Exhibit 10.2

Loan No. 10032921

 

LOAN AGREEMENT

Dated as of November 30, 2006

Between

BEHRINGER HARVARD 945 EAST PACES FERRY ROAD, LLC
as Borrower

and

KEYBANK NATIONAL ASSOCIATION,
as Lender

 

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

TABLE OF CONTENTS

 

 

 

 

Page

I.

 

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

1

 

 

 

 

 

 

 

Section 1.1

Definitions

 

1

 

 

Section 1.2

Principles of Construction

 

23

 

 

 

 

 

 

II.

 

GENERAL TERMS

 

23

 

 

 

 

 

 

 

Section 2.1

Loan Commitment; Disbursement to Borrower

 

23

 

 

Section 2.2

Interest Rate

 

24

 

 

Section 2.3

Loan Payment

 

24

 

 

Section 2.4

Prepayments

 

25

 

 

Section 2.5

Defeasance

 

26

 

 

Section 2.6

Release of Property

 

29

 

 

Section 2.7

Clearing Account/Cash Management

 

29

 

 

 

 

 

 

III.

 

CONDITIONS PRECEDENT

 

31

 

 

 

 

 

 

 

Section 3.1

Conditions Precedent to Closing

 

31

 

 

 

 

 

 

IV.

 

REPRESENTATIONS AND WARRANTIES

 

35

 

 

 

 

 

 

 

Section 4.1

Borrower Representations

 

35

 

 

Section 4.2

Survival of Representations

 

44

 

 

 

 

 

 

V.

 

BORROWER COVENANTS

 

44

 

 

 

 

 

 

 

Section 5.1

Affirmative Covenants

 

44

 

 

Section 5.2

Negative Covenants

 

55

 

 

 

 

 

 

VI.

 

INSURANCE; CASUALTY; CONDEMNATION

 

61

 

 

 

 

 

 

 

Section 6.1

Insurance

 

61

 

 

Section 6.2

Casualty

 

65

 

 

Section 6.3

Condemnation

 

65

 

 

Section 6.4

Restoration

 

66

 

 

 

 

 

 

VII.

 

RESERVE FUNDS

 

71

 

 

 

 

 

 

 

Section 7.1

Property Reserve Funds

 

71

 

 

Section 7.2

Tax and Insurance Escrow Funds

 

71

 

 

Section 7.3

Replacements and Replacement Reserve

 

72

 

 

Section 7.4

Rollover Reserve

 

76

 

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

 

 

 

Section 7.5

Deposits to Additional Collateral Funds

 

77

 

 

Section 7.6

Deposits of Ground Rent Funds

 

78

 

 

Section 7.7

Deposits to TI Allowance Reserve Funds

 

78

 

 

Section 7.8

Reserve Funds, Generally

 

79

 

 

Section 7.9

Letter of Credit Rights

 

80

 

 

Section 7.10

Application of Letter of Credit Proceeds

 

80

 

 

 

 

 

 

VIII.

 

DEFAULTS

 

80

 

 

 

 

 

 

 

Section 8.1

Event of Default

 

80

 

 

Section 8.2

Remedies

 

83

 

 

Section 8.3

Remedies Cumulative; Waivers

 

84

 

 

 

 

 

 

IX.

 

SPECIAL PROVISIONS

 

85

 

 

 

 

 

 

 

Section 9.1

Securitization

 

85

 

 

Section 9.2

Securitization Indemnification

 

88

 

 

Section 9.3

Exculpation

 

90

 

 

Section 9.4

Matters Concerning Property Manager

 

92

 

 

Section 9.5

Servicer

 

92

 

 

 

 

 

 

X.

 

MISCELLANEOUS

 

92

 

 

 

 

 

 

 

Section 10.1

Survival

 

92

 

 

Section 10.2

Lender’s Discretion

 

92

 

 

Section 10.3

Governing Law

 

92

 

 

Section 10.4

Modification, Waiver in Writing

 

93

 

 

Section 10.5

Delay Not a Waiver

 

93

 

 

Section 10.6

Notices

 

93

 

 

Section 10.7

Trial by Jury

 

94

 

 

Section 10.8

Headings

 

94

 

 

Section 10.9

Severability

 

94

 

 

Section 10.10

Preferences

 

94

 

 

Section 10.11

Waiver of Notice

 

95

 

 

Section 10.12

Remedies of Borrower

 

95

 

 

Section 10.13

Expenses; Indemnity

 

95

 

 

Section 10.14

Schedules Incorporated

 

96

 

 

Section 10.15

Offsets, Counterclaims and Defenses

 

96

 

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

 

 

Section 10.16

No Joint Venture or Partnership; No Third Party Beneficiaries

 

97

 

 

Section 10.17

Publicity

 

97

 

 

Section 10.18

Waiver of Marshalling of Assets

 

97

 

 

Section 10.19

Waiver of Counterclaim

 

97

 

 

Section 10.20

Conflict; Construction of Documents; Reliance

 

97

 

 

Section 10.21

Brokers and Financial Advisors

 

98

 

 

Section 10.22

Prior Agreements

 

98

 

 

Section 10.23

Transfer of Loan

 

98

 

 

Section 10.24

Joint and Several Liability

 

98

 

 

Section 10.25

Attorneys Fees

 

98

 

SCHEDULES

 

 

 

 

 

Schedule I

-

REA’s

 

 

 

Schedule II

–

Rent Roll

 

 

 

Schedule III

–

Required Repairs

 

 

 

Schedule IV

–

Organizational Chart of Borrower

 

 

 

Schedule V

–

Exceptions to Representations

 

 

 

Schedule VI

–

Tenant Improvement Obligations

 

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

LOAN AGREEMENT

THIS LOAN AGREEMENT, dated as of this 30th day of November, 2006 (as amended,
restated, replaced, supplemented or otherwise modified from time to time, this
“Agreement”), between KEYBANK NATIONAL ASSOCIATION, a national association,
having an address at 911 Main Street, Suite 1500, Kansas City, MO 64105
(together with its successors and/or assigns, “Lender”) and BEHRINGER HARVARD
945 EAST PACES FERRY ROAD, LLC, a Delaware limited liability company, having its
principal place of business c/o Behringer Harvard Funds, 15601 Dallas Parkway,
Suite 600, Addison, Texas 75001 (“Borrower”).

W I T N E S S E T H:

WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from
Lender; and

WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in
accordance with the terms of this Agreement and the other Loan Documents (as
hereinafter defined).

NOW, THEREFORE, in consideration of the making of the Loan by Lender and the
covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:

I.                                         DEFINITIONS; PRINCIPLES OF
CONSTRUCTION

SECTION 1.1            DEFINITIONS.  FOR ALL PURPOSES OF THIS AGREEMENT, EXCEPT
AS OTHERWISE EXPRESSLY REQUIRED OR UNLESS THE CONTEXT CLEARLY INDICATES A
CONTRARY INTENT:

“Additional Collateral Deposit” shall have the meaning set forth in Section 7.5
hereof.

“Additional Collateral Reserve Account” shall have the meaning set forth in
Section 7.5 hereof.

“Additional Collateral Reserve Funds” shall have the meaning set forth in
Section 7.5 hereof.

“Additional Insolvency Opinion” shall have the meaning set forth in
Section 4.1.30(c) hereof.

“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 Control with such Person or is a director or
officer of such Person or of an Affiliate of such Person.

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

“Affiliated Manager” shall mean any Property Manager in which Borrower,
Principal, or Guarantor has, directly or indirectly, any legal, beneficial or
economic interest.

“Agreement” shall mean this Loan Agreement, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

“ALTA” shall mean American Land Title Association, or any successor thereto.

“Annual Budget” shall mean the operating budget, including all planned Capital
Expenditures, for the Property prepared by Borrower in accordance with
Section 5.1.11.(d) hereof for the applicable Fiscal Year or other period.

“Approved Annual Budget” shall have the meaning set forth in Section 5.1.11(d)
hereof.

“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, assigning to Lender all of Borrower’s interest in and to
the Leases and Rents of the Property as security for the Loan, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.

“Assignment of Management Agreement” shall mean that certain Assignment of
Management Agreement and Subordination of Management Fees, dated as of the
Closing Date, among Lender, Borrower and Property Manager, 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 (a) such Person filing
a voluntary petition under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law; (b) the filing of an involuntary petition against
such Person under the Bankruptcy Code or any other Federal or state bankruptcy
or insolvency law, in which such Person colludes with, or otherwise assists such
Person, or cause to be solicited petitioning creditors for any involuntary
petition against such Person; (c) 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; (d) 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; (e) such Person
making an 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, 11 U.S.C. §101,
et seq., as the same may be 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 or any other Federal or state bankruptcy or insolvency law.

2

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

“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.

“Behringer Holdings” shall mean Behringer Harvard Holdings, LLC, a Delaware
limited liability company.

“Behringer Harvard Funds” shall mean, individually or collectively, Behringer
Holdings, Behringer Harvard Short-Term Opportunity Fund I LP, a Texas limited
partnership, Behringer Harvard Mid-Term Value Enhancement Fund I LP, a Texas
limited partnership, Behringer Harvard Operating Partnership I LP, a Texas
limited partnership, Behringer Harvard REIT I, Inc., a Maryland corporation,
Behringer Harvard Opportunity REIT I, Inc., a Maryland corporation, and/or
Behringer Harvard Strategic Opportunity Fund I LP, a Texas limited partnership.

“Borrower” shall mean Behringer Harvard 945 East Paces Ferry Road, LLC, a
Delaware limited liability company, together with its permitted successors and
assigns.

“Borrower’s Knowledge” shall mean the actual knowledge attributable to those
principals, employees and officers of Borrower who have given substantive
attention to the Property, the Loan Documents and related matters, without any
implied duty to conduct any inquiry or investigation.

“Business Day” shall mean any day other than a Saturday, Sunday or any other day
on which national banks in New York, New York are not open for business.

“Capital Expenditures” shall mean, for any period, the amount expended for items
capitalized under GAAP or other accounting principles reasonably acceptable to
Lender, consistently applied (including expenditures for building improvements
or major repairs, leasing commissions and tenant improvements).

 “Cash Management Agreement” shall mean that certain Cash Management Agreement,
dated as of the date hereof, by and among Borrower, Property Manager and Lender,
as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.

“Cash Sweep Period” shall have the meaning set forth in the Cash Management
Agreement.

“Casualty” shall have the meaning set forth in Section 6.2 hereof.

“Casualty/Condemnation Prepayment”  shall have the meaning set forth in Section
6.4 hereof.

“Casualty Consultant” shall have the meaning set forth in Section 6.4(b)(iii)
hereof.

3

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

“Casualty Retainage” shall have the meaning set forth in Section 6.4(b)(iv)
hereof.

“Clearing Account” shall have the meaning set forth in Section 2.7.1 hereof.

“Clearing Account Agreement” shall mean that certain Clearing Account Agreement,
dated the date hereof, among Borrower, Lender and Clearing Bank, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time, relating to funds deposited in the Clearing Account.

“Clearing Bank” shall mean JP Morgan Chase Bank, N.A., or any successor or
permitted assigns thereof.

 “Closing Date” shall mean the date of the funding of the Loan.

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

“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.

“Condemnation Proceeds” shall have the meaning set forth in Section 6.4(b).

“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 set forth in, and evidenced
by, this Agreement and the Note together with all interest accrued and unpaid
thereon and all other sums (including the Defeasance Payment Amount and any
Yield Maintenance Premium) due to Lender in respect of the Loan under the Note,
this Agreement, the Security Instrument or any other Loan Document.

“Debt Service” shall mean, with respect to any particular period of time,
scheduled principal and interest payments due under this Agreement and the Note.

“Debt Service Coverage Ratio” shall mean a ratio for the applicable period  in
which:

(a)                                  the numerator is the Net Operating Income
(excluding interest on credit accounts and using annualized operating expenses
for any recurring expenses not paid monthly (e.g., Taxes and Insurance
Premiums)) for such period as set forth in the statements required hereunder,
without deduction

4

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

for (i) actual management fees incurred in connection with the operation of the
Property, or (ii) amounts paid to the Reserve Funds, less (A) management fees
equal to the greater of (1) assumed management fees of three percent (3%) of
Gross Income from Operations or (2) the actual management fees incurred, (B)
assumed Replacement Reserve Account contributions equal to $.20 per square foot
of gross leasable area at the Property, and (C) assumed Rollover Reserve Account
contributions equal to (x) $1.28 per square foot of gross leasable area at the
Property for tenant improvement obligations and (y) $.45 per square foot of
gross leasable area at the Property for leasing commission costs, (adjusted
proportionately for any period other than one year); and

(b)                                 the denominator is the aggregate amount of
principal and interest due and payable on the Loan for such applicable period
(assuming a thirty (30) year amortization schedule, unless otherwise provided
herein).

“Default” shall mean the occurrence of any event hereunder or under any other
Loan Document which, but for the giving of notice or passage of time, or both,
would be an Event of Default.

“Default Rate” shall mean, with respect to the Loan, a rate per annum equal to
the lesser of (a) the Maximum Legal Rate or (b) five percent (5%) above the
Interest Rate.

“Defeasance Date” shall have the meaning set forth in Section 2.5.1(a)(i)
hereof.

“Defeasance Deposit” shall mean an amount equal to the remaining principal
amount of the Note, the Defeasance Payment Amount, any costs and expenses
incurred or to be incurred in the purchase of U.S. Obligations necessary to meet
the Scheduled Defeasance Payments and any revenue, documentary stamp or
intangible taxes or any other tax or charge due in connection with the transfer
of the Note or otherwise required to accomplish the agreements of Sections 2.4
and 2.5 hereof (including, without limitation, any fees and expenses of
accountants, attorneys and the Rating Agencies incurred in connection
therewith).

“Defeasance Event” shall have the meaning set forth in Section 2.5.1(a) hereof.

“Defeasance Expiration Date” shall mean the date that is two (2) years from the
“startup day” within the meaning of Section 860G(a)(9) of the Code for the REMIC
Trust.

“Defeasance Payment Amount” shall mean the amount (if any) which, when added to
the remaining principal amount of the Note will be sufficient to purchase U.S.
Obligations providing the required Scheduled Defeasance Payments.

“Deposit Account” shall have the meaning set forth in Section 2.7.2 hereof.

“Development Agreement”  shall have the meaning set forth in the Security
Instrument.

5

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

“Disclosure Document” shall mean a prospectus, prospectus supplement, private
placement memorandum, or similar offering memorandum or offering circular, or
such other information reasonably requested by Lender, in each case in
preliminary or final form, used to offer Securities in connection with a
Securitization.

“Eligible Account” shall mean a separate and identifiable account from all other
funds held by the holding institution that is either (a) an account or accounts
maintained with a federal or state-chartered depository institution or trust
company which complies with the definition of Eligible Institution or (b) a
segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to regulations substantially similar to 12 C.F.R. §9.10(b),
having in either case a combined capital and surplus of at least Fifty Million
and 00/100 Dollars ($50,000,000.00) 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, the
short term unsecured debt obligations or commercial paper of which are rated at
least “A-1+” by S&P, “P-1” by Moody’s and “F-1+” by Fitch in the case of
accounts in which funds are held for thirty (30) days or less (or, in the case
of (a) 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 or (b) any Letter of Credit, the long-term
unsecured debt obligations of which are rated at least “A” by Fitch and S&P and
“A2” by Moody’s).

“Embargoed Person” shall have the meaning set forth in Section 5.1.24 hereof.

“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, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder.

“Escrow Agreement” shall have the meaning set forth in Section 7.1 hereof.

“Event of Default” shall have the meaning set forth in Section 8.1(a) hereof.

“Extraordinary Expense” shall have the meaning set forth in Section 5.1.11(e)
hereof.

“Fiscal Year” shall mean each twelve (12) month period commencing on January 1
and ending on December 31 during each year of the term of the Loan.

“Fitch” shall mean Fitch, Inc.

“GAAP” shall mean generally accepted accounting principles in the United States
of America as of the date of the applicable financial report.

6

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

“Governmental Authority” shall mean any court, board, agency, commission, office
or other authority of any nature whatsoever for any governmental unit (foreign,
federal, state, county, district, municipal, city or otherwise) whether now or
here­after in existence.

“Gross Income from Operations” shall mean for any period, all income, computed
in accordance with GAAP or other accounting principles reasonably acceptable to
Lender, derived from the ownership and operation of the Property from whatever
source during such period, including, but not limited to, Rents from tenants in
occupancy, open for business (except that tenants with ratings of BBB or better
from the Rating Agencies need not be in occupancy or open for business) and
paying full contractual rent without right of offset or credit, utility charges,
escalations, forfeited security deposits, interest on credit accounts, service
fees or charges, license fees, parking fees, rent concessions or credits,
business interruption or other loss of income or rental insurance proceeds or
other required pass-throughs and interest on Reserve Funds, if any, but
excluding Rents which in the aggregate exceed 5% of the total Rents that are
from month-to-month tenants or tenants that are included in any Bankruptcy
Action (unless such tenant’s Lease has been affirmed in the related Bankruptcy
Action), 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, Insurance
Proceeds (other than business interruption or other loss of income or rental
insurance), Awards, unforfeited security deposits, utility and other similar
deposits and any disbursements to Borrower from the Reserve Funds, if any. 
Gross income shall not be diminished as a result of the Security Instrument or
the creation of any intervening estate or interest in the Property or any part
thereof.

“Ground Lease” shall have the meaning set forth in the granting clause of the
Security Instrument.

“Ground Lease Estoppel and Agreement”  shall mean that certain Johnstown South
Site Lease and Development Agreement Estoppel Certificate and Agreement to be
entered into by Borrower, Lender and Metropolitan Atlanta Rapid Transit
Authority, as landlord under the Ground Lease, in form and substance as attached
to the Post Closing Agreement.

“Ground Rent” shall mean any rent, additional rent or other charge payable by
the tenant to landlord under the Ground Lease.

“Ground Rent Funds” shall have the meaning set forth in Section 7.6.

“Ground Rent Escrow Account” shall have the meaning set forth in the Cash
Management Agreement.

“Guarantor” shall mean Behringer Harvard REIT I, Inc., a Maryland corporation.

“Guaranty” shall mean that certain Guaranty Agreement, dated as of the date
hereof, executed and delivered by Guarantor in connection with the Loan to and
for the benefit of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

7

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

“Improvements” shall have the meaning set forth in the granting clause of the
Security Instrument.

“Indebtedness” shall mean, for any Person, at a particular date, the sum
(without duplication) at such date of (a) indebtedness or liability for borrowed
money; (b) obligations evidenced by bonds, debentures, notes, or other similar
instruments; (c) obligations for the deferred purchase price of property or
services (including trade obligations); (d) obligations under letters of credit;
(e) obligations under acceptance facilities; (f) all guaranties, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds, to invest in any Person or entity, or otherwise to assure a
creditor against loss; and (g) obligations secured by any Liens, whether or not
the obligations have been assumed.

“Indemnifying Person” shall mean each of Borrower, Principal and Guarantor.

“Independent Director” shall mean a natural person serving as director of a
corporation or manager of a limited liability company who is not at the time of
initial appointment, or at any time while serving in such capacity, and has not
been at any time during the preceding five (5) years:  (a) a stockholder,
director, member, manager (with the exception of serving as the Independent
Director of Borrower or Principal), trustee, officer, employee, partner,
attorney or counsel of the Borrower or Principal or any Affiliate of either of
them; (b) a creditor, customer, supplier or other Person who derives any of its
purchases or revenues (other than fees for services as an Independent Director
and for providing services incidental thereto) from its activities with the
Borrower or Principal or any Affiliate of either of them; (c) a Person or other
entity Controlling or under common Control with any Person excluded from serving
as Independent Director under subparagraph (a) or (b); or (d) a member of the
immediate family of any Person excluded from serving as Independent Director
under subparagraph (a) or (b).

“Insolvency Opinion” shall mean that certain substantive non-consolidation
opinion letter dated the date hereof delivered by Luce, Forward, Hamilton &
Scripps LLP in connection with the Loan.

“Insurance Premiums” shall have the meaning set forth in Section 6.1(b) hereof.

“Insurance Proceeds” shall have the meaning set forth in Section 6.4(b) hereof.

“Interest Rate” shall mean (i) commencing on the Closing Date through and
including December 31, 2009,  a rate of 5.475% per annum, (ii) commencing on
January 1, 2010 through and including December 31, 2012, a rate of 5.565% per
annum, and (iii) commencing on January 1, 2013 and thereafter until payment in
full of the Loan, a rate of 5.665% per annum.

“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 any Person is granted 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

8

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

and observance of the covenants, conditions and agreements to be performed and
observed by the other party thereto.

“Lease Termination Fee” shall mean any payment, fee or penalty paid by a Tenant
in connection with the cancellation or termination of such Tenant’s Lease,
whether by reason of such Tenant’s default or pursuant to the terms of such
Lease, including without limitation the RSUI Termination Fee.

“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 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 (a) require repairs, modifications or alterations in or to the
Property or any part thereof, or (b) in any way limit the use and enjoyment
thereof.

“Lender” shall mean KeyBank National Association, together with its successors
and assigns.

“Letter of Credit” shall mean a clean, irrevocable, unconditional, transferable
(with all transfer fees for the account of the applicant thereunder), evergreen
letter of credit acceptable to Lender (a) with respect to which Borrower has no
reimbursement obligations, (b) entitling the Lender to draw thereon in a
location approved by Lender, and (c) issued by an Eligible Institution.

“Licenses” shall have the meaning set forth in Section 4.1.22 hereof.

“Lien” shall mean any mortgage, deed of trust, deed to secure debt, lien,
pledge, hypothecation, assignment (for security), security interest, or any
other encumbrance, charge or transfer (for security) of, on or affecting
Borrower, the Property, any portion thereof or any interest therein, including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and mechanic’s, materialmen’s
and other similar liens and encumbrances.

“Loan” shall mean the loan made by Lender to Borrower pursuant to this Agreement
and evidenced by the Note.

“Loan Documents” shall mean, collectively, this Agreement, the Note, the
Security Instrument, the Assignment of Leases, the Environmental Indemnity, the
Assignment of Management Agreement, the Guaranty, the Cash Management Agreement,
the Clearing Account Agreement, the Post Closing Agreement and all other
documents pursuant to which any Person incurs, has incurred or assumes any
obligation to or for the benefit of Lender in connection with the Loan.

9

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

“Material Action” means, with respect to any Person, to file any insolvency or
reorganization case or proceeding, to institute proceedings to have such Person
be adjudicated bankrupt or insolvent, to institute proceedings under any
applicable insolvency law, to seek any relief under any law relating to relief
from debts or the protection of debtors, to consent to the filing or institution
of bankruptcy or insolvency proceedings against such Person, to file a petition
seeking, or consent to, reorganization or relief with respect to such Person
under any applicable federal or state law relating to bankruptcy or insolvency,
to seek or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator, custodian, or any similar official of or for such Person
or a substantial part of its property, to make any assignment for the benefit of
creditors of such Person, to admit in writing such Person’s inability to pay its
debts generally as they become due, or to affirmatively take action in
furtherance of any of the foregoing.

“Maturity Date” shall mean December 1, 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.

“Monthly Debt Service Payment Amount” shall mean (a) an amount equal to interest
only on the outstanding principal balance of the Loan, calculated in accordance
with the terms hereof, for each Payment Date commencing on the Payment Date
occurring in January, 2007 through and including the Payment Date occurring in
December, 2011, (b) a constant monthly payment of $468,936.59 (subject to
re-calculation upon the occurrence of a principal paydown as provided under the
terms of Section 7.5.1 hereof, provided no Event of Default is continuing) for
each Payment Date commencing on the Payment Date occurring in January, 2012
through and including the Payment Date in December, 2012, and (c) a constant
monthly payment of principal and interest (calculated in accordance with the
terms hereof and based on the then outstanding principal balance of the Loan)
with respect to each Payment Date commencing on the Payment Date occurring in
January, 2013 and each and every Payment Date thereafter.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Net Cash Flow” shall mean, for any period, the amount obtained by subtracting
Operating Expenses and Capital Expenditures for such period from Gross Income
from Operations for such period.

“Net Cash Flow Schedule” shall have the meaning set forth in Section 5.1.11(b)
hereof.

“Net Operating Income” shall mean the amount obtained by subtracting Operating
Expenses from Gross Income from Operations.

“Net Proceeds” shall have the meaning set forth in Section 6.4(b) hereof.

10

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

“Net Proceeds Deficiency” shall have the meaning set forth in Section 6.4(b)(vi)
hereof.

“Net Proceeds Prepayment” shall have the meaning set forth in Section 6.4(e)
hereof.

“Note” shall mean that certain Promissory Note, date the date hereof, in the
principal amount of EIGHTY-TWO MILLION and No/100 DOLLARS ($82,000,000), made by
Borrower in favor of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

“Officer’s Certificate” shall mean a certificate delivered to Lender by Borrower
which is signed by an authorized senior (president or vice-president) officer of
Borrower or if applicable an authorized senior (president or vice-president)
officer of the general partner or managing member of Borrower.

“Operating Expenses” shall mean the total of all expenditures, computed in
accordance with GAAP or other accounting principles reasonably acceptable to
Lender, of whatever kind relating to the operation, maintenance and management
of the Property that are incurred on a regular monthly or other periodic basis,
including without limitation, utilities, ordinary repairs and maintenance,
insurance, license fees, property taxes and assessments, advertising expenses,
management fees, payroll and related taxes, computer processing charges,
operational equipment or other lease payments, and other similar costs, but
excluding depreciation, Debt Service, Capital Expenditures and contributions to
the Reserve Funds.

“Other Charges” shall mean all 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, but shall exclude charges for utilities
payable directly by a Tenant.

“Other Obligations” shall have the meaning as set forth in the Security
Instrument.

“Payment Date” shall mean the first (1st) day of each calendar month during the
term of the Loan or, if such day is not a Business Day, the immediately
preceding Business Day.

“Permitted Encumbrances” shall mean, with respect to the Property, collectively,
(a) the Liens and security interests created by the Loan Documents, (b) all
Liens, encumbrances and other matters disclosed in the Title Insurance Policy,
(c) Liens, if any, for Taxes imposed by any Governmental Authority not yet due
or delinquent, and (d) such other title and survey exceptions as Lender has
approved or may approve in writing in Lender’s reasonable discretion, which
Permitted Encumbrances in the aggregate do not materially adversely affect the
value or use of the Property or Borrower’s ability to repay the Loan.

“Permitted Release Date” shall mean the date that is the third (3rd) anniversary
of the first Payment Date.

11

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

“Permitted Use” shall mean office and other appurtenant and related uses.

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

“Personal Property” shall have the meaning set forth in the granting clause of
the Security Instrument.

“Physical Conditions Report” shall mean a report prepared by a company
satisfactory to Lender regarding the physical condition of the Property,
satisfactory in form and substance to Lender in its sole discretion, which
report shall, among other things, (a) confirm that the Property and its use
complies, in all material respects, with all applicable Legal Requirements
(including, without limitation, zoning, subdivision and building laws) and
(b) to the extent available, include a copy of a final certificate of occupancy
with respect to all Improvements on the Property.

“Plan” shall have the meaning specified in Section 5.2.9(c) hereof.

“Policies” shall have the meaning specified in Section 6.1(b) hereof.

“Policy” shall have the meaning specified in Section 6.1(b) hereof.

“Post Closing Agreement”  shall mean that certain Post Closing Obligations
Letter, dated as of the date hereof, given by Borrower to Lender.

“Prepayment Rate” shall mean the yield calculated by the linear interpolation of
the yields, as reported in 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 date the payment or such proceeds
are received, of U.S. Treasury constant maturities with maturity dates (one
longer and 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 Treasury Rate).

“Prime Rate” shall mean the prime rate reported in the Money Rates section of
The Wall Street Journal.  In the event that The Wall Street Journal should cease
or temporarily interrupt publication, the term “Prime Rate” shall mean the daily
average prime rate published in another business newspaper, or business section
of a newspaper, of national standing and general circulation chosen by Lender. 
In the event that a prime rate is no longer generally published or is limited,
regulated or administered by a governmental or quasi-governmental body, then
Lender shall select a comparable interest rate index which is readily available
and verifiable to Borrower but is beyond Lender’s control.

“Principal” shall mean the Special Purpose Entity that is the general partner of
Borrower, if Borrower is a limited partnership, or managing member of Borrower,
if Borrower is a limited liability company.

12

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

“Property” shall mean the parcel of real property, the Improvements thereon and
all personal property owned by Borrower and encumbered by the Security
Instrument, together with all rights pertaining to such property and
Improvements, as more particularly described in the granting clauses of the
Security Instrument and referred to therein as the “Property”.

“Property Management Agreement” shall mean the management agreement entered into
by and between Borrower and Property Manager, pursuant to which Property Manager
is to provide management and other services with respect to the Property, or, if
the context requires, the Replacement Management Agreement.

“Property Manager” shall mean HPT Management Services LP, a Texas limited
partnership, or, if the context requires, a Qualifying Property Manager who is
managing the Property in accordance with the terms and provisions of this
Agreement pursuant to a Replacement Management Agreement.

“Property Reserve Account” shall have the meaning set forth in Section 7.1
hereof.

“Property Reserve Deposit” shall have the meaning set forth in Section 7.1
hereof.

“Property Reserve Funds” shall have the meaning set forth in Section 7.1 hereof.

“Provided Information” shall mean any and all financial and other information
provided at any time by, or on behalf of, any Indemnifying Person with respect
to any Property, Borrower, Principal, Guarantor and/or Property Manager.

“Qualifying Property Manager” shall mean either (a) Property Manager; or (b) a
reputable and experienced management organization reasonably satisfactory to
Lender, which organization or its principals possess at least ten (10) years
experience in managing properties similar in size, scope, use and value as the
Property, provided, that Borrower shall have obtained (i) prior written
confirmation from the applicable Rating Agencies that management of the Property
by such Person will not cause a downgrade, withdrawal or qualification of the
then current ratings of the Securities or any class thereof and (ii) if such
Person is an Affiliate of Borrower, an Additional Insolvency Opinion.  Lender
acknowledges that, notwithstanding anything herein to the contrary, HPT
Management Services LP shall be deemed to be a Qualifying Property Manager.

“Rating Agencies” shall mean each of S&P, Moody’s and Fitch, or any other
nationally recognized statistical rating agency which has been approved by
Lender.

“Related Entities” shall have the meaning set forth in Section 5.2.10(e) hereof.

“REA” shall mean, individually or collectively (as the context requires), each
reciprocal easement or similar agreement affecting the Property as more
particularly described on Schedule I hereto (if any) and any future reciprocal
easement or similar agreement affecting the Property entered into in accordance
with the applicable terms and conditions hereof.

13

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

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

“Relevant Leasing Threshold” shall mean any Lease for an amount of leaseable
square footage equal to or greater than one (1) full floor.

“Relevant Restoration Threshold” shall mean Five Hundred Thousand and No/100
dollars ($500,000).

“Rents” shall mean all rents (including 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, all other amounts payable as rent under
any Lease or other agreement relating to the Property, including, without
limitation, charges for electricity, oil, gas, water, steam, heat, ventilation,
air-conditioning and any other energy, telecommunication, telephone, utility or
similar items or time use charges, HVAC equipment charges, sprinkler charges,
escalation charges, license fees, maintenance fees, charges for Taxes, Operating
Expenses or other reimbursables payable to Borrower (or to the Property Manager
for the account of Borrower) under any Lease, 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 (but excluding amounts paid by Borrower
to 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.

“Replacement Management Agreement” shall mean, collectively, (a) either (i) a
management agreement with a Qualifying Property Manager substantially in the
same form and substance as the Property Management Agreement, or (ii) a
management agreement with a Qualifying Property Manager, which management
agreement shall be reasonably acceptable to Lender in form and substance,
provided, with respect to this subclause (ii), Lender, at its option, may
require that Borrower shall have obtained prior written confirmation from the
applicable Rating Agencies that such management agreement will not cause a
downgrade, withdrawal or qualification of the then current rating of the
Securities or any class thereof and (b) an assignment of management agreement
and subordination of management fees substantially in the form then used by
Lender (or of such other form and substance reasonably acceptable to Lender),
executed and delivered to Lender by Borrower and such Qualifying Property
Manager at Borrower’s expense.

“Replacement Reserve Account” shall have the meaning set forth in Section 7.3.1
hereof.

“Replacement Reserve Funds” shall have the meaning set forth in Section 7.3.1
hereof.

“Replacement Reserve Monthly Deposit” shall have the meaning set forth in
Section 7.3.1 hereof.

“Replacements” shall have the meaning set forth in Section 7.3.1(a) hereof.

14

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

“Required Repairs” shall have the meaning set forth in Section 7.1 hereof.

“Reserve Funds” shall mean, collectively, the Tax and Insurance Escrow Funds,
the Replacement Reserve Funds, the Rollover Reserve Funds, the Property Reserve
Funds, the Additional Collateral Reserve Funds, the TI Improvement Reserve Funds
and any other escrow fund established by the Loan Documents.

“Resizing Event” shall have the meaning set forth in Section 9.1.2 hereof.

“Restoration” shall mean the repair and restoration of the Property after a
Casualty or Condemnation as nearly as possible to the condition the Property was
in immediately prior to such Casualty or Condemnation, with such alterations as
may be reasonably approved by Lender.

“Restricted Party” shall mean collectively, (a) Borrower, Principal, any
Guarantor, and any Affiliated Manager and (b) any shareholder, partner, member,
non-member manager, any direct or indirect legal or beneficial owner of,
Borrower, Principal, any Guarantor, any Affiliated Manager or any non-member
manager.

“Rollover Reserve Account” shall have the meaning set forth in Section 7.4.1
hereof.

“Rollover Reserve Funds” shall have the meaning set forth in Section 7.4.1
hereof.

“RSUI” shall mean RSUI Indemnity Company, a New Hampshire corporation, as tenant
under the RSUI Lease.

“RSUI Lease” shall mean that certain Lease, dated September 9, 1988, by
Borrower’s predecessor in interest, as landlord and RSUI’s predecessor in
interest, as tenant.

“RSUI Termination Fee”  shall mean the “Termination Fee” as defined in the RSUI
Lease.

“S&P” shall mean Standard & Poor’s Ratings Group, a division of the McGraw-Hill
Companies.

“Sale or Pledge” shall mean a voluntary or involuntary sale, conveyance,
assignment, transfer, encumbrance, pledge, grant of option or other transfer or
disposal of a legal or beneficial interest, whether direct or indirect.

“Scheduled Defeasance Payments” shall have the meaning set forth in
Section 2.5.1(b) hereof.

“Securities” shall have the meaning set forth in Section 9.1 hereof.

“Securitization” shall have the meaning set forth in Section 9.1 hereof.

15

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

“Security Agreement” shall have the meaning set forth in Section 2.5.1(a)(vi)
hereof.

