts at the office of Borrower or other
Person maintaining such books, records and accounts and to make such copies or
extracts thereof as Lender shall desire. After the occurrence and during the
continuance of an Event of Default, Borrower shall pay any costs and expenses
incurred by Lender to examine Borrower’s accounting records with respect to the
Property, as Lender shall determine to be necessary or appropriate in the
protection of Lender’s interest.
     (h) Format of Delivery. Any reports, statements or other information
required to be delivered under this Agreement shall be delivered (i) in paper
form, (ii) if requested by Lender and if within the capabilities of Borrower’s
data system without change or modification thereto, on a diskette and (iii) if
requested by Lender and within the capabilities of Borrower’s data systems
without change or modification thereto, in electronic form reasonably acceptable
to Lender.
     (i) Annual Budget. Borrower shall submit the Annual Budget to Lender not
later than thirty (30) days prior to the commencement of each Fiscal Year.
During a Cash Sweep Period, the Annual Budget, shall be subject to Lender’s
written approval, such approval not to be unreasonably withheld, delayed or
qualified (each such Annual Budget, an “Approved Annual Budget”). In the event
that Lender objects to a proposed Annual Budget submitted by Borrower, Lender
shall advise Borrower of such 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 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 approves the Annual Budget. Until such time that Lender
approves a proposed Annual Budget, the most recently Approved Annual Budget
shall apply; provided that, such Approved Annual Budget shall be adjusted to
reflect actual increases in real estate taxes, insurance premiums, utilities
expenses, labor rates and similar expenses that are not subject to Borrower’s
control.
     (j) Other Required Information. Borrower shall furnish to Lender, within
five (5) Business Days after request (or as soon thereafter as may be reasonably
possible), such further detailed information with respect to the operation of
the Property and the financial affairs of Borrower as may be reasonably
requested by Lender, including, without limitation, a comparison of the budgeted
income and expenses and the actual income and expenses for a quarter and year to
date for the Property, together with a detailed explanation of any variances
exceeding the greater of (i) $100,000, and (ii) five percent (5%) between
budgeted and actual

-41-

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

 

amounts for such period and year to date, as well as prompt notice (containing
reasonable detail) of any material change in the financial or physical condition
of the Property, as reasonably determined by Borrower including, but not limited
to, any lease for greater than 200,000 square feet.
     4.1.7 Title to the Property. Borrower will warrant and defend the validity
and priority of the Liens of the Mortgage and the Assignment of Leases on the
Property against the claims of all Persons whomsoever, subject only to Permitted
Encumbrances.
     4.1.8 Estoppel Statement. (a) After request by Lender, Borrower shall
within ten (10) Business Days furnish Lender with a statement, duly acknowledged
and certified, stating (i) the unpaid principal amount of the Note, (ii) the
Interest Rate of the Note, (iii) the date installments of interest and/or
principal were last paid, (iv) any known offsets or defenses to the payment of
the Debt, if any, and (v) that this Agreement and the other Loan Documents have
not been modified or if modified, giving particulars of such modification.
     (b) After request by Borrower, but not more than two (2) times in any
calendar year, Lender shall within ten (10) Business Days furnish Borrower with
a statement, duly acknowledged and certified, stating (i) the unpaid principal
amount of the Note, (ii) the Interest Rate of the Note, (iii) the date
installments of interest and/or principal were last paid and (iv) whether or not
Lender has sent any notice of default under the Loan Documents which remains
uncured in the opinion of Lender.
     (c) Borrower shall use commercially reasonable efforts to obtain and
deliver to Lender, upon request, an estoppel certificate from each Tenant under
any Lease; provided that such certificate may be in the form required under such
Lease or in the form delivered to Lender in connection with the closing of the
Loan; provided, further, that Borrower shall not be required to deliver such
certificates more frequently than two (2) times in any calendar year.
     4.1.9 Leases. (a) Except as otherwise provided in this Agreement to the
contrary, all Leases executed after the date hereof shall in all respects be
approved by Lender and shall be on a standard Lease form previously approved by
Lender with no material modifications (the “Lease Form”) (except as approved by
Lender not to be unreasonably withheld; provided, that, Lender shall not
unreasonably withhold its consent to changes to the Lease Form). Such Lease Form
shall provide that (i) the Lease is subordinate to the Mortgage, and (ii) the
tenant shall attorn to Lender following an Event of Default, provided, that the
Lender has delivered to the tenant a commercially reasonably form of
non-disturbance and attornment agreement. To the extent required by applicable
law, Borrower shall hold, in trust, all tenant security deposits in a segregated
account and shall not commingle any such funds with any other funds of Borrower.
Within ten (10) Business Days after Lender’s request, Borrower shall furnish to
Lender a statement of all tenant security deposits, and copies of all Leases not
previously delivered to Lender, certified by Borrower as being true and correct.
Notwithstanding anything contained in the Loan Documents, Lender’s approval
shall not be required for future Leases or Lease modifications or extensions if
the following conditions are satisfied:
     (A) no Event of Default has occurred and is continuing;

-42-

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

 

     (B) the Lease is in effect as of the date of this Agreement or is on the
Lease Form with no modifications, except for commercially reasonable changes
agreed to in the ordinary course of Borrower’s business, provided, that, in no
event shall there be any material modifications to the subordination,
attornment, estoppel clauses (other than to provide for the execution of a
subordination, non-disturbance and attornment agreement by Lender in the form
attached hereto as Schedule IV) or “so-called” exculpation clauses that limit
the landlord’s liability to the Landlord’s interest in the Property (including
the proceeds thereof) without the prior written consent of Lender, which consent
will not be unreasonably withheld;
     (C) with respect to the modifications of any Lease, such Lease and such
modification(s) (w) is entered into in the ordinary course of business,
consistent with prudent property management practices, (x) would not cause such
Lease to constitute a Major Lease (subject to clause (z) below), (y) would not
have a Material Adverse Effect and (z) if the Lease is a Major Lease, such
modification constitutes a Non-Material Lease Modification;
     (D) the Lease does not conflict with any Operating Agreements affecting the
Property or any other Lease for space in the Property;
     (E) the Lease is not a Major Lease;
     (F) the Lease shall provide for rental rates and landlord concessions
comparable to existing local market rates and shall be an arm’s-length
transaction, provided, that in no event shall the Lease be with an Affiliate of
Borrower;
     (G) the Lease shall not contain any options for renewal or expansion by the
tenant at rental rates which are below reasonable comparable market levels for
renewals or expansions at the time the Lease is executed;
     (H) the Lease shall be to a tenant which Borrower, in its professional and
commercially reasonable judgment, has determined is creditworthy taking into
account the obligations of the landlord and the tenant thereunder; and
     (I) the Lease is for a term of not more than fifteen (15) years (exclusive
of renewal options which together with the initial lease term shall not exceed
twenty (20) years).
     Lender shall execute and deliver a Subordination Non-Disturbance and
Attornment Agreement in the form annexed hereto as Schedule IV to Tenants under
any future Lease demising in excess of 10,000 square feet promptly upon request
with such commercially reasonable changes as may be requested by Tenants, from
time to time, and which are reasonably acceptable to Lender.
     (b) Borrower (i) shall perform the obligations which Borrower is required
to perform under the Leases in a commercially reasonable manner; (ii) shall
enforce the obligations to be performed by the tenants in a commercially
reasonable manner; (iii) shall promptly furnish

-43-

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

 

to Lender any notice of material default or termination received by Borrower
from any tenant whose Lease demises one floor or more at the Property, and any
notice of material default or termination given by Borrower to any tenant whose
Lease demises one floor or more at the Property; (iv) shall not collect any
rents for more than thirty (30) days in advance of the time when the same shall
become due, except for bona fide security deposits; (v) shall not enter into any
ground lease of any part of the Property (except for the Ground Lease);
(vi) shall not further assign or encumber any Lease; (vii) shall not, except
with Lender’s prior written consent (which consent will not be unreasonably
withheld and it shall be deemed reasonable for Lender to withhold its consent to
any such Lease cancellation or acceptance of termination or surrender if after
giving effect thereof, such cancellation, surrender or termination would cause
an NOI Trigger Event to occur), cancel or accept surrender or termination of
(A) any Lease other than a Major Lease unless such cancellation, termination or
acceptance of surrender is entered into in the ordinary course of business,
consistent with prudent property management practices or (B) any Major Lease,
provided, that, the Borrower shall be permitted to accept such cancellation,
surrender or termination of a Major Lease if such action is being taken in
accordance with the express provisions of such Major Lease which is in existence
as of the date of this Agreement, or has been approved by the Lender (such
approval not to be unreasonably withheld) in accordance with the terms hereof
or; provided, that, if no Cash Sweep Period is then in effect, such termination
or surrender is contemporaneous with the releasing of the space demised under
such Major Lease (or applicable portion thereof) at a rental rate equal to or
greater than such Major Lease; (viii) shall not, except with Lender’s prior
written consent (such consent not to be unreasonably withheld), modify or amend
any Lease unless such modification or amendment complies with the provisions of
Section 4.1.9(a)(C) hereof, (ix) shall deposit any Major Lease termination,
default or cancellation fees with Lender, to be held by Lender as Rollover
Funds; and (ix) shall not enter into any Major Lease without the prior written
consent of Lender (such consent not to be unreasonably withheld). Any action in
violation of clauses (v), (vi), (vii), (viii) or (ix) of this Section 4.1.9(b)
shall be void as against Lender at the election of Lender.
     (c) Lender shall respond to a request for Lender’s approval to any Lease or
other matter under Section 4.1.9 hereof delivered, if applicable, together with
copies of the applicable lease documents, and, if applicable, a budget setting
forth the applicable tenant improvement costs and leasing commissions for which
Lender’s consent is required (i) within ten (10) Business Days after Borrower’s
written request therefore, or (ii) within five (5) Business Days after
Borrower’s written request therefore, provided, that, prior to such five
(5) Business Day period Lender has approved all of the economic material terms
of such Lease as set forth in a written summary thereof provided by Borrower to
Lender. If the correspondence from Borrower requesting such approval contains
the following statement at the top of the first page thereof in capitalized,
bold faced, 14 point type stating that “IF YOU FAIL TO RESPOND TO OR TO
EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN TEN (10) or FIVE
(5) BUSINESS DAYS (as the case may be), YOUR APPROVAL SHALL BE DEEMED GIVEN,”
and if Lender shall fail to respond to or to expressly deny such request for
approval in writing (stating in reasonable detail the reason for such
disapproval) within ten (10) or five (5) Business Days (as the case may be)
after receipt of Borrower’s written request then Lender’s consent to the action
or matter in question with respect to such Lease shall be deemed given. Borrower
shall also provide any other information reasonably requested by Lender in
writing in connection with such Lease prior to the expiration of such ten
(10) or five (5) Business Day (as the case may be) period in order to adequately
review the same.

-44-

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

 

     4.1.10 Alterations. (a) Lender’s prior approval shall be required in
connection with any alterations to any Improvements (a) that may have a Material
Adverse Effect or (b) the cost of which (including any related alteration,
improvement or replacement) is reasonably anticipated to exceed the Alteration
Threshold, which approval shall not be unreasonably withheld or delayed or
qualified. Notwithstanding the foregoing, Lender’s consent shall not be required
in connection with any alterations in connection with (i) tenant improvement
work performed pursuant to the terms of any Lease executed on or before the date
hereof, (ii) tenant improvement work performed pursuant to the terms and
provisions of a Lease entered into by Borrower in accordance with the terms of
this Agreement, or (iii) alterations performed in connection with the
restoration of the Property after the occurrence of a casualty or condemnation
in accordance with the terms and provisions of this Agreement. If (x) the total
unpaid amounts incurred and to be incurred with respect to any alterations
(other than amounts to be paid or reimbursed by tenants under Leases) that
require the consent of Lender under this Section 4.1.10 (each such alteration is
called a “Material Alteration”) to the Improvements shall at any time exceed the
Alteration Threshold and such Material Alterations are not of the type intended
to be reimbursed out of the Rollover Funds or the Capital Expenditure Funds or
(y) if the Material Alterations are of the type intended to be reimbursed from
Rollover Funds or Capital Expenditure Funds, as applicable, and 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 and the amount of
Rollover Funds and/or Capital Expenditures Funds, as the case may be, on deposit
with Lender for the reimbursement of the cost of such alterations, then, to the
extent such cost of the Material Alterations exceeds the amount of the Reserve
Funds available, Borrower shall promptly deliver to Lender at Borrower’s option,
either (i) as security for the payment of such amounts and as additional
security for Borrower’s obligations under the Loan Documents any of the
following: (A) cash, (B) Letters of Credit, (C) U.S. Obligations, (D) other
securities reasonably acceptable to Lender, provided that Lender shall have
received a Rating Agency Confirmation as to the form and issuer of same, or
(E) a completion bond issued by a Person having a rating by S&P of not less than
A-1+ if the term of such bond is no longer than three (3) months or, if such
term is in excess of three (3) months, issued by a Person having a rating that
is reasonably acceptable to Lender and that the applicable Rating Agency or
Rating Agencies have confirmed in writing will not, in and of itself, result in
a downgrade, withdrawal or qualification of the then current ratings assigned to
the Securities issued in connection with a Securitization, 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 Material Alterations (other than such amounts
to be paid or reimbursed by tenants under the Leases) over the Alteration
Threshold, less the amount of the Rollover Funds and the Capital Expenditure
Funds to the extent that the alterations are of the type intended to be
reimbursed from Rollover Funds or Capital Expenditure Reserve Funds, as
applicable or (ii) cause an Acceptable Indemnitor to execute and deliver to
Lender an Alteration Indemnity in the form attached hereto as Schedule VIII with
respect to such Material Alterations, such Alteration Indemnity to be in an
amount equal to the excess of the total unpaid amounts with respect to such
Material Alterations to the Improvements (other than such amounts to be paid or
reimbursed by tenants under the Leases) over the Alteration Threshold and the
amount of Rollover Funds and Capital Expenditure Funds, as the case may be, on
deposit with Lender for such Material Alterations; the Alteration Indemnity will
be accompanied by a “bring down” of the Nonconsolidation Opinion. The amount
indemnified

-45-

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

 

under the Alteration Indemnity and the amount guaranteed under any Qualified
Guaranty shall not at any time ,in the aggregate, exceed $40,000,000.00.
     (b) With respect to any Material Alterations, Borrower shall deliver to
Lender via a nationally recognized overnight courier for overnight delivery its
request for approval of such proposed alterations (the “Proposed Alterations”),
together with all materials, plans, specifications, documents and any other
information (and in such detail) as reasonably requested by Lender in order to
evaluate such Proposed Alterations (each, an “Alteration Request”). Each
Alteration Request shall contain a legend on the top of the cover page thereof,
which legend shall be in boldface type and in a font size of not less than 20
points, stating that Lender’s failure to respond to the Alteration Request
within twenty (20) Business Days shall be deemed to be an approval by Lender of
the Proposed Alterations set forth therein. In the event that Lender fails to
notify Borrower within twenty (20) Business Days of Lender’s receipt of an
Alteration Request that Lender (i) requires additional information or
documentation to evaluate the Proposed Alterations, (ii) requires modifications,
amendments or other changes to be made to the plans and specifications with
respect to such Proposed Alterations as a condition to the approval thereof,
(iii) consents to such Proposed Alterations, or (iv) withholds its consent to
such Proposed Alterations (each of items (i) through (iii) above, an “Alteration
Response”), Borrower shall send to Lender a written notice (an “Alteration Final
Notice”) via a nationally recognized overnight courier for overnight delivery,
which notice shall contain a legend on the top of the cover page thereof, which
legend shall be capitalized, bold faced, not less than 14 points type, stating
that “IF YOU FAIL TO RESPOND TO OR TO EXPRESSLY DENY THIS REQUEST FOR APPROVAL
IN WRITING WITHIN TWENTY (20) BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED
GIVEN.” In the event that Lender fails to provide an Alteration Response to
Borrower within twenty (20) Business Days of Lender’s receipt of the Alteration
Final Notice, Lender shall be deemed to have approved of such Proposed
Alterations; provided, that, with respect to any Proposed Alterations which are
approved or deemed approved by Lender, such approval or deemed approval shall
not extend to any material changes or modifications to the plans and
specifications or other materials submitted to Lender in the Alteration Request,
and Borrower shall be required to submit to Lender any such material changes or
modifications for approval in accordance with this Section 4.1.10; provided,
further, that, in the case of clauses (i) and (ii) above, Lender shall have a
period of time to respond to Borrower, as provided herein, equal to the greater
of (A) the unexpired portion of the period of time in which Lender is otherwise
entitled to provide an Alteration Response to Borrower as set forth above, and
(B) ten (10) Business Days after receipt by Lender of any requested additional
information or documentation, or any modification, amendment or other change to
the plans and specifications for any Proposed Alteration requested by Lender,
and the failure by Lender to so respond within such time period shall constitute
deemed approval by Lender. In the event Lender shall withhold its consent to any
Proposed Alteration, Lender shall provide Borrower with a reasonably detailed
description of the reasons therefor.
     4.1.11 Material Agreements. Borrower shall (a) promptly perform and/or
observe all of the material covenants and agreements required to be performed
and observed by it under each Material Agreement and Operating Agreement to
which it is a party, and do all things necessary to preserve and to keep
unimpaired its rights thereunder, (b) promptly notify Lender in writing of the
giving of any notice of any default by any party under any Material Agreement
and Operating Agreement of which it is aware and (c) promptly enforce the

-46-

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

 

performance and observance of all of the material covenants and agreements
required to be performed and/or observed by the other party under each Material
Agreement and Operating Agreement to which it is a party in a commercially
reasonable manner.
     4.1.12 Performance by Borrower. Borrower shall in a timely manner observe,
perform and fulfill each and every covenant, term and provision of each Loan
Document executed and delivered by Borrower, and shall not enter into or
otherwise suffer or permit any amendment, waiver, supplement, termination or
other modification of any Loan Document executed and delivered by Borrower
without the prior consent of Lender.
     4.1.13 Costs of Enforcement/Remedying Defaults. In the event (a) that the
Mortgage is foreclosed in whole or in part or the Note or any other Loan
Document is put into the hands of an attorney for collection, suit, action or
foreclosure, (b) the foreclosure of any Lien or Mortgage prior to or subsequent
to the Mortgage in which proceeding Lender is made a party, (c) of the
bankruptcy, insolvency, rehabilitation or other similar proceeding in respect of
Borrower or any Principal or an assignment by Borrower or any Principal for the
benefit of its creditors, or (d) Lender shall remedy or attempt to remedy any
Event of Default hereunder, Borrower shall be chargeable with and agrees to pay
all costs actually incurred by Lender as a result thereof, including costs of
collection and defense (including reasonable attorneys’, experts’, consultants’
and witnesses’ fees and disbursements) in connection therewith and in connection
with any appellate proceeding or post-judgment action involved therein, which
shall be due and payable on demand, together with interest thereon from the date
incurred by Lender at the Default Rate, and together with all required service
or use taxes.
     4.1.14 Business and Operations. Borrower will continue to engage in the
businesses currently conducted by it as and to the extent the same are necessary
for the ownership and leasing of the Property. Borrower will qualify to do
business and will remain in good standing under the laws of each jurisdiction as
and to the extent the same are required for the ownership and leasing of the
related Property. Borrower shall at all times cause the Property to be
maintained as an office property with related ancillary uses.
     4.1.15 Intentionally Omitted.
     4.1.16 Handicapped Access. (a) Borrower covenants and agrees that the
Property shall at all times comply in all material respects, to the extent
applicable, with the requirements of the Americans with Disabilities Act of
1990, all state and local laws and ordinances related to handicapped access and
all rules, regulations, and orders issued pursuant thereto including, without
limitation, the Americans with Disabilities Act Accessibility Guidelines for
Buildings and Facilities (collectively, “Access Laws”).
     (b) Notwithstanding any provisions set forth herein or in any other
document regarding Lender’s approval of alterations of the Property,
(i) Borrower shall make and shall require all Tenants to make, any alterations
to the Property in material compliance with all applicable Access Laws and
(ii) Lender may condition any approval of alterations hereunder upon receipt of
a certificate of Access Law compliance from an architect, engineer, or other
person acceptable to Lender.