“Security Instrument” shall mean that certain first priority Fee and Leasehold
Deed to Secure Debt and Security Agreement, dated as of the date hereof,
executed and delivered by Borrower to Lender 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.

“Servicer” shall have the meaning set forth in Section 9.5 hereof.

“Servicing Agreement” shall have the meaning set forth in Section 9.5 hereof.

“Severed Loan Documents” shall have the meaning set forth in Section 8.2(c)
hereof.

“Special Purpose Entity” shall mean a corporation, limited partnership or
limited liability company that, since the date of its formation and at all times
on and after the date thereof, has complied with and shall at all times comply
with the following requirements unless it has received either prior consent to
do otherwise from Lender or a permitted administrative agent thereof, or, while
the Loan is securitized, confirmation from each of the applicable Rating
Agencies requiring such review that such noncompliance would not result in the
requalification, withdrawal, or downgrade of the ratings of any Securities or
any class thereof:

(i)    is and shall be organized solely for the purpose of (A) in the case of
Borrower, acquiring, developing, owning, holding, selling, leasing,
transferring, exchanging, managing and operating the Property, entering into and
performing its obligations under the Loan Documents with Lender, refinancing the
Property in connection with a permitted repayment of the Loan, and transacting
lawful business that is incident, necessary and appropriate to accomplish the
foregoing; or (B) in the case of a Principal, acting as a general partner of the
limited partnership that owns the Property or as member of the limited liability
company that owns the Property and transacting lawful business that is incident,
necessary and appropriate to accomplish the foregoing;

(ii)   has not engaged and shall not engage in any business unrelated to (A) the
acquisition, development, ownership, management, operation or sale of the
Property, or (B) in the case of a Principal, acting as general partner of the
limited partnership that owns the Property or acting as a member of the limited
liability company that owns the Property, as applicable;

(iii)  has not owned and shall not own any real property other than, in the case
of Borrower, the Property;

(iv)  does not have, shall not have and at no time had any assets other than (A)
in the case of Borrower, the Property and personal property necessary or
incidental to its ownership and operation of the Property or (B) in the case of
a Principal, its partnership interest in the limited partnership or the member
interest

16

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

in the limited liability company that owns the Property and personal property
necessary or incidental to its ownership of such interests;

(v)   has not engaged in, sought, consented or permitted to and shall not engage
in, seek, consent to or permit (A) any dissolution, winding up, liquidation,
consolidation or merger, (B) any sale or other transfer of all or substantially
all of its assets or any sale of assets outside the ordinary course of its
business, except as permitted by the Loan Documents, or (C) in the case of a
Principal, any transfer of its partnership or membership interests;

(vi)  shall not cause, consent to or permit any amendment of its limited
partnership agreement, articles of incorporation, articles of organization,
certificate of formation, operating agreement or other formation document or
organizational document (as applicable) with respect to the matters set forth in
this definition;

(vii) if such entity is a limited partnership, has and shall have at least one
general partner and has and shall have, as its only general partners, Special
Purpose Entities each of which (A) is a corporation or single-member Delaware
limited liability company, (B) has one Independent Director (provided, however,
if any Rating Agency requires two (2) Independent Directors, Borrower shall
appoint, or cause the appointment of, a second Independent Director), and (C)
holds a direct interest as general partner in the limited partnership of not
less than 0.5% (or 0.1%, if the limited partnership is a Delaware entity);

(viii)  if such entity is a corporation, has and shall have at least one (1)
Independent Director (provided, however, if any Rating Agency requires two (2)
Independent Directors, Borrower shall appoint, or cause the appointment of, a
second Independent Director), and shall not cause or permit the board of
directors of such entity to take any Material Action either with respect to
itself or, if the corporation is a Principal, with respect to Borrower or any
action requiring the unanimous affirmative vote of one hundred percent (100%) of
the members of its board of directors unless each Independent Director shall
have participated in such vote and shall have voted in favor of such action;

(ix)   if such entity is a limited liability company (other than a limited
liability company meeting all of the requirements applicable to a single-member
limited liability company set forth in this definition of “Special Purpose
Entity”), has and shall have at least one (1) member that is a Special Purpose
Entity, that is a corporation, that has at least one (1) Independent Director
(provided, however, if any Rating Agency requires two (2) Independent Directors,
Borrower shall appoint, or cause the appointment of, a second Independent
Director) and that directly owns at least one-half-of-one percent (0.5%) of the
equity of the limited liability company (or 0.1% if the limited liability
company is a Delaware entity);

17

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

(x)    if such entity is a single-member limited liability company, (A) is and
shall be a Delaware limited liability company, (B) has and shall have at least
one (1) Independent Director (provided, however, if any Rating Agency requires
two (2) Independent Directors, Borrower shall appoint, or cause the appointment
of, a second Independent Director) serving as manager of such company, (C) shall
not take any Material Action and shall not cause or permit the members or
managers of such entity to take any Material Action, either with respect to
itself or, if the company is a Principal, with respect to Borrower, in each case
unless the required number of Independent Directors then serving as managers of
the company shall have participated and consented in writing to such action, and
(D) has and shall have either (1) a member which owns no economic interest in
the company, has signed the company’s limited liability company agreement and
has no obligation to make capital contributions to the company, or (2) a natural
person or entity that is not a member of the company, that has signed its
limited liability company agreement and that, under the terms of such limited
liability company agreement becomes a member of the company immediately prior to
the withdrawal or dissolution of the last remaining member of the company;

(xi)   has not and shall not (and, if such entity is (a) a limited liability
company, has and shall have a limited liability agreement or an operating
agreement, as applicable, (b) a limited partnership, has a limited partnership
agreement, or (c) a corporation, has a certificate of incorporation or articles
that, in each case, provide that such entity shall not) (1) dissolve, merge,
liquidate, consolidate; (2) sell all or substantially all of its assets; (3) to
the extent permitted by applicable law, amend its organizational documents with
respect to the matters set forth in this definition without the consent of
Lender; or (4) without the affirmative vote of each Independent Director of
itself or the consent of a Principal that is a member or general partner in it: 
(A) file or consent to the filing of any bankruptcy, insolvency or
reorganization case or proceeding, institute any proceedings under any
applicable insolvency law or otherwise seek relief under any laws relating to
the relief from debts or the protection of debtors generally, file a bankruptcy
or insolvency petition or otherwise institute insolvency proceedings; (B) seek
or consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for the entity or a substantial
portion of its property; (C) make an assignment for the benefit of the creditors
of the entity; or (D) affirmatively take any action in furtherance of any of the
foregoing;

(xii)  has at all times been and shall at all times remain solvent and has paid
and shall pay its debts and liabilities (including, a fairly-allocated portion
of any personnel and overhead expenses that it shares with any Affiliate) from
its assets as the same shall become due, and has maintained and shall 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;

(xiii) has not failed and shall not fail to correct any known misunderstanding
regarding the separate identity of such entity;

18

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

(xiv)   has maintained and shall maintain its bank accounts, books of account,
books and records separate from those of any other Person and, to the extent
that it is not a disregarded entity for tax purposes and is required to file tax
returns under applicable law, has filed and shall file its own tax returns,
except to the extent that it is required by law to file consolidated tax returns
and, if it is a corporation, has not filed and shall not file a consolidated
federal income tax return with any other corporation, except to the extent that
it is required by law to file consolidated tax returns;

(xv) has maintained and shall maintain its own resolutions and agreements;

(xvi)   has not commingled and shall not commingle its funds or assets with
those of any other Person and has not participated and shall not participate in
any cash management system with any other Person, except with respect to a
custodial account maintained by the Property Manager on behalf of Affiliates of
Borrower and, with respect to funds in such custodial account, has separately
accounted, and will continue to separately account for, each item of income and
expense applicable to the Property and Borrower;

(xvii)  has held and shall hold its assets in its own name;

(xviii) [intentionally omitted];

(xix) (A) has maintained and shall maintain its financial statements, accounting
records and other entity documents separate from those of any other Person; (B)
has shown and shall show, in its financial statements, its asset and liabilities
separate and apart from those of any other Person; and (C) has not permitted and
shall not permit its assets to be listed as assets on the financial statement of
any of its Affiliates except as required by GAAP; provided, however, that any
such consolidated financial statement contains a note indicating that the
Special Purpose Entity’s separate assets and credit are not available to pay the
debts of such Affiliate and that the Special Purpose Entity’s liabilities do
not  constitute obligations of the consolidated entity;

(xx)  has paid and shall pay its own liabilities and expenses, including the
salaries of its own employees, out of its own funds and assets, and has
maintained and shall maintain a sufficient number of employees in light of its
contemplated business operations, which may be none;

(xxi) has observed and shall observe all partnership, corporate or limited
liability company formalities, as applicable;

(xxii)  [intentionally omitted]

(xxiii) shall have no Indebtedness other than (i) the Loan, (ii) liabilities
incurred in the ordinary course of business relating to the ownership and
operation of the Property and the routine administration of Borrower, in amounts
not to

19

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

exceed 2.5% of the original principal amount of the Note (other than management
fees and commissions and liabilities that are reserved for) and, in the case of
a general partner or managing member of a Person, liabilities arising by reason
of its status as a general partner or managing member, which liabilities are
paid not more than sixty (60) days after the later of the date incurred or
invoiced (unless disputed in good faith with adequate reserves established
therefor), are not evidenced by a note, and which amounts are normal and
reasonable under the circumstances, and (iii) such other liabilities that are
permitted pursuant to the Loan Documents;

(xxiv) has not assumed, guaranteed or become obligated and shall not assume or
guarantee or become obligated for the debts of any other Person, has not held
out and shall not hold out its credit as being available to satisfy the
obligations of any other Person or has not pledged and shall not pledge its
assets for the benefit of any other Person, in each case except as permitted
pursuant to this Agreement;

(xxv)  has not acquired and shall not acquire obligations or securities of its
partners, members or shareholders or any other owner or Affiliate;

(xxvi) has allocated and shall allocate fairly and reasonably any overhead
expenses that are shared with any of its Affiliates, constituents, or owners, or
any guarantors of any of their respective obligations, or any Affiliate of any
of the foregoing, including, but not limited to, paying for shared office space
and for services performed by any employee of an Affiliate;

(xxvii) has maintained and used and shall maintain and use separate stationery,
invoices and checks bearing its name and not bearing the name of any other
entity unless such entity is clearly designated as being the Special Purpose
Entity’s agent, provided, however, that Property Manager, on behalf of such
Person, may maintain and use invoices and checks bearing Property Manager’s
name;

(xxviii) [intentionally omitted];

(xxix)  has held itself out and identified itself and shall hold itself out and
identify itself as a separate and distinct entity under its own name or in a
name franchised or licensed to it by an entity other than an Affiliate of
Borrower and not as a division or part of any other Person, except for services
rendered by Property Manager under the Property Management Agreement, so long as
Property Manager holds itself out as an agent of Borrower

(xxx)   has maintained and shall maintain its assets in such a manner that it
shall not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any other Person;

(xxxi)  has not made and shall not make loans to any Person and has not held and
shall not hold evidence of indebtedness issued by any other Person or

20

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

entity (other than cash and investment-grade securities issued by an entity that
is not an Affiliate of or subject to common ownership with such entity);

(xxxii)  has not identified and shall not identify its partners, members or
shareholders, or any Affiliate of any of them, as a division or part of it;

(xxxiii)  other than capital contributions and distributions permitted under the
terms of its organizational documents, has not entered into or been a party to,
and shall not enter into or be a party to, any transaction with any of its
partners, members, shareholders or Affiliates except in the ordinary course of
its business and on terms which are commercially reasonable terms comparable to
those of an arm’s-length transaction with an unrelated third party;

(xxxiv)  has not had and shall not have any obligation to, and has not
indemnified and shall not indemnify its partners, officers, directors or
members, as the case may be, in each case unless such an obligation or
indemnification is fully subordinated to the Debt and shall not constitute a
claim against it in the event that its cash flow is insufficient to pay the
Debt;

(xxxv)  if such entity is a corporation, to the extent permitted under
applicable corporate law, has considered and shall consider the interests of its
creditors in connection with all corporate actions that could reasonably be
expected to affect such creditors;

(xxxvi)  has not had and shall not have any of its obligations guaranteed by any
Affiliate except as otherwise required in the Loan Documents;

(xxxvii)  has not formed, acquired or held and shall not form, acquire or hold
any subsidiary, except that a Principal may acquire and hold its interest in
Borrower;

(xxxviii)  has complied and shall comply with all of the terms and provisions
contained in its organizational documents.

(xxxix)  has conducted and shall conduct its business so that each of the
assumptions made about it and each of the facts stated about it in the
Insolvency Opinion are true;

(xl)   has not permitted and shall not permit any Affiliate or constituent party
independent access to its bank accounts;

(xli)  is, has always been and shall continue to be duly formed, validly
existing, and in good standing in the state of its incorporation or formation
and in all other jurisdictions where it is required to be qualified to do
business; and

(xlii) has no material contingent or actual obligations not related to the
Property.

21

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

“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 2.5.3 hereof.

“Survey” shall mean a survey of the Property prepared by a surveyor licensed in
the State and satisfactory to Lender and the company or companies issuing the
Title Insurance Policy, and containing a certification of such surveyor
satisfactory to Lender.

“Tax and Insurance Escrow Funds” shall have the meaning set forth in Section 7.2
hereof regardless of whether the funds held therein are held by Lender for the
payment of Taxes or Insurance Premiums or both.

“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.

“Threshold Amount” shall have the meaning set forth in Section 5.1.21 hereof.

“Tenant” shall mean any person or entity with a possessory right to all or any
part of the Property pursuant to a Lease or other written agreement.

“TI Allowance Deposit” shall have the meaning set forth in Section 7.7 hereof.

TI Allowance Reserve Funds” shall have the meaning set forth in Section 7.7
hereof.

TI Allowance Reserve Account” shall have the meaning set forth in Section 7.7
hereof.

“Title Insurance Policy” shall mean an ALTA mortgagee title insurance policy in
the form acceptable to Lender (or, if the Property is in a State which does not
permit the issuance of such ALTA policy, such form as shall be permitted in such
State and acceptable to Lender) issued with respect to the Property and insuring
the lien of the Security Instrument.

“Transfer” shall have the meaning set forth in Section 5.2.10(b) hereof.

“Transferee” shall have the meaning set forth in Section 5.2.10(e)(iii) hereof.

“Transferee’s Principals” shall mean collectively, (A) Transferee’s managing
members, general partners or principal shareholders and (B) such other members,
partners or shareholders which directly or indirectly shall own a fifty-one
percent (51%) or greater economic and voting interest in Transferee.

“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in
effect in the State in which the Property is located.

22

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

“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, or (b) to the extent acceptable to the
Rating Agencies, other “government securities” within the meaning of
Section 2(a)(16) of the Investment Company Act of 1940, as amended; provided
that up to twenty-five percent (25%) of the U.S. obligations may be securities
issued by quasi-governmental agencies rated at least AAA by the Rating Agencies
provided that such securities are acceptable to the Rating Agencies.

“Yield Maintenance Premium” shall mean an amount equal to the greater of (a) one
percent (1%) of the outstanding principal of the Loan to be prepaid or satisfied
and (b) the excess, if any, of (i) the sum of the present values of all
then-scheduled payments of principal and interest under the Note assuming that
all outstanding principal and interest on the Loan is paid on the Maturity Date
(with each such payment and assumed payment discounted to its present value at
the date of prepayment at the rate which, when compounded monthly, is equivalent
to the Prepayment Rate when compounded semi-annually and deducting from the sum
of such present values any short-term interest paid from the date of prepayment
to the next succeeding Payment Date in the event such payment is not made on a
Payment Date), over (ii) the principal amount being prepaid.

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.  ALL USES OF THE WORD “INCLUDING” SHALL MEAN “INCLUDING,
WITHOUT LIMITATION” UNLESS THE CONTEXT SHALL INDICATE OTHERWISE.  UNLESS
OTHERWISE SPECIFIED, THE WORDS “HEREOF,” “HEREIN” AND “HEREUNDER” AND WORDS OF
SIMILAR IMPORT WHEN USED IN THIS AGREEMENT SHALL REFER TO THIS AGREEMENT AS A
WHOLE AND NOT TO ANY PARTICULAR PROVISION OF THIS AGREEMENT.  UNLESS OTHERWISE
SPECIFIED, ALL MEANINGS ATTRIBUTED TO DEFINED TERMS HEREIN SHALL BE EQUALLY
APPLICABLE TO BOTH THE SINGULAR AND PLURAL FORMS OF THE TERMS SO DEFINED.

II.                                     GENERAL TERMS

SECTION 2.1            LOAN COMMITMENT; DISBURSEMENT TO BORROWER.

2.1.1       AGREEMENT TO LEND AND BORROW. SUBJECT TO AND UPON THE TERMS AND
CONDITIONS SET FORTH HEREIN, LENDER HEREBY AGREES TO MAKE AND BORROWER HEREBY
AGREES TO ACCEPT THE LOAN ON THE CLOSING DATE.

2.1.2       SINGLE DISBURSEMENT TO BORROWER. BORROWER MAY REQUEST AND 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       THE NOTE, SECURITY INSTRUMENT AND LOAN DOCUMENTS. THE LOAN SHALL BE
EVIDENCED BY THE NOTE AND SECURED BY THE SECURITY INSTRUMENT, THE ASSIGNMENT OF
LEASES AND THE OTHER LOAN DOCUMENTS.

23

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

2.1.4       USE OF PROCEEDS. BORROWER SHALL USE THE PROCEEDS OF THE LOAN TO (A)
ACQUIRE THE PROPERTY OR REPAY AND DISCHARGE ANY EXISTING LOANS RELATING TO THE
PROPERTY, (B) PAY ALL PAST-DUE BASIC CARRYING COSTS, IF ANY, WITH RESPECT TO THE
PROPERTY, (C) MAKE DEPOSITS INTO THE RESERVE FUNDS ON THE CLOSING DATE IN THE
AMOUNTS PROVIDED HEREIN, (D) PAY COSTS AND EXPENSES INCURRED IN CONNECTION WITH
THE CLOSING OF THE LOAN, AS APPROVED BY LENDER, (E) FUND ANY WORKING CAPITAL
REQUIREMENTS OF THE PROPERTY AND (F) DISTRIBUTE THE BALANCE, IF ANY, TO
BORROWER.

SECTION 2.2            INTEREST RATE.

2.2.1       INTEREST RATE. INTEREST ON THE OUTSTANDING PRINCIPAL BALANCE OF THE
LOAN SHALL ACCRUE FROM (AND INCLUDE) THE CLOSING DATE TO BUT EXCLUDING THE
MATURITY DATE AT THE INTEREST RATE (UNLESS THE DEFAULT RATE SHALL BE IN EFFECT).

2.2.2       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 BY (C) THE OUTSTANDING
PRINCIPAL BALANCE.

2.2.3       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, ALL ACCRUED AND UNPAID INTEREST
IN RESPECT OF THE LOAN AND ANY OTHER AMOUNTS DUE PURSUANT TO THE LOAN DOCUMENTS,
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.

2.2.4       USURY SAVINGS. THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS
ARE SUBJECT TO THE EXPRESS CONDITION THAT AT NO TIME SHALL BORROWER BE OBLIGATED
OR REQUIRED TO PAY INTEREST ON THE PRINCIPAL BALANCE OF THE LOAN AT A RATE WHICH
COULD SUBJECT LENDER TO EITHER CIVIL OR CRIMINAL LIABILITY AS A RESULT OF BEING
IN EXCESS OF THE MAXIMUM LEGAL RATE.  IF, BY THE TERMS OF THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS, BORROWER IS AT ANY TIME REQUIRED OR OBLIGATED TO PAY
INTEREST ON THE PRINCIPAL BALANCE DUE HEREUNDER AT A RATE IN EXCESS OF THE
MAXIMUM LEGAL RATE, 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 DETENTION OF THE SUMS DUE UNDER THE LOAN, SHALL, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, BE AMORTIZED, PRORATED, ALLOCATED, AND SPREAD
THROUGHOUT THE FULL STATED TERM OF THE LOAN UNTIL PAYMENT IN FULL SO THAT THE
RATE OR AMOUNT OF INTEREST ON ACCOUNT OF THE LOAN DOES NOT EXCEED THE MAXIMUM
LEGAL RATE OF INTEREST FROM TIME TO TIME IN EFFECT AND APPLICABLE TO THE LOAN
FOR SO LONG AS THE LOAN IS OUTSTANDING.

SECTION 2.3            LOAN PAYMENT.

2.3.1       MONTHLY DEBT SERVICE PAYMENTS.  BORROWER SHALL PAY TO LENDER (A) ON
THE CLOSING DATE, AN AMOUNT EQUAL TO INTEREST ONLY ON THE OUTSTANDING PRINCIPAL

24

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

BALANCE OF THE LOAN FROM THE CLOSING DATE UP TO AND INCLUDING NOVEMBER 30, 2006
AND (B) ON EACH PAYMENT DATE THEREAFTER UP TO AND INCLUDING THE MATURITY DATE,
BORROWER SHALL MAKE A PAYMENT TO LENDER OF PRINCIPAL AND/OR INTEREST, AS
APPLICABLE, IN AN AMOUNT EQUAL TO THE MONTHLY DEBT SERVICE PAYMENT AMOUNT, WHICH
PAYMENTS SHALL BE APPLIED FIRST TO ACCRUED AND UNPAID INTEREST AND THE BALANCE
TO PRINCIPAL.  THE NON-INTEREST ONLY PORTION OF MONTHLY DEBT SERVICE PAYMENT
AMOUNT REQUIRED HEREUNDER IS BASED UPON A THIRTY (30) YEAR AMORTIZATION
SCHEDULE.

2.3.2       PAYMENTS GENERALLY.  THE FIRST (1ST) INTEREST ACCRUAL PERIOD
HEREUNDER SHALL COMMENCE ON AND INCLUDE THE CLOSING DATE AND SHALL END ON AND
INCLUDE DECEMBER 31, 2006.  EACH INTEREST ACCRUAL PERIOD THEREAFTER SHALL
COMMENCE ON THE FIRST (1ST) DAY OF EACH CALENDAR MONTH DURING THE TERM OF THIS
AGREEMENT AND SHALL END ON AND INCLUDE THE FINAL CALENDAR DATE OF SUCH CALENDAR
MONTH.  FOR PURPOSES OF MAKING PAYMENTS HEREUNDER, BUT NOT FOR PURPOSES OF
CALCULATING INTEREST ACCRUAL PERIODS, IF THE DAY ON WHICH SUCH PAYMENT IS DUE IS
NOT A BUSINESS DAY, THEN AMOUNTS DUE ON SUCH DATE SHALL BE DUE ON THE
IMMEDIATELY PRECEDING BUSINESS DAY 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, THROUGH AND INCLUDING THE DAY IMMEDIATELY
PRECEDING SUCH MATURITY DATE.  ALL AMOUNTS DUE UNDER THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS SHALL BE PAYABLE WITHOUT SETOFF, COUNTERCLAIM, DEFENSE OR
ANY OTHER DEDUCTION WHATSOEVER.

2.3.3       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
SECURITY INSTRUMENT AND THE OTHER LOAN DOCUMENTS.

2.3.4       LATE PAYMENT CHARGE.  IF ANY PRINCIPAL, INTEREST OR ANY OTHER SUMS
DUE UNDER THE LOAN DOCUMENTS (EXCLUDING PRINCIPAL DUE ON THE MATURITY DATE) ARE
NOT PAID BY BORROWER ON OR PRIOR TO THE DATE ON WHICH IT IS DUE, BORROWER SHALL
PAY TO LENDER UPON DEMAND AN AMOUNT EQUAL TO THE LESSER OF FIVE PERCENT (5%) OF
SUCH UNPAID SUM OR 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 SECURITY INSTRUMENT AND THE OTHER LOAN DOCUMENTS
TO THE EXTENT PERMITTED BY APPLICABLE LAW.

2.3.5       METHOD AND PLACE OF PAYMENT.  EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED HEREIN, ALL PAYMENTS AND PREPAYMENTS UNDER THIS AGREEMENT AND THE NOTE
SHALL BE MADE TO LENDER NOT LATER THAN 11:00 A.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 OR AS OTHERWISE DIRECTED BY
LENDER, 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.

SECTION 2.4            PREPAYMENTS.

2.4.1       VOLUNTARY PREPAYMENTS.  EXCEPT AS OTHERWISE PROVIDED IN
SECTION 2.4.2, BORROWER SHALL NOT HAVE THE RIGHT TO PREPAY THE LOAN IN WHOLE OR
IN PART

25

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

PRIOR TO THE MATURITY DATE; PROVIDED THAT ON THE PAYMENT DATE THREE (3) MONTHS
PRIOR TO THE MATURITY DATE, OR ON ANY PAYMENT DATE THEREAFTER (OR ON ANY DATE
THEREAFTER PROVIDED THAT INTEREST IS PAID THROUGH THE NEXT PAYMENT DATE),
BORROWER MAY, AT ITS OPTION AND UPON THIRTY (30) DAYS PRIOR WRITTEN NOTICE TO
LENDER PREPAY THE DEBT IN WHOLE ONLY WITHOUT PAYMENT OF THE YIELD MAINTENANCE
PREMIUM.  IF FOR ANY REASON BORROWER PREPAYS THE LOAN ON A DATE OTHER THAN A
PAYMENT DATE, BORROWER SHALL PAY LENDER, IN ADDITION TO THE DEBT, ALL INTEREST
WHICH WOULD HAVE ACCRUED ON THE AMOUNT OF THE LOAN THROUGH AND INCLUDING THE
PAYMENT DATE NEXT OCCURRING FOLLOWING THE DATE OF SUCH PREPAYMENT.

2.4.2       MANDATORY PREPAYMENTS.  ON THE NEXT OCCURRING PAYMENT DATE FOLLOWING
THE DATE ON WHICH LENDER ACTUALLY RECEIVES ANY NET PROCEEDS, IF LENDER IS NOT
OBLIGATED OR DOES NOT ELECT TO MAKE SUCH NET PROCEEDS AVAILABLE TO BORROWER FOR
THE RESTORATION OF THE PROPERTY OR OTHERWISE REMIT SUCH NET PROCEEDS TO BORROWER
PURSUANT TO SECTION 6.4 HEREOF, BORROWER SHALL PREPAY OR AUTHORIZE LENDER TO
APPLY SUCH NET PROCEEDS AS A PREPAYMENT OF ALL OR A PORTION OF THE OUTSTANDING
PRINCIPAL BALANCE OF THE LOAN TOGETHER WITH ACCRUED INTEREST AND ANY OTHER SUMS
DUE HEREUNDER IN AN AMOUNT EQUAL TO ONE HUNDRED PERCENT (100%) OF SUCH NET
PROCEEDS; PROVIDED, HOWEVER, IF AN EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING, LENDER MAY APPLY SUCH NET PROCEEDS TO THE DEBT (UNTIL PAID IN FULL)
IN ANY ORDER OR PRIORITY IN ITS SOLE DISCRETION.  OTHER THAN DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, NO YIELD MAINTENANCE PREMIUM SHALL BE DUE IN
CONNECTION WITH ANY PREPAYMENT MADE PURSUANT TO THIS SECTION 2.4.2.

2.4.3       PREPAYMENTS AFTER DEFAULT.  IF DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, PAYMENT OF ALL OR ANY PART OF THE DEBT IS TENDERED BY BORROWER OR
OTHERWISE RECOVERED BY LENDER, SUCH TENDER OR RECOVERY SHALL BE (A) MADE ON THE
NEXT OCCURRING PAYMENT DATE TOGETHER WITH THE MONTHLY DEBT SERVICE PAYMENT AND
(B) DEEMED A VOLUNTARY PREPAYMENT BY BORROWER IN VIOLATION OF THE PROHIBITION
AGAINST PREPAYMENT SET FORTH IN SECTION 2.4.1 HEREOF AND BORROWER SHALL PAY, IN
ADDITION TO THE DEBT, AN AMOUNT EQUAL TO THE YIELD MAINTENANCE PREMIUM.

SECTION 2.5            DEFEASANCE.

2.5.1       VOLUNTARY DEFEASANCE.  (A)  PROVIDED NO EVENT OF DEFAULT SHALL THEN
EXIST, BORROWER SHALL HAVE THE RIGHT AT ANY TIME AFTER THE EARLIER TO OCCUR OF
THE DEFEASANCE EXPIRATION DATE AND THE PERMITTED RELEASE DATE AND PRIOR TO THE
DATE VOLUNTARILY PREPAYMENTS ARE PERMITTED UNDER SECTION 2.4.1 HEREOF TO
VOLUNTARILY DEFEASE THE LOAN IN FULL BY AND UPON SATISFACTION OF THE FOLLOWING
CONDITIONS (SUCH EVENT BEING A “DEFEASANCE EVENT”):

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

(II)   [INTENTIONALLY OMITTED];

(III)  BORROWER SHALL PAY TO LENDER ALL OTHER SUMS (NOT INCLUDING SCHEDULED
INTEREST OR PRINCIPAL PAYMENTS, PROVIDED THAT THE MONTHLY DEBT SERVICE

26

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

PAYMENT AMOUNT DUE ON THE PAYMENT DATE WHICH IS THE DEFEASANCE DATE HAS BEEN
PAID) THEN DUE UNDER THE NOTE, THIS AGREEMENT, THE SECURITY INSTRUMENT AND THE
OTHER LOAN DOCUMENTS;

(IV)  BORROWER SHALL PAY TO LENDER THE REQUIRED DEFEASANCE DEPOSIT FOR THE
DEFEASANCE EVENT;

(V)   [INTENTIONALLY OMITTED];

(VI)  BORROWER SHALL EXECUTE AND DELIVER A PLEDGE AND SECURITY AGREEMENT, IN
FORM AND SUBSTANCE THAT WOULD BE REASONABLY SATISFACTORY TO A PRUDENT LENDER
CREATING A FIRST PRIORITY LIEN ON THE DEFEASANCE DEPOSIT AND THE U.S.
OBLIGATIONS PURCHASED WITH THE DEFEASANCE DEPOSIT IN ACCORDANCE WITH THE
PROVISIONS OF THIS SECTION 2.5 (THE “SECURITY AGREEMENT”);

(VII) BORROWER SHALL DELIVER 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 BORROWER HAS
LEGALLY AND VALIDLY TRANSFERRED AND ASSIGNED THE U.S. OBLIGATIONS AND ALL
OBLIGATIONS, RIGHTS AND DUTIES UNDER AND TO THE NOTE TO THE SUCCESSOR BORROWER,
THAT LENDER HAS A PERFECTED FIRST PRIORITY SECURITY INTEREST IN THE DEFEASANCE
DEPOSIT AND THE U.S. OBLIGATIONS DELIVERED BY BORROWER AND THAT ANY REMIC TRUST
FORMED PURSUANT TO A 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 SUCH DEFEASANCE EVENT;

(VIII)  IF REQUIRED PURSUANT TO THE APPLICABLE POOLING AND SERVICING AGREEMENT
OR BY THE RATING AGENCIES, BORROWER SHALL DELIVER CONFIRMATION IN WRITING FROM
EACH OF THE APPLICABLE RATING AGENCIES TO THE EFFECT THAT SUCH RELEASE WILL NOT
RESULT IN A DOWNGRADE, WITHDRAWAL OR QUALIFICATION OF THE RESPECTIVE RATINGS IN
EFFECT IMMEDIATELY PRIOR TO SUCH DEFEASANCE EVENT FOR THE SECURITIES ISSUED IN
CONNECTION WITH THE SECURITIZATION WHICH ARE THEN OUTSTANDING.  IF REQUIRED BY
THE APPLICABLE RATING AGENCIES, BORROWER SHALL ALSO DELIVER OR CAUSE TO BE
DELIVERED AN ADDITIONAL INSOLVENCY OPINION WITH RESPECT TO THE SUCCESSOR
BORROWER IN FORM AND SUBSTANCE SATISFACTORY TO LENDER AND THE APPLICABLE RATING
AGENCIES;

(IX)   BORROWER SHALL DELIVER AN OFFICER’S CERTIFICATE CERTIFYING THAT THE
REQUIREMENTS SET FORTH IN THIS SECTION 2.5.1(A) HAVE BEEN SATISFIED;

(X)    BORROWER SHALL DELIVER A CERTIFICATE OF BORROWER’S INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANT CERTIFYING THAT THE U.S. OBLIGATIONS PURCHASED WITH THE
DEFEASANCE DEPOSIT GENERATE MONTHLY AMOUNTS EQUAL TO OR GREATER THAN THE
SCHEDULED DEFEASANCE PAYMENTS;

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

27

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

(XII)  BORROWER SHALL PAY ALL COSTS AND EXPENSES OF LENDER INCURRED IN
CONNECTION WITH THE DEFEASANCE EVENT, INCLUDING (A) ANY COSTS AND EXPENSES
ASSOCIATED WITH A RELEASE OF THE LIEN OF THE SECURITY INSTRUMENT AS PROVIDED IN
SECTION 2.6 HEREOF, (B) REASONABLE ATTORNEYS’ FEES AND EXPENSES INCURRED IN
CONNECTION WITH THE DEFEASANCE EVENT, (C) THE COSTS AND EXPENSES OF THE RATING
AGENCIES, (D) ANY REVENUE, DOCUMENTARY STAMP OR INTANGIBLE TAXES OR ANY OTHER
TAX OR CHARGE DUE IN CONNECTION WITH THE TRANSFER OF THE NOTE, OR OTHERWISE
REQUIRED TO ACCOMPLISH THE DEFEASANCE AND (E) THE COSTS AND EXPENSES OF SERVICER
AND ANY TRUSTEE, INCLUDING REASONABLE ATTORNEYS’ FEES.

(B)           IN CONNECTION WITH THE DEFEASANCE EVENT, BORROWER SHALL USE THE
DEFEASANCE DEPOSIT TO PURCHASE U.S. OBLIGATIONS WHICH PROVIDE PAYMENTS ON OR
PRIOR TO, BUT AS CLOSE AS POSSIBLE TO, ALL SUCCESSIVE SCHEDULED PAYMENT DATES
AFTER THE DEFEASANCE DATE UPON WHICH INTEREST AND PRINCIPAL PAYMENTS ARE
REQUIRED UNDER THIS AGREEMENT AND THE NOTE, AND IN AMOUNTS EQUAL TO THE
SCHEDULED PAYMENTS DUE ON SUCH PAYMENT DATES UNDER THIS AGREEMENT AND THE NOTE
(INCLUDING, WITHOUT LIMITATION, SCHEDULED PAYMENTS OF PRINCIPAL, INTEREST,
SERVICING FEES (IF ANY), AND ANY OTHER AMOUNTS DUE UNDER THE LOAN DOCUMENTS ON
SUCH DATES) AND ASSUMING THE NOTE IS PAID IN FULL ON THE MATURITY DATE (THE
“SCHEDULED DEFEASANCE PAYMENTS”).  ANY PORTION OF THE DEFEASANCE DEPOSIT IN
EXCESS OF THE AMOUNT NECESSARY TO PURCHASE THE U.S. OBLIGATIONS REQUIRED BY THIS
SECTION 2.5 AND SATISFY BORROWER’S OTHER OBLIGATIONS UNDER THIS SECTION 2.5 AND
SECTION 2.6 SHALL BE REMITTED TO BORROWER.

2.5.2       COLLATERAL.  EACH OF THE U.S. OBLIGATIONS THAT ARE PART OF THE
DEFEASANCE COLLATERAL SHALL BE DULY ENDORSED BY THE HOLDER THEREOF AS DIRECTED
BY LENDER OR ACCOMPANIED BY A WRITTEN INSTRUMENT OF TRANSFER IN FORM AND
SUBSTANCE THAT WOULD BE SATISFACTORY TO A PRUDENT LENDER (INCLUDING, WITHOUT
LIMITATION, SUCH INSTRUMENTS AS MAY BE REQUIRED BY THE DEPOSITORY INSTITUTION
HOLDING SUCH SECURITIES OR BY THE ISSUER THEREOF, AS THE CASE MAY BE, TO
EFFECTUATE BOOK-ENTRY TRANSFERS AND PLEDGES THROUGH THE BOOK-ENTRY FACILITIES OF
SUCH INSTITUTION) IN ORDER TO PERFECT UPON THE DELIVERY OF THE DEFEASANCE
COLLATERAL A FIRST PRIORITY SECURITY INTEREST THEREIN IN FAVOR OF LENDER IN
CONFORMITY WITH ALL APPLICABLE STATE AND FEDERAL LAWS GOVERNING THE GRANTING OF
SUCH SECURITY INTERESTS.

2.5.3       SUCCESSOR BORROWER.  IN CONNECTION WITH ANY DEFEASANCE EVENT,
BORROWER MAY AT ITS OPTION, OR IF SO REQUIRED BY THE APPLICABLE RATING AGENCIES
SHALL, ESTABLISH OR DESIGNATE A SUCCESSOR ENTITY (THE “SUCCESSOR BORROWER”)
ACCEPTABLE TO LENDER, WHICH SHALL BE A SPECIAL PURPOSE ENTITY, AND BORROWER
SHALL TRANSFER AND ASSIGN ALL OBLIGATIONS, RIGHTS AND DUTIES UNDER AND TO THE
NOTE TOGETHER WITH THE PLEDGED U.S. OBLIGATIONS TO SUCH SUCCESSOR BORROWER. 
SUCH SUCCESSOR BORROWER SHALL ASSUME THE OBLIGATIONS UNDER THE NOTE AND THE
SECURITY AGREEMENT AND BORROWER SHALL BE RELIEVED OF ITS OBLIGATIONS UNDER SUCH
DOCUMENTS.  BORROWER SHALL PAY ONE THOUSAND AND 00/100 DOLLARS ($1,000) TO ANY
SUCH SUCCESSOR BORROWER AS CONSIDERATION FOR ASSUMING THE OBLIGATIONS UNDER THE
NOTE AND THE SECURITY AGREEMENT.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO
THE CONTRARY, NO OTHER ASSUMPTION FEE SHALL BE PAYABLE UPON A TRANSFER OF THE
NOTE IN ACCORDANCE WITH THIS SECTION 2.5.3, BUT BORROWER SHALL PAY ALL COSTS AND
EXPENSES INCURRED BY LENDER, INCLUDING LENDER’S ATTORNEYS’ FEES AND EXPENSES AND
ANY FEES AND EXPENSES OF ANY RATING AGENCIES, INCURRED IN CONNECTION THEREWITH.

28

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

SECTION 2.6            RELEASE OF PROPERTY.  EXCEPT AS SET FORTH IN THIS
SECTION 2.6 OR A PREPAYMENT OF THE ENTIRE LOAN PURSUANT TO SECTION 2.4.2, NO
REPAYMENT, PREPAYMENT OR DEFEASANCE OF ALL OR ANY PORTION OF THE LOAN SHALL
CAUSE, GIVE RISE TO A RIGHT TO REQUIRE, OR OTHERWISE RESULT IN, THE RELEASE OF
THE LIEN OF THE SECURITY INSTRUMENT ON THE PROPERTY.  IF THE ENTIRE LOAN HAS
BEEN PREPAID PURSUANT TO SECTION 2.4.2, OR AFTER THE REQUIREMENTS OF SECTION
2.6.1 HAVE BEEN SATISFIED, THE PROPERTY SHALL BE RELEASED FROM THE LIEN OF THE
SECURITY INSTRUMENT.

2.6.1       RELEASE OF PROPERTY.

(A)           IF BORROWER HAS ELECTED TO DEFEASE THE ENTIRE LOAN AND THE
REQUIREMENTS OF SECTION 2.5 AND THIS SECTION 2.6 HAVE BEEN SATISFIED, THE
PROPERTY SHALL BE RELEASED FROM THE LIEN OF THE SECURITY INSTRUMENT.

(B)           IN CONNECTION WITH THE RELEASE OF THE SECURITY INSTRUMENT,
BORROWER SHALL SUBMIT TO LENDER, NOT LESS THAN THIRTY (30) DAYS PRIOR TO THE
DEFEASANCE DATE, A RELEASE OF LIEN (AND RELATED LOAN DOCUMENTS) FOR THE PROPERTY
FOR EXECUTION BY LENDER.  SUCH RELEASE SHALL BE IN A FORM APPROPRIATE IN THE
JURISDICTION IN WHICH THE PROPERTY IS LOCATED AND THAT WOULD BE SATISFACTORY TO
A PRUDENT LENDER AND CONTAINS STANDARD PROVISIONS, IF ANY, PROTECTING THE RIGHTS
OF THE RELEASING LENDER.  IN ADDITION, BORROWER SHALL PROVIDE ALL OTHER
DOCUMENTATION LENDER REASONABLY REQUIRES TO BE DELIVERED BY BORROWER IN
CONNECTION WITH 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 RELEASES IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

2.6.2       RELEASE ON PAYMENT IN FULL.  LENDER SHALL, 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 SECURITY INSTRUMENT ON THE
PROPERTY.  BORROWER SHALL PAY TO LENDER ALL REASONABLE ADMINISTRATIVE AND LEGAL
COSTS INCURRED IN CONNECTION WITH SUCH RELEASE.

SECTION 2.7         CLEARING ACCOUNT/CASH MANAGEMENT.

2.7.1       CLEARING ACCOUNT.

(A)           DURING THE TERM OF THE LOAN, BORROWER SHALL ESTABLISH AND MAINTAIN
AN ACCOUNT (THE “CLEARING ACCOUNT”) WITH CLEARING BANK IN TRUST FOR THE BENEFIT
OF LENDER, WHICH CLEARING ACCOUNT SHALL BE UNDER THE SOLE DOMINION AND CONTROL
OF LENDER.  THE CLEARING ACCOUNT SHALL BE ENTITLED “BEHRINGER HARVARD 945 EAST
PACES FERRY ROAD, LLC, AS BORROWER, AND JPMORGAN CHASE BANK, N.A., AS LENDER,
PURSUANT TO LOAN AGREEMENT DATED AS OF NOVEMBER 30, 2006 — CLEARING ACCOUNT”. 
BORROWER HEREBY GRANTS TO LENDER A FIRST-PRIORITY SECURITY INTEREST IN THE
CLEARING ACCOUNT AND ALL DEPOSITS AT ANY TIME CONTAINED THEREIN AND THE PROCEEDS
THEREOF AND WILL TAKE ALL ACTIONS NECESSARY TO MAINTAIN IN FAVOR OF LENDER A
PERFECTED FIRST PRIORITY SECURITY INTEREST IN THE CLEARING ACCOUNT, INCLUDING,
WITHOUT LIMITATION, EXECUTING AND FILING UCC-1 FINANCING STATEMENTS AND
CONTINUATIONS THEREOF.  LENDER AND SERVICER SHALL HAVE THE SOLE RIGHT TO MAKE
WITHDRAWALS FROM THE CLEARING ACCOUNT AND ALL COSTS AND EXPENSES FOR
ESTABLISHING AND MAINTAINING THE CLEARING ACCOUNT SHALL BE PAID BY BORROWER. 
ALL MONIES NOW OR HEREAFTER DEPOSITED INTO THE CLEARING ACCOUNT SHALL BE DEEMED
ADDITIONAL SECURITY FOR THE DEBT.

29

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

(B)           BORROWER SHALL, OR SHALL CAUSE PROPERTY MANAGER TO, DELIVER
IRREVOCABLE WRITTEN INSTRUCTIONS TO ALL TENANTS UNDER LEASES TO DELIVER ALL
RENTS PAYABLE THEREUNDER DIRECTLY TO THE CLEARING ACCOUNT.  BORROWER SHALL, AND
SHALL CAUSE PROPERTY MANAGER TO, DEPOSIT ALL AMOUNTS RECEIVED BY BORROWER OR
PROPERTY MANAGER CONSTITUTING RENTS INTO THE CLEARING ACCOUNT WITHIN ONE (1)
BUSINESS DAY AFTER RECEIPT THEREOF.

(C)           BORROWER SHALL OBTAIN FROM CLEARING BANK ITS AGREEMENT TO TRANSFER
TO THE DEPOSIT ACCOUNT IN IMMEDIATELY AVAILABLE FUNDS BY FEDERAL WIRE TRANSFER
ALL AMOUNTS ON DEPOSIT IN THE CLEARING ACCOUNT ONCE EVERY BUSINESS DAY DURING
THE CONTINUANCE OF A CASH SWEEP PERIOD.

(D)           UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, LENDER MAY, IN
ADDITION TO ANY AND ALL OTHER RIGHTS AND REMEDIES AVAILABLE TO LENDER, APPLY ANY
SUMS THEN PRESENT IN THE CLEARING ACCOUNT TO THE PAYMENT OF THE DEBT IN ANY
ORDER IN ITS SOLE DISCRETION.

(E)           THE CLEARING ACCOUNT SHALL BE AN ELIGIBLE ACCOUNT AND SHALL NOT BE
COMMINGLED WITH OTHER MONIES HELD BY BORROWER OR CLEARING BANK.

(F)            BORROWER SHALL NOT FURTHER PLEDGE, ASSIGN OR GRANT ANY SECURITY
INTEREST IN THE CLEARING ACCOUNT OR THE MONIES DEPOSITED THEREIN 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, AND EXCEPT FOR THE RIGHTS OF THE CLEARING BANK
UNDER THE CLEARING ACCOUNT AGREEMENT.

(G)           BORROWER SHALL INDEMNIFY LENDER AND HOLD LENDER HARMLESS FROM AND
AGAINST ANY AND ALL ACTIONS, SUITS, CLAIMS, DEMANDS, LIABILITIES, LOSSES,
DAMAGES, OBLIGATIONS AND COSTS AND EXPENSES (INCLUDING LITIGATION COSTS AND
REASONABLE ATTORNEYS FEES AND EXPENSES) ARISING FROM OR IN ANY WAY CONNECTED
WITH THE CLEARING ACCOUNT AND/OR THE CLEARING ACCOUNT AGREEMENT (UNLESS ARISING
FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LENDER) OR THE PERFORMANCE OF
THE OBLIGATIONS FOR WHICH THE CLEARING ACCOUNT WAS ESTABLISHED.

2.7.2       DEPOSIT ACCOUNT.

(A)           PURSUANT TO THE CASH MANAGEMENT AGREEMENT, LENDER HAS ESTABLISHED
AN ACCOUNT (THE “DEPOSIT ACCOUNT”) WITH A FINANCIAL INSTITUTION CHOSEN BY LENDER
IN ITS DISCRETION, WHICH DEPOSIT ACCOUNT SHALL BE UNDER THE SOLE DOMINION AND
CONTROL OF LENDER.  BORROWER HEREBY GRANTS TO LENDER A FIRST PRIORITY SECURITY
INTEREST IN THE DEPOSIT ACCOUNT AND ALL DEPOSITS AT ANY TIME CONTAINED THEREIN
AND THE PROCEEDS THEREOF AND WILL TAKE ALL ACTIONS NECESSARY TO MAINTAIN IN
FAVOR OF LENDER A PERFECTED FIRST PRIORITY SECURITY INTEREST IN THE DEPOSIT
ACCOUNT, INCLUDING, WITHOUT LIMITATION, EXECUTING AND FILING UCC-1 FINANCING
STATEMENTS AND CONTINUATIONS THEREOF.  LENDER AND SERVICER SHALL HAVE THE SOLE
RIGHT TO MAKE WITHDRAWALS FROM THE DEPOSIT ACCOUNT AND ALL COSTS AND EXPENSES
FOR ESTABLISHING AND MAINTAINING THE DEPOSIT ACCOUNT SHALL BE PAID BY BORROWER.

(B)           THE INSUFFICIENCY OF FUNDS ON DEPOSIT IN THE DEPOSIT ACCOUNT SHALL
NOT RELIEVE BORROWER FROM THE OBLIGATION TO MAKE ANY PAYMENTS, AS AND WHEN DUE
PURSUANT TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND SUCH OBLIGATIONS
SHALL BE SEPARATE AND INDEPENDENT, AND NOT CONDITIONED ON ANY EVENT OR
CIRCUMSTANCE WHATSOEVER.

30

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

(C)           ALL FUNDS ON DEPOSIT IN THE DEPOSIT ACCOUNT FOLLOWING THE
OCCURRENCE OF AN EVENT OF DEFAULT MAY BE APPLIED BY LENDER IN SUCH ORDER AND
PRIORITY AS LENDER SHALL DETERMINE.

(D)           BORROWER HEREBY AGREES THAT LENDER MAY MODIFY THE CASH MANAGEMENT
AGREEMENT FOR THE PURPOSE OF ESTABLISHING ADDITIONAL SUB-ACCOUNTS IN CONNECTION
WITH ANY PAYMENTS OTHERWISE REQUIRED UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND LENDER SHALL PROVIDE NOTICE THEREOF TO BORROWER.

2.7.3       PAYMENTS RECEIVED UNDER THE CASH MANAGEMENT AGREEMENT. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS, AND PROVIDED NO EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING, BORROWER’S OBLIGATIONS WITH RESPECT TO THE PAYMENT OF THE MONTHLY
DEBT SERVICE PAYMENT AMOUNT AND AMOUNTS REQUIRED TO BE DEPOSITED INTO THE
RESERVE FUNDS, IF ANY, SHALL BE DEEMED SATISFIED TO THE EXTENT SUFFICIENT
AMOUNTS ARE DEPOSITED IN THE DEPOSIT ACCOUNT TO SATISFY SUCH OBLIGATIONS
PURSUANT TO THE CASH MANAGEMENT AGREEMENT ON THE DATES EACH SUCH PAYMENT IS
REQUIRED, REGARDLESS OF WHETHER ANY OF SUCH AMOUNTS ARE SO APPLIED BY LENDER.

III.                                 CONDITIONS PRECEDENT

SECTION 3.1            CONDITIONS PRECEDENT TO CLOSING.

 The obligation of Lender to make the Loan hereunder is subject to the
fulfillment by Borrower or waiver by Lender of the following conditions
precedent no later than the Closing Date:

3.1.1       REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH CONDITIONS. THE
REPRESENTATIONS AND WARRANTIES OF BORROWER CONTAINED IN THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON AND
AS OF THE CLOSING DATE WITH THE SAME EFFECT AS IF MADE ON AND AS OF SUCH DATE,
AND NO DEFAULT OR AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING; AND
BORROWER SHALL BE IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL TERMS AND
CONDITIONS SET FORTH IN THIS AGREEMENT AND IN EACH OTHER LOAN DOCUMENT ON ITS
PART TO BE OBSERVED OR PERFORMED.

3.1.2       LOAN AGREEMENT AND NOTE.  LENDER SHALL HAVE RECEIVED A COPY OF THIS
AGREEMENT AND THE NOTE, IN EACH CASE, DULY EXECUTED AND DELIVERED ON BEHALF OF
BORROWER.

3.1.3       DELIVERY OF LOAN DOCUMENTS; TITLE INSURANCE; REPORTS; LEASES, ETC.

(A)           SECURITY INSTRUMENT, ASSIGNMENT OF LEASES. LENDER SHALL HAVE
RECEIVED FROM BORROWER FULLY EXECUTED AND ACKNOWLEDGED COUNTERPARTS OF THE
SECURITY INSTRUMENT AND THE ASSIGNMENT OF LEASES AND EVIDENCE THAT COUNTERPARTS
OF THE SECURITY INSTRUMENT AND ASSIGNMENT OF LEASES HAVE BEEN DELIVERED TO THE
TITLE COMPANY FOR RECORDING, IN THE REASONABLE JUDGMENT OF LENDER, SO AS TO
EFFECTIVELY CREATE UPON SUCH RECORDING VALID AND ENFORCEABLE FIRST PRIORITY
LIENS UPON THE PROPERTY, IN FAVOR OF LENDER (OR SUCH OTHER TRUSTEE AS MAY BE
REQUIRED UNDER LOCAL LAW), SUBJECT ONLY TO THE PERMITTED ENCUMBRANCES AND SUCH
OTHER LIENS AS ARE PERMITTED PURSUANT TO

31

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

THE LOAN DOCUMENTS.  LENDER SHALL HAVE ALSO RECEIVED FROM BORROWER FULLY
EXECUTED COUNTERPARTS OF THE OTHER LOAN DOCUMENTS.

(B)           TITLE INSURANCE. LENDER SHALL HAVE RECEIVED A BINDING COMMITMENT
TO ISSUE THE TITLE INSURANCE POLICY ISSUED BY A TITLE COMPANY ACCEPTABLE TO
LENDER AND DATED AS OF THE CLOSING DATE. TO THE EXTENT PERMITTED BY APPLICABLE
LEGAL REQUIREMENTS, SUCH TITLE INSURANCE POLICY SHALL (I) PROVIDE COVERAGE AN
AMOUNT EQUAL TO THE PRINCIPAL AMOUNT OF THE LOAN TOGETHER WITH, IF APPLICABLE, A
“TIE-IN” OR SIMILAR ENDORSEMENT, (II) INSURE LENDER THAT THE SECURITY INSTRUMENT
CREATES A VALID FIRST PRIORITY LIEN ON THE PROPERTY ENCUMBERED THEREBY, FREE AND
CLEAR OF ALL EXCEPTIONS FROM COVERAGE OTHER THAN PERMITTED ENCUMBRANCES AND
STANDARD EXCEPTIONS AND EXCLUSIONS FROM COVERAGE (AS MODIFIED BY THE TERMS OF
ANY ENDORSEMENTS), (III) CONTAIN SUCH ENDORSEMENTS AND AFFIRMATIVE COVERAGES AS
LENDER MAY REASONABLY REQUEST, AND (IV) NAME LENDER OR LENDER’S NOMINEE, ITS
SUCCESSORS AND ASSIGNS, AS THE INSURED.  LENDER ALSO SHALL HAVE RECEIVED
EVIDENCE THAT ALL PREMIUMS IN RESPECT OF SUCH TITLE INSURANCE POLICY HAVE BEEN
PAID.

(C)           SURVEY. LENDER SHALL HAVE RECEIVED A CURRENT TITLE SURVEY FOR THE
PROPERTY, CERTIFIED TO THE TITLE COMPANY AND LENDER AND THEIR SUCCESSORS AND
ASSIGNS, IN FORM AND CONTENT SATISFACTORY TO LENDER AND PREPARED BY A
PROFESSIONAL AND PROPERLY LICENSED LAND SURVEYOR SATISFACTORY TO LENDER IN
ACCORDANCE WITH THE MOST RECENT MINIMUM STANDARD DETAIL REQUIREMENTS FOR
ALTA/ACSM LAND TITLE SURVEYS.  THE FOLLOWING ADDITIONAL ITEMS FROM THE LIST OF
“OPTIONAL SURVEY RESPONSIBILITIES AND SPECIFICATIONS” (TABLE A) SHOULD BE ADDED
TO THE SURVEY: 2, 3, 4, 6, 8, 9, 10, 11 AND 13.  THE SURVEY SHALL REFLECT THE
SAME LEGAL DESCRIPTION CONTAINED IN THE TITLE INSURANCE POLICY RELATING TO THE
PROPERTY REFERRED TO IN CLAUSE (B) ABOVE AND SHALL INCLUDE, AMONG OTHER THINGS,
A LEGAL DESCRIPTION OF THE REAL PROPERTY COMPRISING PART OF THE PROPERTY
REASONABLY SATISFACTORY TO LENDER.  THE SURVEYOR’S SEAL SHALL BE AFFIXED TO THE
SURVEY AND THE SURVEYOR SHALL PROVIDE A CERTIFICATION FOR THE SURVEY IN FORM AND
SUBSTANCE ACCEPTABLE TO LENDER.

(D)           INSURANCE. LENDER SHALL HAVE RECEIVED VALID CERTIFICATES OF
INSURANCE FOR THE POLICIES OF INSURANCE REQUIRED HEREUNDER, SATISFACTORY TO
LENDER IN ITS SOLE DISCRETION, AND EVIDENCE OF THE PAYMENT OF ALL PREMIUMS
PAYABLE FOR THE EXISTING POLICY PERIOD.

(E)           ENVIRONMENTAL REPORTS. LENDER SHALL HAVE RECEIVED A PHASE I
ENVIRONMENTAL REPORT (AND, IF RECOMMENDED BY THE PHASE I ENVIRONMENTAL REPORT, A
PHASE II ENVIRONMENTAL REPORT) IN RESPECT OF THE PROPERTY, IN EACH CASE
SATISFACTORY IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO LENDER.

(F)            ZONING. WITH RESPECT TO THE PROPERTY, LENDER SHALL HAVE RECEIVED,
AT LENDER’S OPTION, (I) LETTERS OR OTHER EVIDENCE WITH RESPECT TO THE PROPERTY
FROM THE APPROPRIATE MUNICIPAL AUTHORITIES (OR OTHER PERSONS) CONCERNING
APPLICABLE ZONING AND BUILDING LAWS, AND (II) EITHER (A) AN ALTA 3.1 ZONING
ENDORSEMENT FOR THE APPLICABLE TITLE INSURANCE POLICY OR (B) OTHER EVIDENCE OF
ZONING COMPLIANCE, IN EACH CASE IN SUBSTANCE REASONABLY SATISFACTORY TO LENDER.

(G)           ENCUMBRANCES.  BORROWER SHALL HAVE TAKEN OR CAUSED TO BE TAKEN
SUCH ACTIONS IN SUCH A MANNER SO THAT LENDER HAS A VALID AND PERFECTED FIRST
LIEN AS OF THE CLOSING DATE WITH RESPECT TO THE SECURITY INSTRUMENT ON THE
PROPERTY, SUBJECT ONLY TO APPLICABLE PERMITTED

32

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

ENCUMBRANCES AND SUCH OTHER LIENS AS ARE PERMITTED PURSUANT TO THE LOAN
DOCUMENTS, AND LENDER SHALL HAVE RECEIVED SATISFACTORY EVIDENCE THEREOF.

3.1.4       RELATED DOCUMENTS.  EACH ADDITIONAL DOCUMENT NOT SPECIFICALLY
REFERENCED HEREIN, BUT RELATING TO THE TRANSACTIONS CONTEMPLATED HEREIN, SHALL
HAVE BEEN DULY AUTHORIZED, EXECUTED AND DELIVERED BY ALL PARTIES THERETO AND
LENDER SHALL HAVE RECEIVED AND APPROVED CERTIFIED COPIES THEREOF.

3.1.5       DELIVERY OF ORGANIZATIONAL DOCUMENTS.  ON OR BEFORE THE CLOSING
DATE, BORROWER SHALL DELIVER OR CAUSE TO BE DELIVERED TO LENDER COPIES CERTIFIED
BY BORROWER OF ALL ORGANIZATIONAL DOCUMENTATION RELATED TO BORROWER AND/OR THE
FORMATION, STRUCTURE, EXISTENCE, GOOD STANDING AND/OR QUALIFICATION TO DO
BUSINESS, AS LENDER MAY REQUEST IN ITS SOLE DISCRETION, INCLUDING, WITHOUT
LIMITATION, GOOD STANDING CERTIFICATES, QUALIFICATIONS TO DO BUSINESS IN THE
STATE, RESOLUTIONS AUTHORIZING THE ENTERING INTO OF THE LOAN AND INCUMBENCY
CERTIFICATES AS MAY BE REQUESTED BY LENDER.

3.1.6       OPINIONS OF BORROWER’S COUNSEL.  LENDER SHALL HAVE RECEIVED OPINIONS
FROM BORROWER’S COUNSEL WITH RESPECT TO DUE EXECUTION, AUTHORITY, ENFORCEABILITY
OF THE LOAN DOCUMENTS AND SUCH OTHER MATTERS AS LENDER MAY REASONABLY REQUIRE,
ALL SUCH OPINIONS IN FORM, SCOPE AND SUBSTANCE REASONABLY SATISFACTORY TO LENDER
AND LENDER’S COUNSEL IN THEIR REASONABLE DISCRETION.

3.1.7       BUDGETS.  BORROWER SHALL HAVE DELIVERED THE ANNUAL BUDGET FOR THE
CURRENT FISCAL YEAR.

3.1.8       BASIC CARRYING COSTS.  BORROWER SHALL HAVE PAID OR RESERVED FOR ALL
BASIC CARRYING COSTS RELATING TO THE PROPERTY WHICH ARE IN ARREARS, INCLUDING
WITHOUT LIMITATION, (A) ACCRUED BUT UNPAID INSURANCE PREMIUMS DUE PURSUANT TO
THE POLICIES, (B) CURRENTLY DUE AND PAYABLE TAXES (INCLUDING ANY IN ARREARS)
RELATING TO THE PROPERTY, AND (C) CURRENTLY DUE OTHER CHARGES RELATING TO THE
PROPERTY, WHICH AMOUNTS SHALL BE FUNDED WITH PROCEEDS OF THE LOAN.

3.1.9       COMPLETION OF PROCEEDINGS.  ALL ORGANIZATIONAL PROCEEDINGS TAKEN OR
TO BE TAKEN IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
AND OTHER LOAN DOCUMENTS AND ALL DOCUMENTS INCIDENTAL THERETO SHALL BE
REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO LENDER, AND LENDER SHALL HAVE
RECEIVED ALL SUCH COUNTERPART ORIGINALS OR CERTIFIED COPIES OF SUCH DOCUMENTS AS
LENDER MAY REASONABLY REQUEST.

3.1.10     PAYMENTS.  ALL PAYMENTS, DEPOSITS OR ESCROWS REQUIRED TO BE MADE OR
ESTABLISHED BY BORROWER UNDER THIS AGREEMENT, THE NOTE AND THE OTHER LOAN
DOCUMENTS ON OR BEFORE THE CLOSING DATE SHALL HAVE BEEN PAID.

3.1.11     TENANT ESTOPPELS.  LENDER SHALL HAVE RECEIVED AN EXECUTED TENANT
ESTOPPEL LETTER, WHICH SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO LENDER,
FROM A MAJORITY OF THE TENANTS AT THE PROPERTY.

33

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

3.1.12     TRANSACTION COSTS.  BORROWER SHALL HAVE PAID OR REIMBURSED LENDER FOR
ALL TITLE INSURANCE PREMIUMS, RECORDING AND FILING FEES OR TAXES, COSTS OF
ENVIRONMENTAL REPORTS, PHYSICAL CONDITIONS REPORTS, APPRAISALS AND OTHER
REPORTS, THE FEES AND COSTS OF LENDER’S COUNSEL AND ALL OTHER THIRD PARTY
OUT-OF-POCKET EXPENSES INCURRED IN CONNECTION WITH THE ORIGINATION OF THE LOAN.

3.1.13     MATERIAL ADVERSE CHANGE.  THERE SHALL HAVE BEEN NO MATERIAL ADVERSE
CHANGE IN THE FINANCIAL CONDITION OR BUSINESS CONDITION OF BORROWER, PRINCIPAL,
GUARANTOR OR THE PROPERTY SINCE THE DATE OF THE MOST RECENT FINANCIAL STATEMENTS
DELIVERED TO LENDER.  THE INCOME AND EXPENSES OF THE PROPERTY, THE OCCUPANCY
THEREOF, AND ALL OTHER FEATURES OF THE TRANSACTION SHALL BE AS REPRESENTED TO
LENDER WITHOUT MATERIAL ADVERSE CHANGE.  NEITHER BORROWER, PRINCIPAL, GUARANTOR
NOR ANY OF THEIR RESPECTIVE CONSTITUENT PERSONS SHALL BE THE SUBJECT OF ANY
BANKRUPTCY, REORGANIZATION, OR INSOLVENCY PROCEEDING.

3.1.14     LEASES AND RENT ROLL.  LENDER SHALL HAVE RECEIVED COPIES OF ALL
TENANT LEASES, CERTIFIED COPIES OF ANY TENANT LEASES AS REQUESTED BY LENDER AND
CERTIFIED COPIES OF ALL GROUND LEASES AFFECTING THE PROPERTY, IF ANY.  LENDER
SHALL HAVE RECEIVED A CURRENT CERTIFIED RENT ROLL OF THE PROPERTY, REASONABLY
SATISFACTORY IN FORM AND SUBSTANCE TO LENDER.

3.1.15     SUBORDINATION AND ATTORNMENT.  LENDER SHALL HAVE RECEIVED APPROPRIATE
INSTRUMENTS ACCEPTABLE TO LENDER IN ITS COMMERCIALLY REASONABLE DISCRETION
SUBORDINATING ANY LEASES OF RECORD PRIOR TO THE SECURITY INSTRUMENT AND
INCLUDING AN AGREEMENT BY SUCH TENANTS TO ATTORN TO LENDER IN THE EVENT OF A
FORECLOSURE OR DELIVERY OF A DEED IN LIEU THEREOF.

3.1.16     TAX LOT.  LENDER SHALL HAVE RECEIVED EVIDENCE THAT THE PROPERTY
CONSTITUTES ONE (1) OR MORE SEPARATE TAX LOTS, WHICH EVIDENCE SHALL BE
REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO LENDER.

3.1.17     PHYSICAL CONDITIONS REPORT.  LENDER SHALL HAVE RECEIVED A PHYSICAL
CONDITIONS REPORT WITH RESPECT TO THE PROPERTY, WHICH REPORT SHALL BE REASONABLY
SATISFACTORY IN FORM AND SUBSTANCE TO LENDER.

3.1.18     PROPERTY MANAGEMENT AGREEMENT.  LENDER SHALL HAVE RECEIVED A
CERTIFIED COPY OF THE PROPERTY MANAGEMENT AGREEMENT WITH RESPECT TO THE PROPERTY
WHICH SHALL BE SATISFACTORY IN FORM AND SUBSTANCE TO LENDER.

3.1.19     APPRAISAL.  LENDER SHALL HAVE RECEIVED AN APPRAISAL OF THE PROPERTY
WHICH SHALL BE SATISFACTORY IN FORM AND SUBSTANCE TO LENDER.

3.1.20     FINANCIAL STATEMENTS.  LENDER SHALL HAVE RECEIVED (A) A BALANCE SHEET
WITH RESPECT TO THE PROPERTY FOR THE TWO (2) MOST RECENT FISCAL YEARS AND
STATEMENTS OF INCOME AND STATEMENTS OF CASH FLOWS WITH RESPECT TO THE PROPERTY
FOR THE THREE (3) MOST RECENT FISCAL YEARS, EACH IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO LENDER OR (B) SUCH OTHER FINANCIAL STATEMENTS
RELATING TO THE OPERATION OF THE PROPERTY, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO LENDER.

34

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

3.1.21     FURTHER DOCUMENTS.  LENDER OR ITS COUNSEL SHALL HAVE RECEIVED SUCH
OTHER DOCUMENTS AND FURTHER APPROVALS, OPINIONS, DOCUMENTS AND INFORMATION AS
LENDER OR ITS COUNSEL MAY HAVE REASONABLY REQUESTED INCLUDING THE LOAN DOCUMENTS
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO LENDER AND ITS COUNSEL.

IV.                                REPRESENTATIONS AND WARRANTIES

SECTION 4.1            BORROWER REPRESENTATIONS.   BORROWER REPRESENTS AND
WARRANTS AS OF THE DATE HEREOF AND AS OF THE CLOSING DATE THAT, EXCEPT AS SET
FORTH ON SCHEDULE V:

4.1.1       ORGANIZATION.    BORROWER HAS BEEN DULY ORGANIZED AND IS VALIDLY
EXISTING AND IN GOOD STANDING WITH REQUISITE POWER AND AUTHORITY TO OWN THE
PROPERTY AND TO TRANSACT THE BUSINESSES IN WHICH IT IS NOW ENGAGED.  BORROWER IS
DULY QUALIFIED TO DO BUSINESS AND IS IN GOOD STANDING IN EACH JURISDICTION WHERE
IT IS REQUIRED TO BE SO QUALIFIED IN CONNECTION WITH THE PROPERTY, BUSINESSES
AND OPERATIONS.  BORROWER POSSESSES ALL RIGHTS, LICENSES, PERMITS AND
AUTHORIZATIONS, GOVERNMENTAL OR OTHERWISE, NECESSARY TO ENTITLE IT TO OWN THE
PROPERTY AND TO TRANSACT THE BUSINESSES IN WHICH IT IS NOW ENGAGED, AND THE SOLE
BUSINESS OF BORROWER IS THE OWNERSHIP, MANAGEMENT, OPERATION AND SALE OF THE
PROPERTY.

4.1.2       PROCEEDINGS.  BORROWER HAS TAKEN ALL NECESSARY ACTION TO AUTHORIZE
THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.  THIS AGREEMENT AND SUCH OTHER LOAN DOCUMENTS HAVE BEEN DULY EXECUTED
AND DELIVERED BY OR ON BEHALF OF BORROWER AND CONSTITUTE LEGAL, VALID AND
BINDING OBLIGATIONS OF BORROWER ENFORCEABLE AGAINST BORROWER IN ACCORDANCE WITH
THEIR RESPECTIVE TERMS, SUBJECT ONLY TO APPLICABLE BANKRUPTCY, INSOLVENCY AND
SIMILAR LAWS AFFECTING RIGHTS OF CREDITORS GENERALLY, AND SUBJECT, AS TO
ENFORCEABILITY, TO GENERAL PRINCIPLES OF EQUITY (REGARDLESS OF WHETHER
ENFORCEMENT IS SOUGHT IN A PROCEEDING IN EQUITY OR AT LAW).