-47-

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

 

     (c) Borrower covenants and agrees to give prompt notice to Lender of the
commencement of any proceedings or investigations which relate to compliance
with applicable Access Laws.
     4.1.17 Notice of Certain Events. Borrower shall promptly notify Lender of
(a) any Default or Event of Default, together with a detailed statement of the
steps being taken to cure such Default or Event of Default; (b) any notice of
default received by Borrower under other material obligations relating to the
Property or otherwise material to Borrower’s business; and (c) any pending
legal, judicial or regulatory proceedings, including any dispute between
Borrower and any Governmental Authority, affecting Borrower or the Property,
which, if adversely determined, would have a Material Adverse Effect.
     4.1.18 Further Assurances. Borrower shall promptly (a) cure any defects in
the execution and delivery of the Loan Documents, (b) execute and deliver, or
cause to be executed and delivered, all such other documents, agreements,
certificates, assignments and other writings as Lender may reasonably request to
further evidence and more fully describe the collateral for the Loan, to correct
any omissions in the Loan Documents, to perfect, protect or preserve the
collateral at any time securing or intended to secure the obligations of
Borrower under the Loan Documents and any Liens created under any of the Loan
Documents, or to make any recordings, file any notices, or obtain any consents,
as may be necessary or appropriate in connection therewith and (c) do and
execute all and such further lawful and reasonable acts, conveyances and
assurances for the better and more effective carrying out of the intents and
purposes of this Agreement and the other Loan Documents, as Lender shall
reasonably require from time to time. Borrower grants 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 under the Loan
Documents, at law and in equity, provided, that, the Lender shall not act under
such power of attorney unless Borrower has failed to act within five (5) days of
Lender’s written request for action by Borrower.
     4.1.19 Taxes on Security. Borrower shall pay all taxes, charges, filing,
registration and recording fees, excises and levies payable with respect to the
Note or the Liens created or secured by the Loan Documents, other than income,
franchise and doing business taxes imposed on Lender. If there shall be enacted
any law (a) deducting the Loan from the value of the Property for the purpose of
taxation, (b) affecting any Lien on the Property, or (c) changing existing laws
of taxation of mortgages, deeds of trust, security deeds, or debts secured by
real property, or changing the manner of collecting any such taxes, Borrower
shall promptly pay to Lender, on demand, all taxes, costs and charges for which
Lender is or may be liable as a result thereof; however, if such payment would
be prohibited by law or would render the Loan usurious, then instead of
collecting such payment, Lender may declare all amounts owing under the Loan
Documents due and payable to Lender within ninety (90) days of Lender’s demand
therefor.
     4.1.20 Condominium Obligations. Borrower (i) shall pay all maintenance and
Condominium Assessments and shall observe and perform the obligations imposed
upon it under the Condominium Documents; (ii) shall enforce the terms, covenants
and conditions contained in the Condominium Documents to be observed or
performed upon the part of the other parties thereunder in a commercially
reasonable manner; (iii) shall not alter, modify or change the terms

-48-

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

 

of the Condominium Documents without Lender’s consent, such consent not to be
unreasonably withheld, delayed or qualified, (iv) shall comply with any such
state, local or federal law, rule and regulation applicable to the condominium
regime at the Property, the Condominium Units or the sale or transfer of the
Condominium Units, including, but not limited to, the securities and condominium
laws of the State and the rules and regulations pertaining thereto, if
applicable, (v) shall, except as provided herein, take all actions as may be
necessary from time to time to preserve and maintain the condominium regime at
the Property in accordance with Article 9-B of the New York Real Property Law,
and (vi) shall give to Lender prompt notice of any notice of any special
assessment relating to the condominium regime received by Borrower.
     4.1.21 East River Franchise and Chilled Water Agreements. Borrower
(i) shall observe and perform the obligations imposed upon it under the East
River Franchise Agreement and the Chilled Water Agreement; (ii) shall enforce
the terms, covenants and conditions contained in the East River Franchise
Agreement and the Chilled Water Agreement to be observed or performed upon the
part of the other parties thereunder in a commercially reasonable manner;
(iii) shall not terminate, alter, modify or change the terms of the East River
Franchise Agreement or the Chilled Water Agreement without Lender’s consent,
such consent not to be unreasonably withheld, delayed or qualified, and
(iv) shall deliver to Lender copies of any notices of default or revocation
received with respect to the East River Franchise Agreement and the Chilled
Water Agreement.
     Section 4.2 Borrower Negative Covenants. Borrower covenants and agrees with
Lender that:
     4.2.1 Liens. Borrower shall not create, incur, assume or, subject to
Borrower’s rights in this Agreement and the other Loan Documents to contest the
validity and application of Liens, suffer to exist any Lien on any portion of
the Property except for Permitted Encumbrances.
     4.2.2 Dissolution. Borrower shall not (a) engage in any dissolution,
liquidation or consolidation or merger with or into any other business entity,
(b) engage in any business activity not related to the ownership and operation
of the Property, (c) transfer, lease or sell, in one transaction or any
combination of transactions, all or substantially all of the property or assets
of Borrower except to the extent expressly permitted by the Loan Documents, or
(d) cause, permit or suffer any SPC Party to (i) dissolve, wind up or liquidate
or take any action, or omit to take an action, as a result of which such SPC
Party would be dissolved, wound up or liquidated in whole or in part, or
(ii) amend, modify, waive or terminate the certificate of incorporation or
bylaws of such SPC Party, in each case without obtaining the prior consent of
Lender in any matter that (i) violates the single purpose covenants set forth in
Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision
thereof that by its terms cannot be modified at any time when the Loan is
outstanding or by its terms cannot be modified without Lender’s consent.
     4.2.3 Change in Business. Borrower shall not enter into any line of
business other than the ownership and operation of the Property.
     4.2.4 Debt Cancellation. Borrower shall not cancel or otherwise forgive or
release any claim or debt (other than termination of Leases in accordance
herewith) owed to

-49-

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

 

Borrower by any Person, except for adequate consideration and in the ordinary
course of Borrower’s business.
     4.2.5 Affiliate Transactions. Borrower shall not enter into, or be a party
to, any transaction with an Affiliate of Borrower or any of the partners of
Borrower except in the ordinary course of business and on terms which are fully
disclosed to Lender in advance and are no less favorable to Borrower or such
Affiliate than would be obtained in a comparable arm’s length transaction with
an unrelated third party.
     4.2.6 Zoning. Borrower shall not initiate or consent to any zoning
reclassification of any portion of the Property or seek any variance under any
existing zoning ordinance or use or permit the use of any portion of the
Property in any manner that could result in such use becoming a non conforming
use under any zoning ordinance or any other applicable land use law, rule or
regulation, without the prior written consent of Lender (such consent not to be
unreasonably withheld or delayed). Borrower shall use commercially reasonable
efforts to cause Goldman Tenant to obtain an amended certificate of occupancy
with respect to the permit issued by the City of New York to change the
occupancy load on floors 42, 46, 48 and 50 at the Property or to otherwise
comply with all Legal Requirements with respect to such permits.
     4.2.7 Assets. Borrower shall not purchase or own any property other than
the Property and any property necessary or incidental for the operation of the
Property. Borrower may make loans to any of its Affiliates, provided that,
Borrower shall not enforce any of its remedies with respect thereto during the
term of the Loan.
     4.2.8 No Joint Assessment. Borrower shall not suffer, permit or initiate
the joint assessment of the Property (a) with any other real property
constituting a tax lot separate from the Property, and (b) with any portion of
the Property which may be deemed to constitute personal property, or any other
procedure whereby the lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to the Property.
     4.2.9 Principal Place of Business. Borrower shall not change its principal
place of business from the address set forth on the first page of this Agreement
without first giving Lender twenty (20) days prior notice.
     4.2.10 ERISA. (a) Throughout the term of the Loan (A) Borrower will not be
an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to
Title I of ERISA, (B) none of the assets of Borrower will constitute “plan
assets” of one or more such plans within the meaning of 29 C.F.R. Section
2510.3-101, (C) Borrower will not be a “governmental plan” within the meaning of
Section 3(32) of ERISA, and (D) transactions by or with Borrower will not be
subject to any state statute regulating investments of, or fiduciary obligations
with respect to, governmental plans.
     (b) Borrower shall 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 an “employee benefit plan” as defined
in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a
“governmental plan” within the meaning of Section 3(32) of ERISA; (ii) Borrower
is not subject to any state statute regulating investments of, or fiduciary

-50-

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

 

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 is held by “benefit plan investors” within the meaning of
29 C.F.R. §2510.3-101(f)(2); or
     (C) Borrower qualifies as an “operating company” or a “real estate
operating company” within the meaning of 29 C.F.R. §2510.3-101(c) or (e).
     4.2.11 Material Agreements. Borrower shall not, without Lender’s prior
written consent (such consent not to be unreasonably withheld or delayed):
(a) enter into any Material Agreement or Operating Agreement, except on an
arm’s-length basis and commercially reasonable terms (b) surrender or terminate
any Material Agreement or Operating Agreement to which it is a party (unless the
other party thereto is in material default or the termination of such agreement
would be commercially reasonable), (b) increase or consent to the increase of
the amount of any charges under any Material Agreement or Operating Agreement to
which it is a party, except as provided therein or on an arms-length basis and
commercially reasonable terms; or (c) otherwise modify, change, supplement,
alter or amend, or waive or release any of its rights and remedies under any
Material Agreement or Operating Agreement to which it is a party in any material
respect, except on an arms’-length basis and commercially reasonable terms.
ARTICLE V
INSURANCE, CASUALTY AND CONDEMNATION.
     Section 5.1 Insurance.
     5.1.1 Insurance Policies. (a) Borrower shall obtain and maintain, or cause
to be maintained, insurance for Borrower and the Property providing at least the
following coverages:
     (i) comprehensive “All Risk” or “Special Perils” insurance on the
Improvements and the personal property at the Property (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 personal property at the Property waiving all co-insurance
provisions; (C) providing for no deductible in excess of One Hundred Thousand
and No/100 Dollars ($100,000.00) for all such insurance coverage; and
(D) containing an “Ordinance or Law Coverage” or “Enforcement” endorsement if
any of the Improvements or the use of the Property shall at any time constitute
legal non-conforming structures or uses. In addition, Borrower shall obtain:
(y) if any portion of the Improvements is currently or at any time in the future
located in a federally designated “special flood hazard area,” flood hazard

-51-

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

 

insurance in an amount equal to the lesser of (1) the outstanding principal
balance of the Note or (2) the maximum amount of such insurance available under
the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of
1973 or the National Flood Insurance Reform Act of 1994, as each may be amended
or such greater amount as Lender shall reasonably require, except with respect
to portions of the Property located in Flood Zone A-7 in which Borrower shall
maintain $50,000,000.00 of flood insurance with a maximum deductible of up to
five percent (5%); and (z) earthquake insurance in amounts and in form and
substance satisfactory to Lender (notwithstanding anything to the contrary set
forth in Section 5.1.2 hereof, such insurance shall be provided by insurance
companies having a claims paying ability rating reasonably acceptable to Lender)
in the event the Property is located in an area with a high degree of seismic
activity, provided that the insurance pursuant to clauses (y) and (z) hereof
shall otherwise be on terms consistent with the comprehensive “All Risk” or
“Special Perils” 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 the
Property, such insurance (A) to be on the so-called “occurrence” form with a
combined limit of not less than Five Million and No/100 Dollars ($5,000,000);
(B) to continue at not less than the aforesaid limit until required to be
changed by Lender 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 on an “if
any” basis; (3) independent contractors; (4) blanket contractual liability for
all legal contracts; and (5) contractual liability covering the indemnities
contained in Article 9 of the Mortgage to the extent the same is available; the
deductible for this coverage shall not exceed $250,000.00;
     (iii) business income insurance (A) with loss payable to Lender;
(B) covering all risks required to be covered by the insurance provided for in
subsection (i) above for a period commencing at the time of loss for such length
of time as it takes to repair or replace with the exercise of due diligence and
dispatch; (C) containing 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 twelve (12) months from the date that the Property is repaired or
replaced and operations are resumed, whichever first occurs, and notwithstanding
that the policy may expire prior to the end of such period; and (D) in an amount
equal to one hundred percent (100%) of the projected gross income from the
Property for a period from the date of loss to a date (assuming total
destruction) which is twenty-four (24) months from the date that the Property is
repaired or replaced and operations are resumed. The amount of such business
income insurance shall be determined prior to the date hereof and at least once
each year thereafter based on Borrower’s reasonable estimate of the gross income
from the Property for the succeeding twenty-four (24) month period. All proceeds
payable to Lender pursuant to this subsection shall be held by Lender 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

-52-

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

 

obligations secured by the Loan Documents on the respective dates of payment
provided for in the Note and the other Loan Documents except to the extent such
amounts are actually paid out of the proceeds of such business income insurance;
     (iv) at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements, and only if the
Property coverage form 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 Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;
     (v) workers’ compensation, subject to the statutory limits of the state in
which the Property is located, and employer’s liability insurance with a limit
of at least One Million and No/100 Dollars ($1,000,000) per accident and per
disease per employee, and statutory limits for disease aggregate in respect of
any work or operations on or about the Property, or in connection with the
Property or its operation (if applicable);
     (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) umbrella liability insurance in addition to primary coverage in an
amount not less than Seventy-Five Million and No/100 Dollars ($75,000,000) per
occurrence on terms consistent with the commercial general liability insurance
policy required under subsection (ii) above and (viii) below;
     (viii) motor vehicle liability coverage for all owned and non-owned
vehicles, including rented and leased vehicles containing minimum limits per
occurrence of One Million and No/100 Dollars ($1,000,000);
     (ix) so-called “dramshop” insurance or other liability insurance required
in connection with the sale of alcoholic beverages;
     (x) insurance against employee dishonesty in an amount not less than one
(1) month of gross revenue from the Property and with a deductible not greater
than Twenty-Five Thousand and No/100 Dollars ($25,000); and
     (xi) insurance coverage for Terrorism Losses and the loss of business
income resulting from Terrorism Losses, may be maintained by Borrower, at its
option, either (A) as part of its “All Risk” or “Special Perils” and business
income insurance required under Sections 5.1.1(a)(i) and (iii) above on terms
consistent with those required under Sections 5.1.1(a)(i) and (iii) above except
that such coverage shall be in an amount (the “Minimum Coverage Amount”) at
least equal to the lesser of (a) the outstanding principal balance of the Loan
(provided such policy contains a waiver of coinsurance) or (b) the sum of the
business income insurance equal to 100% of the projected gross income from

-53-

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

 

the Property for a period of twenty-four (24) months from the date that the
Property is repaired or replaced and operations are resumed plus the Full
Replacement Cost; (B) through a policy or policies covering multiple locations
so long as such coverage is on terms consistent with those required under
Sections 5.1.1(a)(i) and (iii) above with a deductible of not greater than
$250,000 and such coverage is in an amount equal to the Minimum Coverage Amount
and further provided that if any claim is made (unless on per occurrence basis)
under such policy or policies reducing the amount of coverage below that which
is required to be maintained under this Section, then Borrower shall increase
the amount of such policy or policies to an amount that satisfies the
requirements of this Section; or (C) as a stand-alone policy or policies that
covers solely the Property against Terrorism Losses, which stand-alone policy or
policies shall be on terms consistent with those required under
Sections 5.1.1(a)(i) and (iii) above with a deductible of not greater than
$5,000,000.00 and such coverage is in an amount equal to the Minimum Coverage
Amount. Notwithstanding the foregoing, in no event shall Borrower be required to
pay annual premiums for insurance covering Terrorism Losses in excess of the
Terrorism Premium Limit (i.e., if the cost exceeds the Terrorism Premium Limit,
Borrower shall obtain as much coverage as is available at a cost equal to the
Terrorism Premium Limit);
     (xii) 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 the Property located in or around the
region in which the Property is located.
     (b) All insurance provided for in Section 5.1.1(a) shall be obtained under
valid and enforceable policies (collectively, the “Policies” or, in the
singular, the “Policy”) and, to the extent not specified above, shall be subject
to the reasonable approval of Lender as to deductibles, loss payees and
insureds. Not less than five (5) Business Days prior to the expiration dates of
the Policies theretofore furnished to Lender, certificates of insurance
evidencing the Policies accompanied by evidence satisfactory to Lender of
payment of the premiums then due thereunder (the “Insurance Premiums”), shall be
delivered by Borrower to Lender.
     (c) Any blanket insurance Policy (“Blanket Policy”) shall specifically
allocate to the Property the amount of coverage from time to time required
hereunder and shall otherwise provide the same protection as would a separate
Policy insuring only the Property in compliance with the provisions of
Section 5.1.1(a).
     (d) All Policies of insurance provided for or contemplated by
Section 5.1.1(a) shall be primary coverage and, except for the Policy referenced
in Section 5.1.1(a)(v), shall name Borrower as the insured and Lender and its
successors and/or assigns as the additional insured, as its interests may
appear, and in the case of property damage, boiler and machinery, flood,
earthquake and terrorism 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. Borrower shall not procure or permit any
of its constituent entities to procure any other insurance coverage which would
be on the same level of payment as the Policies or

-54-

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

 

would adversely impact in any way the ability of Lender or Borrower to collect
any proceeds under any of the Policies.
     (e) All Policies of insurance provided for in Section 5.1.1(a), except for
the Policies referenced in Section 5.1.1(a)(v) and (a)(viii), shall contain
clauses or endorsements to the effect that:
     (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 Policy shall not be canceled without at least thirty (30) days’
written notice to Lender and any other party named therein as an additional
insured and, if obtainable by Borrower using commercially reasonable efforts,
shall not be materially changed (other than to increase the coverage provided
thereby) without such a thirty (30) day notice; and
     (iii) 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 the Property, including, without limitation, the
obtaining of such insurance coverage as Lender in its sole discretion deems
appropriate and 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.
     (g) 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 that are not blanket
Policies then in force concerning the Property and all proceeds payable
thereunder shall thereupon vest in the purchaser at such foreclosure or Lender
or other transferee in the event of such other transfer of title.
     (h) In no event shall Borrower permit the Board of Managers (as defined in
the Declaration) to obtain the insurance required to be obtained by Borrower
pursuant to Section 5.1.1(a)(i), (iii), (iv) and (vi) of this Agreement, nor
shall the Board of Managers be named as an additional insured or loss payee
under any such policy.
     (i) Lender acknowledges that for the current period of the Policy, the
Insurance Premiums will not be paid twelve (12) months in advance, but rather,
are financed by Borrower. This arrangement is acceptable to Lender, provided,
that (i) Borrower provides Lender for its review and reasonable approval the
details of such financing arrangement; (ii) Borrower provides Lender with
evidence that all periodic Insurance Premium payments have been paid at its
request, per the terms of the financing arrangement, as they become due; (iii)

-55-

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

 

Lender receives not less than thirty (30) days prior written notice of any
potential termination or expiration of any insurance coverages required herein.
In addition, Borrower agrees that upon the expiration of the Policy scheduled to
occur on December 31, 2006, it shall replace the Montpelier Reinsurance Co.
layer with an acceptable insurer such that the Policy shall no longer be subject
to co-insurance to extent commercially available at commercially reasonable
rates, provided that Lender and Borrower shall not be exposed to co-insurance
risk (i.e. Borrower obtains an “agreed upon value” Endorsement to the Policy).
     5.1.2 Insurance Company. The Policies shall be issued by financially sound
and responsible insurance companies authorized to do business in the state in
which the Property is located and having a claims paying ability rating with the
issuing companies and or within the reinsurance companies/organizations that
reinsure 100% of the risks of the issuing companies, of “A” or better by S&P and
Fitch and an insurance financial strength rating of “Aa2” by Moody’s (provided,
however, (A) if more than one (1) but less than five (5) insurance companies
issue the Policies required hereunder, then at least seventy-five percent (75%)
of the applicable insurance coverages represented by the Policies required
hereunder must be provided by insurance companies having a credit rating of “A”
or better by S&P (or the equivalent rating by Moody and Fitch) and the balance
of the applicable insurance coverages represented by the Policies required
hereunder must be provided by insurance companies having a credit rating of “A”
or better by S&P (or the equivalent rating by Moody and Fitch), or (B) if five
(5) or more insurance companies issue the Policies required hereunder, then at
least seventy percent (70%) of the applicable insurance coverages required
hereunder must be provided by insurance companies having a credit rating of “A-”
or better by S&P (or the equivalent rating by Moody and Fitch) and at least 95%
of the total of the applicable insurance coverages required hereunder must be
provided by insurance companies having a credit rating of “BBB” or better by S&P
(or the equivalent rating by Moody and Fitch); provided further, however, that
in no event shall any insurance company providing primary insurance coverage
hereunder have a credit rating of less than “A” by S&P (or the equivalent rating
by Moody and Fitch)). If a Securitization occurs, the foregoing required
insurance company rating by a Rating Agency not rating any Securities shall be
disregarded. If a Securitization occurs and S&P is not a Rating Agency, each of
the insurance companies shall have the ratings from Fitch and Moody’s as
provided above; provided, however, if Fitch or Moody’s shall not provide a
rating for an insurance company, then an A.M. Best rating of A(X) shall be
substituted for an S&P rating of “A-” or better and an A.M. Best rating of
A-VIII for each of the other foregoing rating requirements of S&P, Fitch or
Moody’s, as applicable. Notwithstanding the foregoing, Borrower shall be
permitted to maintain the Policies required hereunder with insurance companies
which do not meet the foregoing requirements (an “Otherwise Rated Insurer”),
provided Borrower obtains a “cut-through” endorsement (that is, an endorsement
which permits recovery against the provider of such endorsement) with respect to
any Otherwise Rated Insurer from an insurance company which meets the claims
paying ability ratings required above. Moreover, if Borrower desires to maintain
insurance required hereunder from an insurance company which does not meet the
claims paying ability ratings set forth herein but the parent of such insurance
company, which owns at least fifty-one percent (51%) of such insurance company,
maintains such ratings, Borrower may use such insurance companies if approved by
the Rating Agencies (such approval may be conditioned on items required by the
Rating Agencies including a requirement that the parent guarantee the
obligations of such insurance company).

-56-

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

 

     5.1.3 Concordia Insurance Limited. Notwithstanding anything to the contrary
contained in Section 5.1.2, with respect to insurance required to be maintained
by Borrower pursuant to Section 5.1.1(a)(xi) hereof, Concordia Insurance, LLC
(“Concordia”) shall be an acceptable insurer of excess property insurance,
perils of terrorism and acts of terrorism so long as (i) the policy issued by
Concordia has (a) a per occurrence limit of no less than $500,000,000 and (b) a
deductible of no greater than $100,000, (ii) other than the $100,000 deductible,
the portion of such insurance which is not reinsured by TRIA, is reinsured by an
insurance carrier rated no less than “A” (or its equivalent) by all of the
Rating Agencies rating the Securities, (iii) TRIA or a similar federal statute
is in effect and provides that the federal government must reinsure that portion
of any terrorism insurance claim above (a) the applicable deductible payable by
Concordia and (b) those amounts which are reinsured pursuant to clause (ii)
above, (iv) Concordia is not the subject of a bankruptcy or similar insolvency
proceeding and (v) no Governmental Authority issues any statement, finding or
decree that insurers of perils of terrorism similar to Concordia (i.e., captive
insurers arranged similar to Concordia) do not qualify for the payments or
benefits of TRIA. In the event that Concordia is providing insurance coverage
(A) to other properties in close proximity to the Property, and/or (B) to other
properties owned by a Person(s) who is not an Affiliate of Borrower, and such
insurance is not subject to the same reinsurance and other requirements of this
Section 5.1.3, then Lender may reasonably re-evaluate the limits and deductibles
of the insurance required to be provided by Concordia hereunder. In the event
any of the foregoing conditions are not satisfied, Concordia shall not be deemed
an acceptable insurer of Terrorism Losses. Borrower represents, warrants and
covenants to Lender on behalf of Concordia that the insurance premiums for the
insurance coverages provided to Borrower by Concordia are fair market value
insurance premiums.
     Section 5.2 Casualty and Condemnation.
     5.2.1 Casualty. If the Property shall sustain a Casualty, Borrower shall
give prompt notice of such Casualty to Lender and shall promptly commence and
diligently prosecute to completion the repair and restoration of the Property as
nearly as possible to the condition the Property was in immediately prior to
such Casualty (a “Restoration”) and otherwise in accordance with Section 5.3, it
being understood, however, that Borrower shall not be obligated to restore the
Property to the precise condition of the Property prior to such Casualty
provided the Property is restored, to the extent practicable, to be of at least
equal value and of substantially the same character as prior to the Casualty.
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. In the event of a Casualty where the loss
does not exceed Restoration Threshold, Borrower may settle and adjust such
claim; provided that (a) no Event of Default has occurred and is continuing and
(b) such adjustment is carried out in a commercially reasonable and timely
manner. In the event of a Casualty where the loss exceeds the Restoration
Threshold or if an Event of Default then exists, Borrower may settle and adjust
such claim only with the prior written consent of Lender (which consent shall
not be unreasonably withheld or delayed) and Lender shall have the opportunity
to participate, at Borrower’s cost, in any such adjustments. Notwithstanding any
Casualty, 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.

-57-

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

 

     5.2.2 Condemnation. Borrower shall give Lender prompt notice of any actual
or threatened Condemnation by any Governmental Authority of all or any part of
the Property and shall deliver to Lender a copy of any and all papers served in
connection with such proceedings. Provided no Event of Default has occurred and
is continuing, in the event of a Condemnation where the amount of the taking
does not exceed the Restoration Threshold, Borrower may settle and compromise
such Condemnation; provided that the same is effected in a commercially
reasonable and timely manner. In the event of a Condemnation where the amount of
the taking exceeds the Restoration Threshold or if an Event of Default then
exists, Borrower may settle and compromise the Condemnation only with prior
written the consent of Lender (which consent shall not be unreasonably withheld
or delayed) and Lender shall have the opportunity to participate, at Borrower’s
cost, in any litigation and settlement discussions in respect thereof and
Borrower shall from time to time deliver to Lender all instruments requested by
Lender 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. Lender is hereby irrevocably appointed as Borrower’s
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain any Award and to make any compromise or settlement in
connection with any such Condemnation that Lender is otherwise permitted to
settle pursuant to the terms of this Agreement. Notwithstanding any
Condemnation, 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. Lender shall
not be limited to the interest paid on the Award by any Governmental Authority
but shall be entitled to receive out of the Award interest at the rate or rates
provided herein or in the Note. If the Property or any portion thereof is taken
by any Governmental Authority, Borrower shall promptly commence and diligently
prosecute the Restoration of the Property and otherwise comply with the
provisions of Section 5.3. If the 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.
     5.2.3 Casualty Proceeds. Notwithstanding the last sentence of Section
5.1.1(a)(iii) and provided no Event of Default then exists hereunder, proceeds
received by Lender on account of the business interruption insurance specified
in Section 5.1.1(a)(iii) above with respect to any Casualty shall be deposited
by Lender directly into the Borrower Account (as defined in the Clearing Account
Agreement) but (a) only to the extent it reflects a replacement for (i) lost
Rents that would have been due under Leases existing on the date of such
Casualty, and/or (ii) lost Rents under Leases that had not yet been executed and
delivered at the time of such Casualty which Borrower has proven to the
insurance company would have been due under such Leases (and then only to the
extent such proceeds disbursed by the insurance company reflect a replacement
for such past due Rents) and (b) only to the extent necessary to fully make the
disbursements required by Section 3.3(a)(i) through (a)(vi) of the Cash
Management Agreement. All other such proceeds shall be held by Lender and
disbursed in accordance with Section 5.3 hereof.
     Section 5.3 Delivery of Net Proceeds.
     5.3.1 Minor Casualty or Condemnation. If a Casualty or Condemnation has
occurred to the Property and the Net Proceeds shall be less than the Restoration
Threshold and

-58-

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

 

the costs of completing the Restoration shall be less than the Restoration
Threshold, and provided no Event of Default shall have occurred and remain
uncured, the Net Proceeds will be disbursed by Lender to Borrower. Promptly
after receipt of the Net Proceeds, Borrower shall commence and satisfactorily
complete with due diligence the Restoration in accordance with the terms of this
Agreement. If any Net Proceeds are received by Borrower and may be retained by
Borrower pursuant to the terms hereof, such Net Proceeds shall, until completion
of the Restoration, be held in trust for Lender and shall be segregated from
other funds of Borrower to be used to pay for the cost of Restoration in
accordance with the terms hereof.
     5.3.2 Major Casualty or Condemnation. (a) If a Casualty or Condemnation has
occurred to the Property and the Net Proceeds are equal to or greater than the
Restoration Threshold or the costs of completing the Restoration is equal to or
greater than the Restoration Threshold, Lender shall make the Net Proceeds
available for the Restoration, provided that each of the following conditions
are met:
     (i) no Event of Default shall have occurred and be continuing;
     (ii) (A) in the event the Net Proceeds are insurance proceeds, less than
thirty percent (30%) of the total floor area of the Improvements at the Property
has been damaged, destroyed or rendered unusable as a result of such Casualty or
(B) in the event the Net Proceeds are an Award, less than ten percent (10%) of
the land constituting the Property is taken, and such land is located along the
perimeter or periphery of the Property, and no portion of the Improvements is
the subject of the Condemnation;
     (iii) Leases requiring payment of annual rent equal to sixty-five (65%) of
the Gross Income from Operations received by Borrower during the twelve
(12) month period immediately preceding the Casualty or Condemnation and all
Major Leases 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, notwithstanding the occurrence of such Casualty or
Condemnation;
     (iv) Borrower shall commence the Restoration as soon as reasonably
practicable (but in no event later than sixty (60) days after such Casualty or
Condemnation, whichever the case may be, occurs) and shall diligently pursue the
same to satisfactory completion;
     (v) Lender shall be satisfied that any operating deficits and all payments
of principal and interest under the Note will be paid during the period required
for Restoration from (A) the Net Proceeds, or (B) other funds of Borrower;
     (vi) Lender shall be satisfied that the Restoration will be completed on or
before the earliest to occur of (A) the date six (6) months prior to the
Maturity Date, (B) the earliest date required for such completion under the
terms of any Lease, (C) such time as may be required under applicable Legal
Requirements in order to repair and restore the Property to the condition it was
in immediately prior to such Casualty or to as nearly as possible the condition
it was in immediately prior to such Condemnation, as

-59-

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

 

applicable or (D) the expiration of the insurance coverage referred to in
Section 5.1.1(a)(iii);
     (vii) the Property and the use thereof after the Restoration will be in
compliance with and permitted under all applicable Legal Requirements;
     (viii) the Restoration shall be done and completed by Borrower in an
expeditious and diligent fashion and in compliance with all applicable Legal
Requirements;
     (ix) such Casualty or Condemnation, as applicable, does not result in the
loss of access to the Property or the related Improvements; and
     (x) all Operating Agreements shall remain in full force and effect.
     (b) The Net Proceeds shall be paid directly to Lender and held by Lender in
an interest-bearing account and, until disbursed in accordance with the
provisions of this Section 5.3.2, shall constitute additional security for the
Debt. The Net Proceeds (and all interest accrued thereon) 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 reasonably satisfactory to Lender that
(i) all requirements set forth in Section 5.3.2(a) have been satisfied, (ii) 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
Restoration have been paid for in full, and (iii) there exist no notices of
pendency, stop orders, mechanic’s or materialman’s liens or notices of intention
to file same, or any other liens or encumbrances of any nature whatsoever on the
Property arising out of the Restoration 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.
     (c) All plans and specifications required in connection with the
Restoration shall be subject to prior approval of Lender (not to be unreasonably
withheld or delayed) and an independent architect selected by Lender (the
“Casualty Consultant”). The plans and specifications shall require that the
Restoration be completed in a first-class workmanlike manner at least equivalent
to the quality and character of the original work in the Improvements (provided,
however, that in the case of a partial Condemnation, the Restoration shall be
done to the extent reasonable practicable after taking into account the
consequences of such partial Condemnation), so that upon completion thereof, the
Property shall be at least equal in value and general utility to the Property
prior to the damage or destruction; it being understood, however, that Borrower
shall not be obligated to restore the Property to the precise condition of the
Property prior to such Casualty provided the Property is restored, to the extent
practicable, to be of at least equal value and of substantially the same
character as prior to the Casualty. Borrower shall restore all Improvements such
that when they are fully restored and/or repaired, such Improvements and their
contemplated use fully comply with all applicable material Legal Requirements.
The identity of the contractors, subcontractors and materialmen engaged in the
Restoration, as well as the contracts under which they have been engaged, shall
be subject to approval (not to be unreasonably withheld or delayed) of Lender
and the Casualty Consultant. All reasonable out of pocket costs and expenses
actually incurred by Lender in connection with

-60-

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

 

recovering, holding and advancing the Net Proceeds for the Restoration
including, without limitation, reasonable attorneys’ fees and disbursements and
the Casualty Consultant’s fees and disbursements, shall be paid by Borrower.
     (d) 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
Casualty Consultant, less the Casualty Retainage. The term “Casualty Retainage”
shall mean, as to each contractor, subcontractor or materialman engaged in the
Restoration, 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 Casualty
Consultant, until such time as the Casualty Consultant certifies to Lender that
fifty percent (50%) or more of the Restoration has been completed following
which the Casualty Retainage shall be reduced to five percent (5%) until the
Restoration has been completed. The Casualty Retainage shall in no event, and
notwithstanding anything to the contrary set forth above in this
Section 5.3.2(d), be less than the amount actually held back by Borrower from
contractors, subcontractors and materialmen engaged in the Restoration. The
Casualty Retainage shall not be released until the Casualty Consultant certifies
to Lender that the Restoration has been completed in accordance with the
provisions of this Section 5.3.2(d) and that all approvals necessary for the
re-occupancy and use of the 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 Casualty Retainage; provided, however, notwithstanding the foregoing,
Lender will release the portion of the Casualty Retainage being held with
respect to any contractor, subcontractor or materialman engaged in the
Restoration as of the date upon which the Casualty Consultant certifies to
Lender that the contractor, subcontractor or materialman has satisfactorily
completed all work and has supplied all materials in accordance with the
provisions of the contractor’s, subcontractor’s or materialman’s contract, 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 Casualty Retainage
shall be approved by the surety company, if any, which has issued a payment or
performance bond with respect to the contractor, subcontractor or materialman.
     (e) Lender shall not be obligated to make disbursements of the Net Proceeds
more frequently than once every calendar month.
     (f) If at any time the Net Proceeds or the undisbursed balance thereof
shall not, in the opinion of Lender in consultation with the Casualty
Consultant, be sufficient to pay in full the balance of the costs which are
estimated by the Casualty Consultant to be incurred in connection with the
completion of the Restoration, Borrower shall deposit the deficiency (the “Net
Proceeds Deficiency”) with Lender 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 5.3.2 shall constitute additional security for the Debt.