4.1.3       NO CONFLICTS.  THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY BORROWER WILL NOT CONFLICT WITH OR
RESULT IN A BREACH OF ANY OF THE TERMS OR PROVISIONS OF, OR CONSTITUTE A DEFAULT
UNDER, OR RESULT IN THE CREATION OR IMPOSITION OF ANY LIEN, CHARGE OR
ENCUMBRANCE (OTHER THAN PURSUANT TO THE LOAN DOCUMENTS) UPON ANY OF THE PROPERTY
OR ASSETS OF BORROWER PURSUANT TO THE TERMS OF ANY INDENTURE, MORTGAGE, DEED OF
TRUST, LOAN AGREEMENT, PARTNERSHIP AGREEMENT, OR OTHER AGREEMENT OR INSTRUMENT
TO WHICH BORROWER IS A PARTY OR BY WHICH ANY OF BORROWER’S PROPERTY OR ASSETS IS
SUBJECT, NOR TO BORROWER’S KNOWLEDGE WILL SUCH ACTION RESULT IN ANY VIOLATION OF
THE PROVISIONS OF ANY STATUTE OR ANY ORDER, RULE OR REGULATION OF ANY
GOVERNMENTAL AUTHORITY HAVING JURISDICTION OVER BORROWER OR ANY OF BORROWER’S
PROPERTIES OR ASSETS, AND ANY CONSENT, APPROVAL, AUTHORIZATION, ORDER,
REGISTRATION OR QUALIFICATION OF OR WITH ANY COURT OR ANY SUCH GOVERNMENTAL
AUTHORITY REQUIRED FOR THE EXECUTION, DELIVERY AND PERFORMANCE BY BORROWER OF
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS HAS BEEN OBTAINED AND IS IN FULL
FORCE AND EFFECT.

4.1.4       LITIGATION.  TO BORROWER’S KNOWLEDGE, THERE ARE NO ACTIONS, SUITS OR
PROCEEDINGS AT LAW OR IN EQUITY BY OR BEFORE ANY GOVERNMENTAL AUTHORITY OR OTHER
AGENCY NOW PENDING OR THREATENED AGAINST OR AFFECTING BORROWER, GUARANTOR,
PRINCIPAL OR THE

35

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

PROPERTY, WHICH ACTIONS, SUITS OR PROCEEDINGS, IF DETERMINED AGAINST BORROWER,
GUARANTOR, PRINCIPAL OR THE PROPERTY, MIGHT MATERIALLY ADVERSELY AFFECT THE
CONDITION (FINANCIAL OR OTHERWISE) OR BUSINESS OF BORROWER, GUARANTOR, PRINCIPAL
OR THE CONDITION OR OWNERSHIP OF THE PROPERTY.

4.1.5       AGREEMENTS.  EXCEPT SUCH INSTRUMENTS AND AGREEMENTS SET FORTH AS
PERMITTED ENCUMBRANCES IN THE TITLE INSURANCE POLICY, BORROWER IS NOT A PARTY TO
ANY AGREEMENT OR INSTRUMENT OR SUBJECT TO ANY RESTRICTION WHICH MIGHT MATERIALLY
AND ADVERSELY AFFECT BORROWER OR THE PROPERTY, OR BORROWER’S BUSINESS,
PROPERTIES OR ASSETS, OPERATIONS OR CONDITION, FINANCIAL OR OTHERWISE.  TO
BORROWER’S KNOWLEDGE, BORROWER IS NOT IN DEFAULT IN ANY MATERIAL RESPECT IN THE
PERFORMANCE, OBSERVANCE OR FULFILLMENT OF ANY OF THE OBLIGATIONS, COVENANTS OR
CONDITIONS CONTAINED IN ANY AGREEMENT OR INSTRUMENT TO WHICH IT IS A PARTY OR BY
WHICH BORROWER OR THE PROPERTY IS BOUND.  BORROWER HAS NO MATERIAL FINANCIAL
OBLIGATION UNDER ANY INDENTURE, MORTGAGE, DEED OF TRUST, LOAN AGREEMENT OR OTHER
AGREEMENT OR INSTRUMENT TO WHICH BORROWER IS A PARTY OR BY WHICH BORROWER OR THE
PROPERTY IS OTHERWISE BOUND, OTHER THAN (A) OBLIGATIONS INCURRED IN THE ORDINARY
COURSE OF THE OPERATION OF THE PROPERTY AS PERMITTED PURSUANT TO CLAUSE (XXIII)
OF THE DEFINITION OF “SPECIAL PURPOSE ENTITY” SET FORTH IN SECTION 1.1 HEREOF
AND (B) OBLIGATIONS UNDER THE LOAN DOCUMENTS.

4.1.6       TITLE.  BORROWER HAS GOOD AND INDEFEASIBLE FEE AND LEASEHOLD TITLE
TO THE REAL PROPERTY COMPRISING PART OF THE PROPERTY AND GOOD TITLE TO THE
BALANCE OF THE PROPERTY, FREE AND CLEAR OF ALL LIENS WHATSOEVER EXCEPT THE
PERMITTED ENCUMBRANCES, SUCH OTHER LIENS AS ARE PERMITTED PURSUANT TO THE LOAN
DOCUMENTS AND THE LIENS CREATED BY THE LOAN DOCUMENTS.  THE PERMITTED
ENCUMBRANCES IN THE AGGREGATE DO NOT MATERIALLY AND ADVERSELY AFFECT THE VALUE,
OPERATION OR USE OF THE PROPERTY (AS CURRENTLY USED) OR BORROWER’S ABILITY TO
REPAY THE LOAN.  TO BORROWER’S KNOWLEDGE, THERE ARE NO CLAIMS FOR PAYMENT FOR
WORK, LABOR OR MATERIALS AFFECTING THE PROPERTY WHICH ARE DUE AND UNPAID UNDER
THE CONTRACTS PURSUANT TO WHICH WORK OR LABOR WAS PERFORMED OR MATERIALS
PROVIDED WHICH ARE OR MAY BECOME A LIEN PRIOR TO, OR OF EQUAL PRIORITY WITH, THE
LIENS CREATED BY THE LOAN DOCUMENTS.

4.1.7       SOLVENCY; NO BANKRUPTCY FILING.  BORROWER (A) HAS NOT ENTERED INTO
THE TRANSACTION OR EXECUTED THE NOTE, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS
WITH THE ACTUAL INTENT TO HINDER, DELAY OR DEFRAUD ANY CREDITOR AND (B) RECEIVED
REASONABLY EQUIVALENT VALUE IN EXCHANGE FOR ITS OBLIGATIONS UNDER SUCH 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 DEBT AND LIABILITIES (INCLUDING CONTINGENT
LIABILITIES AND OTHER COMMITMENTS) BEYOND ITS ABILITY TO PAY SUCH DEBT AND
LIABILITIES AS THEY MATURE (TAKING INTO ACCOUNT THE

36

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

TIMING AND AMOUNTS OF CASH TO BE RECEIVED BY BORROWER AND THE AMOUNTS TO BE
PAYABLE ON OR IN RESPECT OF OBLIGATIONS OF BORROWER).  EXCEPT AS EXPRESSLY
DISCLOSED TO LENDER IN WRITING, NO PETITION IN BANKRUPTCY HAS BEEN FILED AGAINST
BORROWER, OR TO BORROWER’S KNOWLEDGE, OR ANY CONSTITUENT PERSON IN THE LAST
SEVEN (7) YEARS, AND NEITHER BORROWER NOR, TO BORROWER’S KNOWLEDGE, ANY
CONSTITUENT PERSON IN THE LAST SEVEN (7) YEARS HAS EVER MADE AN ASSIGNMENT FOR
THE BENEFIT OF CREDITORS OR TAKEN ADVANTAGE OF ANY INSOLVENCY ACT FOR THE
BENEFIT OF DEBTORS.  NEITHER BORROWER NOR ANY OF ITS CONSTITUENT PERSONS ARE
CONTEMPLATING EITHER THE FILING OF A PETITION BY IT UNDER ANY STATE OR FEDERAL
BANKRUPTCY OR INSOLVENCY LAWS OR THE LIQUIDATION OF ALL OR A MAJOR PORTION OF
BORROWER’S ASSETS OR PROPERTY, AND BORROWER HAS NO KNOWLEDGE OF ANY PERSON
CONTEMPLATING THE FILING OF ANY SUCH PETITION AGAINST IT OR SUCH CONSTITUENT
PERSONS.

4.1.8       FULL AND ACCURATE DISCLOSURE.  TO BORROWER’S KNOWLEDGE, NO STATEMENT
OF FACT MADE BY BORROWER IN THIS AGREEMENT OR IN ANY OF THE OTHER LOAN DOCUMENTS
CONTAINS ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMITS TO STATE ANY MATERIAL
FACT NECESSARY TO MAKE STATEMENTS CONTAINED HEREIN OR THEREIN NOT MISLEADING. 
THERE IS NO MATERIAL FACT PRESENTLY KNOWN TO BORROWER WHICH HAS NOT BEEN
DISCLOSED TO LENDER WHICH ADVERSELY AFFECTS THE PROPERTY OR THE BUSINESS,
OPERATIONS OR CONDITION (FINANCIAL OR OTHERWISE) OF BORROWER.

4.1.9       NO PLAN ASSETS.  BORROWER DOES NOT SPONSOR, IS NOT OBLIGATED TO
CONTRIBUTE TO, AND IS NOT ITSELF AN “EMPLOYEE BENEFIT PLAN,” AS DEFINED IN
SECTION 3(3) OF ERISA, SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE,
AND NONE OF THE ASSETS OF BORROWER CONSTITUTES OR WILL CONSTITUTE “PLAN ASSETS”
OF ONE OR MORE SUCH PLANS WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3-101. 
IN ADDITION, (A) BORROWER IS NOT A “GOVERNMENTAL PLAN” WITHIN THE MEANING OF
SECTION 3(32) OF ERISA AND (B) TRANSACTIONS BY OR WITH BORROWER ARE NOT SUBJECT
TO ANY STATE OR OTHER STATUTE, REGULATION OR OTHER RESTRICTION REGULATING
INVESTMENTS OF, OR FIDUCIARY OBLIGATIONS WITH RESPECT TO, GOVERNMENTAL PLANS
WITHIN THE MEANING OF SECTION 3(32) OF ERISA WHICH IS SIMILAR TO THE PROVISIONS
OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE AND WHICH PROHIBIT OR
OTHERWISE RESTRICT THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, INCLUDING,
BUT NOT LIMITED TO THE EXERCISE BY LENDER OF ANY OF ITS RIGHTS UNDER THE LOAN
DOCUMENTS.

4.1.10     COMPLIANCE.  TO BORROWER’S KNOWLEDGE, 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.  TO BORROWER’S KNOWLEDGE, BORROWER IS NOT IN DEFAULT OR VIOLATION OF ANY
ORDER, WRIT, INJUNCTION, DECREE OR DEMAND OF ANY GOVERNMENTAL AUTHORITY.  THERE
HAS NOT BEEN COMMITTED BY BORROWER OR, TO BORROWER’S KNOWLEDGE, ANY OTHER PERSON
IN OCCUPANCY OF OR INVOLVED WITH THE OPERATION OR USE OF THE PROPERTY ANY ACT OR
OMISSION AFFORDING THE FEDERAL GOVERNMENT OR ANY OTHER GOVERNMENTAL AUTHORITY
THE RIGHT OF FORFEITURE AS AGAINST THE PROPERTY OR ANY PART THEREOF OR ANY
MONIES PAID IN PERFORMANCE OF BORROWER’S OBLIGATIONS UNDER ANY OF THE LOAN
DOCUMENTS.

4.1.11     FINANCIAL INFORMATION.  ALL FINANCIAL DATA, INCLUDING, WITHOUT
LIMITATION, THE STATEMENTS OF CASH FLOW AND INCOME AND OPERATING EXPENSE, THAT
HAVE BEEN DELIVERED TO LENDER IN RESPECT OF THE PROPERTY (I) TO BORROWER’S
KNOWLEDGE, ARE TRUE,

37

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

COMPLETE AND CORRECT IN ALL MATERIAL RESPECTS, (II) ACCURATELY REPRESENT THE
FINANCIAL CONDITION OF BORROWER AND TO BORROWER’S KNOWLEDGE, THE PROPERTY, AS
APPLICABLE, AS OF THE DATE OF SUCH REPORTS, AND (III) TO BORROWER’S KNOWLEDGE,
TO THE EXTENT PREPARED OR AUDITED BY AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTING
FIRM, HAVE BEEN PREPARED IN ACCORDANCE WITH ACCOUNTING PRINCIPLES REASONABLY
ACCEPTABLE TO LENDER, CONSISTENTLY APPLIED THROUGHOUT THE PERIODS COVERED,
EXCEPT AS DISCLOSED THEREIN.  BORROWER DOES NOT HAVE ANY CONTINGENT LIABILITIES,
LIABILITIES FOR TAXES, UNUSUAL FORWARD OR LONG-TERM COMMITMENTS OR UNREALIZED OR
ANTICIPATED LOSSES FROM ANY UNFAVORABLE COMMITMENTS THAT ARE KNOWN TO BORROWER
AND REASONABLY LIKELY TO HAVE A MATERIALLY ADVERSE EFFECT ON THE PROPERTY OR THE
OPERATION THEREOF FOR THE PERMITTED USE, EXCEPT AS REFERRED TO OR REFLECTED IN
SAID FINANCIAL STATEMENTS.  SINCE THE DATE OF SUCH FINANCIAL STATEMENTS, THERE
HAS BEEN NO MATERIALLY ADVERSE CHANGE IN THE FINANCIAL CONDITION, OPERATIONS OR
BUSINESS OF BORROWER FROM THAT SET FORTH IN SAID FINANCIAL STATEMENTS.

4.1.12     CONDEMNATION.  NO CONDEMNATION OR OTHER PROCEEDING HAS BEEN COMMENCED
OR, TO BORROWER’S KNOWLEDGE, IS CONTEMPLATED WITH RESPECT TO ALL OR ANY PORTION
OF THE PROPERTY OR FOR THE RELOCATION OF ROADWAYS PROVIDING ACCESS TO THE
PROPERTY.

4.1.13     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.

4.1.14     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.  TO
BORROWER’S KNOWLEDGE, ALL PUBLIC UTILITIES NECESSARY OR CONVENIENT TO THE FULL
USE AND ENJOYMENT OF THE PROPERTY ARE LOCATED EITHER IN THE PUBLIC RIGHT-OF-WAY
ABUTTING THE PROPERTY (WHICH ARE CONNECTED SO AS TO SERVE THE PROPERTY WITHOUT
PASSING OVER OTHER PROPERTY) OR IN RECORDED EASEMENTS SERVING THE PROPERTY AND
SUCH EASEMENTS ARE SET FORTH IN AND INSURED BY THE TITLE INSURANCE POLICY.  ALL
ROADS NECESSARY FOR THE USE OF THE PROPERTY FOR ITS CURRENT PURPOSES HAVE BEEN
COMPLETED AND DEDICATED TO PUBLIC USE AND ACCEPTED BY ALL GOVERNMENTAL
AUTHORITIES.

4.1.15     NOT A FOREIGN PERSON.  BORROWER IS NOT A “FOREIGN PERSON” WITHIN THE
MEANING OF §1445(F)(3) OF THE CODE.

4.1.16     SEPARATE LOTS.  THE PROPERTY IS COMPRISED OF ONE (1) OR MORE PARCELS
WHICH CONSTITUTE A SEPARATE TAX LOT OR LOTS AND DOES NOT CONSTITUTE A PORTION OF
ANY OTHER TAX LOT NOT A PART OF THE PROPERTY.

4.1.17     ASSESSMENTS.  THERE ARE NO PENDING, OR TO BORROWER’S KNOWLEDGE,
PROPOSED SPECIAL OR OTHER ASSESSMENTS FOR PUBLIC IMPROVEMENTS OR OTHERWISE
AFFECTING THE PROPERTY, NOR ARE THERE ANY CONTEMPLATED IMPROVEMENTS TO THE
PROPERTY THAT MAY RESULT IN SUCH SPECIAL OR OTHER ASSESSMENTS.

38

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

4.1.18     ENFORCEABILITY.  THE LOAN DOCUMENTS ARE NOT SUBJECT TO ANY RIGHT OF
RESCISSION, SET-OFF, COUNTERCLAIM OR DEFENSE BY BORROWER OR GUARANTOR, 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 EXERCISED BY LENDER IN
ACCORDANCE WITH APPLICABLE LAW, RENDER THE LOAN DOCUMENTS UNENFORCEABLE, AND
NEITHER BORROWER NOR GUARANTOR HAS ASSERTED ANY RIGHT OF RESCISSION, SET-OFF,
COUNTERCLAIM OR DEFENSE WITH RESPECT THERETO.

4.1.19     NO PRIOR ASSIGNMENT.  THERE IS NO PRIOR ASSIGNMENT OF THE LEASES OR
ANY PORTION OF THE RENTS BY BORROWER OR ANY OF ITS PREDECESSORS IN INTEREST,
GIVEN AS COLLATERAL SECURITY WHICH WILL BE OUTSTANDING UPON APPLICATION OF THE
PROCEEDS OF THE LOAN.

4.1.20     INSURANCE.  BORROWER HAS OBTAINED AND HAS DELIVERED TO LENDER (A)
CERTIFIED COPIES OF THE POLICIES REFLECTING THE INSURANCE COVERAGES, AMOUNTS AND
OTHER REQUIREMENTS SET FORTH IN THIS AGREEMENT OR (B) OTHER EVIDENCE OF SUCH
MATTERS ACCEPTABLE TO LENDER.  NO CLAIMS HAVE BEEN MADE OR ARE CURRENTLY
PENDING, OUTSTANDING OR OTHERWISE REMAIN UNSATISFIED UNDER ANY SUCH POLICY, AND
NEITHER BORROWER NOR TO BORROWER’S KNOWLEDGE ANY OTHER PERSON, HAS DONE, BY ACT
OR OMISSION, ANYTHING WHICH WOULD IMPAIR THE COVERAGE OF ANY SUCH POLICY.

4.1.21     USE OF PROPERTY.  THE PROPERTY IS USED EXCLUSIVELY FOR THE PERMITTED
USE.

4.1.22     CERTIFICATE OF OCCUPANCY; LICENSES.  TO BORROWER’S KNOWLEDGE, ALL
CERTIFICATIONS, PERMITS, LICENSES AND APPROVALS, INCLUDING WITHOUT LIMITATION,
CERTIFICATES OF COMPLETION AND OCCUPANCY PERMITS REQUIRED TO BE OBTAINED BY
BORROWER FOR THE LEGAL USE, OCCUPANCY AND OPERATION OF THE PROPERTY FOR THE
PERMITTED USE HAVE BEEN OBTAINED AND ARE IN FULL FORCE AND EFFECT, AND TO
BORROWER’S KNOWLEDGE, ALL CERTIFICATIONS, PERMITS, LICENSES AND APPROVALS,
INCLUDING WITHOUT LIMITATION, CERTIFICATES OF COMPLETION AND OCCUPANCY PERMITS
REQUIRED TO BE OBTAINED BY ANY PERSON OTHER THAN BORROWER FOR THE LEGAL USE,
OCCUPANCY AND OPERATION OF THE PROPERTY THE PERMITTED USE, HAVE BEEN OBTAINED
AND ARE IN FULL FORCE AND EFFECT (ALL OF THE FOREGOING CERTIFICATIONS, PERMITS,
LICENSES AND APPROVALS ARE COLLECTIVELY REFERRED TO AS THE “LICENSES”). 
BORROWER SHALL AND SHALL CAUSE ALL OTHER PERSONS TO, KEEP AND MAINTAIN ALL
LICENSES NECESSARY FOR THE OPERATION OF THE PROPERTY FOR THE PERMITTED USE.  THE
USE BEING MADE OF THE PROPERTY IS IN CONFORMITY WITH ALL CERTIFICATES OF
OCCUPANCY ISSUED FOR THE PROPERTY.

4.1.23     FLOOD ZONE.  TO BORROWER’S KNOWLEDGE, NO IMPROVEMENTS ON THE PROPERTY
ARE LOCATED IN AN AREA IDENTIFIED BY THE FEDERAL EMERGENCY MANAGEMENT AGENCY AS
AN AREA HAVING SPECIAL FLOOD HAZARDS OR, IF SO LOCATED, THE FLOOD INSURANCE
REQUIRED PURSUANT TO SECTION 6.1(A)(I) IS IN FULL FORCE AND EFFECT WITH RESPECT
TO THE PROPERTY.

4.1.24     PHYSICAL CONDITION.  EXCEPT AS DISCLOSED IN THE PHYSICAL CONDITIONS
REPORT DELIVERED TO LENDER IN CONNECTION WITH THIS LOAN, TO BORROWER’S
KNOWLEDGE, 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

39

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

AND REPAIR IN ALL MATERIAL RESPECTS; THERE EXISTS NO STRUCTURAL OR OTHER
MATERIAL DEFECTS OR DAMAGES IN THE PROPERTY 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.

4.1.25     BOUNDARIES.  TO BORROWER’S KNOWLEDGE, ALL OF THE IMPROVEMENTS WHICH
WERE INCLUDED IN DETERMINING THE APPRAISED VALUE OF THE PROPERTY 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 UPON 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 THE TITLE INSURANCE POLICY.

4.1.26     LEASES.  THE PROPERTY IS NOT SUBJECT TO ANY LEASES OTHER THAN THE
LEASES DESCRIBED IN THE RENT ROLL ATTACHED AS SCHEDULE II HERETO AND MADE A PART
HEREOF.  BORROWER IS THE OWNER AND LESSOR OF LANDLORD’S INTEREST IN THE LEASES. 
NO PERSON HAS ANY POSSESSORY INTEREST IN THE PROPERTY OR RIGHT TO OCCUPY THE
SAME EXCEPT UNDER AND PURSUANT TO THE PROVISIONS OF THE LEASES.  THE CURRENT
LEASES ARE IN FULL FORCE AND EFFECT AND, TO BORROWER’S KNOWLEDGE, THERE ARE NO
DEFAULTS THEREUNDER BY EITHER PARTY AND THERE ARE NO CONDITIONS THAT, WITH THE
PASSAGE OF TIME OR THE GIVING OF NOTICE, OR BOTH, WOULD CONSTITUTE DEFAULTS
THEREUNDER.  NO RENT (INCLUDING SECURITY DEPOSITS) HAS BEEN PAID MORE THAN ONE
(1) MONTH IN ADVANCE OF ITS DUE DATE.  ALL WORK TO BE PERFORMED BY BORROWER
UNDER EACH LEASE HAS BEEN PERFORMED AS REQUIRED AND HAS BEEN ACCEPTED BY THE
APPLICABLE TENANT, AND ANY PAYMENTS, FREE RENT, PARTIAL RENT, REBATE OF RENT OR
OTHER PAYMENTS, CREDITS, ALLOWANCES OR ABATEMENTS REQUIRED TO BE GIVEN BY
BORROWER TO ANY TENANT HAS ALREADY BEEN RECEIVED BY SUCH TENANT.  THERE HAS BEEN
NO PRIOR SALE, TRANSFER OR ASSIGNMENT, HYPOTHECATION OR PLEDGE OF ANY LEASE OR
OF THE RENTS RECEIVED THEREIN WHICH IS OUTSTANDING.  TO BORROWER’S KNOWLEDGE,
EXCEPT AS SET FORTH ON SCHEDULE II, NO TENANT LISTED ON SCHEDULE II HAS ASSIGNED
ITS LEASE OR SUBLET ALL OR ANY PORTION OF THE PREMISES DEMISED THEREBY, NO SUCH
TENANT HOLDS ITS LEASED PREMISES UNDER ASSIGNMENT OR SUBLEASE, NOR DOES ANYONE
EXCEPT SUCH TENANT AND ITS EMPLOYEES OCCUPY SUCH LEASED PREMISES.  NO TENANT
UNDER ANY LEASE HAS A RIGHT OR OPTION PURSUANT TO SUCH LEASE OR OTHERWISE TO
PURCHASE ALL OR ANY PART OF THE LEASED PREMISES OR THE BUILDING OF WHICH THE
LEASED PREMISES ARE A PART.  EXCEPT AS SET FORTH IN SCHEDULE II, NO TENANT UNDER
ANY LEASE HAS ANY RIGHT OR OPTION FOR ADDITIONAL SPACE IN THE IMPROVEMENTS.  TO
BORROWER’S ACTUAL KNOWLEDGE BASED ON THE ENVIRONMENTAL REPORT DELIVERED TO
LENDER IN CONNECTION HEREWITH, NO HAZARDOUS WASTES OR TOXIC SUBSTANCES, AS
DEFINED BY APPLICABLE FEDERAL, STATE OR LOCAL STATUTES, RULES AND REGULATIONS,
HAVE BEEN DISPOSED, STORED OR TREATED BY ANY TENANT UNDER ANY LEASE ON OR ABOUT
THE LEASED PREMISES NOR DOES BORROWER HAVE ANY KNOWLEDGE OF ANY TENANT’S
INTENTION TO USE ITS LEASED PREMISES FOR ANY ACTIVITY WHICH, DIRECTLY OR
INDIRECTLY, INVOLVES THE USE, GENERATION, TREATMENT, STORAGE, DISPOSAL OR
TRANSPORTATION OF ANY PETROLEUM PRODUCT OR ANY TOXIC OR HAZARDOUS CHEMICAL,
MATERIAL, SUBSTANCE OR WASTE, EXCEPT IN EITHER EVENT, IN COMPLIANCE WITH
APPLICABLE FEDERAL, STATE OR LOCAL STATUES, RULES AND REGULATIONS.

40

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

4.1.27     SURVEY.  TO BORROWER’S KNOWLEDGE NO SURVEY FOR THE PROPERTY DELIVERED
TO LENDER IN CONNECTION WITH THIS AGREEMENT FAILS TO REFLECT ANY MATERIAL MATTER
AFFECTING THE PROPERTY OR THE TITLE THERETO.

4.1.28     INVENTORY.  BORROWER IS THE OWNER OF ALL OF THE EQUIPMENT, FIXTURES
AND PERSONAL PROPERTY (AS SUCH TERMS ARE DEFINED IN THE SECURITY INSTRUMENT)
LOCATED ON OR AT THE PROPERTY AND SHALL NOT LEASE ANY EQUIPMENT, FIXTURES OR
PERSONAL PROPERTY OTHER THAN AS PERMITTED HEREUNDER.  ALL OF THE EQUIPMENT,
FIXTURES AND PERSONAL PROPERTY ARE SUFFICIENT TO OPERATE THE PROPERTY IN THE
MANNER REQUIRED HEREUNDER AND IN THE MANNER IN WHICH IT IS CURRENTLY OPERATED.

4.1.29     FILING AND RECORDING TAXES.  ALL TRANSFER TAXES, DEED STAMPS,
INTANGIBLE TAXES OR OTHER AMOUNTS IN THE NATURE OF TRANSFER TAXES REQUIRED TO BE
PAID BY ANY PERSON UNDER APPLICABLE LEGAL REQUIREMENTS CURRENTLY IN EFFECT IN
CONNECTION WITH THE ACQUISITION OF THE PROPERTY TO BORROWER HAVE BEEN PAID OR
ARE SIMULTANEOUSLY BEING PAID.  ALL MORTGAGE, MORTGAGE RECORDING, STAMP,
INTANGIBLE OR OTHER SIMILAR TAX REQUIRED TO BE PAID BY ANY PERSON UNDER
APPLICABLE LEGAL REQUIREMENTS CURRENTLY IN EFFECT IN CONNECTION WITH THE
EXECUTION, DELIVERY, RECORDATION, FILING, REGISTRATION, PERFECTION OR
ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, THE
SECURITY INSTRUMENT, HAVE BEEN PAID, AND, UNDER CURRENT LEGAL REQUIREMENTS, THE
SECURITY INSTRUMENT IS ENFORCEABLE IN ACCORDANCE WITH ITS TERMS BY LENDER (OR
ANY SUBSEQUENT HOLDER THEREOF).

4.1.30     SPECIAL PURPOSE ENTITY/SEPARATENESS.  (A)  UNTIL THE DEBT HAS BEEN
PAID IN FULL, BORROWER HEREBY REPRESENTS, WARRANTS AND COVENANTS THAT BORROWER
IS, SHALL BE AND SHALL CONTINUE TO BE A SPECIAL PURPOSE ENTITY.  LENDER
ACKNOWLEDGES THAT THE SINGLE PURPOSE PROVISIONS CONTAINED IN THE OPERATING
AGREEMENT OF THE BORROWER AS OF THE DATE HEREOF SATISFY THE REQUIREMENTS OF A
SINGLE PURPOSE ENTITY.

(B)           THE REPRESENTATIONS, WARRANTIES AND COVENANTS SET FORTH IN
SECTION 4.1.30(A) SHALL SURVIVE FOR SO LONG AS ANY AMOUNT REMAINS PAYABLE TO
LENDER UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

(C)           ALL OF THE FACTS STATED AND ALL OF THE ASSUMPTIONS MADE IN THE
INSOLVENCY OPINION, INCLUDING, BUT NOT LIMITED TO, IN ANY EXHIBITS ATTACHED
THERETO, ARE TRUE AND CORRECT IN ALL RESPECTS.  BORROWER HAS COMPLIED AND WILL
COMPLY WITH ALL OF THE ASSUMPTIONS MADE WITH RESPECT TO BORROWER IN THE
INSOLVENCY OPINION.  BORROWER WILL COMPLY WITH ALL OF THE ASSUMPTIONS MADE WITH
RESPECT TO BORROWER AND PRINCIPAL IN ANY SUBSEQUENT NON-CONSOLIDATION OPINION
REQUIRED TO BE DELIVERED IN CONNECTION WITH THE LOAN DOCUMENTS (AN “ADDITIONAL
INSOLVENCY OPINION”).  EACH AFFILIATE OF BORROWER AND PRINCIPAL WITH RESPECT TO
WHICH AN ASSUMPTION SHALL BE MADE IN ANY ADDITIONAL INSOLVENCY OPINION WILL
COMPLY WITH ALL OF THE ASSUMPTIONS MADE WITH RESPECT TO IT IN ANY ADDITIONAL
INSOLVENCY OPINION.

4.1.31     PROPERTY MANAGEMENT AGREEMENT.  THE PROPERTY MANAGEMENT AGREEMENT IS
IN FULL FORCE AND EFFECT AND THERE ARE NO DEFAULTS THEREUNDER BY ANY PARTY
THERETO AND NO EVENT HAS OCCURRED THAT, WITH THE PASSAGE OF TIME AND/OR THE
GIVING OF NOTICE WOULD CONSTITUTE A DEFAULT THEREUNDER.

41

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

4.1.32     ILLEGAL ACTIVITY.  NO PORTION OF THE PROPERTY HAS BEEN TO BORROWER’S
KNOWLEDGE NOR WILL BE PURCHASED BY BORROWER WITH PROCEEDS OF ANY ILLEGAL
ACTIVITY.

4.1.33     NO CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE.  ALL INFORMATION
SUBMITTED BY BORROWER TO LENDER AND IN ALL FINANCIAL STATEMENTS, RENT ROLLS
(INCLUDING THE RENT ROLL ATTACHED HERETO AS SCHEDULE II), REPORTS, CERTIFICATES
AND OTHER DOCUMENTS SUBMITTED IN CONNECTION WITH THE LOAN OR IN SATISFACTION OF
THE TERMS THEREOF AND ALL STATEMENTS OF FACT MADE BY BORROWER IN THIS AGREEMENT
OR IN ANY OTHER LOAN DOCUMENT, ARE ACCURATE, COMPLETE AND CORRECT IN ALL
MATERIAL RESPECTS, PROVIDED, HOWEVER, THAT IF SUCH INFORMATION WAS PROVIDED TO
BORROWER BY NON-AFFILIATED THIRD PARTIES, BORROWER REPRESENTS THAT SUCH
INFORMATION IS, TO BORROWER’S KNOWLEDGE, ACCURATE, COMPLETE AND CORRECT IN ALL
MATERIAL RESPECTS.  TO BORROWER’S KNOWLEDGE, THERE HAS BEEN NO MATERIAL ADVERSE
CHANGE IN ANY CONDITION, FACT, CIRCUMSTANCE OR EVENT THAT WOULD MAKE ANY SUCH
INFORMATION INACCURATE, INCOMPLETE OR OTHERWISE MISLEADING IN ANY MATERIAL
RESPECT OR THAT OTHERWISE MATERIALLY AND ADVERSELY AFFECTS OR MIGHT MATERIALLY
AND ADVERSELY AFFECT THE PROPERTY OR THE BUSINESS OPERATIONS OR THE FINANCIAL
CONDITION OF BORROWER.  TO BORROWER’S KNOWLEDGE, BORROWER HAS DISCLOSED TO
LENDER ALL MATERIAL FACTS AND HAS NOT FAILED TO DISCLOSE ANY MATERIAL FACT THAT
COULD CAUSE ANY PROVIDED INFORMATION OR REPRESENTATION OR WARRANTY MADE HEREIN
TO BE MATERIALLY MISLEADING.

4.1.34     INVESTMENT COMPANY ACT.  BORROWER IS NOT (A) AN “INVESTMENT COMPANY”
OR A COMPANY “CONTROLLED” BY AN “INVESTMENT COMPANY,” WITHIN THE MEANING OF THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED; (B) A “HOLDING COMPANY” OR A
“SUBSIDIARY COMPANY” OF A “HOLDING COMPANY” OR AN “AFFILIATE” OF EITHER A
“HOLDING COMPANY” OR A “SUBSIDIARY COMPANY” WITHIN THE MEANING OF THE PUBLIC
UTILITY HOLDING COMPANY ACT OF 1935, AS AMENDED; OR (C) SUBJECT TO ANY OTHER
FEDERAL OR STATE LAW OR REGULATION WHICH PURPORTS TO RESTRICT OR REGULATE ITS
ABILITY TO BORROW MONEY.

4.1.35     EMBARGOED PERSON.  AS OF THE CLOSING DATE, (A) NONE OF THE FUNDS OR
OTHER ASSETS OF BORROWER CONSTITUTE PROPERTY OF, OR ARE BENEFICIALLY OWNED,
DIRECTLY OR INDIRECTLY, BY ANY EMBARGOED PERSON; (B) NO EMBARGOED PERSON HAS ANY
INTEREST OF ANY NATURE WHATSOEVER IN BORROWER WITH THE RESULT THAT THE
INVESTMENT IN BORROWER (WHETHER DIRECTLY OR INDIRECTLY), IS PROHIBITED BY LAW OR
THE LOAN IS IN VIOLATION OF LAW; AND (C) NONE OF THE FUNDS OF BORROWER HAVE BEEN
DERIVED FROM ANY UNLAWFUL ACTIVITY WITH THE RESULT THAT THE INVESTMENT IN
BORROWER (WHETHER DIRECTLY OR INDIRECTLY), IS PROHIBITED BY LAW OR THE LOAN IS
IN VIOLATION OF LAW.