-61-

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

 

     (g) The excess, if any, of the Net Proceeds and the remaining balance, if
any, of the Net Proceeds Deficiency deposited with Lender after the Casualty
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Section 5.3.2, and the receipt by Lender
of evidence reasonably satisfactory to Lender that all costs incurred in
connection with the Restoration have been paid in full, shall be remitted by
Lender to Borrower, provided no Event of Default shall have occurred and shall
be continuing under any of the Loan Documents; provided, however, the amount of
such excess returned to Borrower in the case of a Condemnation shall not exceed
the amount of Net Proceeds Deficiency deposited by Borrower with the balance
being applied to the Debt in the manner provided for in subsection 5.3.2(h).
     (h) 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 5.3.2(g) may 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, at the
discretion of Lender, the same may be paid, either in whole or in part, to
Borrower for such purposes as Lender shall designate.
ARTICLE VI
RESERVE FUNDS
     Section 6.1 Intentionally Omitted.
     Section 6.2 Tax Funds.
     6.2.1 Deposits of Tax Funds. At all times during a Cash Sweep Period,
Borrower shall, pursuant to the Cash Management Agreement, make deposits on each
Monthly Payment Date in an amount equal to one-twelfth of the Taxes that Lender
reasonably estimates will be payable with respect to the Property during the
next ensuing twelve (12) months in order to accumulate sufficient funds to pay
all such Taxes at least thirty (30) days prior to their respective due dates.
Amounts deposited pursuant to this Section 6.2.1 are referred to herein as the
“Tax Funds” and the account in which such amounts are held shall hereinafter be
referred to as Borrower’s “Tax Fund Reserve Account”. If at any time deposits
are required to be made pursuant to this Section 6.2.1 and Lender reasonably
determines that the Tax Funds will not be sufficient to pay the Taxes, Lender
shall notify Borrower of such determination and the monthly deposits for Taxes
shall be increased by the amount that Lender estimates is sufficient to make up
the deficiency at least thirty (30) days prior to the respective due dates for
the Taxes; provided that if Borrower receives notice of any deficiency after the
date that is ten (10) days prior to the date that Taxes are due, Borrower will
deposit such amount within one (1) Business Day after its receipt of such
notice. Borrower has deposited with Lender on the date hereof the sum of
$7,374,632.00 (the “Unassessed Tax Funds”) to be held in the Tax Fund Reserve
Account and to be disbursed in accordance with Section 6.2.2 with respect to
those portions of the Property which are currently not assessed for Taxes for
the 2004/05 and 2005/06 tax years (the “Unassessed Property”). In the event that
New York City fails to correctly calculate and bill the Borrower for real estate
taxes with respect all or any portion of to the Unassessed Property within six
(6) months from the date hereof, Borrower may replace the Unassessed Tax Funds
by

-62-

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

 

delivering to Lender a Qualified Letter of Credit and/or Qualified Guaranty (or
any combination thereof) in an aggregate amount equal to the Unassessed Tax
Funds or such other amount reasonably agreed to by Lender at which time Lender
shall return the Unassessed Tax Funds, together with interest thereon, to
Borrower. The Qualified Guaranty shall be accompanied by a “bring down” of the
Nonconsolidation Opinion. In no event shall the amount indemnified under the
Alteration Indemnity and the amount guaranteed under any Qualified Guaranties,
in the aggregate, at any time exceed $40,000,000.00. Upon payment of such Taxes
for the Unassessed Property, the balance of the Unassessed Tax Funds, together
with interest thereon, shall be returned to Borrower.
     6.2.2 Release of Tax Funds. Lender shall apply the Tax Funds to payments of
Taxes before the date Taxes are due and payable, provided that no Event of
Default is continuing and subject to Lender’s receipt of all necessary bills for
Taxes to be so paid at least ten (10) Business Days prior to the date the same
are due and payable. In making any payment relating to Taxes, Lender may do so
according to any bill, statement or estimate procured from the appropriate
public office (with respect to Taxes) 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 Funds
shall exceed the amounts due for Taxes, Lender shall, in its sole discretion,
return any excess to Borrower or credit such excess against future payments to
be made to the Tax Funds. Any Tax Funds remaining after the occurrence of a
Defeasance Event or the Debt has been paid in full shall be returned to
Borrower.
     Section 6.3 Insurance Funds.
     6.3.1 Deposits of Insurance Funds. At all times during a Cash Sweep Period,
Borrower shall, pursuant to the Cash Management Agreement, make deposits on each
Monthly Payment Date in an amount equal to one-twelfth of the Insurance Premiums
that Lender estimates will be payable for the renewal of the coverage afforded
by the Policies upon the expiration thereof in order to accumulate sufficient
funds to pay all such Insurance Premiums at least thirty (30) days prior to the
expiration of the Policies. Amounts deposited pursuant to this Section 6.3.1 are
referred to herein as the “Insurance Funds”. If at any time deposits are
required to be made pursuant to this Section 6.3.1 and Lender reasonably
determines that the Insurance Funds will not be sufficient to pay the Insurance
Premiums, Lender shall notify Borrower of such determination and the monthly
deposits for Insurance Premiums shall be increased by the amount that Lender
estimates is sufficient to make up the deficiency at least thirty (30) days
prior to expiration of the Policies. Notwithstanding the foregoing, deposits of
Insurance Funds under this Section 6.3.1 shall not be required in respect of
Insurance Premiums payable under Blanket Policies maintained by Borrower in
accordance with Section 5.1 hereof, provided, that Lender receives evidence
reasonably acceptable to it of Borrower making the payment of all such Insurance
Premiums.
     6.3.2 Release of Insurance Funds. Lender shall apply the Insurance Funds to
payment of Insurance Premiums before the date Insurance Premiums are due and
payable, provided that no Event of Default is continuing and subject to Lender’s
receipt of all necessary bills and/or invoices for Insurance Premiums to be so
paid at least ten (10) Business Days prior to the date the same are due and
payable. In making any payment relating to Insurance Premiums, Lender may do so
according to any bill, statement or estimate procured from the

-63-

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

 

insurer or its agent, without inquiry into the accuracy of such bill, statement
or estimate. If the amount of the Insurance Funds shall exceed the amounts due
for Insurance Premiums, Lender shall, in its sole discretion, return any excess
to Borrower or credit such excess against future payments to be made to the
Insurance Funds. Any Insurance Funds remaining after the occurrence of a
Defeasance Event or the Debt has been paid in full shall be returned to
Borrower.
     Section 6.4 Capital Expenditure Funds.
     6.4.1 Deposits of Capital Expenditure Funds. At all times during a Cash
Sweep Period, Borrower shall make deposits on each Monthly Payment Date in an
amount equal to Fifty Thousand Three Hundred Seven and 31/100 Dollars $50,307.31
for Capital Expenditures. Amounts deposited pursuant to this Section 6.4.1 are
referred to herein as the “Capital Expenditure Funds”. To the extent the balance
in the Capital Expenditures Fund should equal or exceed $1,207,375.44 then
Borrower’s obligation for such monthly deposits under this Section 6.4.1 shall
be suspended; provided, however, such obligations for monthly deposits shall be
reinstated to the extent the balance in the Capital Expenditures Fund should
thereafter be less than $1,207,375.44.
     6.4.2 Release of Capital Expenditure Funds. (a) Lender shall disburse
Capital Expenditure Funds only for Capital Expenditures.
     (b) Lender shall disburse to Borrower the Capital Expenditure Funds upon
satisfaction by Borrower of each of the following conditions: (i) Borrower shall
submit a request for payment to Lender at least ten (10) days prior to the date
on which Borrower requests such payment be made and specifies the Capital
Expenditures to be paid, (ii) on the date such request is received by Lender and
on the date such payment is to be made, no Event of Default shall exist and
remain uncured and Lender shall not have exercised its right to cause the
Borrower to replace the Manager (if any) pursuant to Section 7.3 hereof,
provided, that, the condition set forth in this clause (ii) below shall not be
applicable in the event that the Capital Expenditure for which a request for
payment has been submitted relates to the installation, maintenance or
improvement of fire or smoke alarms, sprinklers or other life safety systems,
(iii) Lender shall have received an Officer’s Certificate (A) stating that the
items to be funded by the requested disbursement are Capital Expenditures,
(B) stating that all Capital Expenditures at the Property to be funded by the
requested disbursement have been completed or, subject to clause (D) below,
performed, in a good and workmanlike manner and in accordance with all
applicable Legal Requirements, such Officer’s Certificate to be accompanied by a
copy of any license, permit or other approval required by any Governmental
Authority in connection with the Capital Expenditures, (C) identifying each
Person that supplied materials or labor in connection with the Capital
Expenditures to be funded by the requested disbursement, and (D) stating that
each such Person has been paid in full or will be paid in full upon such
disbursement for all costs relating to such Capital Expenditure as of the date
identified in such Certificate, or in the event that the cost of the Capital
Expenditure to be funded by the requested disbursement is in excess of $250,000
and the underlying contract requires payment before such Capital Expenditure is
fully completed, stating that such Person has been paid in full or will be paid
in full for the work performed upon such disbursement, such Officer’s
Certificate to be accompanied by lien waivers or other evidence of payment
satisfactory to Lender, (iv) at Lender’s option, if the cost of any individual
Capital Expenditure exceeds One Million Dollars ($1,000,000), a title search for
the

-64-

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

 

Property indicating that the Property is free from all Liens, claims and other
encumbrances not previously approved by Lender, (v) at Lender’s option, if the
cost of any individual Capital Expenditure exceeds One Million and No/100
Dollars ($1,000,000), Lender shall have received a report reasonably
satisfactory to Lender in its reasonable discretion from an architect or
engineer approved by Lender in respect of such architect or engineer’s
inspection of the required repairs, and (vi) Lender shall have received such
other evidence as Lender shall reasonably request that the Capital Expenditures
at the Property to be funded by the requested disbursement have been completed
or, subject to clause (D) above, performed, and are paid for or will be paid
upon such disbursement to Borrower. Lender shall not be required to disburse
Capital Expenditure Funds more frequently than once each calendar month, unless
such requested disbursement is in an amount greater than the Minimum
Disbursement Amount (or a lesser amount if the total amount of Capital
Expenditure Funds is less than the Minimum Disbursement Amount, in which case
only one disbursement of the amount remaining in the account shall be made).
     (c) Nothing in this Section 6.4.2 shall (i) make Lender responsible for
making or completing the Capital Expenditures Work; (ii) require Lender to
expend funds in addition to the Capital Expenditure Funds to complete any
Capital Expenditures Work; (iii) obligate Lender to proceed with the Capital
Expenditures Work; or (iv) obligate Lender to demand from Borrower additional
sums to complete any Capital Expenditures Work.
     (d) Borrower shall permit Lender and Lender’s agents and representatives
(including, without limitation, Lender’s engineer, architect, or inspector) or
third parties to enter onto the Property (upon prior notice, except in an
emergency, during normal business hours and subject to the rights of Tenants
under their Leases) to inspect the progress of any Capital Expenditures Work and
all materials being used in connection therewith and to examine all plans and
shop drawings relating to such Capital Expenditures Work. Borrower shall use
commercially reasonable efforts to cause all contractors and subcontractors to
cooperate with Lender or Lender’s representatives or such other Persons
described above in connection with inspections described in this
Section 6.4.2(d).
     (e) If a disbursement will exceed One Million and No/100 Dollars
($1,000,000), Lender may require an inspection of the Property at Borrower’s
expense prior to making a disbursement of Capital Expenditure Funds in order to
verify completion of the Capital Expenditures Work for which reimbursement is
sought. Lender may require that such inspection be conducted by an appropriate
independent qualified professional selected by Lender and may require a
certificate of completion by an independent qualified professional architect
reasonably acceptable to Lender prior to the disbursement of Capital Expenditure
Funds. Borrower shall pay the reasonable, out of pocket costs and expenses
actually incurred by Lender in connection with such inspection required
hereunder, whether such inspection is conducted by Lender or by an independent
qualified professional architect. Any Capital Expenditure Funds remaining after
the occurrence of a Defeasance Event or the Debt has been paid in full shall be
returned to Borrower.
     (f) In addition to any insurance required under the Loan Documents,
Borrower shall provide or cause to be provided workmen’s compensation insurance,
builder’s risk, and public liability insurance and other insurance to the extent
required under applicable

-65-

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

 

law in connection with Capital Expenditures Work. All such policies shall be in
form and amount reasonably satisfactory to Lender.
     Section 6.5 Rollover Funds.
     6.5.1 Deposits of Rollover Funds. (a) Borrower shall make deposits (i) on
each Monthly Payment Date commencing on January 6, 2008 and continuing for the
next nineteen (19) succeeding Monthly Payment Dates thereafter, an amount equal
to $1,000,000 (the “Goldman Reserve Funds”), until such time that the amount of
the Goldman Reserve Funds shall be equal to $20,000,000 for costs of tenant
improvements or work allowances, leasing commissions and other costs associated
with the space currently leased to Goldman Tenant to the Goldman Lease (the
“Goldman Space”) and (ii) on each Monthly Payment Date commencing on December 6,
2010 and continuing for the next forty-seven (47) succeeding Monthly Payment
Dates thereafter, an amount equal to $1,000,000 (the “Wachovia Reserve Funds”),
until such time that the amount of the Wachovia Reserve Funds shall be equal to
$48,000,000 for costs of tenant improvements or work allowances, leasing
commissions and other costs associated with the space currently leased to
Wachovia pursuant to the Wachovia Lease (the “Wachovia Space”). All amounts
deposited pursuant to this Section 6.5.1 including the Goldman Reserve Funds and
the Wachovia Reserve Funds are referred to herein as the “Rollover Funds” and
the account in which such amounts are held shall hereinafter be referred to as
Borrower’s “Rollover Reserve Account”. In lieu of all or any portion of the cash
deposits referenced in the preceding sentence, Borrower may satisfy its
obligations with respect to the Goldman Reserve Funds and the Wachovia Reserve
Funds by delivering to Lender a Qualified Letter of Credit and/or a guarantee of
all or any part of the Goldman Reserve Funds and the Wachovia Reserve Funds from
a Qualified Equity Holder; provided that such guarantor has a minimum cash
liquidity capacity on its balance sheet equal to 2:1 of the amount being
guaranteed (a “Qualified Guaranty”) in the form attached hereto as Schedule II.
The Qualified Guaranty will be accompanied by a “bring down” of the
Nonconsolidation Opinion. In the event that Borrower delivers a Qualified
Guaranty for all or any part of the Goldman Reserve Funds and the Wachovia
Reserve Funds, the amount of such Qualified Guaranty shall be increased on each
Monthly Payment Date by the monthly amount (or portion thereof) required to be
delivered to Lender with respect to the Goldman Reserve Funds and the Wachovia
Reserve Funds, respectively, for such month less any amounts delivered to Lender
in the form of cash or Qualified Letter of Credit with respect to such monthly
payment. In no event shall the amount indemnified under the Alteration Indemnity
and the amount guaranteed under any Qualified Guaranties, in the aggregate, at
any time exceed $40,000,000.00.
     (b) In the event that that Borrower delivers a Qualified Letter of Credit
for all or any part of the Goldman Reserve Funds and the Wachovia Reserve Funds,
Borrower shall, within 10 days following the Borrower’s receipt of written
notice from Lender that such Letter of Credit has ceased to be a Qualified
Letter of Credit, either make a deposit into the Rollover Reserve Account in an
amount equal to the amount that would then be required to be held in such
account had such letter of credit not been posted (and thereafter continue to
make monthly deposits as provided herein), in which event such letter of credit
delivered to Lender will be returned to Borrower, or deliver to Lender a
Qualified Letter of Credit (in each case subject to the requirements set forth
in this Section 6.5.1).

-66-

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

 

     (c) In the event the terms of the Goldman Lease and the Wachovia Lease are
extended pursuant to the terms thereof (or replacement Leases are entered into
in accordance with the terms of this Agreement) with respect to all or any
portion of the Goldman Space and the Wachovia Space, respectively, the aggregate
amount of Goldman Reserve Funds and/or the Wachovia Reserve Funds required to be
deposited by Borrower hereunder shall be reduced on a pro-rata basis by an
amount equal to the Goldman Space and/or Wachovia Space re-let; provided that,
with respect to any extension of the Goldman Lease or Wachovia Lease or any new
Lease(s) of all or any portion of the Goldman Space and/or Wachovia Space, the
portion of the Goldman Reserve Funds and/or the Wachovia Reserve Funds,
allocable to such space shall be disbursed to Borrower at the written request of
Borrower in accordance with Section 6.5.2 below in respect of leasing
commissions and tenant improvement costs incurred by Borrower in connection with
extension of the Goldman Lease or Wachovia Lease or any such replacement
Lease(s) entered into in accordance with the terms hereof in respect of the
applicable space provided no Event of Default is continuing. At such time as all
of the Goldman Space and Wachovia Space have been so re-let, provided no Event
of Default has occurred and is continuing, the balance of the Goldman Reserve
Funds and Wachovia Reserve Funds, as applicable, together with interest thereon,
shall be returned to Borrower and any Qualified Letter of Credit and/or
Qualified Guaranty with respect to such Reserves shall be cancelled and/or
terminated and returned to Borrower.
     (d) If (i) a Major Lease is terminated in whole or in part (whether by buy
out, cancellation, default, reduction or otherwise) or any space demised
thereunder is surrendered, and Borrower receives any payment, fee or penalty in
respect thereof (a “Termination Fee”), then Borrower shall promptly cause such
Termination Fee to be deposited into the Rollover Reserve Account. Provided no
Event of Default is continuing, Lender shall disburse each Termination Fee (to
the extent reserved in the Rollover Reserve Account) to Borrower at the written
request of Borrower in accordance with Section 6.5.2 below in respect of leasing
commissions and tenant improvement costs incurred by Borrower in connection with
a Lease entered into in accordance with the terms hereof and, provided no Event
of Default has occurred and is continuing, the remainder of such Termination
Fee, if any, shall be remitted to Borrower after Borrower has entered into
Leases demising space at the Property having a square footage equal to or
greater than the square footage demised under the terminated Major Lease.
     6.5.2 Release of Rollover Funds. Lender shall disburse to Borrower the
Rollover Funds upon satisfaction by Borrower of each of the following
conditions: (a) Borrower shall submit a request for payment to Lender at least
ten (10) days prior to the date on which Borrower requests such payment be made
and specifies the tenant improvement costs and leasing commissions to be paid,
(b) on the date such request is received by Lender and on the date such payment
is to be made, no Event of Default shall exist and remain uncured, (c) if such
Lease is subject to Lender’s approval, Lender shall have reviewed and approved
the Lease in accordance with the terms hereof in respect of which Borrower is
obligated to pay or reimburse certain tenant improvement costs and leasing
commissions, (d) if such Lease is subject to Lender’s approval, Lender shall
have received and approved (which approval will not be unreasonably withheld) a
budget for tenant improvement costs and a schedule of leasing commissions
payments and the requested disbursement will be used to pay all or a portion of
such costs and payments, (e) Lender shall have received an Officer’s Certificate
(i) stating that the tenant improvements (or applicable portion thereof) at the
Property to be funded by the requested

-67-

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

 

disbursement have been or, subject to clause (iii) below, performed, in good and
workmanlike manner and in accordance with all applicable federal, state and
local laws, rules and regulations, such Officer’s Certificate to be accompanied
by a copy of any license, permit or other approval by any Governmental Authority
required in connection with such tenant improvements or leasing commissions, as
applicable, (ii) identifying each Person that supplied materials or labor in
connection with the tenant improvements to be funded by the requested
disbursement, and (iii) stating that each such Person has been paid in full or
will be paid in full upon such disbursement for work completed as of the date
identified in such certificate, or in the event that the cost of the tenant
improvements to be funded by the requested disbursement is in excess of $250,000
and the underlying contract requires payment before such tenants improvements
are fully completed, stating that such Person has been paid in full or will be
paid in full for the work performed upon such disbursement for work completed as
of the date identified in such certificate, such Officer’s Certificate to be
accompanied by lien waivers or other evidence of payment satisfactory to Lender,
(f) at Lender’s option, if the cost of any individual disbursement exceeds One
Million Dollars ($1,000,000), a title search for the Property indicating that
the Property is free from all Liens, claims and other encumbrances not
previously approved by Lender, (g) as a condition to the final disbursement with
respect to a particular Lease, Lender shall have received an estoppel
certificate from the applicable tenant stating that (i) all required work is
complete and refunds or reimbursements are due Tenant pursuant to its Lease and
(ii) such tenant is in occupancy or has taken possession of the demised
premises, and (h) Lender shall have received such other evidence as Lender shall
reasonably request that the tenant improvements at the Property to be funded by
the requested disbursement have been completed and are paid for or will be paid
upon such disbursement to Borrower. Lender shall not be required to disburse
Rollover Funds more frequently than once each calendar month unless such
requested disbursement is in an amount greater than the Minimum Disbursement
Amount (or a lesser amount if the total amount of Rollover Funds is less than
the Minimum Disbursement Amount, in which case only one disbursement of the
amount remaining in the account shall be made).
     Section 6.6 Unfunded Obligations Account. (a) On the Closing Date, Borrower
has deposited with Lender the sum of Fourteen Million Nine Hundred Twenty-Six
Thousand Four Hundred Eighty-Seven and 50/100 Dollars ($14,926,487.50) for the
purpose of reserving an amount in respect of Unfunded Obligations more
particularly desirable on Schedule VI hereto required to be funded by Borrower
with respect to the payment or performance of tenant improvements under that
certain Lease dated as of September 16, 1994 with Fried, Frank, Harris, Shriver
and Jacobson (the “Fried Frank Lease”) and that certain Lease dated as of
August 22, 2005 with Benfield Holdings Inc. (the “Benfield Lease”). Amounts so
deposited shall hereinafter be referred to as Borrower’s “Unfunded Obligations
Funds” and the account in which such amounts are held shall hereinafter be
referred to as Borrower’s “Unfunded Obligations Account”. Upon Borrower’s
satisfactory performance and completion of the Unfunded Obligations, provided no
Event of Default has occurred and is continuing, the balance of the Unfunded
Obligations Funds, together with interest thereon, shall be returned to
Borrower.
     (b) Borrower shall perform the Unfunded Obligations, in a diligent,
workmanlike manner, if applicable, and shall complete the same within the
respective time periods set forth in the Fried Frank Lease and the Benfield
Lease, as applicable. Within five (5) Business Days following the request of
Borrower at any time that no Event of Default is

-68-

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

 

continuing (but not more often than once per calendar month), Lender shall cause
disbursements from the Unfunded Obligations Account to pay (or, if applicable,
to reimburse Borrower) for reasonable costs and expenses incurred in the
performance of Unfunded Obligations, provided, that:
     (i) To the extent required under the Fried Frank Lease and the Benfield
Lease, as applicable, Borrower shall deliver to Lender invoices evidencing the
costs for such disbursements;
     (ii) Borrower shall deliver to Lender an Officer’s Certificate confirming
that the amounts requested are due and payable under the Fried Frank Lease
and/or the Benfield Lease, as applicable; and
     (iii) Lender may condition the making of a requested disbursement on
(1) reasonable evidence establishing that Borrower has applied any amounts
previously received by it in accordance with this Section for the expenses to
which specific draws made hereunder relate and (2) to the extent required under
the Fried Frank Lease or Benfield Lease, as applicable, receipt of partial lien
releases and waivers from any contractors, subcontractors and others with
respect to amounts for which disbursements have previously been made by Lender
under this Section 6.6.
     Section 6.7 Release of Reserve Funds upon Termination of Cash Sweep Period.
Upon the occurrence of a Cash Sweep Cure, Lender shall disburse to Borrower the
Tax Fund, Insurance Funds and the Capital Expenditure Funds, the Rollover Funds
(other than the Goldman Reserve Funds and the Wachovia Reserve Funds) and any
other amounts then remaining on deposit in the Accounts (as defined in the Cash
Management Agreement).
     Section 6.8 Security Interest in Reserve Funds.
     6.8.1 Grant of Security Interest. Borrower hereby pledges to Lender, and
grants a security interest in, any and all monies now or hereafter deposited in
the Reserve Funds as additional security for the payment of the Loan. The
Reserve Funds shall be held in Lender’s name for the benefit of Borrower, shall
be assigned the federal tax identification number of Borrower, and may be
commingled with any of Lender’s other funds then being held by the Lender or
Servicer. The Reserve Funds shall be held in an interest-bearing Eligible
Account in Permitted Investments in accordance with the terms of this Agreement
and, during a Cash Sweep Period, pursuant to the provisions of the Cash
Management Agreement. Borrower may direct the investment of the Reserve Funds,
provided that no Event of Default has occurred and is continuing. Upon the
occurrence of an Event of Default, Lender may apply any sums then on deposit in
the Reserve Funds to the payment of the Loan in any order in its sole
discretion, provided, that, if any Capital Expenditure Funds have not been
otherwise applied to amounts payable under the Loan Documents, Borrower shall be
entitled to obtain disbursements thereof for life safety purposes to the extent
provided in Section 6.4.2. Until expended or applied as above provided, the
Reserve Funds shall constitute additional security for the Loan. Lender shall
have no obligation to release any of the Reserve Funds while any Event of
Default then exists.

-69-

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

 

     6.8.2 Income Taxes. Interest shall accrue on the Reserve Funds for the
benefit and account of Borrower. Borrower shall report on its federal, state and
local income tax returns all interest or income earned on the applicable Reserve
Funds.
     6.8.3 Prohibition Against Further Encumbrance. Borrower shall not, without
the prior consent of Lender, further pledge, assign or grant any security
interest in the Reserve Funds or permit any lien or encumbrance to attach
thereto, or any levy to be made thereon, or any UCC-1 Financing Statements,
except those naming Lender as the secured party, to be filed with respect
thereto.
ARTICLE VII
PROPERTY MANAGEMENT.
     Section 7.1 The Management Agreement. (a) Borrower represents, warrants and
covenants to Lender that, as of the date hereof, (i) the Property is managed by
Borrower and no other Person, (ii) there exists no management or other agreement
pursuant to which the Property or any portion thereof is managed, and (iii) any
individuals engaged in the management of the Property are (and at all times
during which Borrower shall be the Manager shall continue to be) the direct
employees or consultants of an Affiliate of Borrower and are directly
compensated for their services by Borrower.
     (b) Borrower shall cause the Property to be managed in accordance with any
Management Agreement; provided, that, at all times during which Borrower shall
be the Manager, Borrower shall manage the Property in a manner consistent with
other prudent owners of real estate similar to the Property and in accordance
with the terms and provisions of this Agreement. Borrower shall (i) diligently
perform and observe all of the terms, covenants and conditions of any Management
Agreement on the part of Borrower to be performed and observed, (ii) promptly
notify Lender of any notice to Borrower of any default by Borrower in the
performance or observance of any of the terms, covenants or conditions of any
Management Agreement on the part of Borrower to be performed and observed, and
(iii) promptly deliver to Lender a copy of each financial statement, business
plan, capital expenditures plan, report and estimate received by it under any
Management Agreement as it relates to the Property. If Borrower shall default in
the performance or observance of any material term, covenant or condition of any
Management Agreement on the part of Borrower to be performed or observed (beyond
the expiration of any applicable notice and/or grace periods), then, without
limiting Lender’s other rights or remedies under this Agreement or the other
Loan Documents, and without waiving or releasing Borrower from any of its
obligations hereunder or under such Management Agreement, Lender shall have the
right, but shall be under no obligation, to pay any sums and to perform any act
as may be appropriate to cause all the material terms, covenants and conditions
of such Management Agreement on the part of Borrower to be performed or
observed.
     Section 7.2 Prohibition Against Termination or Modification. Borrower shall
not surrender, terminate, cancel, modify, renew, amend or extend any Management
Agreement or cause or consent to the surrender, termination, cancellation,
modification, renewal amendment or extension (unless such renewal or extension
is commercially reasonably), or enter into any

-70-

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

 

other agreement relating to the management or operation of the Property with
Manager or any other Person, or consent to the assignment by the Manager of its
interest under any Management Agreement, in each case without the express
consent of Lender, which consent shall not be unreasonably withheld; provided,
however, (i) with respect to a new manager, such new manager shall be a
Qualified Manager (and Borrower shall have satisfied each of the conditions set
forth in the definition of Qualified Manager which are applicable to such new
manager, i.e., delivery of a Rating Agency Confirmation and/or a new or updated
Insolvency Opinion, as applicable), and (ii) with respect to a new management
agreement, Lender’s consent to such new management agreement may be conditioned
upon Borrower delivering a Rating Agency Confirmation as to such new management
agreement if a Securitization shall have occurred. If at any time Lender
consents to the appointment of a new manager (except in the case where such new
manager is Borrower), such new manager and Borrower shall, as a condition of
Lender’s consent, execute an Assignment of Management Agreement.
     Section 7.3 Replacement of Manager. In the event that the Property is
managed by a Manager after the date hereof, Lender shall have the right to
require Borrower to replace such Manager with a Person which is not an Affiliate
of, but is chosen by, Borrower and approved by Lender upon the occurrence of any
one or more of the following events: (a) at any time following the occurrence of
and during the continuance of a monetary Event of Default, (b) a Bankruptcy
Action with respect to the Manager and/or (c) if Manager (who is not a Trizec
Affiliate) shall be in default under the Management Agreement beyond any
applicable notice and cure period.
ARTICLE VIII
TRANSFERS
     Section 8.1 Transfer or Encumbrance of Property. (a) Without the prior
written consent of Lender, neither Borrower nor any other Person having an
ownership or beneficial interest in Borrower shall (i) directly or indirectly
sell, transfer, convey, mortgage, pledge, or assign the Property, any part
thereof or any interest therein (including any partnership or any other
ownership interest in Borrower); (ii) further encumber, alienate, grant a Lien
or grant any other interest in the Property or any part thereof (including any
partnership or other ownership interest in Borrower), whether voluntarily or
involuntarily; or (iii) enter into any easement or other agreement granting
rights in or restricting the use or development of the Property.
     (b) As used in this Article VIII, “transfer” shall include (i) an
installment sales agreement wherein Borrower agrees to sell the Property or any
part thereof for a price to be paid in installments; (ii) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder 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 Borrower or any general partner or
managing member of Borrower is a corporation, the voluntary or involuntary sale,
conveyance or transfer of such corporation’s stock (or the stock of any
corporation directly or indirectly Controlling such corporation by operation of
law or otherwise) or the creation or issuance of new stock such that such
corporation’s stock shall be vested in a party or parties who are not now
stockholders or any change in the Control of

-71-

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

 

such corporation; and (iv) if Borrower or any general partner or managing member
of Borrower is a limited or general partnership, joint venture or limited
liability company, the change, removal, resignation or addition of a general
partner, managing partner, limited partner, joint venturer, managing member or
member or the transfer of the partnership interest of any general partner,
managing partner or limited partner or the transfer of the interest of any joint
venture or member.
            (c) 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 Borrower’s sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Property without Lender’s consent. This provision shall apply to every sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Property regardless of whether voluntary or not, or whether or not Lender has
consented to any previous sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer of the Property.
            (d) Lender’s consent to one sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Property shall not be deemed to be a
waiver of Lender’s right to require such consent to any future occurrence of
same. Any sale, conveyance, alienation, mortgage, encumbrance, pledge or
transfer of the Property made in contravention of this paragraph shall be null
and void and of no force and effect.
            (e) Borrower agrees to bear and shall pay or reimburse Lender on
demand for all reasonable expenses (including, without limitation, reasonable
attorneys’ fees and disbursements, title search costs and title insurance
endorsement premiums) incurred by Lender in connection with the review, approval
and documentation of any such sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer.
            (f) Lender shall not withhold its consent to the sale or transfer of
the entire Property; provided that the following conditions are satisfied as
reasonably determined by Lender:
     (i) no Event of Default or material Default shall have occurred and remain
uncured;
     (ii) payment of an assumption fee of $100,000;
     (iii) the proposed transferee (the “Transferee”) is a Permitted Transferee;
     (iv) after such conveyance of the Property, any Manager shall be a
Qualified Manager;
     (v) after a Securitization, Lender shall have received a Rating Agency
Confirmation as to such transfer;
     (vi) Lender shall have received evidence satisfactory to it (which shall
include a legal non-consolidation opinion acceptable to Lender) that the single
purpose nature and bankruptcy remoteness of Borrower its shareholders, partners,
or members, as the

-72-

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

 

case may be, following such transfers are in accordance with the standards of
the Rating Agencies;
     (vii) the Transferee shall have executed and delivered to Lender an
assumption agreement in form and substance acceptable to Lender in its
reasonable discretion, evidencing such Transferee’s agreement to assume
Borrower’s obligations under, abide and be bound by the terms of this Agreement,
the Note, the Mortgage and the other Loan Documents after the date of such
conveyance, together with such legal opinions, Officer’s Certificates, documents
and title insurance endorsements as may be reasonably requested by Lender; and
     (viii) Lender shall have received on or prior to the date of the sale or
transfer (A) a rating confirmation fee for each of the Rating Agencies
delivering a confirmation pursuant to clause (v) above, which confirmation fees
shall be equal to the then customary fees charged by each applicable Rating
Agency for such a confirmation and (B) the payment of all reasonable third party
costs and expenses actually incurred by Lender and Servicer and all costs and
expenses of the Rating Agencies in connection with such assumption.
            Upon satisfaction of each of the conditions set forth in
subparagraphs (f)(i)-(viii) above, Lender shall release Borrower from any
liability or obligation under the Loan Documents which arises from any act,
omission or event that occurs from and after the date of the conveyance of the
Property to a Transferee.
            Section 8.2 Transfer of Equity Interests. Notwithstanding the
restrictions on transfers set forth in Section 8.1(a) above, the following
transfers of ownership interests in the Borrower shall not be deemed to be a
violation of such restrictions on transfers (each of the following is a
“Permitted Transfer”):
            (a) the transfer of the direct or indirect ownership interests in
Borrower to a Permitted Transferee, provided, that, the following conditions are
satisfied:
     (i) no Event of Default shall have occurred and be continuing;
     (ii) if, after giving effect to such proposed transfer and all prior
transfers, more than forty-nine percent (49%) in the aggregate of direct or
indirect interests in Borrower are owned by any Person and/or its Affiliates
that owned less than a forty-nine percent (49%) direct or indirect interest in
Borrower as of the date of this Agreement, Lender receives a non-consolidation
opinion reasonably acceptable to Lender and acceptable to the Rating Agencies in
their sole discretion;
     (iii) such transfer shall not affect the single purpose, bankruptcy remote
nature of Borrower as required pursuant to this Agreement and in its
organizational documents;
     (iv) Borrower shall have paid all reasonable out-of-pocket costs and
expenses (including, without limitation, reasonable and actual attorney’s fees)
incurred by Lender, Servicer or the Rating Agencies in connection with such
transfer; and

-73-

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

 

     (v) following such transfer, (A) Borrower continues to be Controlled
directly or indirectly by a Permitted Transferee and (B) the Property shall
continue to be managed by a Qualified Manager; or
            (b) any transfer not otherwise permitted pursuant to clause (a)
above of the direct or indirect ownership interests in Borrower to any Person,
provided, that, the following conditions are satisfied:
     (i) no Event of Default shall have occurred and be continuing; and
     (ii) if, after giving effect to such proposed transfer and all prior
transfers, more than forty-nine percent (49%) in the aggregate of direct or
indirect interests in Borrower are owned by any Person and/or its Affiliates
that owned less than a forty-nine percent (49%) direct or indirect interest in
Borrower as of the date of this Agreement, Lender receives a non-consolidation
opinion reasonably acceptable to Lender and acceptable to the Rating Agencies in
their sole discretion; and
     (iii) such transfer shall not affect the single purpose, bankruptcy remote
nature of Borrower as required hereunder and in its organizational documents;
and
     (iv) Borrower shall have paid all reasonable out-of-pocket costs and
expenses (including, without limitation, reasonable and actual attorney’s fees)
incurred by Lender, Servicer and the Rating Agencies in connection with such
transfer; and
     (v) following such transfer, (A) Borrower continues to be Controlled
directly or indirectly by a Permitted Transferee (provided that Specified
Decisions may be subject to customary approval by a Permitted Transferee if the
direct or indirect ownership interests in Borrower are being transferred to a
Permitted Transferee), (B) an aggregate of 50.1% or more of the interests in
Borrower are owned directly or indirectly by a Permitted Transferee and (C) the
Property shall continue to be managed by a Qualified Manager; or
            (c) Transfers of direct or indirect interests in any Qualified
Equity Holder shall be permitted.
ARTICLE IX
SALE AND SECURITIZATION OF MORTGAGE
            Section 9.1 Sale of Mortgage and Securitization. (a) Lender shall
have the right (i) to sell or otherwise transfer the Loan or any portion thereof
as a whole loan, (ii) to sell participation interests in the Loan or (iii) to
securitize the Loan or any portion thereof in a single asset securitization or a
pooled loan securitization. (The transactions referred to in clauses (i), (ii)
and (iii) shall hereinafter be referred to collectively as “Secondary Market
Transactions” and the transaction referred to in clause (iii) shall hereinafter
be referred to as a “Securitization”. Any certificates, notes or other
securities issued in connection with a Securitization are hereinafter referred
to as “Securities”).

-74-

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

 

            (b) If requested by Lender, Borrower shall use commercially
reasonable, good faith efforts to assist Lender in satisfying the market
standards to which Lender customarily adheres or which may be reasonably
required in the marketplace or by the Rating Agencies in connection with any
Secondary Market Transactions, including, without limitation, to:
     (i) (A) provide updated financial and other information with respect to the
Property, the business operated at the Property, Borrower and the Manager (if
any), (B) provide updated budgets relating to the Property and (C) at Lender’s
expense, provide updated appraisals, market studies, environmental reviews
(Phase I’s and, if appropriate, Phase II’s), property condition reports and
other due diligence investigations of the Property (the “Updated Information”),
together, if customary, with appropriate verification of the Updated Information
through letters of auditors or opinions of counsel acceptable to Lender and the
Rating Agencies;
     (ii) provide opinions of counsel, at Lender’s expense, which may be relied
upon by Lender, the Rating Agencies and their respective counsel, agents and
representatives, as to non-consolidation, fraudulent conveyance, and “true sale”
or any other opinion customary in Secondary Market Transactions or required by
the Rating Agencies with respect to the Property and Borrower and Affiliates,
which counsel and opinions shall be satisfactory to Lender and the Rating
Agencies;
     (iii) provide updated, as of the closing date of the Secondary Market
Transaction, representations and warranties made in the Loan Documents and such
additional representations and warranties as the Rating Agencies may require;
     (iv) execute such amendments to the Loan Documents and Borrower’s
organizational documents reasonably requested by Lender, including, without
limitation, amending the Monthly Payment Date, the execution of one or more
replacement loan agreements, as may be requested by Lender or the Rating
Agencies to effect the Securitization and/or deliver one or more new component
notes to replace the original note or modify the original note to reflect
multiple components of the Loan (and such new notes or modified note shall have
the same weighted average coupon and amortization of the original note, but such
new notes or modified note may change the interest rate, Monthly Payment Date
and amortization of the Loan after the occurrence of an Event of Default), and
modify the Cash Management Agreement with respect to the newly created
components such that the pricing and marketability of the Securities and the
size of each class of Securities and the rating assigned to each such class by
the Rating Agencies shall provide the most favorable rating levels and achieve
the optimum rating levels for the Loan; provided, however, that Borrower shall
not be required to modify or amend any Loan Document if such modification or
amendment would (A) change the interest rate, the stated maturity or the
amortization of principal except as set forth above, (B) modify or amend any
other material economic term of the Loan or (C) otherwise have a material
adverse effect on any of Borrower’s rights and obligations under the Loan
Documents; and
     (v) attend management meetings and conduct tours of the Property.

-75-

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

 

     (c) If, at the time one or more Disclosure Documents 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, 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 reasonably 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 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 reasonably 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
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 thirty (30) Business Days after notice from Lender in
connection with the preparation of Disclosure Documents for the securitization,
(B) not later than sixty (60) 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 a filing pursuant to the
Securities Exchange Act of 1934 in connection with or relating to the
securitization (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. Lender shall use commercially reasonable
efforts in connection with a Securitization of all or part of the Loan so that
Borrower may avoid compliance with Regulation AB.
     (d) If requested by Lender, Borrower shall furnish, or shall cause the
applicable tenant to furnish, to Lender financial data and/or financial
statements in accordance with Regulation AB (as defined above) for any tenant of
any Property if, in connection with a securitization, Lender expects there to
be, with respect to such tenant or group of affiliated tenants, a concentration
within all of the mortgage loans included or expected to be included, as
applicable, in such securitization such that such tenant or group of affiliated
tenants would constitute a Significant Obligor (as defined above); provided,
however, that in the event the related lease does not require the related tenant
to provide the foregoing information, Borrower shall only be required to use
commercially reasonable efforts to cause the applicable tenant to furnish such
information.