4.1.36     PRINCIPAL PLACE OF BUSINESS; STATE OF ORGANIZATION.  BORROWER’S
PRINCIPAL PLACE OF BUSINESS AS OF THE DATE HEREOF IS THE ADDRESS SET FORTH IN
THE INTRODUCTORY PARAGRAPH OF THIS AGREEMENT.  THE BORROWER IS ORGANIZED UNDER
THE LAWS OF THE STATE OF DELAWARE.

4.1.37     LOAN TO VALUE.  THE MAXIMUM PRINCIPAL AMOUNT OF THE LOAN DOES NOT
EXCEED ONE HUNDRED TWENTY-FIVE PERCENT (125%) OF THE FAIR MARKET VALUE OF THE
PROPERTY AS SET FORTH ON THE APPRAISAL OF THE PROPERTY.

42

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

4.1.38     MORTGAGE TAXES.  AS OF THE DATE HEREOF, BORROWER REPRESENTS THAT IT
HAS PAID OR HAS DEPOSITED WITH THE TITLE COMPANY ISSUING THE TITLE INSURANCE
POLICY FUNDS SUFFICIENT TO PAY ALL STATE, COUNTY AND MUNICIPAL RECORDING AND ALL
OTHER TAXES IMPOSED UPON THE EXECUTION AND RECORDATION OF THE SECURITY
INSTRUMENT.

4.1.39     GROUND LEASE.  BORROWER HEREBY REPRESENTS AND WARRANTS TO LENDER THE
FOLLOWING WITH RESPECT TO THE GROUND LEASE:

(A)           RECORDING; MODIFICATION.  THE GROUND LEASE OR A MEMORANDUM OF THE
GROUND LEASE HAS BEEN DULY RECORDED.  THE GROUND LEASE PERMITS THE INTEREST OF
BORROWER TO BE ENCUMBERED BY A MORTGAGE.  THERE HAVE NOT BEEN AMENDMENTS OR
MODIFICATIONS TO THE TERMS OF THE GROUND LEASE SINCE ITS RECORDATION, WITH THE
EXCEPTION OF WRITTEN INSTRUMENTS WHICH HAVE BEEN RECORDED OR IN RESPECT OF WHICH
A MEMORANDUM HAS BEEN RECORDED.  THE GROUND LEASE MAY NOT BE CANCELED,
TERMINATED, SURRENDERED OR AMENDED WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER.

(B)           NO LIENS.  EXCEPT FOR THE PERMITTED ENCUMBRANCES, BORROWER’S
INTEREST IN THE GROUND LEASE IS NOT SUBJECT TO ANY LIENS OR ENCUMBRANCES
SUPERIOR TO, OR OF EQUAL PRIORITY WITH, THE RELATED SECURITY INSTRUMENT OTHER
THAN THE GROUND LESSOR’S RELATED FEE INTEREST.

(C)           GROUND LEASE ASSIGNABLE.  BORROWER’S INTEREST IN THE GROUND LEASE
IS ASSIGNABLE TO LENDER UPON NOTICE TO, BUT WITHOUT THE CONSENT OF, THE GROUND
LESSOR (OR, IF ANY SUCH CONSENT IS REQUIRED, IT HAS BEEN OBTAINED PRIOR TO THE
CLOSING DATE).

(D)           DEFAULT.  AS OF THE DATE HEREOF, THE GROUND LEASE IS IN FULL FORCE
AND EFFECT AND NO DEFAULT HAS OCCURRED UNDER THE GROUND LEASE AND THERE IS NO
EXISTING CONDITION WHICH, BUT FOR THE PASSAGE OF TIME OR THE GIVING OF NOTICE,
COULD RESULT IN A DEFAULT UNDER THE TERMS OF THE GROUND LEASE.

(E)           NOTICE.  THE GROUND LEASE REQUIRES THE GROUND LESSOR TO GIVE
NOTICE OF ANY DEFAULT BY BORROWER TO LENDER, SUBJECT TO COMPLIANCE WITH SECTION
7(B) OF THE GROUND LEASE.  THE GROUND LEASE, OR ESTOPPEL LETTERS RECEIVED BY
LENDER FROM THE GROUND LESSOR, FURTHER PROVIDES THAT NOTICE OF TERMINATION GIVEN
UNDER THE GROUND LEASE IS NOT EFFECTIVE AGAINST LENDER UNLESS A COPY OF THE
NOTICE HAS BEEN DELIVERED TO LENDER IN THE MANNER DESCRIBED IN THE GROUND LEASE,
SUBJECT TO COMPLIANCE WITH SECTION 7(B) OF THE GROUND LEASE.

(F)            CURE.  SUBJECT TO SECTION 7(B) OF THE GROUND LEASE, LENDER IS
PERMITTED THE OPPORTUNITY (INCLUDING, WHERE NECESSARY, SUFFICIENT TIME TO GAIN
POSSESSION OF THE INTEREST OF BORROWER UNDER THE GROUND LEASE) TO CURE ANY
DEFAULT UNDER THE GROUND LEASE, WHICH IS CURABLE AFTER THE RECEIPT OF NOTICE OF
ANY OF THE DEFAULT BEFORE THE GROUND LESSOR THEREUNDER MAY TERMINATE THE GROUND
LEASE.

(G)           TERM.  THE GROUND LEASE HAS A TERM, INCLUDING EXTENSION OPTIONS,
WHICH EXTENDS NOT LESS THAN TWENTY (20) YEARS BEYOND THE MATURITY DATE.

(H)           NEW LEASE.  THE GROUND LEASE REQUIRES THE GROUND LESSOR TO ENTER
INTO A NEW LEASE WITH LENDER UPON TERMINATION OF THE GROUND LEASE FOR ANY
REASON.

43

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

 

(I)            INSURANCE PROCEEDS.  UNDER THE TERMS OF THE GROUND LEASE AND THE
SECURITY INSTRUMENT, TAKEN TOGETHER, ANY RELATED INSURANCE PROCEEDS WILL BE
APPLIED EITHER TO THE REPAIR OR RESTORATION OF ALL OR PART OF THE PROPERTY, WITH
LENDER HAVING THE RIGHT TO HOLD AND DISBURSE THE PROCEEDS AS THE REPAIR OR
RESTORATION PROGRESSES, OR TO THE PAYMENT OF THE OUTSTANDING PRINCIPAL BALANCE
OF THE LOAN TOGETHER WITH ANY ACCRUED INTEREST THEREON.

(J)            SUBLEASING.  THE GROUND LEASE DOES NOT IMPOSE ANY RESTRICTIONS ON
SUBLEASING.

4.1.40     REA/DEVELOPMENT AGREEMENT.  THE REA AND THE DEVELOPMENT AGREEMENT ARE
IN FULL FORCE AND EFFECT AND NEITHER BORROWER NOR, TO BORROWER’S KNOWLEDGE, ANY
OTHER PARTY TO THE REA OR THE DEVELOPMENT AGREEMENT, IS IN DEFAULT THEREUNDER,
AND TO THE BEST OF BORROWER’S KNOWLEDGE, THERE ARE NO CONDITIONS WHICH, WITH THE
PASSAGE OF TIME OR THE GIVING OF NOTICE, OR BOTH, WOULD CONSTITUTE A DEFAULT
THEREUNDER.  EXCEPT AS SET FORTH ON SCHEDULE V, THE REA HAS NOT BEEN MODIFIED,
AMENDED OR SUPPLEMENTED.

SECTION 4.2            SURVIVAL OF REPRESENTATIONS. BORROWER AGREES THAT ALL OF
THE REPRESENTATIONS AND WARRANTIES OF BORROWER SET FORTH IN SECTION 4.1 AND
ELSEWHERE IN THIS AGREEMENT AND IN THE OTHER LOAN DOCUMENTS SHALL SURVIVE FOR SO
LONG AS ANY AMOUNT REMAINS OWING TO LENDER UNDER THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS BY BORROWER.  ALL REPRESENTATIONS, WARRANTIES, COVENANTS
AND AGREEMENTS MADE IN THIS AGREEMENT OR IN THE OTHER LOAN DOCUMENTS BY BORROWER
SHALL BE DEEMED TO HAVE BEEN RELIED UPON BY LENDER NOTWITHSTANDING ANY
INVESTIGATION HERETOFORE OR HEREAFTER MADE BY LENDER OR ON ITS BEHALF.

V.                                    BORROWER COVENANTS

SECTION 5.1            AFFIRMATIVE COVENANTS.  FROM THE CLOSING DATE AND UNTIL
PAYMENT AND PERFORMANCE IN FULL OF ALL OBLIGATIONS OF BORROWER UNDER THE LOAN
DOCUMENTS OR THE EARLIER RELEASE OF THE LIEN OF THE SECURITY INSTRUMENT
ENCUMBERING THE PROPERTY (AND ALL RELATED OBLIGATIONS) IN ACCORDANCE WITH THE
TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, BORROWER HEREBY COVENANTS
AND AGREES WITH LENDER THAT:

5.1.1       EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS; INSURANCE.  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. 
BORROWER SHALL NOT COMMIT, NOR SHALL BORROWER PERMIT ANY OTHER PERSON IN
OCCUPANCY OF OR INVOLVED WITH THE OPERATION OR USE OF THE PROPERTY TO COMMIT ANY
ACT OR OMISSION AFFORDING THE FEDERAL GOVERNMENT OR ANY STATE OR LOCAL
GOVERNMENT THE RIGHT OF FORFEITURE AS AGAINST THE PROPERTY OR ANY PART THEREOF
OR ANY MONIES PAID IN PERFORMANCE OF BORROWER’S OBLIGATIONS UNDER ANY OF THE
LOAN DOCUMENTS.  BORROWER HEREBY COVENANTS AND AGREES NOT TO COMMIT, PERMIT OR
SUFFER TO EXIST ANY ACT OR OMISSION AFFORDING SUCH RIGHT OF FORFEITURE. 
BORROWER SHALL AT ALL TIMES MAINTAIN, PRESERVE AND PROTECT ALL ITS FRANCHISES
AND TRADE NAMES AND PRESERVE ALL THE REMAINDER OF ITS PROPERTY USED OR USEFUL IN
THE CONDUCT OF ITS BUSINESS AND SHALL KEEP THE PROPERTY IN GOOD WORKING ORDER
AND REPAIR, AND FROM TIME TO TIME MAKE, OR CAUSE TO BE MADE, ALL REASONABLY
NECESSARY REPAIRS, RENEWALS, REPLACEMENTS, BETTERMENTS AND

44

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

IMPROVEMENTS THERETO, ALL AS MORE FULLY PROVIDED IN THE SECURITY INSTRUMENT. 
BORROWER SHALL KEEP THE PROPERTY INSURED AT ALL TIMES BY FINANCIALLY SOUND AND
REPUTABLE INSURERS, TO SUCH EXTENT AND AGAINST SUCH RISKS, AND MAINTAIN
LIABILITY AND SUCH OTHER INSURANCE, AS IS MORE FULLY PROVIDED IN THIS
AGREEMENT.  AFTER PRIOR WRITTEN NOTICE TO LENDER, BORROWER, AT ITS OWN EXPENSE,
MAY CONTEST BY APPROPRIATE LEGAL PROCEEDING PROMPTLY INITIATED AND CONDUCTED IN
GOOD FAITH AND WITH DUE DILIGENCE, THE VALIDITY OF ANY LEGAL REQUIREMENT, THE
APPLICABILITY OF ANY LEGAL REQUIREMENT TO BORROWER OR THE PROPERTY OR ANY
ALLEGED VIOLATION OF ANY LEGAL REQUIREMENT, PROVIDED THAT (I) NO DEFAULT OR
EVENT OF DEFAULT HAS OCCURRED AND REMAINS UNCURED; (II) INTENTIONALLY OMITTED;
(III) SUCH PROCEEDING SHALL BE PERMITTED UNDER AND BE CONDUCTED IN ACCORDANCE
WITH THE PROVISIONS OF ANY INSTRUMENT TO WHICH BORROWER IS SUBJECT AND SHALL NOT
CONSTITUTE A DEFAULT THEREUNDER AND SUCH PROCEEDING SHALL BE CONDUCTED IN
ACCORDANCE WITH ALL APPLICABLE STATUTES, LAWS AND ORDINANCES; (IV) NEITHER THE
PROPERTY NOR ANY PART THEREOF OR INTEREST THEREIN WILL BE IN IMMEDIATE DANGER OF
BEING SOLD, FORFEITED, TERMINATED, CANCELLED OR LOST; (V) BORROWER SHALL
PROMPTLY UPON FINAL DETERMINATION THEREOF COMPLY WITH ANY SUCH LEGAL REQUIREMENT
DETERMINED TO BE VALID OR APPLICABLE OR CURE ANY VIOLATION OF ANY LEGAL
REQUIREMENT; (VI) SUCH PROCEEDING SHALL SUSPEND THE ENFORCEMENT OF THE CONTESTED
LEGAL REQUIREMENT AGAINST BORROWER OR THE PROPERTY; AND (VII) BORROWER SHALL
FURNISH SUCH SECURITY AS MAY BE REQUIRED IN THE PROCEEDING, OR AS MAY BE
REQUESTED BY LENDER, TO INSURE COMPLIANCE WITH SUCH LEGAL REQUIREMENT, TOGETHER
WITH ALL INTEREST AND PENALTIES PAYABLE IN CONNECTION THEREWITH.  LENDER MAY
APPLY ANY SUCH SECURITY, AS NECESSARY TO CAUSE COMPLIANCE WITH SUCH LEGAL
REQUIREMENT AT ANY TIME WHEN, IN THE REASONABLE JUDGMENT OF LENDER, THE
VALIDITY, APPLICABILITY OR VIOLATION OF SUCH LEGAL REQUIREMENT IS FINALLY
ESTABLISHED OR THE PROPERTY (OR ANY PART THEREOF OR INTEREST THEREIN) SHALL BE
IN DANGER OF BEING SOLD, FORFEITED, TERMINATED, CANCELLED OR LOST.  PROVIDED NO
EVENT OF DEFAULT THEN EXISTS, ANY SECURITY DEPOSITED WITH LENDER PURSUANT TO
THIS SECTION 5.1.1 MAY BE USED TO SATISFY COMPLIANCE WITH THE RELATED LEGAL
REQUIREMENT WITH ANY EXCESS AFTER THE SATISFACTION OF SAME TO BE RETURNED TO
BORROWER.

5.1.2       TAXES AND OTHER CHARGES. BORROWER SHALL PAY OR CAUSE TO BE PAID 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 TO THE APPROPRIATE TAXING
AUTHORITY TAXES SHALL BE SUSPENDED IF BORROWER HAS DEPOSITED AMOUNTS FOR THE
PAYMENT OF SUCH TAXES INTO THE TAX AND INSURANCE ESCROW FUNDS PURSUANT TO OF
SECTION 7.2 HEREOF.  BORROWER WILL DELIVER TO LENDER RECEIPTS FOR PAYMENT OR
OTHER EVIDENCE SATISFACTORY TO LENDER THAT THE TAXES AND OTHER CHARGES HAVE BEEN
SO PAID OR ARE NOT THEN DELINQUENT NO LATER THAN TEN (10) DAYS PRIOR TO THE DATE
ON WHICH THE TAXES AND/OR OTHER CHARGES WOULD OTHERWISE BE DELINQUENT IF NOT
PAID (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 7.2 HEREOF).  IF BORROWER PAYS OR CAUSES TO BE PAID ALL
TAXES AND OTHER CHARGES AND PROVIDES A COPY OF THE RECEIPT EVIDENCING THE
PAYMENT THEREOF TO LENDER, THEN LENDER SHALL REIMBURSE BORROWER, PROVIDED THAT
THERE ARE THEN SUFFICIENT PROCEEDS IN THE TAX AND INSURANCE ESCROW FUNDS AND
PROVIDED THAT THE TAXES ARE BEING PAID PURSUANT TO SECTION 7.2.  UPON WRITTEN
REQUEST OF BORROWER, IF LENDER HAS PAID SUCH TAXES PURSUANT TO SECTION 7.2
HEREOF, LENDER SHALL PROVIDE BORROWER WITH EVIDENCE THAT SUCH TAXES HAVE BEEN
PAID.  BORROWER SHALL NOT SUFFER AND SHALL PROMPTLY CAUSE TO BE PAID AND
DISCHARGED ANY LIEN OR

45

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

CHARGE WHATSOEVER WHICH MAY BE OR BECOME A LIEN OR CHARGE AGAINST THE PROPERTY,
AND SHALL PROMPTLY PAY FOR ALL UTILITY SERVICES PROVIDED TO THE PROPERTY.  AFTER
PRIOR WRITTEN NOTICE TO LENDER, BORROWER, AT ITS OWN EXPENSE, MAY CONTEST BY
APPROPRIATE LEGAL PROCEEDING, PROMPTLY INITIATED AND CONDUCTED IN GOOD FAITH AND
WITH DUE DILIGENCE, THE AMOUNT OR VALIDITY OR APPLICATION IN WHOLE OR IN PART OF
ANY TAXES OR OTHER CHARGES, PROVIDED THAT (I)  BORROWER IS PERMITTED TO DO SO
UNDER THE PROVISIONS OF ANY MORTGAGE OR DEED OF TRUST SUPERIOR IN LIEN TO THE
SECURITY INSTRUMENT; (II) SUCH PROCEEDING SHALL BE PERMITTED UNDER AND BE
CONDUCTED IN ACCORDANCE WITH THE PROVISIONS OF ANY OTHER INSTRUMENT TO WHICH
BORROWER IS SUBJECT AND SHALL NOT CONSTITUTE A DEFAULT THEREUNDER AND SUCH
PROCEEDING SHALL BE CONDUCTED IN ACCORDANCE WITH ALL APPLICABLE STATUTES, LAWS
AND ORDINANCES; (III) NEITHER THE PROPERTY NOR ANY PART THEREOF OR INTEREST
THEREIN WILL BE IN IMMEDIATE DANGER OF BEING SOLD, FORFEITED, TERMINATED,
CANCELLED OR LOST; (IV) 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; (V) SUCH
PROCEEDING SHALL SUSPEND THE COLLECTION OF SUCH CONTESTED TAXES OR OTHER CHARGES
FROM THE PROPERTY; AND (VI) BORROWER SHALL FURNISH SUCH SECURITY AS MAY BE
REQUIRED IN THE PROCEEDING, OR AS MAY BE REASONABLY REQUESTED BY LENDER, TO
INSURE THE PAYMENT OF ANY SUCH TAXES OR OTHER CHARGES, TOGETHER WITH ALL
INTEREST AND PENALTIES THEREON.  LENDER MAY PAY OVER ANY SUCH CASH DEPOSIT OR
PART THEREOF HELD BY LENDER TO THE CLAIMANT ENTITLED THERETO AT ANY TIME WHEN,
IN THE REASONABLE JUDGMENT OF LENDER, THE ENTITLEMENT OF SUCH CLAIMANT IS
ESTABLISHED OR THE PROPERTY (OR PART THEREOF OR INTEREST THEREIN) SHALL BE IN
IMMINENT DANGER OF BEING SOLD, FORFEITED, TERMINATED, CANCELLED OR LOST OR THERE
SHALL BE ANY DANGER OF THE LIEN OF THE SECURITY INSTRUMENT BEING PRIMED BY ANY
RELATED LIEN OTHER THAN A LIEN IN RESPECT OF TAXES BEING CONTESTED IN ACCORDANCE
WITH THE PROVISIONS OF THIS SECTION 5.1.2.  PROVIDED NO EVENT OF DEFAULT THEN
EXISTS, ANY SECURITY DEPOSITED WITH LENDER PURSUANT TO THIS SECTION 5.1.2 MAY BE
USED TO SATISFY THE RELATED TAXES OR OTHER CHARGES WITH ANY EXCESS AFTER THE
SATISFACTION OF SAME TO BE RETURNED TO BORROWER.

5.1.3       LITIGATION.  BORROWER SHALL GIVE PROMPT WRITTEN NOTICE TO LENDER
UPON OBTAINING INFORMATION OF ANY LITIGATION OR GOVERNMENTAL PROCEEDINGS PENDING
OR THREATENED AGAINST BORROWER AND/OR GUARANTOR WHICH MIGHT MATERIALLY ADVERSELY
AFFECT BORROWER’S OR GUARANTOR’S CONDITION (FINANCIAL OR OTHERWISE) OR BUSINESS
OR THE PROPERTY.

5.1.4       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.

5.1.5       NOTICE OF DEFAULT.  BORROWER SHALL PROMPTLY ADVISE LENDER OF THE
OCCURRENCE OF ANY DEFAULT OR EVENT OF DEFAULT OF WHICH BORROWER HAS KNOWLEDGE.

5.1.6       COOPERATE IN LEGAL PROCEEDINGS.  BORROWER SHALL COOPERATE FULLY WITH
LENDER WITH RESPECT TO ANY PROCEEDINGS BEFORE ANY COURT, BOARD OR OTHER
GOVERNMENTAL AUTHORITY WHICH MAY IN ANY WAY AFFECT THE RIGHTS OF LENDER
HEREUNDER OR ANY RIGHTS OBTAINED BY LENDER UNDER ANY OF THE OTHER LOAN DOCUMENTS
AND, IN CONNECTION THEREWITH, PERMIT LENDER, AT ITS ELECTION, TO PARTICIPATE IN
ANY SUCH PROCEEDINGS.

46

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

5.1.7       PERFORM LOAN DOCUMENTS.  BORROWER SHALL OBSERVE, PERFORM AND SATISFY
ALL THE TERMS, PROVISIONS, COVENANTS AND CONDITIONS OF, AND SHALL PAY WHEN DUE
ALL COSTS, FEES AND EXPENSES TO THE EXTENT REQUIRED UNDER THE LOAN DOCUMENTS
EXECUTED AND DELIVERED BY, OR APPLICABLE TO, BORROWER.

5.1.8       AWARD AND INSURANCE BENEFITS.  BORROWER SHALL COOPERATE WITH LENDER
IN OBTAINING FOR LENDER THE BENEFITS OF ANY AWARDS OR INSURANCE PROCEEDS
LAWFULLY OR EQUITABLY PAYABLE IN CONNECTION WITH THE PROPERTY, AND LENDER SHALL
BE REIMBURSED FOR ANY EXPENSES INCURRED IN CONNECTION THEREWITH (INCLUDING
REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS, AND THE PAYMENT BY BORROWER OF THE
EXPENSE OF AN APPRAISAL ON BEHALF OF LENDER IN CASE OF CASUALTY OR CONDEMNATION
AFFECTING THE PROPERTY OR ANY PART THEREOF) OUT OF SUCH INSURANCE PROCEEDS.

5.1.9       FURTHER ASSURANCES. BORROWER SHALL, AT BORROWER’S SOLE COST AND
EXPENSE:

(A)           FURNISH TO LENDER ALL INSTRUMENTS, DOCUMENTS, BOUNDARY SURVEYS,
FOOTING OR FOUNDATION SURVEYS, CERTIFICATES, PLANS AND SPECIFICATIONS,
APPRAISALS, TITLE AND OTHER INSURANCE REPORTS AND AGREEMENTS, AND EACH AND EVERY
OTHER DOCUMENT, CERTIFICATE, AGREEMENT AND INSTRUMENT REQUIRED TO BE FURNISHED
BY BORROWER PURSUANT TO THE TERMS OF THE LOAN DOCUMENTS OR REASONABLY REQUESTED
BY LENDER IN CONNECTION THEREWITH;

(B)           EXECUTE AND DELIVER TO LENDER SUCH DOCUMENTS, INSTRUMENTS,
CERTIFICATES, ASSIGNMENTS AND OTHER WRITINGS, AND DO SUCH OTHER ACTS NECESSARY
OR DESIRABLE, TO EVIDENCE, PRESERVE AND/OR PROTECT THE COLLATERAL AT ANY TIME
SECURING OR INTENDED TO SECURE THE OBLIGATIONS OF BORROWER UNDER THE LOAN
DOCUMENTS, AS LENDER MAY REASONABLY REQUIRE; 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.

5.1.10     PRINCIPAL PLACE OF BUSINESS, STATE OF ORGANIZATION.  BORROWER WILL
NOT CAUSE OR PERMIT ANY CHANGE TO BE MADE IN ITS NAME, IDENTITY (INCLUDING ITS
TRADE NAME OR NAMES), PLACE OF ORGANIZATION OR FORMATION (AS SET FORTH IN
SECTION 4.1.36 HEREOF) OR BORROWER’S CORPORATE, PARTNERSHIP OR OTHER STRUCTURE
UNLESS BORROWER SHALL HAVE FIRST NOTIFIED LENDER IN WRITING OF SUCH CHANGE AT
LEAST THIRTY (30) DAYS PRIOR TO THE EFFECTIVE DATE OF SUCH CHANGE, AND SHALL
HAVE FIRST TAKEN ALL ACTION REQUIRED BY LENDER FOR THE PURPOSE OF PERFECTING OR
PROTECTING THE LIEN AND SECURITY INTERESTS OF LENDER PURSUANT TO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS AND, IN THE CASE OF A CHANGE IN BORROWER’S
STRUCTURE, WITHOUT FIRST OBTAINING THE PRIOR CONSENT OF LENDER.  UPON LENDER’S
REQUEST, BORROWER SHALL EXECUTE AND DELIVER ADDITIONAL FINANCING STATEMENTS,
SECURITY AGREEMENTS AND OTHER INSTRUMENTS WHICH MAY BE NECESSARY TO EFFECTIVELY
EVIDENCE OR PERFECT LENDER’S SECURITY INTEREST IN THE PROPERTY AS A RESULT OF
SUCH CHANGE OF PRINCIPAL PLACE OF BUSINESS OR PLACE OF ORGANIZATION.  BORROWER’S
PRINCIPAL PLACE OF BUSINESS AND CHIEF EXECUTIVE OFFICE, AND THE PLACE WHERE
BORROWER KEEPS ITS BOOKS AND RECORDS, INCLUDING RECORDED DATA OF ANY KIND OR
NATURE, REGARDLESS OF THE MEDIUM OR RECORDING, INCLUDING SOFTWARE, WRITINGS,
PLANS,

47

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

SPECIFICATIONS AND SCHEMATICS, HAS BEEN FOR THE PRECEDING FOUR MONTHS (OR, IF
LESS, THE ENTIRE PERIOD OF THE EXISTENCE OF BORROWER) AND WILL CONTINUE TO BE
THE ADDRESS OF BORROWER SET FORTH AT THE INTRODUCTORY PARAGRAPH OF THIS
AGREEMENT (UNLESS BORROWER NOTIFIES LENDER IN WRITING AT LEAST THIRTY (30) DAYS
PRIOR TO THE DATE OF SUCH CHANGE).  BORROWER’S ORGANIZATIONAL IDENTIFICATION
NUMBER, ASSIGNED BY THE STATE OF INCORPORATION OR ORGANIZATION IS  4239703. 
BORROWER SHALL PROMPTLY NOTIFY LENDER OF ANY CHANGE IN ITS ORGANIZATIONAL
IDENTIFICATION NUMBER.  IF BORROWER DOES NOT NOW HAVE AN ORGANIZATIONAL
IDENTIFICATION NUMBER AND LATER OBTAINS ONE, BORROWER PROMPTLY SHALL NOTIFY
LENDER OF SUCH ORGANIZATIONAL IDENTIFICATION NUMBER.

5.1.11     FINANCIAL REPORTING.  (A)  BORROWER WILL KEEP AND MAINTAIN OR WILL
CAUSE TO BE KEPT AND MAINTAINED ON A FISCAL YEAR BASIS, IN ACCORDANCE WITH GAAP
(OR SUCH OTHER ACCOUNTING BASIS REASONABLY ACCEPTABLE TO LENDER), RECORDS AND
ACCOUNTS REFLECTING ALL OF THE FINANCIAL AFFAIRS OF BORROWER AND ALL ITEMS OF
INCOME AND EXPENSE IN CONNECTION WITH THE OPERATION OF THE PROPERTY.  LENDER
SHALL HAVE THE RIGHT FROM TIME TO TIME AT ALL TIMES DURING NORMAL BUSINESS HOURS
UPON REASONABLE NOTICE 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 REASONABLY DETERMINE TO BE
NECESSARY OR APPROPRIATE IN THE PROTECTION OF LENDER’S INTEREST.

(B)           BORROWER WILL FURNISH TO LENDER ANNUALLY, WITHIN ONE HUNDRED
TWENTY (120) DAYS FOLLOWING THE END OF EACH FISCAL YEAR OF BORROWER, CERTIFIED
ANNUAL FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GAAP (OR SUCH OTHER
ACCOUNTING BASIS REASONABLY ACCEPTABLE TO LENDER) COVERING THE PROPERTY FOR SUCH
FISCAL YEAR AND CONTAINING STATEMENTS OF PROFIT AND LOSS FOR BORROWER AND THE
PROPERTY AND A BALANCE SHEET FOR BORROWER.  SUCH STATEMENTS SHALL SET FORTH THE
FINANCIAL CONDITION AND THE RESULTS OF OPERATIONS FOR THE PROPERTY FOR SUCH
FISCAL YEAR, AND SHALL INCLUDE, BUT NOT BE LIMITED TO, AMOUNTS REPRESENTING
ANNUAL NET CASH FLOW, NET OPERATING INCOME, GROSS INCOME FROM OPERATIONS AND
OPERATING EXPENSES.  SUCH 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 FISCAL 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 BEING REPORTED UPON AND
HAS BEEN PREPARED IN ACCORDANCE WITH GAAP (OR SUCH OTHER ACCOUNTING BASIS
REASONABLY ACCEPTABLE TO LENDER), (III) A LIST OF TENANTS, IF ANY, OCCUPYING
MORE THAN TWENTY PERCENT (20%) OF THE TOTAL FLOOR AREA OF THE IMPROVEMENTS,
(IV) A BREAKDOWN SHOWING THE YEAR IN WHICH EACH LEASE THEN IN EFFECT EXPIRES AND
THE PERCENTAGE OF TOTAL FLOOR AREA OF THE IMPROVEMENTS AND THE PERCENTAGE OF
BASE RENT WITH RESPECT TO WHICH LEASES SHALL EXPIRE IN EACH SUCH YEAR, EACH SUCH
PERCENTAGE TO BE EXPRESSED ON BOTH A PER YEAR AND CUMULATIVE BASIS, AND (V) A
SCHEDULE RECONCILING NET OPERATING INCOME TO NET CASH FLOW (THE “NET CASH FLOW
SCHEDULE”), WHICH SHALL ITEMIZE ALL MATERIAL ADJUSTMENTS MADE TO NET OPERATING
INCOME TO ARRIVE AT NET CASH FLOW.  TOGETHER WITH BORROWER’S ANNUAL FINANCIAL
STATEMENTS, BORROWER SHALL FURNISH TO LENDER AN OFFICER’S CERTIFICATE CERTIFYING
TO ITS KNOWLEDGE AS OF THE DATE THEREOF WHETHER THERE EXISTS AN EVENT OR
CIRCUMSTANCE WHICH CONSTITUTES A DEFAULT OR EVENT OF DEFAULT UNDER THE LOAN
DOCUMENTS EXECUTED AND DELIVERED BY, OR APPLICABLE TO, BORROWER, AND IF SUCH
DEFAULT OR EVENT OF DEFAULT EXISTS, THE

48

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

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

(C)           BORROWER WILL FURNISH, OR CAUSE TO BE FURNISHED, TO LENDER ON OR
BEFORE TWENTY (20) DAYS AFTER THE END OF EACH CALENDAR QUARTER THE FOLLOWING
ITEMS, ACCOMPANIED BY AN OFFICER’S CERTIFICATE STATING THAT SUCH ITEMS ARE TRUE,
CORRECT, ACCURATE, AND COMPLETE AND FAIRLY PRESENT THE FINANCIAL CONDITION AND
RESULTS OF THE OPERATIONS OF BORROWER AND THE PROPERTY (SUBJECT TO NORMAL
YEAR-END ADJUSTMENTS) AS APPLICABLE:  (I)  QUARTERLY AND YEAR-TO-DATE OPERATING
STATEMENTS (INCLUDING CAPITAL EXPENDITURES) PREPARED FOR EACH CALENDAR QUARTER,
NOTING NET OPERATING INCOME, GROSS INCOME FROM OPERATIONS, AND OPERATING
EXPENSES (NOT INCLUDING ANY CONTRIBUTIONS TO THE REPLACEMENT RESERVE ACCOUNT),
AND OTHER INFORMATION NECESSARY AND SUFFICIENT TO FAIRLY REPRESENT THE FINANCIAL
POSITION AND RESULTS OF OPERATION OF THE PROPERTY DURING SUCH CALENDAR QUARTER,
AND CONTAINING A COMPARISON OF BUDGETED INCOME AND EXPENSES AND THE ACTUAL
INCOME AND EXPENSES TOGETHER WITH A DETAILED EXPLANATION OF ANY VARIANCES OF
FIVE PERCENT (5%) OR MORE BETWEEN BUDGETED AND ACTUAL AMOUNTS FOR SUCH PERIODS,
ALL IN FORM SATISFACTORY TO LENDER; (II) A CALCULATION REFLECTING THE ANNUAL
DEBT SERVICE COVERAGE RATIO FOR THE IMMEDIATELY PRECEDING TWELVE (12) MONTH
PERIOD AS OF THE LAST DAY OF SUCH QUARTER ACCOMPANIED BY AN OFFICER’S
CERTIFICATE WITH RESPECT THERETO; AND (III) A NET CASH FLOW SCHEDULE.  PRIOR TO
A SECURITIZATION, BORROWER SHALL PROVIDE THE ITEMS REQUIRED PURSUANT TO THIS
SECTION 5.1.11(C) ON A MONTHLY BASIS.

(D)           FOR THE PARTIAL YEAR PERIOD COMMENCING ON THE CLOSING DATE, AND
FOR EACH FISCAL YEAR THEREAFTER, BORROWER SHALL SUBMIT TO LENDER AN ANNUAL
BUDGET NOT LATER THAN THIRTY (30) DAYS AFTER THE COMMENCEMENT OF SUCH PERIOD OR
FISCAL YEAR IN FORM REASONABLY SATISFACTORY TO LENDER.  THE ANNUAL BUDGET SHALL
BE SUBJECT TO LENDER’S WRITTEN APPROVAL IF A CASH SWEEP PERIOD EXISTS (EACH SUCH
ANNUAL BUDGET, AN “APPROVED ANNUAL BUDGET”).  IN THE EVENT THAT LENDER OBJECTS
TO A PROPOSED ANNUAL BUDGET SUBMITTED BY BORROWER DURING A CASH SWEEP PERIOD,
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 TAXES, INSURANCE PREMIUMS AND OTHER CHARGES.