-76-

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

 

     (e) At such time (i) the entire principal balance of the Loan has been
placed into one or more Securitizations, and (ii) no reports are required to be
filed under the Securities Exchange Act of 1934 with respect to any such
Securitization that would require provision of any of the financial statements
identified in Section 9.1 (c) and (d) (which time is anticipated by Lender to
occur following the end of the fiscal year in which the last such Securitization
occurs and the provision of the financial statements required by Section 9.1
(c) and (d) for such fiscal year), Borrower shall no longer be required to
provide the financial statements required by this Section 9.1 (c) and (d).
     (f) Lender shall reimburse Borrower for all of its reasonable costs and
expenses up to an amount not to exceed $5,000 incurred in connection with its
cooperation with such Lender pursuant to this Section 9.1, Section 9.3 and
Section 11.29 (except that such Lender shall have no obligation to reimburse
Borrower with respect to any of the foregoing which Borrower is otherwise
required to perform and/or deliver at its cost under another provision of this
Agreement).
     Section 9.2 Securitization Indemnification. (a) Borrower understands that
information provided to Lender by Borrower and its agents, counsel and
representatives may be included in disclosure documents in connection with the
Securitization, including, without limitation, an offering circular, a
prospectus, prospectus supplement, private placement memorandum or other
offering document (each, a “Disclosure Document”) and may also be included in
filings with the Securities and Exchange Commission pursuant to the Securities
Act of 1933, as amended (the “Securities Act”), or the Securities and Exchange
Act of 1934, as amended (the “Exchange Act”), and may be made available to
investors or prospective investors in the Securities, the Rating Agencies, and
service providers relating to the Securitization.
     (b) Borrower shall provide in connection with each of (i) a preliminary and
a final private placement memorandum or (ii) a preliminary and final prospectus
or prospectus supplement, as applicable, an agreement (A) certifying that
Borrower has examined such Disclosure Documents specified by Lender and that
each such Disclosure Document, as it relates to Borrower, Borrower Affiliates,
the Property and Manager (if any), does 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, (B) indemnifying Lender (and for purposes of this Section 9.2,
Lender hereunder shall include its officers and directors), the Affiliate of
Lender that has filed the registration statement relating to the Securitization
(the “Registration Statement”), each of its directors, each of its officers who
have signed the Registration Statement and each Person that Controls the
Affiliate within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act (collectively, the “Lender Group”), and Lender, and any
other placement agent or underwriter with respect to the Securitization, each of
their respective directors and each Person who Controls Lender or any other
placement agent or underwriter within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act (collectively, the
“Underwriter Group”) for any losses, claims, damages or liabilities
(collectively, the “Liabilities”) to which Lender, the Lender Group or the
Underwriter Group may become subject insofar as the Liabilities arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in such sections 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 or necessary in order to make the statements in such

-77-

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

 

sections, in light of the circumstances under which they were made, not
misleading and (C) agreeing to reimburse Lender, the Lender Group and/or the
Underwriter Group for any legal or other expenses reasonably incurred by Lender,
the Lender Group and the Underwriter Group in connection with investigating or
defending the 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
loss claim, damage or liability arises out of or is based upon any such untrue
statement or omission made therein in reliance upon and in conformity with
information furnished to Lender by or on behalf of Borrower in connection with
the preparation of the Disclosure Document or in connection with the
underwriting or closing of the Loan, including, without limitation, financial
statements of Borrower, operating statements and rent rolls with respect to the
Property. This indemnity agreement will be in addition to any liability which
Borrower may otherwise have.
     (c) In connection with Exchange Act Filings, Borrower shall (i) indemnify
Lender, the Lender Group and the Underwriter Group for Liabilities to which
Lender, the Lender Group or the Underwriter Group may become subject insofar as
the Liabilities arise out of or are based upon the omission or alleged omission
to state in the Disclosure Document relating to Borrower, the Property, the
Manager (if any), the Principal or the Trizec Affiliates a material fact
required to be stated in the Disclosure Document in order to make the statements
in the Disclosure Document, in light of the circumstances under which they were
made, not misleading and (ii) reimburse Lender, the Lender Group or the
Underwriter Group for any legal or other expenses reasonably incurred by Lender,
the Lender Group or the Underwriter Group in connection with defending or
investigating the Liabilities; provided, however, that Borrower will be liable
in any such case above only to the extent that any such Liability arises out of,
or is based upon, any such untrue statement or omission made in the Disclosure
Document in reliance upon, and in conformity with, information furnished to
Lender by or at the direction of Borrower, any Affiliate of Borrower, any Trizec
Affiliate pursuant to the Loan Documents, whether in connection with the
preparation of a Disclosure Document, or in connection with the underwriting or
closing of the Loan or otherwise, including, without limitation, the financial
statements of Borrower and THL and the operating statements and rent rolls with
respect to the Property.
     (d) Promptly after receipt by an indemnified party under this Section 9.2
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 9.2, 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 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 satisfactory to such indemnified party.
After notice from the indemnifying party to such indemnified party under this
Section 9.2, such indemnified party shall pay for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, if the
defendants in any such action include both the indemnified party and the

-78-

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

 

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 at
the cost of the indemnifying party. The indemnifying party shall not be liable
for the expenses of more than one separate counsel unless an indemnified party
shall have reasonably concluded that there may be legal defenses available to it
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 agreement provided for in Section 9.2(b) or
(c) is for any reason held to be unenforceable as to 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 9.2(b) or (c), 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) Lender’s and Borrower’s relative
knowledge and access to information concerning the matter with respect to which
the claim was asserted; (ii) the opportunity to correct and prevent any
statement or omission; and (iii) any other equitable considerations appropriate
in the circumstances. Lender and Borrower hereby agree that it 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 both Borrower and Lender under this
Section 9.2 shall survive the termination of this Agreement and the satisfaction
and discharge of the Debt.
     Section 9.3 Mezzanine Loans. Notwithstanding the provisions of Article IX
to the contrary, Borrower covenants and agrees that after the Closing Date and
prior to a Securitization, Lender shall have the right to create one or more
mezzanine loans (each, a “New Mezzanine Loan”), to establish different interest
rates and to reallocate the amortization, and principal balances of the Loan and
any New Mezzanine Loan amongst each other and to require the payment of the Loan
and any New Mezzanine Loan in such order of priority as may be designated by
Lender; provided, that in no event shall the weighted average spread and
amortization of the Loan and any New Mezzanine Loan following any such
reallocation or modification change from the weighted average spread and
amortization for all in effect immediately preceding such reallocation,
modification or creation of any New Mezzanine Loan. Borrower shall execute and
deliver such documents as shall reasonably be required by Lender as promptly as
possible under the circumstances in connection with this Section 9.3, all in
form and substance reasonably satisfactory to Lender and the Rating Agencies,
including, without limitation, in connection with the creation of any New
Mezzanine Loan, a promissory note and loan documents necessary to evidence such
New Mezzanine Loan, and Borrower shall execute such amendments to the Loan
Documents as are necessary in connection with the creation of such 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

-79-

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

 

borrower under any 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 any 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 additional Insolvency Opinion for the Loan and a substantive
non-consolidation opinion with respect to any New Mezzanine Loan, each as
reasonably acceptable to Lender, prospective investors and/or the Rating
Agencies.
ARTICLE X
DEFAULTS
     Section 10.1 Event of Default. (a) Each of the following events shall
constitute an event of default hereunder (an “Event of Default”):
     (i) if (A) any monthly installment of principal and/or interest due under
the Note is not paid when due or (B) the payment due on the Maturity Date is not
paid when due or (C) any other portion of the Debt is not paid when due and such
non-payment continues for five (5) days following notice to Borrower that the
same is due and payable;
     (ii) if any of the Taxes or Other Charges are not paid when due subject,
however, to the provisions of Section 4.1.2;
     (iii) if the Policies are not kept in full force and effect;
     (iv) if Borrower breaches or permits or suffers a breach of Article 6 of
the Mortgage and same is not cured within five (5) Business Days after notice
thereof from Lender;
     (v) if any representation or warranty made by Borrower herein or in any
other Loan Document, or in any report, certificate, financial statement or other
instrument, agreement or document furnished to Lender shall have been false or
misleading in any material respect as of the date the representation or warranty
was made and same is not cured within five (5) Business Days after notice
thereof from Lender;
     (vi) if Borrower, any SPC Party or any Principal shall make an assignment
for the benefit of creditors;
     (vii) reserved;
     (viii) if a receiver, liquidator or trustee shall be appointed for Borrower
or any Principal or if Borrower or any Principal shall be adjudicated a bankrupt
or insolvent, or if any petition for bankruptcy, reorganization or arrangement
pursuant to federal bankruptcy law, or any similar federal or state law, shall
be filed by or against, consented to, or acquiesced in by, Borrower or any
Principal, or if any proceeding for the dissolution or liquidation of Borrower
or any Principal shall be instituted; provided,

-80-

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

 

however, if such appointment, adjudication, petition or proceeding was
involuntary and not consented to by Borrower or any Principal, upon the same not
being discharged, stayed or dismissed within sixty (60) days or if an order for
relief is entered;
     (ix) if Borrower attempts to assign its rights under this Agreement or any
of the other Loan Documents or any interest herein or therein in contravention
of the Loan Documents;
     (x) a default under any agreement creating a Lien or encumbrance on the
Property, subject to Borrower’s right to contest such Lien or encumbrance in
strict accordance with the terms of the Loan Documents;
     (xi) if any of the assumptions contained in the Insolvency Opinion, or in
any other non-consolidation opinion delivered to Lender in connection with the
Loan, or in any other non-consolidation delivered subsequent to the closing of
the Loan, is or shall become untrue in any material respect; provided, however,
such assumption which has become untrue in such material respect (an “Untrue
Material Assumption”) shall not constitute an Event of Default in the event that
(1) such Untrue Material Assumption is not intentional, (2) such Untrue Material
Assumption is immaterial, (3) such Untrue Material Assumption shall be remedied
within a timely manner and (4) within fifteen (15) Business Days of the request
of Lender, Borrower delivers to Lender an additional Insolvency Opinion, or a
modification of the Insolvency Opinion, to the effect that such Untrue Material
Assumption shall not in any way impair, negate or adversely change the opinions
rendered in the Insolvency Opinion, which opinion or modification and any
counsel delivering such opinion or modification shall be acceptable to Lender in
its reasonable discretion;
     (xii) if Borrower breaches any representation, warranty or covenant
contained in Section 3.1.24 hereof; provided, however, such violation or breach
shall not constitute an Event of Default in the event that (1) such violation or
breach is not intentional, (2) such violation or breach is immaterial, (3) such
violation or breach shall be remedied within a timely manner and (4) within
fifteen (15) Business Days of the request of Lender, Borrower delivers to Lender
an additional Insolvency Opinion, or a modification of the Insolvency Opinion,
to the effect that such breach or violation shall not in any way impair, negate
or adversely change the opinions rendered in the Insolvency Opinion, which
opinion or modification and any counsel delivering such opinion or modification
shall be acceptable to Lender in its reasonable discretion;
     (xiii) if Borrower breaches any of the negative covenants contained in
Section 4.2.10;
     (xiv) if Borrower or any owner of Borrower violates any of the covenants
set forth in Section 8.1 or 8.2 hereof and same is not cured within five
(5) Business Days after notice thereof from Lender; or
     (xv) if Borrower shall continue to be in Default under any of the other
terms, covenants or conditions of this Agreement or any other Loan Document not
specified in

-81-

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

 

subsections (i) to (xiv) above, for ten (10) days after notice to Borrower from
Lender, in the case of any Default which can be cured by the payment of a sum of
money, or for thirty (30) days after notice from Lender in the case of any other
Default; provided, however, that if such non monetary Default is susceptible of
cure but cannot reasonably be cured within such thirty (30) day period and
provided, further, that Borrower 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
such time as is reasonably necessary for Borrower in the exercise of due
diligence to cure such Default, such additional period not to exceed sixty
(60) days.
            (b) Upon the occurrence of an Event of Default (other than an Event
of Default described in Section 10.1(a)(vi), (vii) or (viii) above) and at any
time thereafter 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 and to the
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 the Property,
including, without limitation, all rights or remedies available at law or in
equity; and upon any Event of Default described in Section 10.1(a)(vi), (vii) or
(viii) 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.
            Section 10.2 Remedies. (a) 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 the Property. Any such actions taken by Lender shall
be cumulative and concurrent and may be pursued independently, singly,
successively, together or otherwise, at such time and in such order as Lender
may determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of Lender
permitted by law, equity or contract or as set forth herein or in the other Loan
Documents. Without limiting the generality of the foregoing, if an Event of
Default is continuing (i) Lender is not subject to any “one action” or “election
of remedies” law or rule, and (ii) all liens and other rights, remedies or
privileges provided to Lender shall remain in full force and effect until Lender
has exhausted all of its remedies against the Property and the Mortgage has been
foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt or
the Debt has been paid in full.
            (b) Lender shall have the right from time to time to partially
foreclose the Mortgage in any manner and for any amounts secured by the Mortgage
then due and payable as determined by Lender in its sole discretion including,
without limitation, the following

-82-

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

 

circumstances: (i) in the event Borrower defaults beyond any applicable grace
period in the payment of one or more scheduled payments of principal and
interest, Lender may foreclose the Mortgage to recover such delinquent payments,
or (ii) in the event Lender elects to accelerate less than the entire
outstanding principal balance of the Loan, Lender may foreclose the Mortgage to
recover so much of the principal balance of the Loan as Lender may accelerate
and such other sums secured by the Mortgage as Lender may elect. Notwithstanding
one or more partial foreclosures, the Property shall remain subject to the
Mortgage to secure payment of sums secured by the Mortgage and not previously
recovered.
     (c) Lender shall have the right from time to time to sever the Note and the
other Loan Documents into one or more separate notes, mortgages and other
security documents (the “Severed Loan Documents”) in such denominations as
Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order to
effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender. Borrower hereby absolutely and
irrevocably appoints Lender as its true and lawful attorney, coupled with an
interest, in its name and stead to make and execute all documents necessary or
desirable to effect the aforesaid severance, Borrower ratifying all that its
said attorney shall do by virtue thereof; provided, however, Lender shall not
make or execute any such documents under such power until three (3) days after
notice has been given to Borrower by Lender of Lender’s intent to exercise its
rights under such power. Except as may be required in connection with a
Securitization pursuant to Section 9.1 hereof, (i) Borrower shall not be
obligated to pay any costs or expenses incurred in connection with the
preparation, execution, recording or filing of the Severed Loan Documents, and
(ii) the Severed Loan Documents shall not contain any representations,
warranties or covenants not contained in the Loan Documents and any such
representations and warranties contained in the Severed Loan Documents will be
given by Borrower only as of the Closing Date.
     (d) Any amounts recovered from the Property or any other collateral for the
Loan after an Event of Default may be applied by Lender toward the payment of
any interest and/or principal of the Loan and/or any other amounts due under the
Loan Documents in such order, priority and proportions as Lender in its sole
discretion shall determine.
     Section 10.3 Right to Cure Defaults. After the occurrence of an Event of
Default, Lender may, but without any obligation to do so and without notice to
or demand on Borrower and without releasing Borrower from any obligation
hereunder or being deemed to have cured any Event of Default hereunder, make, do
or perform any obligation of Borrower hereunder in such manner and to such
extent as Lender may deem necessary. Lender is authorized to enter upon the
Property for such purposes, or appear in, defend, or bring any action or
proceeding to protect its interest in the Property for such purposes, and the
cost and expense thereof (including reasonable attorneys’ fees to the extent
permitted by law), with interest as provided in this Section 10.3, shall
constitute a portion of the Debt and shall be due and payable to Lender upon
demand. All such costs and expenses incurred by Lender in remedying such Event
of Default or such failed payment or act or in appearing in, defending, or
bringing any action or proceeding shall bear interest at the Default Rate, for
the period after such cost or expense was incurred into the date of payment to
Lender. All such costs and expenses incurred

-83-

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

 

by Lender together with interest thereon calculated at the Default Rate shall be
deemed to constitute a portion of the Debt and be secured by the liens, claims
and security interests provided to Lender under the Loan Documents and shall be
immediately due and payable upon demand by Lender therefore.
     Section 10.4 Remedies Cumulative. 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 pursuant to this
Agreement or the other Loan Documents, or existing at law or in equity or
otherwise. Lender’s rights, powers and remedies may be pursued singly,
concurrently or otherwise, at such time and in such order as Lender may
determine in Lender’s sole discretion. No delay or omission to exercise any
remedy, right or power accruing upon an Event of Default shall impair any such
remedy, right or power or shall be construed as a waiver thereof, but any such
remedy, right or power may be exercised from time to time and as often as may be
deemed expedient. A waiver of one Default or Event of Default with respect to
Borrower 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.
ARTICLE XI
MISCELLANEOUS
     Section 11.1 Successors and Assigns. 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 11.2 Lender’s Discretion. Whenever pursuant to this Agreement
Lender exercises any right given to it to approve or disapprove, or any
arrangement or term is to be satisfactory to Lender, the decision of Lender to
approve or disapprove or to decide whether arrangements or terms are
satisfactory or not satisfactory shall (except as is otherwise specifically
herein provided) be in the sole discretion of Lender and shall be final and
conclusive. Prior to a Securitization, whenever pursuant to this Agreement the
Rating Agencies are given any right to approve or disapprove, or any arrangement
or term is to be satisfactory to the Rating Agencies, or the requirement for
delivery of a Rating Agency Confirmation exists, the decision of Lender (a) to
approve or disapprove, (b) to decide whether arrangements or terms are
satisfactory or not satisfactory or (c) to determine whether it is reasonably
likely that a Rating Agency Confirmation would be issued, based upon Lender’s
determination of Rating Agency criteria, shall be substituted therefore.
     Section 11.3 Governing Law. (A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE
OF NEW YORK, AND MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW
YORK, AND THE PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM
THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL
RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY,
AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND
THE OBLIGATIONS ARISING HEREUNDER SHALL BE

-84-

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

 

GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF
SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION,
VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS
ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW,
BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT
THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS
AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
     (B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING
OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER’S OPTION BE INSTITUTED IN ANY
FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO
SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER AND LENDER
WAIVE ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR
FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER AND
LENDER HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY SUCH COURT IN ANY
SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:
     CORPORATION SERVICE COMPANY
     80 STATE STREET
     ALBANY, NEW YORK 12207
     AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF
ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING
IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER,
(II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED
AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE
SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III)
SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT

-85-

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

 

CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A
SUCCESSOR.
     Section 11.4 Modification, Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement
or of any other Loan Document, nor consent to any departure by Borrower
therefrom, shall in any event be effective unless the same shall be in a writing
signed by the party against whom enforcement is sought, and then such waiver or
consent shall be effective only in the specific instance, and for the purpose,
for which given. Except as otherwise expressly provided herein, no notice to, or
demand on Borrower, shall entitle Borrower to any other or future notice or
demand in the same, similar or other circumstances.
     Section 11.5 Delay Not a Waiver. Neither any failure nor any delay on the
part of Lender in insisting upon strict performance of any term, condition,
covenant or agreement, or exercising any right, power, remedy or privilege
hereunder, or under any other Loan Document, shall operate as or constitute a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other future exercise, or the exercise of any other right, power, remedy or
privilege. In particular, and not by way of limitation, by accepting payment
after the due date of any amount payable under this Agreement 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 or the
other Loan Documents, or to declare a default for failure to effect prompt
payment of any such other amount. Lender shall have the right to waive or reduce
any time periods that Lender is entitled to under the Loan Documents in its sole
and absolute discretion.
     Section 11.6 Notices. All notices, demands, requests, consents, approvals
or other communications (any of the foregoing, a “Notice”) required, permitted,
or desired to be given hereunder shall be in writing sent by telefax (with
answer back acknowledged) or by registered or certified mail, postage prepaid,
return receipt requested, or delivered by hand or reputable overnight courier
addressed to the party to be so notified at its address hereinafter set forth,
or to such other address as such party may hereafter specify in accordance with
the provisions of this Section 11.6. Any Notice shall be deemed to have been
received: (a) three (3) days after the date such Notice is mailed, (b) on the
date of sending by telefax if sent during business hours on a Business Day
(otherwise on the next Business Day), (c) on the date of delivery by hand if
delivered during business hours on a Business Day (otherwise on the next
Business Day), and (d) on the next Business Day if sent by an overnight
commercial courier, in each case addressed to the parties as follows:

         
If to Goldman:
  Goldman Sachs Commercial Mortgage Capital  
 
  c/o Goldman Sachs & Co.  
 