(E)           IN THE EVENT THAT A CASH SWEEP PERIOD EXISTS AND BORROWER MUST
INCUR AN EXTRAORDINARY OPERATING EXPENSE OR CAPITAL EXPENSE NOT SET FORTH IN THE
APPROVED ANNUAL BUDGET (EACH AN “EXTRAORDINARY EXPENSE”), THEN BORROWER SHALL
PROMPTLY DELIVER TO LENDER A REASONABLY DETAILED EXPLANATION OF SUCH PROPOSED
EXTRAORDINARY EXPENSE FOR LENDER’S APPROVAL.

(F)            ANY REPORTS, STATEMENTS OR OTHER INFORMATION REQUIRED TO BE
DELIVERED UNDER THIS AGREEMENT SHALL BE DELIVERED (I) IN PAPER FORM, (II) 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 AND PREPARED USING MICROSOFT WORD FOR WINDOWS OR WORDPERFECT FOR

49

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

WINDOWS FILES (WHICH FILES MAY BE PREPARED USING A SPREADSHEET PROGRAM AND SAVED
AS WORD PROCESSING FILES).  BORROWER AGREES THAT LENDER MAY DISCLOSE INFORMATION
REGARDING THE PROPERTY AND BORROWER THAT IS PROVIDED TO LENDER PURSUANT TO THIS
SECTION 5.1.11(F) IN CONNECTION WITH THE SECURITIZATION TO SUCH PARTIES
REQUESTING SUCH INFORMATION IN CONNECTION WITH SUCH SECURITIZATION.

5.1.12     BUSINESS AND OPERATIONS.  BORROWER WILL CONTINUE TO ENGAGE IN THE
BUSINESSES PRESENTLY CONDUCTED BY IT AS AND TO THE EXTENT THE SAME ARE NECESSARY
FOR THE OWNERSHIP, MAINTENANCE, MANAGEMENT AND OPERATION OF THE PROPERTY. 
BORROWER WILL QUALIFY TO DO BUSINESS AND WILL REMAIN IN GOOD STANDING UNDER THE
LAWS OF THE JURISDICTION AS AND TO THE EXTENT THE SAME ARE REQUIRED FOR THE
OWNERSHIP, MAINTENANCE, MANAGEMENT AND OPERATION OF THE PROPERTY.  BORROWER
SHALL AT ALL TIMES DURING THE TERM OF THE LOAN, CONTINUE TO OWN ALL OF THE
EQUIPMENT, FIXTURES AND PERSONAL PROPERTY WHICH ARE NECESSARY TO OPERATE THE
PROPERTY IN THE MANNER REQUIRED HEREUNDER AND IN THE MANNER IN WHICH IT IS
CURRENTLY OPERATED.

5.1.13     TITLE TO THE PROPERTY.  BORROWER WILL WARRANT AND DEFEND (A) THE
TITLE TO THE PROPERTY AND EVERY PART THEREOF, SUBJECT ONLY TO LIENS PERMITTED
HEREUNDER (INCLUDING PERMITTED ENCUMBRANCES) AND (B) THE VALIDITY AND PRIORITY
OF THE LIEN OF THE SECURITY INSTRUMENT AND THE ASSIGNMENT OF LEASES ON THE
PROPERTY, SUBJECT ONLY TO LIENS PERMITTED HEREUNDER (INCLUDING PERMITTED
ENCUMBRANCES), IN EACH CASE AGAINST THE CLAIMS OF ALL PERSONS WHOMSOEVER. 
BORROWER SHALL REIMBURSE LENDER FOR ANY LOSSES, COSTS, DAMAGES OR EXPENSES
(INCLUDING REASONABLE ATTORNEYS’ FEES AND COURT COSTS) INCURRED BY LENDER IF AN
INTEREST IN THE PROPERTY, OTHER THAN AS PERMITTED HEREUNDER, IS CLAIMED BY
ANOTHER PERSON.

5.1.14     COSTS OF ENFORCEMENT.  IN THE EVENT (A) THAT THE SECURITY INSTRUMENT
ENCUMBERING THE PROPERTY IS FORECLOSED IN WHOLE OR IN PART OR THAT THE SECURITY
INSTRUMENT IS PUT INTO THE HANDS OF AN ATTORNEY FOR COLLECTION, SUIT, ACTION OR
FORECLOSURE, (B) OF THE FORECLOSURE OF ANY MORTGAGE PRIOR TO OR SUBSEQUENT TO
THE SECURITY INSTRUMENT ENCUMBERING THE PROPERTY IN WHICH PROCEEDING LENDER IS
MADE A PARTY, OR (C) OF THE BANKRUPTCY, INSOLVENCY, REHABILITATION OR OTHER
SIMILAR PROCEEDING IN RESPECT OF BORROWER OR ANY OF ITS CONSTITUENT PERSONS OR
AN ASSIGNMENT BY BORROWER OR ANY OF ITS CONSTITUENT PERSONS FOR THE BENEFIT OF
ITS CREDITORS, BORROWER, ITS SUCCESSORS OR ASSIGNS, SHALL BE CHARGEABLE WITH AND
AGREES TO PAY ALL COSTS OF COLLECTION AND DEFENSE, INCLUDING REASONABLE
ATTORNEYS’ FEES AND COSTS, INCURRED BY LENDER OR BORROWER IN CONNECTION
THEREWITH AND IN CONNECTION WITH ANY APPELLATE PROCEEDING OR POST-JUDGMENT
ACTION INVOLVED THEREIN, TOGETHER WITH ALL REQUIRED SERVICE OR USE TAXES.

5.1.15     ESTOPPEL STATEMENT.  (A)  AFTER REQUEST BY LENDER, BORROWER SHALL
FURNISH TO LENDER WITHIN TEN (10) DAYS A STATEMENT, DULY ACKNOWLEDGED AND
CERTIFIED, SETTING FORTH (I)  THE AMOUNT OF THE ORIGINAL PRINCIPAL AMOUNT OF THE
NOTE, (II) THE UNPAID PRINCIPAL AMOUNT OF THE NOTE, (III) THE INTEREST RATE OF
THE NOTE, (IV) THE DATE INSTALLMENTS OF INTEREST AND/OR PRINCIPAL WERE LAST
PAID, (V) ANY KNOWN OFFSETS OR DEFENSES TO THE PAYMENT OF THE DEBT, IF ANY, AND
(VI) THAT THE NOTE, THIS AGREEMENT, THE SECURITY INSTRUMENT AND THE OTHER LOAN
DOCUMENTS ARE VALID, LEGAL AND BINDING OBLIGATIONS AND HAVE NOT BEEN MODIFIED OR
IF MODIFIED, GIVING PARTICULARS OF SUCH MODIFICATION.

50

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

(B)           BORROWER SHALL USE COMMERCIALLY REASONABLE EFFORTS TO DELIVER TO
LENDER UPON REQUEST, ESTOPPEL CERTIFICATES FROM THE GROUND LESSOR UNDER THE
GROUND LEASE AND EACH COMMERCIAL TENANT LEASING SPACE AT THE PROPERTY IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO LENDER; PROVIDED, HOWEVER, THAT
BORROWER SHALL NOT BE REQUIRED TO DELIVER SUCH CERTIFICATES MORE FREQUENTLY THAN
ONE (1) TIME IN ANY CALENDAR YEAR EXCEPT IN CONNECTION WITH A SECURITIZATION OR
AN EVENT OF DEFAULT.

(C)           WITHIN THIRTY (30) DAYS OF REQUEST BY BORROWER, LENDER SHALL
DELIVER TO BORROWER A STATEMENT SETTING FORTH THE ITEMS DESCRIBED AT (A)(I),
(II), (III) AND (IV) OF THIS SECTION 5.1.15.

5.1.16     LOAN PROCEEDS.  BORROWER SHALL USE THE PROCEEDS OF THE LOAN RECEIVED
BY IT ON THE CLOSING DATE ONLY FOR THE PURPOSES SET FORTH IN SECTION 2.1.4.

5.1.17     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, OR APPLICABLE TO, 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, OR APPLICABLE TO, BORROWER WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER.

5.1.18     CONFIRMATION OF REPRESENTATIONS.  BORROWER SHALL DELIVER, IN
CONNECTION WITH ANY SECURITIZATION, (A) ONE (1) OR MORE OFFICER’S CERTIFICATES
CERTIFYING AS TO THE ACCURACY (OR DISCLOSING ANY INACCURACIES, AS APPLICABLE) OF
ALL REPRESENTATIONS MADE BY BORROWER IN THE LOAN DOCUMENTS AS OF THE DATE OF THE
CLOSING OF SUCH SECURITIZATION, AND (B) CERTIFICATES OF THE RELEVANT
GOVERNMENTAL AUTHORITIES IN ALL RELEVANT JURISDICTIONS INDICATING THE GOOD
STANDING AND QUALIFICATION OF BORROWER, PRINCIPAL AND GUARANTOR AS OF THE DATE
OF THE SECURITIZATION.

5.1.19     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) WHICH CONSTITUTES
REAL PROPERTY 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 SUCH REAL PROPERTY PORTION OF THE PROPERTY.

5.1.20     LEASING MATTERS. ANY LEASES WITH RESPECT TO THE PROPERTY WRITTEN
AFTER THE CLOSING DATE, FOR MORE THAN THE RELEVANT LEASING THRESHOLD SQUARE
FOOTAGE SHALL BE SUBJECT TO THE PRIOR WRITTEN APPROVAL OF LENDER, WHICH APPROVAL
MAY BE GIVEN OR WITHHELD IN THE SOLE DISCRETION OF LENDER.  LENDER SHALL APPROVE
OR DISAPPROVE ANY SUCH LEASE WITHIN TEN (10) BUSINESS DAYS OF LENDER’S RECEIPT
OF A FINAL EXECUTION DRAFT OF SUCH LEASE (INCLUDING ALL EXHIBITS, SCHEDULES,
SUPPLEMENTS, ADDENDA OR OTHER AGREEMENTS RELATING THERETO) AND A WRITTEN NOTICE
FROM BORROWER REQUESTING LENDER’S APPROVAL TO SUCH LEASE, AND SUCH LEASE SHALL
BE DEEMED APPROVED, IF LENDER DOES NOT DISAPPROVE SUCH LEASE WITHIN SAID TEN
(10) BUSINESS DAY PERIOD PROVIDED SUCH WRITTEN NOTICE CONSPICUOUSLY STATES, IN
LARGE BOLD TYPE, THAT “PURSUANT TO SECTION 5.1.20 OF THE LOAN AGREEMENT, THE
LEASE SHALL BE DEEMED APPROVED IF LENDER

51

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

DOES NOT RESPOND TO THE CONTRARY WITHIN TEN (10) BUSINESS DAYS OF LENDER’S
RECEIPT OF SUCH LEASE AND WRITTEN NOTICE”, PROVIDED THAT IN NO EVENT SHALL
LENDER’S CONSENT BE DEEMED GIVEN WITH RESPECT TO ANY LEASE FOR 50,000 OR MORE
RENTABLE SQUARE FEET.  BORROWER SHALL FURNISH LENDER WITH EXECUTED COPIES OF ALL
LEASES.  ALL RENEWALS OF LEASES AND ALL PROPOSED LEASES SHALL PROVIDE FOR RENTAL
RATES COMPARABLE TO EXISTING LOCAL MARKET RATES (UNLESS SUCH RENTAL RATES ARE
OTHERWISE SET FORTH IN THE LEASES EXECUTED PRIOR TO THE CLOSING DATE).  ALL
PROPOSED LEASES SHALL BE ON COMMERCIALLY REASONABLE TERMS AND SHALL NOT CONTAIN
ANY TERMS WHICH WOULD MATERIALLY IMPAIR LENDER’S RIGHTS UNDER THE LOAN
DOCUMENTS.  ALL LEASES EXECUTED AFTER THE CLOSING DATE SHALL PROVIDE THAT THEY
ARE SUBORDINATE TO THE SECURITY INSTRUMENT ENCUMBERING THE PROPERTY AND THAT THE
TENANT THEREUNDER AGREES TO ATTORN TO LENDER OR ANY PURCHASER AT A SALE BY
FORECLOSURE OR POWER OF SALE.  BORROWER (I) SHALL OBSERVE AND PERFORM THE
OBLIGATIONS IMPOSED UPON THE LESSOR UNDER THE LEASES IN A COMMERCIALLY
REASONABLE MANNER; (II) SHALL ENFORCE THE TERMS, COVENANTS AND CONDITIONS
CONTAINED IN THE LEASES UPON THE PART OF THE TENANT THEREUNDER TO BE OBSERVED OR
PERFORMED IN A COMMERCIALLY REASONABLE MANNER AND IN A MANNER NOT TO IMPAIR THE
VALUE OF THE PROPERTY INVOLVED EXCEPT THAT NO TERMINATION BY BORROWER OR
ACCEPTANCE OF SURRENDER BY A TENANT OF ANY LEASE SHALL BE PERMITTED UNLESS BY
REASON OF A TENANT DEFAULT AND THEN ONLY IN A COMMERCIALLY REASONABLE MANNER TO
PRESERVE AND PROTECT THE PROPERTY; PROVIDED, HOWEVER, THAT NO SUCH TERMINATION
OR SURRENDER OF ANY LEASE COVERING MORE THAN THE RELEVANT LEASING THRESHOLD WILL
BE PERMITTED WITHOUT THE WRITTEN CONSENT OF LENDER WHICH CONSENT MAY BE WITHHELD
IN THE REASONABLE DISCRETION OF LENDER; (III) SHALL NOT COLLECT ANY OF THE RENTS
MORE THAN ONE (1) MONTH IN ADVANCE (OTHER THAN SECURITY DEPOSITS); (IV) SHALL
NOT EXECUTE ANY OTHER ASSIGNMENT OF LESSOR’S INTEREST IN THE LEASES OR THE RENTS
(EXCEPT AS CONTEMPLATED BY THE LOAN DOCUMENTS); (V) SHALL NOT ALTER, MODIFY OR
CHANGE THE TERMS OF THE LEASES IN A MANNER INCONSISTENT WITH THE PROVISIONS OF
THE LOAN DOCUMENTS WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER, WHICH CONSENT
MAY BE WITHHELD IN THE SOLE DISCRETION OF LENDER; AND (VI) SHALL EXECUTE AND
DELIVER AT THE REQUEST OF LENDER ALL SUCH FURTHER ASSURANCES, CONFIRMATIONS AND
ASSIGNMENTS IN CONNECTION WITH THE LEASES AS LENDER SHALL FROM TIME TO TIME
REASONABLY REQUIRE.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN,
BORROWER SHALL NOT ENTER INTO A LEASE OF ALL OR SUBSTANTIALLY ALL OF THE
PROPERTY WITHOUT LENDER’S PRIOR WRITTEN CONSENT.  NOTWITHSTANDING THE FOREGOING,
BORROWER MAY, WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER, TERMINATE ANY LEASE
WHICH DEMISES LESS THAN THE RELEVANT LEASING THRESHOLD UNDER ANY OF THE
FOLLOWING CIRCUMSTANCES: (I) THE TENANT UNDER SAID LEASE IS IN DEFAULT BEYOND
ANY APPLICABLE GRACE AND CURE PERIOD, AND BORROWER HAS THE RIGHT TO TERMINATE
SUCH LEASE; (II) SUCH TERMINATION IS PERMITTED BY THE TERMS OF THE LEASE IN
QUESTION AND BORROWER HAS SECURED AN OBLIGATION FROM A THIRD PARTY TO LEASE THE
SPACE UNDER THE LEASE TO BE TERMINATED AT A RENTAL EQUAL TO OR HIGHER THAN THE
RENTAL DUE UNDER THE LEASE TO BE TERMINATED; AND (III) IF THE TENANT UNDER THE
LEASE TO BE TERMINATED, HAS EXECUTED A RIGHT UNDER SAID LEASE TO TERMINATE ITS
LEASE UPON PAYMENT OF A TERMINATION FEE TO BORROWER, AND HAS IN FACT TERMINATED
ITS LEASE AND PAID SAID FEE, BORROWER MAY ACCEPT SAID TERMINATION.

5.1.21     ALTERATIONS. SUBJECT TO THE RIGHTS OF TENANTS TO MAKE ALTERATIONS
PURSUANT TO THE TERMS OF THEIR RESPECTIVE LEASES, BORROWER SHALL OBTAIN LENDER’S
PRIOR WRITTEN CONSENT TO ANY ALTERATIONS TO ANY IMPROVEMENTS, WHICH CONSENT
SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED EXCEPT WITH RESPECT TO ALTERATIONS
THAT MAY HAVE A MATERIAL ADVERSE EFFECT ON BORROWER’S FINANCIAL CONDITION, THE
VALUE OF THE PROPERTY OR THE

52

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

NET OPERATING INCOME.  NOTWITHSTANDING THE FOREGOING, LENDER’S CONSENT SHALL NOT
BE REQUIRED IN CONNECTION WITH ANY ALTERATIONS THAT WILL NOT HAVE A MATERIAL
ADVERSE EFFECT ON BORROWER’S FINANCIAL CONDITION, THE VALUE OF THE PROPERTY OR
THE NET OPERATING INCOME, PROVIDED THAT SUCH ALTERATIONS ARE MADE IN CONNECTION
WITH (A) TENANT IMPROVEMENT WORK PERFORMED PURSUANT TO THE TERMS OF ANY LEASE
EXECUTED ON OR BEFORE THE CLOSING DATE, (B) TENANT IMPROVEMENT WORK PERFORMED
PURSUANT TO THE TERMS AND PROVISIONS OF A LEASE AND NOT ADVERSELY AFFECTING ANY
STRUCTURAL COMPONENT OF ANY IMPROVEMENTS, ANY UTILITY OR HVAC SYSTEM CONTAINED
IN ANY IMPROVEMENTS OR THE EXTERIOR OF ANY BUILDING CONSTITUTING A PART OF ANY
IMPROVEMENTS, (C) 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 OR (D) ANY STRUCTURAL ALTERATION
WHICH COSTS LESS THAN $150,000.00 IN THE AGGREGATE FOR ALL COMPONENTS THEREOF
WHICH CONSTITUTE SUCH ALTERATION OR ANY NON-STRUCTURAL ALTERATION WHICH COSTS
LESS THAN $300,000.00 IN THE AGGREGATE FOR ALL COMPONENTS THEREOF WHICH
CONSTITUTE SUCH ALTERATION.  IF THE TOTAL UNPAID AMOUNTS DUE AND PAYABLE WITH
RESPECT TO ALTERATIONS TO THE IMPROVEMENTS AT THE PROPERTY (OTHER THAN SUCH
AMOUNTS TO BE PAID OR REIMBURSED BY TENANTS UNDER THE LEASES) SHALL AT ANY TIME
EQUAL OR EXCEED $300,000.00 (AND SUCH AMOUNT IS NOT BEING PAID FROM ANY RESERVE
FUND) (THE “THRESHOLD AMOUNT”), BORROWER, UPON LENDER’S REQUEST, SHALL PROMPTLY
DELIVER TO LENDER AS SECURITY FOR THE PAYMENT OF SUCH AMOUNTS AND AS ADDITIONAL
SECURITY FOR BORROWER’S OBLIGATIONS UNDER THE LOAN DOCUMENTS ANY OF THE
FOLLOWING:  (A) CASH, (B) U.S. OBLIGATIONS, (C) OTHER SECURITIES HAVING A RATING
ACCEPTABLE TO LENDER AND THAT THE APPLICABLE 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 ANY SECURITIES OR ANY
CLASS THEREOF IN CONNECTION WITH ANY SECURITIZATION OR (D) A COMPLETION AND
PERFORMANCE BOND OR AN IRREVOCABLE LETTER OF CREDIT (PAYABLE ON SIGHT DRAFT
ONLY) ISSUED BY A FINANCIAL INSTITUTION HAVING A RATING BY S&P OF NOT LESS THAN
“A-1+” IF THE TERM OF SUCH BOND OR LETTER OF CREDIT IS NO LONGER THAN THREE (3)
MONTHS OR, IF SUCH TERM IS IN EXCESS OF THREE (3) MONTHS, ISSUED BY A FINANCIAL
INSTITUTION HAVING A RATING THAT IS ACCEPTABLE TO LENDER AND THAT THE APPLICABLE
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
ANY SECURITIES OR CLASS THEREOF IN CONNECTION WITH ANY SECURITIZATION.  SUCH
SECURITY SHALL BE IN AN AMOUNT EQUAL TO THE EXCESS OF THE TOTAL UNPAID AMOUNTS
WITH RESPECT TO ALTERATIONS TO THE IMPROVEMENTS ON THE PROPERTY (OTHER THAN SUCH
AMOUNTS TO BE PAID OR REIMBURSED BY TENANTS UNDER THE LEASES) OVER THE THRESHOLD
AMOUNT AND, IF CASH, U.S. OBLIGATIONS OR OTHER SECURITIES, MAY BE APPLIED FROM
TIME TO TIME, AT THE OPTION OF BORROWER TO PAY FOR SUCH ALTERATIONS.  AT THE
OPTION OF LENDER, FOLLOWING THE OCCURRENCE AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT, LENDER MAY TERMINATE ANY OF THE ALTERATIONS AND USE THE
DEPOSIT TO RESTORE THE PROPERTY TO THE EXTENT NECESSARY TO PREVENT ANY MATERIAL
ADVERSE EFFECT ON THE VALUE OF THE PROPERTY.

5.1.22     OPERATION OF PROPERTY. (A) BORROWER SHALL CAUSE THE PROPERTY TO BE
OPERATED, IN ALL MATERIAL RESPECTS, IN ACCORDANCE WITH THE PROPERTY MANAGEMENT
AGREEMENT (OR REPLACEMENT MANAGEMENT AGREEMENT) AS APPLICABLE.  IN THE EVENT
THAT THE PROPERTY MANAGEMENT AGREEMENT EXPIRES OR IS TERMINATED (WITHOUT
LIMITING ANY OBLIGATION OF BORROWER TO OBTAIN LENDER’S CONSENT TO ANY
TERMINATION OR MODIFICATION OF THE PROPERTY MANAGEMENT AGREEMENT IN ACCORDANCE
WITH THE TERMS AND PROVISIONS OF THIS AGREEMENT),

53

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

BORROWER SHALL PROMPTLY ENTER INTO A REPLACEMENT MANAGEMENT AGREEMENT WITH
PROPERTY MANAGER OR ANOTHER QUALIFYING PROPERTY MANAGER, AS APPLICABLE.

(B)           BORROWER SHALL:  (I) PROMPTLY PERFORM AND/OR OBSERVE, IN ALL
MATERIAL RESPECTS, ALL OF THE COVENANTS AND AGREEMENTS REQUIRED TO BE PERFORMED
AND OBSERVED BY IT UNDER THE PROPERTY MANAGEMENT AGREEMENT AND DO ALL THINGS
NECESSARY TO PRESERVE AND TO KEEP UNIMPAIRED ITS MATERIAL RIGHTS THEREUNDER;
(II) PROMPTLY NOTIFY LENDER OF ANY MATERIAL DEFAULT UNDER THE PROPERTY
MANAGEMENT AGREEMENT OF WHICH IT IS AWARE; AND (III) ENFORCE THE PERFORMANCE AND
OBSERVANCE OF ALL OF THE COVENANTS AND AGREEMENTS REQUIRED TO BE PERFORMED
AND/OR OBSERVED BY PROPERTY MANAGER UNDER THE PROPERTY MANAGEMENT AGREEMENT, IN
A COMMERCIALLY REASONABLE MANNER.

5.1.23     SUPPLEMENTAL MORTGAGE AFFIDAVITS. AS OF THE DATE HEREOF, BORROWER
REPRESENTS THAT IT HAS PAID OR HAS DEPOSITED WITH THE TITLE COMPANY ISSUING THE
TITLE INSURANCE POLICY FUNDS SUFFICIENT TO PAY ALL STATE, COUNTY AND MUNICIPAL
RECORDING AND ALL OTHER TAXES IMPOSED UPON THE EXECUTION AND RECORDATION OF THE
SECURITY INSTRUMENT.  IF AT ANY TIME LENDER DETERMINES, BASED ON APPLICABLE LAW,
THAT LENDER IS NOT BEING AFFORDED THE MAXIMUM AMOUNT OF SECURITY AVAILABLE FROM
THE PROPERTY AS A DIRECT OR INDIRECT RESULT OF APPLICABLE TAXES NOT HAVING BEEN
PAID WITH RESPECT TO THE PROPERTY, BORROWER AGREES THAT BORROWER WILL EXECUTE,
ACKNOWLEDGE AND DELIVER TO LENDER, WITHIN FIFTEEN (15) DAYS OF LENDER’S REQUEST,
SUPPLEMENTAL AFFIDAVITS INCREASING THE AMOUNT OF THE DEBT ATTRIBUTABLE TO THE
PROPERTY FOR WHICH ALL APPLICABLE TAXES HAVE BEEN PAID TO AN AMOUNT DETERMINED
BY LENDER TO BE EQUAL TO THE LESSER OF (A) THE GREATER OF THE FAIR MARKET VALUE
OF THE PROPERTY (I) AS OF THE DATE HEREOF AND (II) AS OF THE DATE SUCH
SUPPLEMENTAL AFFIDAVITS ARE TO BE DELIVERED TO LENDER, AND (B) THE AMOUNT OF THE
DEBT ATTRIBUTABLE TO THE PROPERTY, AND BORROWER SHALL, ON DEMAND, PAY ANY
ADDITIONAL TAXES.

5.1.24     GROUND LEASE/DEVELOPMENT AGREEMENT.

(A)           BORROWER SHALL (I) PAY ALL RENTS, ADDITIONAL RENTS AND OTHER SUMS
REQUIRED TO BE PAID BY BORROWER, AS TENANT UNDER AND PURSUANT TO THE PROVISIONS
OF THE GROUND LEASE, (II) DILIGENTLY PERFORM AND OBSERVE ALL OF THE TERMS,
COVENANTS AND CONDITIONS OF THE GROUND LEASE AND THE DEVELOPMENT AGREEMENT ON
THE PART OF BORROWER THEREUNDER, (III) PROMPTLY NOTIFY LENDER OF THE GIVING OF
ANY NOTICE BY THE LANDLORD UNDER THE GROUND LEASE TO BORROWER OR ANY PARTY UNDER
THE DEVELOPMENT AGREEMENT OF ANY DEFAULT BY BORROWER, AS TENANT THEREUNDER, AND
DELIVER TO LENDER A TRUE COPY OF EACH SUCH NOTICE WITHIN FIVE (5) BUSINESS DAYS
OF RECEIPT AND (IV) PROMPTLY (UPON BECOMING AWARE OF) NOTIFY LENDER OF ANY
BANKRUPTCY, REORGANIZATION OR INSOLVENCY OF THE LANDLORD UNDER THE GROUND LEASE
OR OF ANY NOTICE THEREOF, AND DELIVER TO LENDER A TRUE COPY OF SUCH NOTICE
WITHIN FIVE (5) BUSINESS DAYS OF BORROWER’S RECEIPT.  BORROWER SHALL NOT,
WITHOUT THE PRIOR CONSENT OF LENDER, SURRENDER THE LEASEHOLD ESTATE CREATED BY
THE GROUND LEASE OR TERMINATE OR CANCEL THE GROUND LEASE OR THE DEVELOPMENT
AGREEMENT.  BORROWER SHALL NOT, WITHOUT THE PRIOR CONSENT OF LENDER WHICH
CONSENT SHALL NOT BE UNREASONABLY WITHHELD, MODIFY, CHANGE, SUPPLEMENT, ALTER OR
AMEND THE GROUND LEASE OR THE DEVELOPMENT AGREEMENT, AND IF BORROWER SHALL
DEFAULT IN THE PERFORMANCE OR OBSERVANCE OF ANY TERM, COVENANT OR CONDITION OF
THE GROUND LEASE OR THE DEVELOPMENT AGREEMENT ON THE PART OF BORROWER,
THEREUNDER, AND SHALL FAIL TO CURE THE SAME PRIOR TO THE EXPIRATION OF ANY
APPLICABLE CURE PERIOD PROVIDED THEREUNDER, LENDER SHALL HAVE THE RIGHT, BUT
SHALL BE UNDER NO OBLIGATION, TO

54

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

PAY ANY SUMS AND TO PERFORM ANY ACT OR TAKE ANY ACTION AS MAY BE APPROPRIATE TO
CAUSE ALL OF THE TERMS, COVENANTS AND CONDITIONS OF THE GROUND LEASE OR THE
DEVELOPMENT AGREEMENT ON THE PART OF BORROWER TO BE PERFORMED OR OBSERVED ON
BEHALF OF BORROWER, TO THE END THAT THE RIGHTS OF BORROWER IN, TO AND UNDER THE
GROUND LEASE OR THE DEVELOPMENT AGREEMENT SHALL BE KEPT UNIMPAIRED AND FREE FROM
DEFAULT.  IF THE LANDLORD UNDER THE GROUND LEASE OR ANY PARTY UNDER THE
DEVELOPMENT AGREEMENT SHALL DELIVER TO LENDER A COPY OF ANY NOTICE OF DEFAULT
UNDER THE GROUND LEASE, SUCH NOTICE SHALL CONSTITUTE FULL PROTECTION TO LENDER
FOR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY LENDER, IN GOOD FAITH, IN
RELIANCE THEREON.  BORROWER SHALL EXERCISE EACH INDIVIDUAL OPTION, IF ANY, TO
EXTEND OR RENEW THE TERM OF THE GROUND LEASE UPON DEMAND BY LENDER MADE AT ANY
TIME WITHIN ONE (1) YEAR PRIOR TO THE LAST DAY UPON WHICH ANY SUCH OPTION MAY BE
EXERCISED, AND BORROWER HEREBY EXPRESSLY AUTHORIZES AND APPOINTS LENDER ITS
ATTORNEY-IN-FACT TO EXERCISE ANY SUCH OPTION IN THE NAME OF AND UPON BEHALF OF
BORROWER, WHICH POWER OF ATTORNEY SHALL BE IRREVOCABLE AND SHALL BE DEEMED TO BE
COUPLED WITH AN INTEREST.

SECTION 5.2            NEGATIVE COVENANTS.

  From the Closing Date until payment and performance in full of all obligations
of Borrower under the Loan Documents or the earlier release of the Lien of the
Security Instrument encumbering the Property in accordance with the terms of
this Agreement and the other Loan Documents, Borrower covenants and agrees with
Lender that it will not do, directly or indirectly, any of the following:

5.2.1       OPERATION OF PROPERTY.  BORROWER SHALL NOT, WITHOUT LENDER’S PRIOR
WRITTEN CONSENT (WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD):
(I) SURRENDER, TERMINATE OR CANCEL THE PROPERTY MANAGEMENT AGREEMENT; PROVIDED,
THAT BORROWER MAY, WITHOUT LENDER’S CONSENT, REPLACE THE PROPERTY MANAGER SO
LONG AS THE REPLACEMENT MANAGER IS A QUALIFYING PROPERTY MANAGER PURSUANT TO A
REPLACEMENT MANAGEMENT AGREEMENT; (II) REDUCE OR CONSENT TO THE REDUCTION OF THE
TERM OF THE PROPERTY MANAGEMENT AGREEMENT; (III) INCREASE OR CONSENT TO THE
INCREASE OF THE AMOUNT OF ANY CHARGES UNDER THE PROPERTY MANAGEMENT AGREEMENT;
OR (IV) OTHERWISE MODIFY, CHANGE, SUPPLEMENT, ALTER OR AMEND, OR WAIVE OR
RELEASE ANY OF ITS RIGHTS AND REMEDIES UNDER, THE PROPERTY MANAGEMENT AGREEMENT
IN ANY MATERIAL RESPECT.  LENDER AGREES THAT ITS CONSENT PURSUANT TO THIS
SECTION 5.2.1(A) WILL NOT BE UNREASONABLY WITHHELD, DELAYED OR CONDITIONED
PROVIDED THAT IN CONNECTION WITH ANY REPLACEMENT OF THE PROPERTY MANAGER THE
PERSON CHOSEN BY BORROWER AS THE REPLACEMENT PROPERTY MANAGER IS A QUALIFYING
PROPERTY MANAGER, AND FURTHER AGREES THAT ANY SUCH WRITTEN REQUEST FOR CONSENT
THAT INCLUDES EVIDENCE THAT THE REPLACEMENT PROPERTY MANAGER IS A QUALIFYING
PROPERTY MANAGER, SHALL BE APPROVED OR DISAPPROVED WITHIN TEN (10) BUSINESS DAYS
OF LENDER’S RECEIPT, PROVIDED SUCH WRITTEN REQUEST FROM BORROWER SHALL
CONSPICUOUSLY STATE, IN LARGE BOLD TYPE, THAT “PURSUANT TO SECTION 5.2.1 OF THE
LOAN AGREEMENT, A RESPONSE IS REQUIRED WITHIN TEN (10) BUSINESS DAYS OF LENDER’S
RECEIPT OF THIS WRITTEN NOTICE”.  IF LENDER FAILS TO DISAPPROVE ANY SUCH MATTER
WITHIN SUCH PERIOD, BORROWER SHALL PROVIDE A SECOND WRITTEN NOTICE REQUESTING
APPROVAL, WHICH WRITTEN NOTICE SHALL CONSPICUOUSLY STATE, IN LARGE BOLD TYPE,
THAT “PURSUANT TO SECTION 5.2.1 OF THE LOAN AGREEMENT, THE MATTER DESCRIBED
HEREIN SHALL BE DEEMED APPROVED IF LENDER DOES NOT RESPOND TO THE CONTRARY
WITHIN FIVE (5) BUSINESS DAYS OF LENDER’S RECEIPT OF THIS WRITTEN

55

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

NOTICE”.  THEREAFTER, IF LENDER DOES NOT DISAPPROVE SUCH MATTER WITHIN SAID FIVE
(5) BUSINESS DAY PERIOD SUCH MATTER SHALL BE DEEMED APPROVED.

5.2.2       LIENS.  BORROWER SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF
LENDER, CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY LIEN ON ANY PORTION OF THE
PROPERTY OR PERMIT ANY SUCH ACTION TO BE TAKEN, EXCEPT:

(I)             PERMITTED ENCUMBRANCES;

(II)            LIENS CREATED BY OR PERMITTED PURSUANT TO THE LOAN DOCUMENTS;
AND

(III)           LIENS FOR TAXES OR OTHER CHARGES NOT YET DELINQUENT (OR THAT
BORROWER IS CONTESTING IN ACCORDANCE WITH THE TERMS OF SECTION 5.1.2 HEREOF).

5.2.3       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, THE ASSETS OR ALL OR SUBSTANTIALLY ALL OF THE
PROPERTIES OR ASSETS OF BORROWER EXCEPT TO THE EXTENT PERMITTED BY THE LOAN
DOCUMENTS, (D) MODIFY, AMEND, WAIVE OR TERMINATE ITS ORGANIZATIONAL DOCUMENTS OR
ITS QUALIFICATION AND GOOD STANDING IN ANY JURISDICTION IN WHICH IT IS ORGANIZED
OR THE PROPERTY IS LOCATED OR (E) CAUSE THE PRINCIPAL TO (I) DISSOLVE, WIND UP
OR LIQUIDATE OR TAKE ANY ACTION, OR OMIT TO TAKE AN ACTION, AS A RESULT OF WHICH
THE PRINCIPAL WOULD BE DISSOLVED, WOUND UP OR LIQUIDATED IN WHOLE OR IN PART, OR
(II) AMEND, MODIFY, WAIVE OR TERMINATE THE CERTIFICATE OF FORMATION OR OPERATING
AGREEMENT OF THE PRINCIPAL, IN EACH CASE, WITHOUT OBTAINING THE PRIOR WRITTEN
CONSENT OF LENDER OR LENDER’S DESIGNEE.

5.2.4       CHANGE IN BUSINESS.  BORROWER SHALL NOT ENTER INTO ANY LINE OF
BUSINESS OTHER THAN THE OWNERSHIP AND OPERATION OF THE PROPERTY, OR MAKE ANY
MATERIAL CHANGE IN THE SCOPE OR NATURE OF ITS BUSINESS OBJECTIVES, PURPOSES OR
OPERATIONS, OR UNDERTAKE OR PARTICIPATE IN ACTIVITIES OTHER THAN THE CONTINUANCE
OF ITS PRESENT BUSINESS.  NOTHING CONTAINED IN THIS SECTION 5.2.4 IS INTENDED TO
EXPAND THE RIGHTS OF BORROWER CONTAINED IN SECTION 5.2.10(D) HEREOF.

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

5.2.6       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 CONSENT OF LENDER.

5.2.7       INTENTIONALLY OMITTED.

5.2.8       INTENTIONALLY OMITTED.

56

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

5.2.9       ERISA.  (A) BORROWER SHALL NOT ENGAGE IN ANY TRANSACTION WHICH WOULD
CAUSE ANY OBLIGATION, OR ACTION TAKEN OR TO BE TAKEN, HEREUNDER (OR THE EXERCISE
BY LENDER OF ANY OF ITS RIGHTS UNDER THE NOTE, THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS) TO BE A NON-EXEMPT (UNDER A STATUTORY OR ADMINISTRATIVE CLASS
EXEMPTION) PROHIBITED TRANSACTION UNDER ERISA.

(B)           DURING THE TERM OF THE LOAN OR ANY OBLIGATION OR RIGHT HEREUNDER,
BORROWER  SHALL NOT BE A PLAN AND NONE OF THE ASSETS OF BORROWER SHALL
CONSTITUTE OF A PLAN WITHIN THE MEANING OF SECTION 29C.F.R. §2510.3-101, AS
MODIFIED BY SECTION 3(42) OF ERISA.  BORROWER FURTHER COVENANTS AND AGREES TO
DELIVER TO LENDER SUCH CERTIFICATIONS OR OTHER EVIDENCE FROM TIME TO TIME
THROUGHOUT THE TERM OF THE LOAN, AS REQUESTED BY LENDER IN ITS SOLE DISCRETION,
THAT (I) BORROWER IS NOT A PLAN, 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 OBLIGATIONS WITH RESPECT TO,
GOVERNMENTAL PLANS; AND (III) ONE OR MORE OF THE FOLLOWING CIRCUMSTANCES IS
TRUE:

(I)          EQUITY INTERESTS IN BORROWER ARE PUBLICLY OFFERED SECURITIES,
WITHIN THE MEANING OF 29 C.F.R. §2510.3-101(B)(2);

(II)         NONE OF THE ASSETS OF THE BORROWER ARE, WITH THE APPLICATION OF 29
C.F.R. §2510.3-101, AS MODIFIED BY SECTION 3(42) OF ERISA, REGARDED AS ASSETS OF
ANY PLAN; OR

(III)        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).

(C)           “PLAN” SHALL MEAN AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION
3(3) OF ERISA) SUBJECT TO TITLE I OF ERISA OR A PLAN OR ANOTHER ARRANGEMENT
(WITHIN THE MEANING OF SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, AND THE RELATED TREASURY DEPARTMENT REGULATIONS, INCLUDING TEMPORARY
REGULATIONS), SUBJECT TO SECTION 4975 OF THE CODE.

5.2.10     TRANSFERS.  (A) BORROWER ACKNOWLEDGES THAT LENDER HAS EXAMINED AND
RELIED ON THE EXPERIENCE OF BORROWER AND ITS STOCKHOLDERS, GENERAL PARTNERS,
MEMBERS, PRINCIPALS AND (IF BORROWER IS A TRUST) BENEFICIAL OWNERS IN OWNING AND
OPERATING PROPERTIES SUCH AS THE PROPERTY IN AGREEING TO MAKE THE LOAN, AND WILL
CONTINUE TO RELY ON BORROWER’S OWNERSHIP OF THE PROPERTY AS A MEANS OF
MAINTAINING THE VALUE OF THE PROPERTY AS SECURITY FOR REPAYMENT OF THE DEBT AND
THE PERFORMANCE OF THE OTHER OBLIGATIONS.  BORROWER ACKNOWLEDGES THAT LENDER HAS
A VALID INTEREST IN MAINTAINING THE VALUE OF THE PROPERTY SO AS TO ENSURE THAT,
SHOULD BORROWER DEFAULT IN THE REPAYMENT OF THE DEBT OR THE PERFORMANCE OF THE
OTHER OBLIGATIONS, LENDER CAN RECOVER THE DEBT BY A SALE OF THE PROPERTY.

(B)           WITHOUT THE PRIOR WRITTEN CONSENT OF LENDER, AND EXCEPT TO THE
EXTENT OTHERWISE SET FORTH IN THIS SECTION 5.2.10, BORROWER SHALL NOT, AND SHALL
NOT PERMIT ANY RESTRICTED PARTY DO ANY OF THE FOLLOWING (COLLECTIVELY, A
“TRANSFER”): (I) SELL, CONVEY, MORTGAGE, GRANT, BARGAIN, ENCUMBER, PLEDGE,
ASSIGN, GRANT OPTIONS WITH RESPECT TO, OR OTHERWISE TRANSFER OR DISPOSE OF
(DIRECTLY OR INDIRECTLY, VOLUNTARILY OR INVOLUNTARILY, BY OPERATION OF LAW OR
OTHERWISE, AND WHETHER OR NOT FOR CONSIDERATION OR OF RECORD) THE PROPERTY OR
ANY PART THEREOF OR ANY LEGAL OR

57

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

BENEFICIAL INTEREST THEREIN OR (II) PERMIT A SALE OR PLEDGE OF AN INTEREST IN
ANY RESTRICTED PARTY, OTHER THAN PURSUANT TO LEASES OF SPACE IN THE IMPROVEMENTS
TO TENANTS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.1.20.

(C)           A TRANSFER SHALL INCLUDE, BUT NOT BE LIMITED TO, (I) AN
INSTALLMENT SALES AGREEMENT WHEREIN BORROWER AGREES TO SELL THE PROPERTY OR ANY
PART THEREOF FOR A PRICE TO BE PAID IN INSTALLMENTS; (II) AN AGREEMENT BY
BORROWER LEASING ALL OR A SUBSTANTIAL PART OF THE PROPERTY FOR OTHER THAN ACTUAL
OCCUPANCY BY A SPACE TENANT THEREUNDER OR A SALE, ASSIGNMENT OR OTHER TRANSFER
OF, OR THE GRANT OF A SECURITY INTEREST IN, BORROWER’S RIGHT, TITLE AND INTEREST
IN AND TO ANY LEASES OR ANY RENTS; (III) IF A RESTRICTED PARTY IS A CORPORATION,
ANY MERGER, CONSOLIDATION OR SALE OR PLEDGE OF SUCH CORPORATION’S STOCK OR THE
CREATION OR ISSUANCE OF NEW STOCK; (IV) IF A RESTRICTED PARTY IS A LIMITED OR
GENERAL PARTNERSHIP OR JOINT VENTURE, ANY MERGER OR CONSOLIDATION OR THE CHANGE,
REMOVAL, RESIGNATION OR ADDITION OF A GENERAL PARTNER OR THE SALE OR PLEDGE OF
THE PARTNERSHIP INTEREST OF ANY GENERAL PARTNER OR ANY PROFITS OR PROCEEDS
RELATING TO SUCH PARTNERSHIP INTEREST, OR THE SALE OR PLEDGE OF LIMITED
PARTNERSHIP INTERESTS OR ANY PROFITS OR PROCEEDS RELATING TO SUCH LIMITED
PARTNERSHIP INTEREST OR THE CREATION OR ISSUANCE OF NEW LIMITED PARTNERSHIP
INTERESTS; (V) IF A RESTRICTED PARTY IS A LIMITED LIABILITY COMPANY, ANY MERGER
OR CONSOLIDATION OR THE CHANGE, REMOVAL, RESIGNATION OR ADDITION OF A MANAGING
MEMBER OR NON-MEMBER MANAGER (OR IF NO MANAGING MEMBER, ANY MEMBER) OR THE SALE
OR PLEDGE OF THE MEMBERSHIP INTEREST OF A MANAGING MEMBER (OR IF NO MANAGING
MEMBER, ANY MEMBER) OR ANY PROFITS OR PROCEEDS RELATING TO SUCH MEMBERSHIP
INTEREST, OR THE SALE OR PLEDGE OF NON-MANAGING MEMBERSHIP INTERESTS OR THE
CREATION OR ISSUANCE OF NEW NON-MANAGING MEMBERSHIP INTERESTS; (VI) IF A
RESTRICTED PARTY IS A TRUST OR NOMINEE TRUST, ANY MERGER, CONSOLIDATION OR THE
SALE OR PLEDGE OF THE LEGAL OR BENEFICIAL INTEREST IN A RESTRICTED PARTY OR THE
CREATION OR ISSUANCE OF NEW LEGAL OR BENEFICIAL INTERESTS; OR (VII) THE REMOVAL
OR THE RESIGNATION OF THE MANAGING AGENT (INCLUDING, WITHOUT LIMITATION, AN
AFFILIATED MANAGER) OTHER THAN IN ACCORDANCE WITH SECTION 5.1.22 HEREOF.

(D)           NOTWITHSTANDING THE PROVISIONS OF THIS SECTION 5.2.10, LENDER’S
CONSENT SHALL NOT BE REQUIRED IN CONNECTION WITH (I) ONE OR A SERIES OF
TRANSFERS, OF UP TO FORTY-NINE PERCENT (49%) OF THE STOCK IN A RESTRICTED PARTY,
THE LIMITED PARTNERSHIP INTERESTS OR NON-MANAGING MEMBERSHIP INTERESTS (AS THE
CASE MAY BE) IN A RESTRICTED PARTY, (II) ANY TRANSFER TO BEHRINGER HARVARD FUNDS
OR AN AFFILIATE OF BEHRINGER HARVARD FUNDS, (III) ANY TRANSFER OF AN EQUITY
INTEREST IN BEHRINGER HARVARD FUNDS OR ANY AFFILIATE THEREOF OR THE ISSUANCE OF
ADDITIONAL EQUITY INTERESTS IN BEHRINGER HOLDINGS OR ANY AFFILIATE THEREOF, OR
(IV) INTENTIONALLY OMITTED; PROVIDED, HOWEVER, NO SUCH TRANSFER SHALL RESULT IN
THE CHANGE OF CONTROL IN BORROWER, GUARANTOR OR PROPERTY MANAGER.  IF AFTER
GIVING EFFECT TO ANY SUCH TRANSFER, MORE THAN FORTY-NINE PERCENT (49%) IN THE
AGGREGATE OF DIRECT OR INDIRECT INTERESTS IN A RESTRICTED PARTY ARE OWNED BY ANY
PERSON AND ITS AFFILIATES THAT OWNED LESS THAN FORTY-NINE PERCENT (49%) DIRECT
OR INDIRECT INTEREST IN SUCH RESTRICTED PARTY AS OF THE CLOSING DATE, BORROWER
SHALL, NO LESS THAN THIRTY (30) DAYS PRIOR TO THE EFFECTIVE DATE OF ANY SUCH
TRANSFER, DELIVER TO LENDER AN ADDITIONAL INSOLVENCY OPINION ACCEPTABLE TO
LENDER AND THE RATING AGENCIES.  IN ADDITION, NOTWITHSTANDING ANYTHING TO THE
CONTRARY HEREIN, AS A CONDITION TO ANY TRANSFER PURSUANT TO THIS SECTION
5.2.10(D), AT ALL TIMES, GUARANTOR MUST CONTINUE TO CONTROL BORROWER AND OWN,
DIRECTLY OR INDIRECTLY, AT LEAST A 51% LEGAL AND BENEFICIAL INTEREST IN
BORROWER.

(E)           NO CONSENT TO ANY ASSUMPTION OF THE LOAN SHALL OCCUR ON OR BEFORE
THE FIRST (1ST) ANNIVERSARY OF THE FIRST (1ST) PAYMENT DATE. THEREAFTER,
LENDER’S CONSENT TO TRANSFERS OF THE

58

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

PROPERTY SHALL NOT BE UNREASONABLY WITHHELD PROVIDED THAT LENDER RECEIVES SIXTY
(60) DAYS PRIOR WRITTEN NOTICE OF SUCH TRANSFER AND NO EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING, AND FURTHER PROVIDED THAT THE FOLLOWING ADDITIONAL
REQUIREMENTS ARE SATISFIED:

(I)          BORROWER SHALL PAY LENDER A TRANSFER FEE EQUAL TO ONE-QUARTER OF
ONE PERCENT (0.25%) OF THE OUTSTANDING PRINCIPAL BALANCE OF THE LOAN AT THE TIME
OF THE FIRST SUCH TRANSFER AND A TRANSFER FEE EQUAL TO ONE-HALF OF ONE PERCENT
(0.5%) OF THE OUTSTANDING PRINCIPAL BALANCE OF THE LOAN AT THE TIME OF EACH
SUBSEQUENT TRANSFER (PROVIDED THAT NO TRANSFER FEE SHALL BE PAYABLE IN
CONNECTION WITH ANY TRANSFER TO BEHRINGER HARVARD FUNDS OR AN AFFILIATE OF
BEHRINGER HARVARD FUNDS);

(II)         BORROWER SHALL PAY ANY AND ALL REASONABLE OUT-OF-POCKET COSTS
INCURRED IN CONNECTION WITH SUCH TRANSFER (INCLUDING, WITHOUT LIMITATION,
LENDER’S COUNSEL FEES AND DISBURSEMENTS AND ALL RECORDING FEES, TITLE INSURANCE
PREMIUMS AND MORTGAGE AND INTANGIBLE TAXES AND THE FEES AND EXPENSES OF THE
RATING AGENCIES PURSUANT TO CLAUSE (X) BELOW);

(III)        THE PROPOSED TRANSFEREE (THE “TRANSFEREE”) OR TRANSFEREE’S
PRINCIPALS MUST HAVE DEMONSTRATED EXPERTISE IN OWNING AND OPERATING PROPERTIES
SIMILAR IN LOCATION, SIZE, CLASS AND OPERATION TO THE PROPERTY, WHICH EXPERTISE
SHALL BE REASONABLY DETERMINED BY LENDER;

(IV)        TRANSFEREE AND TRANSFEREE’S PRINCIPALS SHALL, AS OF THE DATE OF SUCH
TRANSFER, HAVE AN AGGREGATE NET WORTH AND LIQUIDITY REASONABLY ACCEPTABLE TO
LENDER;

(V)         TRANSFEREE, TRANSFEREE’S PRINCIPALS AND ALL OTHER ENTITIES WHICH MAY
BE OWNED OR CONTROLLED DIRECTLY OR INDIRECTLY BY TRANSFEREE’S PRINCIPALS
(“RELATED ENTITIES”) MUST NOT HAVE BEEN PARTY TO ANY BANKRUPTCY PROCEEDINGS,
VOLUNTARY OR INVOLUNTARY, MADE AN ASSIGNMENT FOR THE BENEFIT OF CREDITORS OR
TAKEN ADVANTAGE OF ANY INSOLVENCY ACT, OR ANY ACT FOR THE BENEFIT OF DEBTORS
WITHIN SEVEN (7) YEARS PRIOR TO THE DATE OF THE PROPOSED TRANSFER;

(VI)        TRANSFEREE SHALL ASSUME ALL OF THE OBLIGATIONS OF BORROWER UNDER THE
LOAN DOCUMENTS IN A MANNER SATISFACTORY TO LENDER IN ALL RESPECTS, INCLUDING,
WITHOUT LIMITATION, BY ENTERING INTO AN ASSUMPTION AGREEMENT IN FORM AND
SUBSTANCE SATISFACTORY TO LENDER;

(VII)       THERE SHALL BE NO MATERIAL LITIGATION OR REGULATORY ACTION PENDING
OR THREATENED AGAINST TRANSFEREE, TRANSFEREE’S PRINCIPALS OR RELATED ENTITIES
WHICH IS NOT REASONABLY ACCEPTABLE TO LENDER;

(VIII)      TRANSFEREE, TRANSFEREE’S PRINCIPALS AND RELATED ENTITIES SHALL NOT
HAVE DEFAULTED UNDER ITS OR THEIR OBLIGATIONS WITH RESPECT TO ANY OTHER
INDEBTEDNESS IN A MANNER WHICH IS NOT REASONABLY ACCEPTABLE TO LENDER;

(IX)         TRANSFEREE AND TRANSFEREE’S PRINCIPALS MUST BE ABLE TO SATISFY ALL
THE REPRESENTATIONS AND COVENANTS SET FORTH IN SECTIONS 4.1.30 AND 5.2.9 OF THIS

59

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

AGREEMENT, NO DEFAULT OR EVENT OF DEFAULT SHALL OTHERWISE OCCUR AS A RESULT OF
SUCH TRANSFER, AND TRANSFEREE AND TRANSFEREE’S PRINCIPALS SHALL DELIVER (A) ALL
ORGANIZATIONAL DOCUMENTATION REASONABLY REQUESTED BY LENDER, WHICH SHALL BE
REASONABLY SATISFACTORY TO LENDER AND (B) ALL CERTIFICATES, AGREEMENTS AND
COVENANTS REASONABLY REQUIRED BY LENDER;

(X)          TRANSFEREE SHALL BE APPROVED BY THE RATING AGENCIES SELECTED BY
LENDER, WHICH APPROVAL, IF REQUIRED BY LENDER, SHALL TAKE THE FORM OF A
CONFIRMATION IN WRITING FROM SUCH RATING AGENCIES TO THE EFFECT THAT SUCH
TRANSFER WILL NOT RESULT IN A REQUALIFICATION, REDUCTION, DOWNGRADE OR
WITHDRAWAL OF THE RATINGS IN EFFECT IMMEDIATELY PRIOR TO SUCH ASSUMPTION OR
TRANSFER FOR THE SECURITIES OR ANY CLASS THEREOF ISSUED IN CONNECTION WITH A
SECURITIZATION WHICH ARE THEN OUTSTANDING;

(XI)         BORROWER OR TRANSFEREE, AT ITS SOLE COST AND EXPENSE, SHALL DELIVER
TO LENDER AN ADDITIONAL INSOLVENCY OPINION REFLECTING SUCH TRANSFER SATISFACTORY
IN FORM AND SUBSTANCE TO LENDER;

(XII)        PRIOR TO ANY RELEASE OF GUARANTOR, ONE (1) OR MORE SUBSTITUTE
GUARANTORS REASONABLY ACCEPTABLE TO LENDER SHALL HAVE ASSUMED ALL OF THE
LIABILITIES AND OBLIGATIONS OF GUARANTOR UNDER THE GUARANTY AND ENVIRONMENTAL
INDEMNITY EXECUTED BY GUARANTOR OR EXECUTE A REPLACEMENT GUARANTY, ENVIRONMENTAL
INDEMNITY REASONABLY SATISFACTORY TO LENDER;

(XIII)       BORROWER OR TRANSFEREE SHALL DELIVER, AT ITS SOLE COST AND EXPENSE,
AN ENDORSEMENT TO THE TITLE INSURANCE POLICY, AS MODIFIED BY THE ASSUMPTION
AGREEMENT, AS A VALID FIRST LIEN ON THE PROPERTY AND NAMING THE TRANSFEREE AS
OWNER OF THE PROPERTY, WHICH ENDORSEMENT SHALL INSURE THAT, AS OF THE DATE OF
THE RECORDING OF THE ASSUMPTION AGREEMENT, THE PROPERTY SHALL NOT BE SUBJECT TO
ANY ADDITIONAL EXCEPTIONS OR LIENS OTHER THAN THOSE CONTAINED IN THE TITLE
POLICY ISSUED ON THE DATE HEREOF AND OTHER PERMITTED ENCUMBRANCES;

(XIV)      THE PROPERTY SHALL BE MANAGED BY A QUALIFYING PROPERTY MANAGER
PURSUANT TO A REPLACEMENT MANAGEMENT AGREEMENT; AND

(XV)       THE TRANSFER MUST BE PERMITTED UNDER THE GROUND LEASE OR CONSENTED TO
BY THE LANDLORD UNDER THE GROUND LEASE AND LENDER SHALL HAVE RECEIVED EVIDENCE
OF SUCH PERMISSION OR APPROVAL, AS APPLICABLE, WHICH EVIDENCE SHALL BE
REASONABLY SATISFACTORY TO LENDER.

Immediately upon a Transfer to such Transferee and the satisfaction of all of
the above requirements, the named Borrower and Guarantor herein shall be
released from all liability under this Agreement, the Note, the Security
Instrument and the other Loan Documents accruing after such Transfer.  The
foregoing release shall be effective upon the date of such Transfer, but Lender
agrees to provide written evidence thereof reasonably requested by Borrower.

(F)            BORROWER, WITHOUT THE CONSENT OF LENDER, MAY GRANT EASEMENTS,
RESTRICTIONS, COVENANTS, RESERVATIONS AND RIGHTS OF WAY IN THE ORDINARY COURSE
OF BUSINESS FOR

60

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

WATER AND SEWER LINES, TELEPHONE AND TELEGRAPH LINES, ELECTRIC LINES AND OTHER
UTILITIES OR FOR OTHER SIMILAR PURPOSES, PROVIDED THAT NO TRANSFER, CONVEYANCE
OR ENCUMBRANCE SHALL MATERIALLY IMPAIR THE UTILITY AND OPERATION OF THE PROPERTY
OR MATERIALLY ADVERSELY AFFECT THE VALUE OF THE PROPERTY OR THE NET OPERATING
INCOME OF THE PROPERTY.  IF BORROWER SHALL RECEIVE ANY CONSIDERATION IN
CONNECTION WITH ANY OF SAID DESCRIBED TRANSFERS OR CONVEYANCES, BORROWER SHALL
HAVE THE RIGHT TO USE ANY SUCH PROCEEDS IN CONNECTION WITH ANY ALTERATIONS
PERFORMED IN CONNECTION THEREWITH, OR REQUIRED THEREBY.  IN CONNECTION WITH ANY
TRANSFER, CONVEYANCE OR ENCUMBRANCE PERMITTED ABOVE, THE LENDER SHALL EXECUTE
AND DELIVER ANY INSTRUMENT REASONABLY NECESSARY OR APPROPRIATE TO EVIDENCE ITS
CONSENT TO SAID ACTION OR TO SUBORDINATE THE LIEN OF THE RELATED SECURITY
INSTRUMENT TO SUCH EASEMENTS, RESTRICTIONS, COVENANTS, RESERVATIONS AND RIGHTS
OF WAY OR OTHER SIMILAR GRANTS UPON RECEIPT BY THE LENDER OF: (A) A COPY OF THE
INSTRUMENT OF TRANSFER; AND (B) AN OFFICER’S CERTIFICATE STATING WITH RESPECT TO
ANY TRANSFER DESCRIBED ABOVE, THAT SUCH TRANSFER DOES NOT MATERIALLY IMPAIR THE
UTILITY AND OPERATION OF THE PROPERTY OR MATERIALLY REDUCE THE VALUE OF THE
PROPERTY OR THE NET OPERATING INCOME OF THE PROPERTY.

(G)           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 TRANSFER WITHOUT LENDER’S
CONSENT.  THIS PROVISION SHALL APPLY TO EVERY TRANSFER REGARDLESS OF WHETHER
VOLUNTARY OR NOT, OR WHETHER OR NOT LENDER HAS CONSENTED TO ANY PREVIOUS
TRANSFER.

(I)          INTENTIONALLY OMITTED.

VI.                                INSURANCE; CASUALTY; CONDEMNATION

SECTION 6.1            INSURANCE. (A)       (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 INSURANCE (“SPECIAL FORM”) INCLUDING, BUT NOT
LIMITED TO, LOSS CAUSED BY ANY TYPE OF WINDSTORM OR HAIL ON THE IMPROVEMENTS AND
THE PERSONAL PROPERTY, (A) IN AN AMOUNT EQUAL TO ONE HUNDRED PERCENT (100%) OF
THE “FULL REPLACEMENT COST,” WHICH FOR PURPOSES OF THIS 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 WAIVING ALL CO-INSURANCE PROVISIONS; (C) PROVIDING FOR NO
DEDUCTIBLE IN EXCESS OF ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000) FOR
ALL SUCH INSURANCE COVERAGE EXCLUDING WINDSTORM AND EARTHQUAKE 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 “SPECIAL FLOOD HAZARD AREA,” AS DESIGNATED BY THE FEDERAL EMERGENCY
MANAGEMENT AGENCY OR SUCH OTHER APPLICABLE FEDERAL AGENCY, FLOOD HAZARD
INSURANCE IN AN AMOUNT EQUAL TO THE MAXIMUM AMOUNT AVAILABLE UNDER THE NATIONAL
FLOOD INSURANCE PROGRAM AND IN ADDITION TO THE MAXIMUM AVAILABLE UNDER THE
NATIONAL FLOOD PROGRAM, ANY EXCESS LIMITS AS DETERMINED BY LENDER IN ITS SOLE
AND ABSOLUTE

61

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

DISCRETION; AND (Z) EARTHQUAKE INSURANCE IN AMOUNTS AND IN FORM AND SUBSTANCE
SATISFACTORY TO LENDER IN THE EVENT THE PROPERTY IS LOCATED IN AN AREA WITH A
HIGH DEGREE OF SEISMIC ACTIVITY, WITH A PROBABLE MAXIMUM LOSS EXCEEDING TWENTY
PERCENT (20%), PROVIDED THAT THE INSURANCE PURSUANT TO CLAUSES (Y) AND (Z)
HEREOF SHALL BE ON TERMS CONSISTENT WITH THE COMPREHENSIVE ALL RISK INSURANCE
POLICY REQUIRED UNDER THIS SUBSECTION (I).

(II)         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; (C) IN AN AMOUNT EQUAL TO ONE HUNDRED PERCENT (100%) OF
THE PROJECTED GROSS REVENUES FROM THE OPERATION OF THE PROPERTY (AS REDUCED TO
REFLECT EXPENSES NOT INCURRED DURING A PERIOD OF RESTORATION) FOR A PERIOD OF AT
LEAST EIGHTEEN (18) MONTHS AFTER THE DATE OF THE CASUALTY; AND (D) 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.  THE AMOUNT OF SUCH BUSINESS INCOME INSURANCE SHALL BE
DETERMINED PRIOR TO THE CLOSING DATE AND AT LEAST ONCE EACH YEAR THEREAFTER
BASED ON BORROWER’S REASONABLE ESTIMATE OF THE GROSS INCOME FROM THE PROPERTY
FOR THE SUCCEEDING EIGHTEEN (18) MONTH PERIOD.  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 OBLIGATIONS
SECURED BY THE LOAN DOCUMENTS ON THE RESPECTIVE DATES OF PAYMENT PROVIDED FOR IN
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS EXCEPT TO THE EXTENT SUCH AMOUNTS
ARE ACTUALLY PAID OUT OF THE PROCEEDS OF SUCH BUSINESS INCOME INSURANCE;

(III)        AT ALL TIMES DURING WHICH STRUCTURAL CONSTRUCTION, REPAIRS OR
ALTERATIONS ARE BEING MADE WITH RESPECT TO THE IMPROVEMENTS, AND ONLY IF THE
PROPERTY COVERAGE FORM DOES NOT OTHERWISE APPLY, (A) OWNER’S CONTINGENT OR
PROTECTIVE LIABILITY INSURANCE, OTHERWISE KNOWN AS OWNER CONTRACTOR’S PROTECTIVE
LIABILITY, COVERING CLAIMS NOT COVERED BY OR UNDER THE TERMS OR PROVISIONS OF
THE 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;

(IV)        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;

62

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

(V)         COMMERCIAL GENERAL LIABILITY INSURANCE AGAINST CLAIMS FOR PERSONAL
INJURY, BODILY INJURY, DEATH OR PROPERTY DAMAGE OCCURRING UPON, IN OR ABOUT THE
PROPERTY, SUCH INSURANCE (A) TO BE ON THE SO-CALLED “OCCURRENCE” FORM WITH A
COMBINED LIMIT OF NOT LESS THAN TWO MILLION AND 00/100 DOLLARS ($2,000,000.00)
IN THE AGGREGATE AND ONE MILLION AND 00/100 DOLLARS ($1,000,000.00) PER
OCCURRENCE; (B) TO CONTINUE AT NOT LESS THAN THE AFORESAID LIMIT UNTIL REQUIRED
TO BE CHANGED BY LENDER IN WRITING BY REASON OF CHANGED ECONOMIC CONDITIONS
MAKING SUCH PROTECTION INADEQUATE AND (C) TO COVER AT LEAST THE FOLLOWING
HAZARDS:  (1) PREMISES AND OPERATIONS; (2) PRODUCTS AND COMPLETED OPERATIONS ON
AN “IF ANY” BASIS; (3) INDEPENDENT CONTRACTORS; (4) BLANKET CONTRACTUAL
LIABILITY FOR ALL WRITTEN CONTRACTS AND (5) CONTRACTUAL LIABILITY COVERING THE
INDEMNITIES CONTAINED IN ARTICLE 9 OF THE SECURITY INSTRUMENT TO THE EXTENT THE
SAME IS AVAILABLE;

(VI)        AUTOMOBILE LIABILITY COVERAGE FOR ALL OWNED AND NON-OWNED VEHICLES,
INCLUDING RENTED AND LEASED VEHICLES CONTAINING MINIMUM LIMITS PER OCCURRENCE OF
ONE MILLION DOLLARS AND 00/100 DOLLARS ($1,000,000.00);

(VII)       WORKER’S COMPENSATION AND EMPLOYEE’S LIABILITY SUBJECT TO THE
WORKER’S COMPENSATION LAWS OF THE APPLICABLE STATE;

(VIII)      UMBRELLA AND EXCESS LIABILITY INSURANCE IN AN AMOUNT NOT LESS THAN
FIFTY MILLION AND 00/100 DOLLARS ($50,000,000.00) PER OCCURRENCE ON TERMS
CONSISTENT WITH THE COMMERCIAL GENERAL LIABILITY INSURANCE POLICY REQUIRED UNDER
SUBSECTION (V) ABOVE, INCLUDING, BUT NOT LIMITED TO, SUPPLEMENTAL COVERAGE FOR
EMPLOYER LIABILITY AND AUTOMOBILE LIABILITY, WHICH UMBRELLA LIABILITY COVERAGE
SHALL APPLY IN EXCESS OF THE AUTOMOBILE LIABILITY COVERAGE IN CLAUSE (VI) ABOVE;

(IX)         THE INSURANCE REQUIRED UNDER SECTION 6.1(A)(I) AND (II) ABOVE SHALL
COVER PERILS OF TERRORISM AND ACTS OF TERRORISM AND BORROWER SHALL MAINTAIN
INSURANCE FOR LOSS RESULTING FROM PERILS AND ACTS OF TERRORISM ON TERMS
(INCLUDING AMOUNTS) CONSISTENT WITH THOSE REQUIRED UNDER SECTION 6.1(A)(I) AND
(II) ABOVE AT ALL TIMES DURING THE TERM OF THE LOAN; PROVIDED, HOWEVER, BORROWER
SHALL NOT BE REQUIRED TO PAY ANNUAL PREMIUMS IN EXCESS OF AMOUNTS THAT ARE THEN
COMMERCIALLY REASONABLE, BASED ON PROPERTIES OF THE SAME GENERAL TYPE, SIZE AND
LOCATION, FOR THE COVERAGE REQUIRED UNDER THIS SECTION 6.1.1(A)(IX).  IF FULL
COVERAGE FOR ACTS OF TERRORISM SATISFYING SUCH REQUIREMENTS IS NOT AVAILABLE FOR
AN AMOUNT EQUAL TO OR LESS THAN WHAT IS THEN COMMERCIALLY REASONABLE (BUT
COVERAGE FOR ACTS OF TERRORISM NOT FULLY SATISFYING SUCH REQUIREMENTS IS
AVAILABLE), BORROWER SHALL BE REQUIRED TO SPEND AN AMOUNT EQUAL TO AN AMOUNT
WHICH IS AGREED BY LENDER TO BE A COMMERCIALLY REASONABLE AMOUNT FOR COVERAGE
FOR ACTS OF TERRORISM, AND THE SCOPE, FORM, DEDUCTIBLE AND CARRIER WITH RESPECT
TO SUCH COVERAGE SHALL BE ACCEPTABLE TO LENDER IN ITS COMMERCIALLY REASONABLE
DISCRETION; AND

(X)          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

63

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

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 6.1(A) SHALL BE OBTAINED
UNDER VALID AND ENFORCEABLE POLICIES (COLLECTIVELY, THE “POLICIES” OR IN THE
SINGULAR, THE “POLICY”), AND SHALL BE SUBJECT TO THE APPROVAL OF LENDER AS TO
INSURANCE COMPANIES, AMOUNTS, DEDUCTIBLES, LOSS PAYEES AND INSUREDS.  THE
POLICIES SHALL BE ISSUED BY FINANCIALLY SOUND AND RESPONSIBLE INSURANCE
COMPANIES AUTHORIZED TO DO BUSINESS IN THE STATE AND HAVING A CLAIMS PAYING
ABILITY RATING OF “A” OR BETTER (AND THE EQUIVALENT THEREOF) BY AT LEAST TWO (2)
OF THE RATING AGENCIES RATING THE SECURITIES (ONE (1) OF WHICH SHALL BE S&P IF
THEY ARE RATING THE SECURITIES AND ONE (1) OF WHICH WILL BE MOODY’S IF THEY ARE
RATING THE SECURITIES), OR IF ONLY ONE (1) RATING AGENCY IS RATING THE
SECURITIES, THEN ONLY BY SUCH RATING AGENCY.  THE POLICIES DESCRIBED IN
SECTION 6.1 (OTHER THAN THOSE STRICTLY LIMITED TO LIABILITY PROTECTION) SHALL
DESIGNATE LENDER AS LOSS PAYEE.  NOT LESS THAN THIRTY (30) 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 DUE THEREUNDER (THE “INSURANCE PREMIUMS”),
SHALL BE DELIVERED BY BORROWER TO LENDER.