  85 Broad Street  
 
  New York, NY 10004  
 
  Attention: J. Theodore Borter  
 
  Facsimile No.: (212) 346-3594

-86-

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

 

         
with a copy to:
  Cadwalader, Wickersham & Taft LLP  
 
  One World Financial Center  
 
  New York, New York 10281  
 
  Attention: Fredric L. Altschuler, Esq.  
 
  Facsimile No. (212) 504-6666  
 
     
If to Lehman:
  Lehman Brothers Bank FSB  
 
  1000 West Street, Suite 200  
 
  Wilmington, Delaware 19801  
 
  Attention: Jeffrey R. Peltier  
 
  Facsimile No.: (646) 758-3128  
 
     
with a copy to:
  Lehman Brothers Holdings Inc.  
 
  399 Park Avenue, 8th Floor  
 
  New York, New York 10022  
 
  Attention: Jeffrey R. Peltier  
 
  Facsimile No.: (646) 758-3128  
 
     
with a copy to:
  Cadwalader, Wickersham & Taft LLP  
 
  100 Maiden Lane  
 
  New York, New York 10038  
 
  Attention: Fredric L. Altschuler, Esq.  
 
  Facsimile No. (212) 504-6666  
 
     
If to Borrower:
  Trizechahn One NY Plaza, LLC  
 
  c/o Trizec Properties, Inc.  
 
  10 South Riverside Plaza, Suite 1100  
 
  Chicago, Illinois 60606  
 
  Attention: Finance Department  
 
  Facsimile No.: (866) 728-6454  
 
     
with a copy to:
  DLA Piper Rudnick Gray Cary US LLP  
 
  203 North LaSalle Street  
 
  Chicago, Illinois 60601  
 
  Attention: James L. Beard, Esq.  
 
  Facsimile No.: (312) 236-7516

     Section 11.7 Trial by Jury. BORROWER 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 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

-87-

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

 

ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.
     Section 11.8 Headings. The Article and/or Section headings and the Table of
Contents in this Agreement are included herein for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose.
     Section 11.9 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 11.10 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
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by
Lender.
     Section 11.11 Waiver of Notice. Borrower shall not be entitled to any
notices of any nature whatsoever from Lender except with respect to matters for
which this Agreement or the other Loan Documents specifically and expressly
provide for the giving of notice by Lender to Borrower and except with respect
to matters for which Borrower is not, pursuant to applicable Legal Requirements,
permitted to waive the giving of notice. Borrower hereby expressly waives the
right to receive any notice from Lender with respect to any matter for which
this Agreement or the other Loan Documents do not specifically and expressly
provide for the giving of notice by Lender to Borrower.
     Section 11.12 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, neither Lender nor its agents shall be
liable for any monetary damages, and Borrower’s sole remedy shall be limited to
commencing an action seeking injunctive relief or declaratory judgment. Any
action or proceeding to determine whether Lender has acted reasonably shall be
determined by an action seeking declaratory judgment.
     Section 11.13 Expenses; Indemnity. (a) Except as expressly provided herein,
Borrower shall pay or, if Borrower fails to pay, reimburse Lender upon receipt
of notice from Lender, for all reasonable out of pocket costs and expenses
(including reasonable attorneys’ fees and disbursements) actually incurred by
Lender in connection with (i) Borrower’s ongoing performance of and compliance
with Borrower’s agreements and covenants contained in this Agreement and the
other Loan Documents on its part to be performed or complied with after the

-88-

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

 

Closing Date, including, without limitation, confirming compliance with
environmental and insurance requirements (but expressly excluding Lender’s
ordinary internal administrative costs and expenses and costs and expenses
incurred by Lender in the day-to-day administration of the Loan prior to the
occurrence of an Event of Default); (ii) Lender’s ongoing performance of and
compliance with all agreements and covenants contained in this Agreement and the
other Loan Documents on its part to be performed or complied with after the
Closing Date (but expressly excluding Lender’s ordinary internal administrative
costs and expenses and costs and expenses incurred by Lender in the day-to-day
administration of the Loan prior to the occurrence of an Event of Default);
(iii) the negotiation, preparation, execution, delivery and administration of
any consents, amendments, waivers or other modifications to this Agreement and
the other Loan Documents and any other documents or matters requested by
Borrower; (iv) 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 Liens in favor of Lender pursuant to this Agreement and the other Loan
Documents; (v) enforcing or preserving any rights, in response to third party
claims or the prosecuting or defending of any action or proceeding or other
litigation or otherwise, in each case against, under or affecting Borrower, this
Agreement, the other Loan Documents, the Property, or any other security given
for the Loan; and (vi) enforcing any obligations of or collecting any payments
due from Borrower under this Agreement, the other Loan Documents or with respect
to the Property or in connection with any refinancing or restructuring of the
credit arrangements provided under this Agreement in the nature of a “work out”
or of any insolvency or bankruptcy proceedings; 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. Any costs due and payable to Lender may be paid to Lender
pursuant to the Cash Management Agreement.
     (b) Borrower shall indemnify, defend and hold harmless Lender and its
officers, directors, agents, employees (and the successors and assigns of the
foregoing) (the “Lender Indemnitees”) from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for the
Lender Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not the Lender
Indemnitees shall be designated a party thereto), that may be imposed on,
incurred by, or asserted against the Lender Indemnitees in any manner relating
to or arising out of (i) any breach by Borrower of its obligations under, or any
material misrepresentation by Borrower contained in, this Agreement or the other
Loan Documents, or (ii) the use or intended use of the proceeds of the Loan
(collectively, the “Indemnified Liabilities”); provided, however, that Borrower
shall not have any obligation to the Lender Indemnitees hereunder to the extent
that such Indemnified Liabilities arise from the gross negligence, illegal acts,
fraud or willful misconduct of the Lender Indemnitees. 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 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 the Lender Indemnitees.

-89-

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

 

     Section 11.14 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 11.15 Offsets, Counterclaims and Defenses. Any assignee of Lender’s
interest in and to this Agreement 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 11.16 No Joint Venture or Partnership; No Third Party
Beneficiaries. (a) Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy in common, or joint tenancy relationship between Borrower
and Lender nor to grant Lender any interest in the Property other than that of
mortgagee, beneficiary or lender.
     (b) This Agreement and the other Loan Documents are solely for the benefit
of Lender and nothing contained in this Agreement or the other Loan Documents
shall be deemed to confer upon anyone other than Lender any right to insist upon
or to enforce the performance or observance of any of the obligations contained
herein or therein. All conditions to the obligations of Lender to make the Loan
hereunder are imposed solely and exclusively for the benefit of Lender and no
other Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Lender will refuse to
make the Loan in the absence of strict compliance with any or all thereof and no
other Person shall under any circumstances be deemed to be a beneficiary of such
conditions, any or all of which may be freely waived in whole or in part by
Lender if, in Lender’s sole discretion, Lender deems it advisable or desirable
to do so.
     Section 11.17 Publicity. All news releases, publicity or advertising by
Borrower or its Affiliates through any media intended to reach the general
public which refers to the Loan Documents or the financing evidenced by the Loan
Documents, to Lender or any of its Affiliates shall be subject to the prior
written approval of Lender. All 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, any Trizec Affiliate shall be
subject to the prior approval of Borrower (other than any information and
disclosure in connection with or in furtherance of any actual or proposed
Secondary Market Transaction, and other than any standard so-called “tombstone”
announcements referring to the financing evidenced by the Loan Documents).
     Section 11.18 Waiver of Marshalling of Assets. To the fullest extent
permitted by law, Borrower, for itself and its successors and assigns, waives
all rights to a marshalling of the assets of Borrower, Borrower’s partners and
others with interests in Borrower, and of the Property, and shall not assert any
right under any laws pertaining to the marshalling of assets, the

-90-

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

 

sale in inverse order of alienation, homestead exemption, the administration of
estates of decedents, or any other matters whatsoever to defeat, reduce or
affect the right of Lender under the Loan Documents to a sale of the Property
for the collection of the 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 the Property in preference to every other claimant whatsoever.
     Section 11.19 Waiver of Offsets/Defenses/Counterclaims. 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 or
otherwise to offset any obligations to make the payments required by the Loan
Documents. No failure by Lender to perform any of its obligations hereunder
shall be a valid defense to, or result in any offset against, any payments which
Borrower is obligated to make under any of the Loan Documents.
     Section 11.20 Conflict; Construction of Documents; Reliance. In the event
of any conflict between the provisions of this Agreement and any of the other
Loan Documents, the provisions of this Agreement shall control. The parties
hereto acknowledge that they were represented by competent counsel in connection
with the negotiation, drafting and execution of the Loan Documents and that such
Loan Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. Borrower acknowledges that, with respect
to the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements,
representations or recommendations of Lender or any parent, subsidiary or
Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in
the exercise of any rights or remedies available to it under 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 11.21 Brokers and Financial Advisors. Each of Borrower and Lender
hereby represents that it has dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the
transactions contemplated by this Agreement. Each of Borrower and Lender shall
indemnify, defend and hold the other party harmless from and against any and all
claims, liabilities, costs and expenses of any kind (including reasonable
attorneys’ fees and expenses actually incurred) in any way relating to or
arising from a claim by any Person that such Person acted on behalf of Borrower
or Lender in connection with the transactions contemplated herein. The
provisions of this Section 11.21 shall survive the expiration and termination of
this Agreement and the payment of the Debt.
     Section 11.22 Exculpation. (a) Subject to the qualifications below, Lender
shall not enforce the liability and obligation of Borrower to perform and
observe the obligations contained in the Note, this Agreement, the Mortgage or
the other Loan Documents by any action or proceeding wherein a money judgment
shall be sought against Borrower, except that Lender may bring a foreclosure
action, an action for specific performance or any other appropriate action or
proceeding to enable Lender to enforce and realize upon its interest under the
Note, this

-91-

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

 

Agreement, the Mortgage and the other Loan Documents, or in the Property, the
Rents, or any other collateral given to Lender pursuant to the Loan Documents;
provided, however, that, except as specifically provided herein, any judgment in
any such action or proceeding shall be enforceable against Borrower only to the
extent of Borrower’s interest in the Property, in the Rents, Net Proceeds and in
any other collateral given to Lender, and Lender, by accepting the Note, this
Agreement, the Mortgage and the other Loan Documents, shall not sue for, seek or
demand any deficiency judgment against Borrower in any such action or proceeding
under or by reason of or under or in connection with the Note, this Agreement,
the Mortgage or the other Loan Documents. The provisions of this Section shall
not, however, (a) constitute a waiver, release or impairment of any obligation
evidenced or secured by any of the Loan Documents; (b) impair the right of
Lender to name Borrower as a party defendant in any action or suit for
foreclosure and sale under the Mortgage; (c) affect the validity or
enforceability of any guaranty made in connection with the Loan or any of the
rights and remedies of Lender thereunder; (d) impair the right of Lender to
obtain the appointment of a receiver; (e) impair the enforcement of the
Assignment of Leases; (f) constitute a prohibition against Lender to seek a
deficiency judgment against Borrower in order to fully realize the security
granted by the Mortgage or to commence any other appropriate action or
proceeding in order for Lender to exercise its remedies against the Property; or
(g) constitute a waiver of the right of Lender to enforce the liability and
obligation of Borrower, by money judgment or otherwise, to the extent of any
loss, damage, cost, expense, liability, claim or other obligation incurred by
Lender (including attorneys’ fees and costs reasonably and actually incurred)
arising out of or in connection with and Borrower shall be personally liable for
the following:
     (i) fraud or intentional misrepresentation by Borrower or any guarantor in
connection with the Loan;
     (ii) the gross negligence or willful misconduct of Borrower;
     (iii) the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity or in the Mortgage
concerning environmental laws, hazardous substances and asbestos and any
indemnification of Lender with respect thereto in either document;
     (iv) the misappropriation, removal or disposal of any portion of the
Property in violation of the terms of the Loan Documents;
     (v) the misapplication or conversion by Borrower of (A) any insurance
proceeds paid by reason of any loss, damage or destruction to the Property,
(B) any Awards or other amounts received in connection with the Condemnation of
all or a portion of the Property, or (C) any Rents following an Event of Default
or any Rents collected for more than one month in advance to the extent such
Rents or any other payments in respect of the Leases and other income of the
Property or any other collateral are not applied to the costs of maintenance and
operation of the Property and to the payment of taxes, lien claims, insurance
premiums, Debt Service and other amounts due under the Loan Documents;

-92-

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

 

     (vi) failure to pay charges for labor or materials or other charges that
can create Liens on any portion of the Property other than Liens specifically
permitted by the terms of this Agreement and the other Loan Documents;
     (vii) any security deposits, advance deposits or any other deposits
collected with respect to the Property which are not delivered to Lender upon a
foreclosure of the Property or action in lieu thereof, except to the extent any
such security deposits were applied in accordance with the terms and conditions
of any of the Leases prior to the occurrence of the Event of Default that gave
rise to such foreclosure or action in lieu thereof;
     (viii) Borrower’s indemnification of Lender set forth in Section 9.2
hereof;
     (ix) Borrower’s failure to maintain insurance as required by this Agreement
or to pay any taxes or assessments affecting the Property;
     (x) any intentional damage or destruction to the Property caused by the
acts or omissions of Borrower, its agents, employees, or contractors;
     (xi) any failure of Borrower to maintain its status as a single purpose
entity as required by, and in accordance with, the terms hereof; or
     (xii) Borrower’s commission of a criminal act.
     (b) Notwithstanding anything to the contrary in this Agreement, the Note or
any of the Loan Documents, (A) Lender shall not be deemed to have waived any
right which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the Bankruptcy Code to file a claim for the full amount of the
Debt or to require that all collateral shall continue to secure all of the Debt
owing to Lender in accordance with the Loan Documents, and (B) the Debt shall be
fully recourse to Borrower in the event that: (i) the first full monthly payment
of interest under the Note is not paid when due; (ii) Borrower fails to permit
on-site inspections of the Property, fails to provide financial information,
fails to maintain its status as a single purpose entity or fails to appoint a
new property manager upon the request of Lender after an Event of Default, each
as required by, and in accordance with the terms and provisions of, this
Agreement and the Mortgage; (iii) Borrower fails to obtain Lender’s prior
consent to any subordinate financing or other voluntary Lien encumbering the
Property; (iv) Borrower fails to obtain Lender’s prior consent to any
assignment, transfer, or conveyance of the Property or any interest therein as
required by the Mortgage or this Agreement; (v) Borrower files a voluntary
petition under the Bankruptcy code or any other Federal or state bankruptcy or
insolvency law; (vi) an Affiliate, officer, director, or representative which
controls, directly or indirectly, Borrower files, or joins in the filing of, an
involuntary petition against Borrower under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law, or solicits or causes to be
solicited petitioning creditors for any involuntary petition against Borrower
from any Person; (vii) Borrower files an answer consenting to or otherwise
acquiescing in or joining in any involuntary petition filed against it, by any
other Person under the Bankruptcy Code or any other Federal or state bankruptcy
or insolvency law, or solicits or causes to be solicited petitioning creditors
for any involuntary petition from any Person; (viii) any Affiliate, officer,

-93-

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

 

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 the Property; or
(ix) Borrower makes an assignment for the benefit of creditors, or admits, in
writing or in any legal proceeding, its insolvency or inability to pay its debts
as they become due.
     Section 11.23 Prior Agreements. This Agreement and the other Loan Documents
contain the entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior agreements among or
between such parties, whether oral or written, are superseded by the terms of
this Agreement and the other Loan Documents.
     Section 11.24 Servicer. (a) At the option of Lender, the Loan may be
serviced by a servicer (the “Servicer”) selected by Lender and Lender may
delegate all or any portion of its responsibilities under this Agreement and the
other Loan Documents to the Servicer pursuant to a servicing agreement (the
“Servicing Agreement”) between Lender and Servicer. Servicer shall be entitled
to reimbursement of reasonable out of pocket costs and expenses actually
incurred as and to the same extent (but without duplication) as Lender is
entitled thereto under the applicable provisions of this Agreement and the other
Loan Documents.
     (b) Upon notice thereof from Lender, Servicer shall have the right to
exercise all rights of Lender and enforce all obligations of Borrower pursuant
to the provisions of this Agreement, the Note and the other Loan Documents.
     (c) Provided Borrower shall have been given notice of Servicer’s address by
Lender, Borrower shall deliver to Servicer duplicate originals of all notices
and other instruments which Borrower may or shall be required to deliver to
Lender pursuant to this Agreement, the Note and the other Loan Documents (and no
delivery of such notices or other instruments by Borrower shall be of any force
or effect unless delivered to Lender and Servicer as provided above).
     (d) Notwithstanding anything to the contrary contained herein or in any
other Loan Documents, if the Loan is subject to multiple Securitizations,
Borrower shall only be required to deal with one primary Servicer with respect
to any consents, approvals, notices, required from, or to, Lender pursuant to
the Loan Documents (it being understood that such primary Servicer may need to
consult with other Persons that hold a portion of Lender’s rights and
obligations under the Loan or with the Rating Agencies in connection with any
such consent, approval or notice). Lender may replace such primary Servicer with
another single primary Servicer at any time in Lender’s sole discretion. Lender
agrees that promptly after the date hereof it shall appoint such primary
Servicer.
     Section 11.25 Joint and Several Liability. If more than one Person has
executed this Agreement as “Borrower,” the representations, covenants,
warranties and obligations of all such Persons hereunder shall be joint and
several.
     Section 11.26 Creation of Security Interest. Notwithstanding any other
provision set forth in this Agreement, the Note, the Mortgage or any of the
other Loan Documents, Lender

-94-

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

 

may at any time create a security interest in all or any portion of its rights
under this Agreement, the Note, the Mortgage and any other Loan Document
(including, without limitation, the advances owing to it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
     Section 11.27 Assignments and Participations. (a) The Lender may assign to
one or more Persons all or a portion of its rights and obligations under this
Loan Agreement.
     (b) Upon such execution and delivery, from and after the effective date
specified in such Assignment and Acceptance, the assignee thereunder shall be a
party hereto and have the rights and obligations of Lender hereunder.
     (c) Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 11.27, disclose to
the assignee or participant or proposed assignee or participant, as the case may
be, any information relating to Borrower or any of its Affiliates or to any
aspect of the Loan that has been furnished to the Lender by or on behalf of
Borrower or any of its Affiliates.
     Section 11.28 Set-Off. In addition to any rights and remedies of Lender
provided by this Loan Agreement and by law, the Lender shall have the right,
without prior notice to Borrower, any such notice being expressly waived by
Borrower to the extent permitted by applicable law, upon any amount becoming due
and payable by Borrower hereunder and after the expiration of any applicable
notice and/or cure period (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by Lender or any Affiliate thereof to or
for the credit or the account of Borrower. Lender agrees promptly to notify
Borrower after any such set-off and application made by Lender; provided that
the failure to give such notice shall not affect the validity of such set-off
and application.
     Section 11.29 Component Notes. (a) Prior to the last Securitization,
Lender, without in any way limiting Lender’s other rights hereunder, in its sole
and absolute discretion, shall have the right at any time to require Borrower to
execute and deliver “component” notes (including senior and junior notes) in
replacement of the Note or re-size the Notes as evidence of the Loan, which
notes may be paid in such order of priority as may be designated by Lender,
provided that (i) the aggregate principal amount of such “component” notes
and/or resized notes shall equal the outstanding principal balance of the Loan
immediately prior to the creation of such “component” notes and/or re-sized
notes, (ii) the weighted average interest rate of all such “component” notes
and/or re-sized notes shall on the date created equal the interest rate which
was applicable to the Loan immediately prior to the creation of such “component”
notes and/or re-sized notes, (iii) the debt service payments and the
amortization on all such “component” notes and/or re-sized notes shall on the
date created equal the debt service payment which was due under the Loan
immediately prior to the creation of such component notes and/or re-sized notes
and (iv) the other terms and provisions of each of the “component” notes and/or
resized notes shall be identical in substance and substantially similar in form
to the Loan Documents. Subject to the next paragraph of this Section, at
Borrower’s cost and expense, Borrower shall

-95-

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

 

cooperate with all reasonable requests of Lender in order to establish the
“component” notes and/or re-sized notes and shall execute and deliver such
documents as shall reasonably be required by Lender and any Rating Agency in
connection therewith, all in form and substance reasonably satisfactory to
Lender and satisfactory to any Rating Agency, including, without limitation, the
severance of security documents if requested. In the event Borrower fails to
execute and deliver such documents to Lender within five (5) Business Days
following such request by Lender, Borrower hereby absolutely and irrevocably
appoints Lender as its true and lawful attorney, coupled with an interest, in
its name and stead to make and execute all documents necessary or desirable to
effect such transactions, Borrower ratifying all that such attorney shall do by
virtue thereof.
     (b) Lender shall reimburse Borrower for all of its reasonable costs and
expenses (including Borrower’s legal fees) in an amount not to exceed $5,000)
incurred in connection with its cooperation with Lender pursuant to this
Section 11.29, Section 9.3 and Section 9.1 (except that Lender shall have no
obligation to reimburse Borrower with respect to any of the foregoing which
Borrower is otherwise required to perform and/or deliver at its cost under
another provision of this Agreement).
     (c) It shall be an Event of Default under this Agreement, the Note, the
Mortgage and the other Loan Documents if Borrower fails to comply with any of
the terms, covenants or conditions of this Section 11.29 within ten
(10) Business Days of notice thereof.
     Section 11.30 Approvals; Third Parties; Conditions. All approval rights
retained or exercised by Lender with respect to Leases, contracts, plans,
studies and other matters are solely to facilitate Lender’s credit underwriting,
and shall not be deemed or construed as a determination that Lender has passed
on the adequacy thereof for any other purpose and may not be relied upon by
Borrower or any other Person. This Agreement is for the sole and exclusive use
of Lender and Borrower and may not be enforced, nor relied upon, by any Person
other than Lender and Borrower. All conditions of the obligations of Lender
hereunder, including the obligation to make advances, if any, are imposed solely
and exclusively for the benefit of Lender, its successors and assigns, and no
other Person shall have standing to require satisfaction of such conditions or
be entitled to assume that Lender will refuse to make advances in the absence of
strict compliance with any or all of such conditions, and no other Person shall,
under any circumstances, be deemed to be a beneficiary of such conditions, any
and all of which may be freely waived in whole or in part by Lender at any time
in Lender’s sole discretion.
     Section 11.31 Limitation on Liability of Lender’s Officers, Employees, etc.
Any obligation or liability whatsoever of Lender which may arise at any time
under this Agreement or any other Loan Document shall be satisfied, if at all,
out of Lender’s interest in the Property only. No such obligation or liability
shall be personally binding upon, nor shall resort for the enforcement thereof
be had to, the property of any of Lender’s shareholders, directors, officers,
employees or agents, regardless of whether such obligation or liability is in
the nature of contract, tort or otherwise.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]

-96-

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

 

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

            BORROWER:

TRIZECHAHN ONE NY PLAZA LLC,
a Delaware limited liability company
      By:   /s/ Patrick L. Aldrich       Name:   Patrick L. Aldrich       
Title:   Assistant Treasurer     

            LENDER:

GOLDMAN SACHS COMMERCIAL MORTGAGE
CAPITAL, a Delaware limited partnership
    By:   /s/ Andy Reiken       Name:   Andy Reiken       Title:   Director    

            LEHMAN BROTHERS BANK FSB, a federal stock
savings bank
    By:   /s/ Charlene Thomas       Name:   Charlene Thomas       Title:   Vice
President    

 

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

 

SCHEDULE I
(RENT ROLL)
[Intentionally Omitted]

 

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

 

SCHEDULE II
FORM OF QUALIFIED GUARANTY
[Intentionally Omitted]

 

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

 

SCHEDULE III
PROPERTY OWNERSHIP STRUCTURE
[Intentionally Omitted]

 

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

 

SCHEDULE IV
FORM OF SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
[Intentionally Omitted]

 

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

 

SCHEDULE V
AMORTIZATION SCHEDULE

                  Whole Loan                
Loan Amt
    400,000,000          
Gross Cpn
    5.4995 %        
Day Count
    1     ( 1 = Actual/360, 2 = 30/360)
Loan Term
    120          
Amort Term
    300          
Mthly Pmt
  $ 2,456,230.53          
1st Payment
    4/6/2006          
IO Period
    36          
Closing Date
    3/1/2006          

                                                  Period   Pmt Date     Days    
Interest     Principal     Total Payment     Ending Balance    
0
    03/06/06       5       305,527.78               305,527.78      
400,000,000.00  
1
    04/06/06       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
2
    05/06/06       30       1,833,166.67       —       1,833,166.67      
400,000,000.00  
3
    06/06/06       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
4
    07/06/06       30       1,833,166.67       —       1,833,166.67      
400,000,000.00  
5
    08/06/06       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
6
    09/06/06       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
7
    10/06/06       30       1,833,166.67       —       1,833,166.67      
400,000,000.00  
8
    11/06/06       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
9
    12/06/06       30       1,833,166.67       —       1,833,166.67      
400,000,000.00  
10
    01/06/07       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
11
    02/06/07       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
12
    03/06/07       28       1,710,955.56       —       1,710,955.56      
400,000,000.00  
13
    04/06/07       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
14
    05/06/07       30       1,833,166.67       —       1,833,166.67      
400,000,000.00  
15
    06/06/07       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
16
    07/06/07       30       1,833,166.67       —       1,833,166.67      
400,000,000.00  
17
    08/06/07       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
18
    09/06/07       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
19
    10/06/07       30       1,833,166.67       —       1,833,166.67      
400,000,000.00  
20
    11/06/07       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
21
    12/06/07       30       1,833,166.67       —       1,833,166.67      
400,000,000.00  
22
    01/06/08       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
23
    02/06/08       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
24
    03/06/08       29       1,772,061.11       —       1,772,061.11      
400,000,000.00  
25
    04/06/08       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
26
    05/06/08       30       1,833,166.67       —       1,833,166.67      
400,000,000.00  
27
    06/06/08       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
28
    07/06/08       30       1,833,166.67       —       1,833,166.67      
400,000,000.00  
29
    08/06/08       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
30
    09/06/08       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
31
    10/06/08       30       1,833,166.67       —       1,833,166.67      
400,000,000.00  

Schedule V-1

 

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

 

                                                  Period   Pmt Date     Days    
Interest     Principal     Total Payment     Ending Balance    
32
    11/06/08       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
33
    12/06/08       30       1,833,166.67       —       1,833,166.67      
400,000,000.00  
34
    01/06/09       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
35
    02/06/09       31       1,894,272.22       —       1,894,272.22      
400,000,000.00  
36
    03/06/09       28       1,710,955.56       —       1,710,955.56      
400,000,000.00  
37
    04/06/09       31       1,894,272.22       561,958.31       2,456,230.53    
  399,438,041.69  
38
    05/06/09       30       1,830,591.26       625,639.27       2,456,230.53    
  398,812,402.42  
39
    06/06/09       31       1,888,648.14       567,582.39       2,456,230.53    
  398,244,820.03  
40
    07/06/09       30       1,825,122.82       631,107.71       2,456,230.53    
  397,613,712.32  
41
    08/06/09       31       1,882,971.53       573,259.00       2,456,230.53    
  397,040,453.32  
42
    09/06/09       31       1,880,256.75       575,973.78       2,456,230.53    
  396,464,479.54  
43
    10/06/09       30       1,816,963.67       639,266.86       2,456,230.53    
  395,825,212.68  
44
    11/06/09       31       1,874,501.76       581,728.77       2,456,230.53    
  395,243,483.91  
45
    12/06/09       30       1,811,367.95       644,862.58       2,456,230.53    
  394,598,621.33  
46
    01/06/10       31       1,868,693.02       587,537.51       2,456,230.53    
  394,011,083.82  
47
    02/06/10       31       1,865,910.63       590,319.90       2,456,230.53    
  393,420,763.92  
48
    03/06/10       28       1,682,813.60       773,416.93       2,456,230.53    
  392,647,346.99  
49
    04/06/10       31       1,859,452.41       596,778.12       2,456,230.53    
  392,050,568.87  
50
    05/06/10       30       1,796,735.09       659,495.44       2,456,230.53    
  391,391,073.43  
51
    06/06/10       31       1,853,503.10       602,727.43       2,456,230.53    
  390,788,346.00  
52
    07/06/10       30       1,790,950.42       665,280.11       2,456,230.53    
  390,123,065.89  
53
    08/06/10       31       1,847,498.22       608,732.31       2,456,230.53    
  389,514,333.58  
54
    09/06/10       31       1,844,615.46       611,615.07       2,456,230.53    
  388,902,718.51  
55
    10/06/10       30       1,782,308.75       673,921.78       2,456,230.53    
  388,228,796.73  
56
    11/06/10       31       1,838,527.56       617,702.97       2,456,230.53    
  387,611,093.76  
57
    12/06/10       30       1,776,389.34       679,841.19       2,456,230.53    
  386,931,252.57  
58
    01/06/11       31       1,832,382.81       623,847.72       2,456,230.53    
  386,307,404.85  
59
    02/06/11       31       1,829,428.47       626,802.06       2,456,230.53    
  385,680,602.79  
60
    03/06/11       28       1,649,705.93       806,524.60       2,456,230.53    
  384,874,078.19  
61
    04/06/11       31       1,822,640.69       633,589.84       2,456,230.53    
  384,240,488.35  
62
    05/06/11       30       1,760,942.14       695,288.39       2,456,230.53    
  383,545,199.96  
63
    06/06/11       31       1,816,347.55       639,882.98       2,456,230.53    
  382,905,316.98  
64
    07/06/11       30       1,754,823.16       701,407.37       2,456,230.53    
  382,203,909.61  
65
    08/06/11       31       1,809,995.62       646,234.91       2,456,230.53    
  381,557,674.70  
66
    09/06/11       31       1,806,935.26       649,295.27       2,456,230.53    
  380,908,379.43  
67
    10/06/11       30       1,745,671.36       710,559.17       2,456,230.53    
  380,197,820.26  
68
    11/06/11       31       1,800,495.42       655,735.11       2,456,230.53    
  379,542,085.15  
69
    12/06/11       30       1,739,409.75       716,820.78       2,456,230.53    
  378,825,264.37  
70
    01/06/12       31       1,793,995.44       662,235.09       2,456,230.53    
  378,163,029.28  
71
    02/06/12       31       1,790,859.30       665,371.23       2,456,230.53    
  377,497,658.05  
72
    03/06/12       29       1,672,372.30       783,858.23       2,456,230.53    
  376,713,799.82  
73
    04/06/12       31       1,783,996.22       672,234.31       2,456,230.53    
  376,041,565.51  
74
    05/06/12       30       1,723,367.16       732,863.37       2,456,230.53    
  375,308,702.14  
75
    06/06/12       31       1,777,342.12       678,888.41       2,456,230.53    
  374,629,813.73  
76
    07/06/12       30       1,716,897.22       739,333.31       2,456,230.53    
  373,890,480.42  
77
    08/06/12       31       1,770,625.88       685,604.65       2,456,230.53    
  373,204,875.77  
78
    09/06/12       31       1,767,379.07       688,851.46       2,456,230.53    
  372,516,024.31  
79
    10/06/12       30       1,707,209.90       749,020.63       2,456,230.53    
  371,767,003.68  
80
    11/06/12       31       1,760,569.77       695,660.76       2,456,230.53    
  371,071,342.92    

Schedule V-2

 

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

 

                                                  Period   Pmt Date     Days    
Interest     Principal     Total Payment     Ending Balance    
81
    12/06/12       30       1,700,589.04       755,641.49       2,456,230.53    
  370,315,701.43  
82
    01/06/13       31       1,753,696.87       702,533.66       2,456,230.53    
  369,613,167.77  
83
    02/06/13       31       1,750,369.89       705,860.64       2,456,230.53    
  368,907,307.13  
84
    03/06/13       28       1,577,960.02       878,270.51       2,456,230.53    
  368,029,036.62  
85
    04/06/13       31       1,742,867.95       713,362.58       2,456,230.53    
  367,315,674.04  
86
    05/06/13       30       1,683,377.12       772,853.41       2,456,230.53    
  366,542,820.63  
87
    06/06/13       31       1,735,829.71       720,400.82       2,456,230.53    
  365,822,419.81  
88
    07/06/13       30       1,676,533.66       779,696.87       2,456,230.53    
  365,042,722.94  
89
    08/06/13       31       1,728,725.72       727,504.81       2,456,230.53    
  364,315,218.13  
90
    09/06/13       31       1,725,280.49       730,950.04       2,456,230.53    
  363,584,268.09  
91
    10/06/13       30       1,666,276.40       789,954.13       2,456,230.53    
  362,794,313.96  
92
    11/06/13       31       1,718,077.98       738,152.55       2,456,230.53    
  362,056,161.41  
93
    12/06/13       30       1,659,273.22       796,957.31       2,456,230.53    
  361,259,204.10  
94
    01/06/14       31       1,710,808.19       745,422.34       2,456,230.53    
  360,513,781.76  
95
    02/06/14       31       1,707,278.11       748,952.42       2,456,230.53    
  359,764,829.34  
96
    03/06/14       28       1,538,854.08       917,376.45       2,456,230.53    
  358,847,452.89  
97
    04/06/14       31       1,699,386.91       756,843.62       2,456,230.53    
  358,090,609.27  
98
    05/06/14       30       1,641,099.42       815,131.11       2,456,230.53    
  357,275,478.16  
99
    06/06/14       31       1,691,942.53       764,288.00       2,456,230.53    
  356,511,190.16  
100
    07/06/14       30       1,633,861.08       822,369.45       2,456,230.53    
  355,688,820.71  
101
    08/06/14       31       1,684,428.63       771,801.90       2,456,230.53    
  354,917,018.81  
102
    09/06/14       31       1,680,773.62       775,456.91       2,456,230.53    
  354,141,561.90  
103
    10/06/14       30       1,623,001.27       833,229.26       2,456,230.53    
  353,308,332.64  
104
    11/06/14       31       1,673,155.40       783,075.13       2,456,230.53    
  352,525,257.51  
105
    12/06/14       30       1,615,593.88       840,636.65       2,456,230.53    
  351,684,620.86  
106
    01/06/15       31       1,665,466.02       790,764.51       2,456,230.53    
  350,893,856.35  
107
    02/06/15       31       1,661,721.21       794,509.32       2,456,230.53    
  350,099,347.03  
108
    03/06/15       28       1,497,511.06       958,719.47       2,456,230.53    
  349,140,627.56  
109
    04/06/15       31       1,653,418.48       802,812.05       2,456,230.53    
  348,337,815.51  
110
    05/06/15       30       1,596,403.18       859,827.35       2,456,230.53    
  347,477,988.16  
111
    06/06/15       31       1,645,544.75       810,685.78       2,456,230.53    
  346,667,302.38  
112
    07/06/15       30       1,588,747.36       867,483.17       2,456,230.53    
  345,799,819.21  
113
    08/06/15       31       1,637,597.48       818,633.05       2,456,230.53    
  344,981,186.16  
114
    09/06/15       31       1,633,720.70       822,509.83       2,456,230.53    
  344,158,676.33  
115
    10/06/15       30       1,577,250.53       878,980.00       2,456,230.53    
  343,279,696.33  
116
    11/06/15       31       1,625,662.98       830,567.55       2,456,230.53    
  342,449,128.78  
117
    12/06/15       30       1,569,415.82       886,814.71       2,456,230.53    
  341,562,314.07  
118
    01/06/16       31       1,617,530.01       838,700.52       2,456,230.53    
  340,723,613.55  
119
    02/06/16       31       1,613,558.19       842,672.34       2,456,230.53    
  339,880,941.21  
120
    03/06/16       29       1,505,724.50       339,880,941.21      
341,386,665.71       —    

Schedule V-3

 

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

 

SCHEDULE VI
UNFUNDED OBLIGATIONS
[Intentionally Omitted]

 

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

 

SCHEDULE VII
ASSIGNMENT OF MANAGEMENT AGREEMENT AND
SUBORDINATION OF MANAGEMENT FEES
[Intentionally Omitted]

 

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

 

SCHEDULE VIII
FORM OF MATERIAL ALTERATION INDEMNITY AGREEMENT
[Intentionally Omitted]