(C)           ANY BLANKET INSURANCE 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 6.1(A).

(D)           ALL POLICIES OF INSURANCE PROVIDED FOR OR CONTEMPLATED BY
SECTION 6.1(A), EXCEPT FOR THE POLICY REFERENCED IN SECTION 6.1(A)(VII) OF THIS
AGREEMENT, SHALL NAME BORROWER, OR THE TENANT, AS THE INSURED AND LENDER AS THE
ADDITIONAL INSURED, AS ITS INTERESTS MAY APPEAR, AND IN THE CASE OF PROPERTY
DAMAGE, BOILER AND MACHINERY, FLOOD AND EARTHQUAKE INSURANCE, SHALL CONTAIN A
SO-CALLED NEW YORK STANDARD NON-CONTRIBUTING MORTGAGEE CLAUSE IN FAVOR OF LENDER
PROVIDING THAT THE LOSS THEREUNDER SHALL BE PAYABLE TO LENDER.

(E)           ALL POLICIES OF INSURANCE PROVIDED FOR IN SECTION 6.1(A) 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 MATERIALLY CHANGED (OTHER THAN TO INCREASE
THE COVERAGE PROVIDED THEREBY) OR CANCELED WITHOUT AT LEAST THIRTY (30) DAYS
WRITTEN NOTICE TO LENDER AND ANY OTHER PARTY NAMED THEREIN AS AN ADDITIONAL
INSURED;

(III)        THE ISSUERS THEREOF SHALL GIVE WRITTEN NOTICE TO LENDER IF THE
POLICY HAS NOT BEEN RENEWED FIFTEEN (15) DAYS PRIOR TO ITS EXPIRATION; AND

(IV)        LENDER SHALL NOT BE LIABLE FOR ANY INSURANCE PREMIUMS THEREON OR
SUBJECT TO ANY ASSESSMENTS THEREUNDER.

64

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

(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 REASONABLE
DISCRETION DEEMS APPROPRIATE AFTER THREE (3) BUSINESS DAYS NOTICE TO BORROWER IF
PRIOR TO THE DATE UPON WHICH ANY SUCH COVERAGE WILL LAPSE OR AT ANY TIME LENDER
DEEMS NECESSARY (REGARDLESS OF PRIOR NOTICE TO BORROWER) TO AVOID THE LAPSE OF
ANY SUCH COVERAGE.  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 SECURITY
INSTRUMENT AND SHALL BEAR INTEREST AT THE DEFAULT RATE.  IF BORROWER FAILS IN SO
INSURING THE PROPERTY OR IN SO ASSIGNING AND DELIVERING THE POLICY, LENDER MAY,
AT ITS OPTION, OBTAIN SUCH INSURANCE USING SUCH CARRIERS AND AGENCIES AS LENDER
SHALL ELECT FROM YEAR TO YEAR AND PAY THE PREMIUMS THEREFOR, AND BORROWER WILL
REIMBURSE LENDER FOR ANY PREMIUM SO PAID, WITH INTEREST THEREON AS STATED IN THE
NOTE FROM THE TIME OF PAYMENT, ON DEMAND, AND THE AMOUNT SO OWING TO LENDER
SHALL BE SECURED BY THE SECURITY INSTRUMENT.  THE INSURANCE OBTAINED BY LENDER
MAY, BUT NEED NOT, PROTECT BORROWER’S INTEREST AND THE COVERAGE THAT LENDER
PURCHASES MAY NOT PAY ANY CLAIM THAT BORROWER MAKES OR ANY CLAIM THAT IS MADE
AGAINST BORROWER IN CONNECTION WITH THE PROPERTY.

SECTION 6.2            CASUALTY.  IF THE PROPERTY SHALL BE DAMAGED OR DESTROYED,
IN WHOLE OR IN PART, BY FIRE OR OTHER CASUALTY (A “CASUALTY”), BORROWER (A)
SHALL GIVE TO LENDER PROMPT NOTICE OF SUCH DAMAGE REASONABLY ESTIMATED BY
BORROWER TO COST MORE THAN TWO HUNDRED THOUSAND DOLLARS ($200,000.00) TO REPAIR,
AND (B) SHALL PROMPTLY COMMENCE AND DILIGENTLY PROSECUTE THE COMPLETION OF THE
RESTORATION OF THE PROPERTY PURSUANT TO SECTION 6.4 HEREOF AS NEARLY AS POSSIBLE
TO THE CONDITION THE PROPERTY WAS IN IMMEDIATELY PRIOR TO SUCH CASUALTY, WITH
SUCH ALTERATIONS AS MAY BE REASONABLY APPROVED BY LENDER AND OTHERWISE IN
ACCORDANCE WITH SECTION 6.4 HEREOF.  BORROWER SHALL PAY, OR CAUSE TO BE PAID,
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 ADDITION, LENDER MAY PARTICIPATE IN ANY
SETTLEMENT DISCUSSIONS WITH ANY INSURANCE COMPANIES (AND SHALL APPROVE THE FINAL
SETTLEMENT, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED) WITH
RESPECT TO ANY CASUALTY IN WHICH THE NET PROCEEDS OR THE COSTS OF COMPLETING THE
RESTORATION ARE EQUAL TO OR GREATER THAN TWO HUNDRED THOUSAND AND 00/100 DOLLARS
($200,000.00) AND BORROWER SHALL DELIVER TO LENDER ALL INSTRUMENTS REQUIRED BY
LENDER TO PERMIT SUCH PARTICIPATION.

SECTION 6.3            CONDEMNATION. BORROWER SHALL PROMPTLY GIVE LENDER NOTICE
OF THE ACTUAL OR THREATENED COMMENCEMENT OF ANY PROCEEDING FOR THE CONDEMNATION
OF THE PROPERTY UPON OBTAINING INFORMATION OF SUCH PROCEEDING AND SHALL DELIVER
TO LENDER COPIES OF ANY AND ALL PAPERS SERVED IN CONNECTION WITH SUCH
PROCEEDINGS.  LENDER MAY PARTICIPATE IN ANY SUCH PROCEEDINGS IF AN EVENT OF
DEFAULT EXISTS OR IF THE AMOUNT OF THE AWARD EXCEEDS THREE PERCENT 3% OF THE
OUTSTANDING PRINCIPAL BALANCE OF THE LOAN, AND BORROWER SHALL FROM TIME TO TIME
DELIVER TO LENDER ALL INSTRUMENTS REQUESTED BY IT TO PERMIT SUCH PARTICIPATION. 
BORROWER SHALL, AT ITS EXPENSE, DILIGENTLY PROSECUTE ANY SUCH PROCEEDINGS, AND
SHALL CONSULT WITH LENDER, ITS ATTORNEYS AND EXPERTS, AND COOPERATE WITH THEM IN
THE CARRYING ON OR DEFENSE OF ANY SUCH PROCEEDINGS.  NOTWITHSTANDING ANY TAKING
BY ANY PUBLIC OR QUASI-PUBLIC AUTHORITY THROUGH CONDEMNATION OR OTHERWISE
(INCLUDING, BUT NOT LIMITED TO, ANY TRANSFER MADE IN LIEU OF OR IN ANTICIPATION
OF THE

65

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

EXERCISE OF SUCH TAKING), BORROWER SHALL CONTINUE TO PAY THE DEBT AT THE TIME
AND IN THE MANNER PROVIDED FOR ITS PAYMENT IN THE NOTE AND IN THIS AGREEMENT AND
THE DEBT SHALL NOT BE REDUCED UNTIL ANY AWARD SHALL HAVE BEEN ACTUALLY RECEIVED
AND APPLIED BY LENDER, AFTER THE DEDUCTION OF EXPENSES OF COLLECTION, TO THE
REDUCTION OR DISCHARGE OF THE DEBT.  LENDER SHALL NOT BE LIMITED TO THE INTEREST
PAID ON THE AWARD BY THE CONDEMNING AUTHORITY BUT SHALL BE ENTITLED TO RECEIVE
OUT OF THE AWARD INTEREST AT THE RATE OR RATES PROVIDED HEREIN OR IN THE NOTE. 
IF THE PROPERTY OR ANY PORTION THEREOF IS TAKEN BY A CONDEMNING AUTHORITY,
BORROWER SHALL PROMPTLY COMMENCE AND DILIGENTLY PROSECUTE THE RESTORATION OF THE
PROPERTY OR ANY PORTION THEREOF PURSUANT TO SECTION 6.4 HEREOF AND OTHERWISE
COMPLY WITH THE PROVISIONS OF SECTION 6.4 HEREOF.  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.

SECTION 6.4            RESTORATION.  THE FOLLOWING PROVISIONS SHALL APPLY IN
CONNECTION WITH THE RESTORATION OF THE PROPERTY:

(A)           IF THE NET PROCEEDS SHALL BE LESS THAN THE RELEVANT RESTORATION
THRESHOLD AND THE COSTS OF COMPLETING THE RESTORATION SHALL BE LESS THAN THE
RELEVANT RESTORATION THRESHOLD, THE NET PROCEEDS WILL BE DISBURSED BY LENDER TO
BORROWER UPON RECEIPT, PROVIDED THAT ALL OF THE CONDITIONS SET FORTH IN
SECTION 6.4(B)(I) BELOW ARE MET AND BORROWER DELIVERS TO LENDER A WRITTEN
UNDERTAKING TO EXPEDITIOUSLY COMMENCE AND TO SATISFACTORILY COMPLETE WITH DUE
DILIGENCE THE RESTORATION IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

(B)           IF THE NET PROCEEDS ARE EQUAL TO OR GREATER THAN THE RELEVANT
RESTORATION THRESHOLD OR THE COSTS OF COMPLETING THE RESTORATION IS EQUAL TO OR
GREATER THAN THE RELEVANT RESTORATION THRESHOLD, THEN IN EITHER CASE LENDER
SHALL MAKE THE NET PROCEEDS AVAILABLE FOR THE RESTORATION IN ACCORDANCE WITH THE
PROVISIONS OF THIS SECTION 6.4(B).  THE TERM “NET PROCEEDS” FOR PURPOSES OF THIS
SECTION 6.4 SHALL MEAN:  (X) THE NET AMOUNT OF ALL INSURANCE PROCEEDS RECEIVED
BY LENDER PURSUANT TO SECTION 6.1 (A)(I), (IV), (IX) AND (X) AS A RESULT OF SUCH
DAMAGE OR DESTRUCTION, AFTER DEDUCTION OF ITS REASONABLE COSTS AND EXPENSES
(INCLUDING, BUT NOT LIMITED TO, REASONABLE COUNSEL FEES), IF ANY, IN COLLECTING
SAME (“INSURANCE PROCEEDS”), OR (Y) THE NET AMOUNT OF THE AWARD, AFTER DEDUCTION
OF ITS REASONABLE COSTS AND EXPENSES (INCLUDING, BUT NOT LIMITED TO, REASONABLE
COUNSEL FEES), IF ANY, IN COLLECTING SAME (“CONDEMNATION PROCEEDS”), WHICHEVER
THE CASE MAY BE.

(I)          THE NET PROCEEDS SHALL BE MADE AVAILABLE TO BORROWER FOR
RESTORATION PROVIDED THAT EACH OF THE FOLLOWING CONDITIONS ARE MET:

(A)  NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING;

(B)   (1) IN THE EVENT THE NET PROCEEDS ARE INSURANCE PROCEEDS, LESS THAN
TWENTY-FIVE PERCENT (25%) OF THE TOTAL FLOOR AREA OF THE IMPROVEMENTS ON THE
PROPERTY HAS BEEN DAMAGED, DESTROYED OR RENDERED UNUSABLE AS A RESULT OF SUCH
CASUALTY OR (2) IN THE EVENT THE NET PROCEEDS ARE CONDEMNATION PROCEEDS, LESS
THAN TEN PERCENT (10%) OF THE LAND CONSTITUTING THE PROPERTY IS TAKEN, AND SUCH
LAND IS LOCATED ALONG THE

66

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

PERIMETER OR PERIPHERY OF THE PROPERTY, AND NO PORTION OF THE IMPROVEMENTS IS
LOCATED ON SUCH LAND;

(C)   LEASES DEMISING IN THE AGGREGATE A PERCENTAGE AMOUNT EQUAL TO OR GREATER
THAN THE RENTABLE SPACE PERCENTAGE OF THE TOTAL RENTABLE SPACE IN THE PROPERTY
WHICH HAS BEEN DEMISED UNDER EXECUTED AND DELIVERED LEASES IN EFFECT AS OF THE
DATE OF THE OCCURRENCE OF SUCH CASUALTY OR CONDEMNATION, WHICHEVER THE CASE MAY
BE, AND THE GROUND LEASE SHALL REMAIN IN FULL FORCE AND EFFECT DURING AND AFTER
THE COMPLETION OF THE RESTORATION, NOTWITHSTANDING THE OCCURRENCE OF ANY SUCH
CASUALTY OR CONDEMNATION, WHICHEVER THE CASE MAY BE, AND BORROWER AND/OR TENANT,
AS APPLICABLE UNDER THE RESPECTIVE LEASE, WILL MAKE ALL NECESSARY REPAIRS AND
RESTORATIONS THERETO AT THEIR SOLE COST AND EXPENSE.  THE TERM “RENTABLE SPACE
PERCENTAGE” SHALL MEAN A PERCENTAGE AMOUNT EQUAL TO SIXTY-FIVE PERCENT (65%);

(D)  BORROWER SHALL COMMENCE THE RESTORATION AS SOON AS REASONABLY PRACTICABLE
(BUT IN NO EVENT LATER THAN ONE HUNDRED TWENTY (120) DAYS AFTER SUCH CASUALTY OR
CONDEMNATION OR OBTAINING BUILDING PERMITS, WHICHEVER THE CASE MAY BE, OCCURS)
AND SHALL DILIGENTLY PURSUE THE SAME TO SATISFACTORY COMPLETION;

(E)   LENDER SHALL BE SATISFIED THAT ANY OPERATING DEFICITS, INCLUDING ALL
SCHEDULED PAYMENTS OF PRINCIPAL AND INTEREST UNDER THE NOTE, WHICH WILL BE
INCURRED WITH RESPECT TO THE PROPERTY AS A RESULT OF THE OCCURRENCE OF ANY SUCH
CASUALTY OR CONDEMNATION, WHICHEVER THE CASE MAY BE, WILL BE COVERED OUT OF
(1) THE NET PROCEEDS, (2) THE INSURANCE COVERAGE REFERRED TO IN
SECTION 6.1(A)(II) HEREOF, IF APPLICABLE, OR (3) BY OTHER FUNDS OF BORROWER;

(F)   LENDER SHALL BE SATISFIED THAT THE RESTORATION WILL BE COMPLETED ON OR
BEFORE THE EARLIEST TO OCCUR OF (1) SIX (6) MONTHS PRIOR TO THE MATURITY DATE,
(2) THE EARLIEST DATE REQUIRED FOR SUCH COMPLETION UNDER THE TERMS OF ANY
LEASES, INCLUDING THE GROUND LEASE, (3) SUCH TIME AS MAY BE REQUIRED UNDER ALL
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
APPLICABLE, OR (4) THE EXPIRATION OF THE INSURANCE COVERAGE REFERRED TO IN
SECTION 6.1(A)(II) HEREOF;

(G)   THE PROPERTY AND THE USE THEREOF AFTER THE RESTORATION WILL BE IN
COMPLIANCE WITH AND PERMITTED UNDER ALL APPLICABLE LEGAL REQUIREMENTS AND THE
GROUND LEASE;

(H)  THE RESTORATION SHALL BE DONE AND COMPLETED BY BORROWER IN AN EXPEDITIOUS
AND DILIGENT FASHION AND IN COMPLIANCE WITH ALL APPLICABLE LEGAL REQUIREMENTS
AND THE GROUND LEASE;

67

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

(I)    SUCH CASUALTY OR CONDEMNATION, AS APPLICABLE, DOES NOT RESULT IN THE LOSS
OF ACCESS TO THE PROPERTY OR THE IMPROVEMENTS;

(J)    THE DEBT SERVICE COVERAGE RATIO FOR THE PROPERTY, AFTER GIVING EFFECT TO
THE RESTORATION, SHALL BE EQUAL TO OR GREATER THAN 1.30 TO 1.0;

(K)  BORROWER SHALL DELIVER, OR CAUSE TO BE DELIVERED, TO LENDER A SIGNED
DETAILED BUDGET APPROVED IN WRITING BY BORROWER’S ARCHITECT OR ENGINEER STATING
THE ENTIRE COST OF COMPLETING THE RESTORATION, WHICH BUDGET SHALL BE APPROVED BY
LENDER, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD; AND

(L)   THE NET PROCEEDS TOGETHER WITH ANY CASH OR CASH EQUIVALENT DEPOSITED BY
BORROWER WITH LENDER ARE SUFFICIENT IN LENDER’S DISCRETION TO COVER THE COST OF
THE RESTORATION.

(II)         THE NET PROCEEDS SHALL BE HELD BY LENDER IN AN INTEREST-BEARING
ACCOUNT AND, UNTIL DISBURSED IN ACCORDANCE WITH THE PROVISIONS OF THIS
SECTION 6.4(B), SHALL CONSTITUTE ADDITIONAL SECURITY FOR THE DEBT AND OTHER
OBLIGATIONS UNDER THE LOAN DOCUMENTS.  THE NET PROCEEDS SHALL BE DISBURSED BY
LENDER TO, OR AS DIRECTED BY, BORROWER FROM TIME TO TIME DURING THE COURSE OF
THE RESTORATION, UPON RECEIPT OF EVIDENCE SATISFACTORY TO LENDER THAT (A) ALL
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 OR WILL BE PAID IN FULL UPON SUCH
DISBURSEMENT, AND (B) 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 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.

(III)        ALL PLANS AND SPECIFICATIONS REQUIRED IN CONNECTION WITH THE
RESTORATION, THE COST OF WHICH EXCEEDS THE RELEVANT RESTORATION THRESHOLD, SHALL
BE SUBJECT TO PRIOR REVIEW AND ACCEPTANCE IN ALL RESPECTS BY LENDER AND BY AN
INDEPENDENT CONSULTING ENGINEER SELECTED BY LENDER (THE “CASUALTY CONSULTANT”),
SUCH REVIEW AND ACCEPTANCE NOT TO BE UNREASONABLY WITHHELD OR DELAYED.  LENDER
SHALL HAVE THE USE OF THE PLANS AND SPECIFICATIONS AND ALL PERMITS, LICENSES AND
APPROVALS REQUIRED OR OBTAINED IN CONNECTION WITH THE RESTORATION.  THE IDENTITY
OF THE CONTRACTORS, SUBCONTRACTORS AND MATERIALMEN ENGAGED IN THE RESTORATION,
AS WELL AS THE CONTRACTS UNDER WHICH THEY HAVE BEEN ENGAGED, SHALL BE SUBJECT TO
PRIOR REVIEW AND ACCEPTANCE BY LENDER AND THE CASUALTY CONSULTANT, SUCH REVIEW
AND ACCEPTANCE NOT TO BE UNREASONABLY WITHHELD OR DELAYED.  ALL COSTS AND
EXPENSES INCURRED BY LENDER IN CONNECTION WITH MAKING THE NET PROCEEDS AVAILABLE
FOR THE RESTORATION INCLUDING, WITHOUT LIMITATION, REASONABLE COUNSEL FEES AND
DISBURSEMENTS AND THE CASUALTY CONSULTANT’S FEES, SHALL BE PAID BY BORROWER.

68

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

(IV)        IN NO EVENT SHALL LENDER BE OBLIGATED TO MAKE DISBURSEMENTS OF THE
NET PROCEEDS IN EXCESS OF AN AMOUNT EQUAL TO THE COSTS ACTUALLY INCURRED FROM
TIME TO TIME FOR WORK IN PLACE AS PART OF THE RESTORATION, AS CERTIFIED BY THE
CASUALTY CONSULTANT, MINUS THE CASUALTY RETAINAGE.  THE TERM “CASUALTY
RETAINAGE” SHALL MEAN AN AMOUNT EQUAL TO TEN PERCENT (10%) OF THE COSTS ACTUALLY
INCURRED FOR WORK IN PLACE AS PART OF THE RESTORATION, AS CERTIFIED BY THE
CASUALTY CONSULTANT, 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 6.4(B), BE LESS THAN THE AMOUNT ACTUALLY HELD BACK
BY BORROWER FROM CONTRACTORS, SUBCONTRACTORS AND MATERIALMEN ENGAGED IN THE
RESTORATION.  THE CASUALTY RETAINAGE SHALL NOT BE RELEASED UNTIL THE CASUALTY
CONSULTANT CERTIFIES TO LENDER THAT THE RESTORATION HAS BEEN COMPLETED IN
ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 6.4(B) AND THAT ALL APPROVALS
NECESSARY FOR THE RE-OCCUPANCY AND USE OF THE PROPERTY HAVE BEEN OBTAINED FROM
ALL APPROPRIATE GOVERNMENTAL AND QUASI-GOVERNMENTAL AUTHORITIES, AND LENDER
RECEIVES EVIDENCE SATISFACTORY TO LENDER THAT THE COSTS OF THE RESTORATION HAVE
BEEN PAID IN FULL OR WILL BE PAID IN FULL OUT OF THE CASUALTY RETAINAGE;
PROVIDED, HOWEVER, THAT LENDER WILL RELEASE THE PORTION OF THE CASUALTY
RETAINAGE BEING HELD WITH RESPECT TO ANY CONTRACTOR, SUBCONTRACTOR OR
MATERIALMAN ENGAGED IN THE RESTORATION AS OF THE DATE UPON WHICH THE CASUALTY
CONSULTANT CERTIFIES TO LENDER THAT THE CONTRACTOR, SUBCONTRACTOR OR MATERIALMAN
HAS SATISFACTORILY COMPLETED ALL WORK AND HAS SUPPLIED ALL MATERIALS IN
ACCORDANCE WITH THE PROVISIONS OF THE CONTRACTOR’S, SUBCONTRACTOR’S OR
MATERIALMAN’S CONTRACT, 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 SECURITY INSTRUMENT 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.

(V)         LENDER SHALL NOT BE OBLIGATED TO MAKE DISBURSEMENTS OF THE NET
PROCEEDS MORE FREQUENTLY THAN ONCE EVERY CALENDAR MONTH.

(VI)        IF AT ANY TIME THE NET PROCEEDS OR THE UNDISBURSED BALANCE THEREOF
SHALL NOT, IN THE REASONABLE OPINION OF LENDER 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

69

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

SECTION 6.4(B) SHALL CONSTITUTE ADDITIONAL SECURITY FOR THE DEBT AND OTHER
OBLIGATIONS UNDER THE LOAN DOCUMENTS.

(VII)       THE EXCESS, IF ANY, OF THE NET PROCEEDS (AND THE REMAINING BALANCE,
IF ANY, OF THE NET PROCEEDS DEFICIENCY) DEPOSITED WITH LENDER AFTER THE CASUALTY
CONSULTANT CERTIFIES TO LENDER THAT THE RESTORATION HAS BEEN COMPLETED IN
ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 6.4(B), AND THE RECEIPT BY LENDER
OF EVIDENCE SATISFACTORY TO LENDER THAT ALL COSTS INCURRED IN CONNECTION WITH
THE RESTORATION HAVE BEEN PAID IN FULL, SHALL BE REMITTED BY LENDER TO BORROWER,
PROVIDED NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND SHALL BE CONTINUING UNDER
THE NOTE, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.

(C)           ALL NET PROCEEDS NOT REQUIRED (I) TO BE MADE AVAILABLE FOR THE
RESTORATION OR (II) TO BE RETURNED TO BORROWER AS EXCESS NET PROCEEDS PURSUANT
TO SECTION 6.4(B)(VII) 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 (PROVIDED NO
EVENT OF DEFAULT EXISTS, BORROWER SHALL NOT BE REQUIRED TO PAY ANY PREPAYMENT
CONSIDERATION IN CONNECTION WITH SUCH PAYMENT), 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, IN ITS DISCRETION.

(D)           IN THE EVENT OF FORECLOSURE OF THE SECURITY INSTRUMENT, 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.

(E)           LENDER SHALL WITH REASONABLE PROMPTNESS FOLLOWING ANY CASUALTY OR
CONDEMNATION NOTIFY BORROWER WHETHER OR NOT NET PROCEEDS ARE REQUIRED TO BE MADE
AVAILABLE TO BORROWER FOR RESTORATION PURSUANT TO THIS SECTION 6.4.  ALL NET
PROCEEDS NOT REQUIRED TO BE MADE AVAILABLE FOR RESTORATION SHALL BE RETAINED AND
APPLIED BY LENDER IN ACCORDANCE WITH SECTION 2.4.2 HEREOF (A “NET PROCEEDS
PREPAYMENT”).   IF SUCH NET PROCEEDS PREPAYMENT SHALL BE EQUAL TO OR GREATER
THAN FIVE MILLION AND 00/100 DOLLARS ($5,000,000.00), BORROWER SHALL HAVE THE
RIGHT TO ELECT TO PREPAY THE OUTSTANDING PRINCIPAL BALANCE OF THE LOAN (LESS THE
NET PROCEEDS PREPAYMENT) FOR THE PROPERTY (A “CASUALTY/CONDEMNATION PREPAYMENT”)
WITHOUT PAYMENT OF THE YIELD MAINTENANCE PREMIUM UPON SATISFACTION OF THE
FOLLOWING CONDITIONS:  (I) WITHIN THIRTY (30) DAYS FOLLOWING THE DATE OF THE NET
PROCEEDS PREPAYMENT, BORROWER SHALL PROVIDE LENDER WITH WRITTEN NOTICE OF
BORROWER’S INTENTION TO PAY THE NOTE IN FULL (WITH A CREDIT FOR THE AMOUNT OF
THE NET PROCEEDS PREPAYMENT), (II) BORROWER SHALL PREPAY THE NOTE IN SUCH AMOUNT
ON OR BEFORE THE THIRD (3RD) PAYMENT DATE OCCURRING FOLLOWING THE DATE OF THE
NET PROCEEDS PREPAYMENT (PROVIDED THAT IF ANY SUCH PREPAYMENT IS MADE ON A DATE
OTHER THAN A PAYMENT DATE, BORROWER SHALL PAY LENDER ALL INTEREST WHICH WOULD
HAVE ACCRUED ON THE AMOUNT BEING PREPAID THROUGH THE NEXT PAYMENT DATE), AND
(III) NO EVENT OF DEFAULT SHALL EXIST ON THE DATE OF SUCH CASUALTY/CONDEMNATION
PREPAYMENT.  NOTWITHSTANDING ANYTHING IN SECTION 6.2 OR SECTION 6.3 TO THE
CONTRARY, BORROWER SHALL HAVE NO OBLIGATION TO COMMENCE RESTORATION OF THE
PROPERTY UPON DELIVERY OF THE WRITTEN NOTICE SET FORTH IN CLAUSE (I) OF THE
PRECEDING SENTENCE (UNLESS BORROWER SUBSEQUENTLY SHALL FAIL TO SATISFY THE
REQUIREMENT OF CLAUSE (II) OF THE PRECEDING SENTENCE).

70

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

VII.                            RESERVE FUNDS

SECTION 7.1            PROPERTY RESERVE FUNDS. BORROWER SHALL PAY TO LENDER ON
THE DATE HEREOF THE SUM OF $1,000,000.00 (THE “PROPERTY RESERVE DEPOSIT”) FOR
REPLACEMENTS AND THE REPAIRS SET FORTH ON SCHEDULE III HERETO (SUCH REPAIRS
HEREINAFTER REFERRED TO AS “REQUIRED REPAIRS”).  AMOUNTS SO DEPOSITED SHALL
HEREINAFTER BE REFERRED TO AS BORROWER’S “PROPERTY RESERVE FUNDS” AND THE
ACCOUNT IN WHICH SUCH AMOUNTS ARE HELD SHALL HEREINAFTER BE REFERRED TO AS
BORROWER’S “PROPERTY RESERVE ACCOUNT”.   THE PROPERTY RESERVE FUNDS SHALL BE
DISBURSED IN ACCORDANCE WITH THE MECHANISMS FOR DISBURSEMENTS UNDER THE
REPLACEMENT RESERVE FUNDS.

SECTION 7.2            TAX AND INSURANCE ESCROW FUNDS. BORROWER SHALL PAY TO
LENDER ON EACH PAYMENT DATE (A) ONE-TWELFTH (1/12) OF THE TAXES THAT LENDER
ESTIMATES WILL BE PAYABLE DURING THE NEXT ENSUING TWELVE (12) MONTHS IN ORDER TO
ACCUMULATE WITH LENDER SUFFICIENT FUNDS TO PAY ALL SUCH TAXES AT LEAST
THIRTY (30) DAYS PRIOR TO THEIR RESPECTIVE DUE DATES, AND (B) ONE-TWELFTH (1/12)
OF THE INSURANCE PREMIUMS THAT LENDER ESTIMATES WILL BE PAYABLE FOR THE RENEWAL
OF THE COVERAGE AFFORDED BY THE POLICIES UPON THE EXPIRATION THEREOF IN ORDER TO
ACCUMULATE WITH LENDER SUFFICIENT FUNDS TO PAY ALL SUCH INSURANCE PREMIUMS AT
LEAST THIRTY (30) DAYS PRIOR TO THE EXPIRATION OF THE POLICIES (SAID AMOUNTS IN
(A) AND (B) ABOVE ARE HEREINAFTER CALLED THE “TAX AND INSURANCE ESCROW FUNDS”). 
THE TAX AND INSURANCE ESCROW FUNDS AND THE MONTHLY DEBT SERVICE PAYMENT AMOUNT,
SHALL BE ADDED TOGETHER AND SHALL BE PAID AS AN AGGREGATE SUM BY BORROWER TO
LENDER.  LENDER WILL APPLY THE TAX AND INSURANCE ESCROW FUNDS TO PAYMENTS OF
TAXES AND INSURANCE PREMIUMS REQUIRED TO BE MADE BY BORROWER PURSUANT TO THIS
AGREEMENT AND UNDER THE SECURITY INSTRUMENT.  IN MAKING ANY PAYMENT RELATING TO
THE TAX AND INSURANCE ESCROW FUNDS, LENDER MAY DO SO ACCORDING TO ANY BILL,
STATEMENT OR ESTIMATE PROCURED FROM THE APPROPRIATE PUBLIC OFFICE (WITH RESPECT
TO TAXES) OR INSURER OR AGENT (WITH RESPECT TO INSURANCE PREMIUMS) OR FROM
BORROWER 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, PROVIDED, HOWEVER, LENDER SHALL USE REASONABLE EFFORTS TO PAY
SUCH REAL PROPERTY TAXES SUFFICIENTLY EARLY TO OBTAIN THE BENEFIT OF ANY
AVAILABLE DISCOUNTS OF WHICH IT HAS KNOWLEDGE.  IF THE AMOUNT OF THE TAX AND
INSURANCE ESCROW FUNDS SHALL EXCEED THE AMOUNTS DUE FOR TAXES AND 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 TAX AND INSURANCE
ESCROW FUNDS.  ANY AMOUNT REMAINING IN THE TAX AND INSURANCE ESCROW FUNDS AFTER
THE DEBT HAS BEEN PAID IN FULL SHALL BE RETURNED TO BORROWER.  IN ALLOCATING
SUCH EXCESS, LENDER MAY DEAL WITH THE PERSON SHOWN ON THE RECORDS OF LENDER TO
BE THE OWNER OF THE PROPERTY.  IF AT ANY TIME LENDER REASONABLY DETERMINES THAT
THE TAX AND INSURANCE ESCROW FUNDS ARE NOT OR WILL NOT BE SUFFICIENT TO PAY
TAXES AND INSURANCE PREMIUMS BY THE DATES SET FORTH ABOVE, LENDER SHALL NOTIFY
BORROWER OF SUCH DETERMINATION AND BORROWER SHALL INCREASE ITS MONTHLY PAYMENTS
TO LENDER BY THE AMOUNT THAT LENDER ESTIMATES IS SUFFICIENT TO MAKE UP THE
DEFICIENCY AT LEAST THIRTY (30) DAYS PRIOR TO DELINQUENCY OF THE TAXES OR
INSURANCE PREMIUMS.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN,
BORROWER SHALL NOT BE REQUIRED TO MAKE MONTHLY DEPOSITS WITH RESPECT TO (A) AND
(B) ABOVE PROVIDED THAT: (I) NO EVENT OF DEFAULT HAS OCCURRED, AND (II) BORROWER
PAYS ALL TAXES PRIOR TO DELINQUENCY AND DELIVERS TO LENDER EVIDENCE OF SUCH
PAYMENT PURSUANT TO SECTION 5.1.2 HEREOF (WITH RESPECT TO CLAUSE (A) ABOVE) AND
ALL INSURANCE PREMIUMS FOR THE POLICIES REQUIRED UNDER SECTION 6.1(A) HEREOF
WITHOUT ANY LAPSE OF COVERAGE ON THE PROPERTY (WITH RESPECT TO CLAUSE (B)
ABOVE).

71

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

SECTION 7.3            REPLACEMENTS AND REPLACEMENT RESERVE.

7.3.1       REPLACEMENT RESERVE FUNDS.  BORROWER SHALL PAY TO LENDER ON EACH
PAYMENT DATE THE SUM OF $6,670.00 (THE “REPLACEMENT RESERVE MONTHLY DEPOSIT”)
FOR REPLACEMENTS AND REPAIRS REQUIRED TO BE MADE TO THE PROPERTY DURING THE
CALENDAR YEAR (COLLECTIVELY, THE “REPLACEMENTS”).  AMOUNTS SO DEPOSITED SHALL
HEREINAFTER BE REFERRED TO AS BORROWER’S “REPLACEMENT RESERVE FUNDS” AND THE
ACCOUNT IN WHICH SUCH AMOUNTS ARE HELD SHALL HEREINAFTER BE REFERRED TO AS
BORROWER’S “REPLACEMENT RESERVE ACCOUNT”.  NOTWITHSTANDING THE FOREGOING, IF THE
REPLACEMENT RESERVE FUNDS SHALL AT ANY TIME EQUAL OR EXCEED $240,105.00 (THE
“REPLACEMENT RESERVE CAP”), THEN BORROWER’S OBLIGATION TO MAKE THE REPLACEMENT
RESERVE MONTHLY DEPOSIT SHALL BE SUSPENDED UNTIL SUCH TIME AS THE REPLACEMENT
RESERVE FUNDS ARE LESS THAN THE REPLACEMENT RESERVE CAP.  LENDER MAY REASSESS
ITS ESTIMATE OF THE AMOUNT NECESSARY FOR THE REPLACEMENT RESERVE FUNDS FROM TIME
TO TIME, AND MAY INCREASE THE MONTHLY AMOUNTS REQUIRED TO BE DEPOSITED INTO THE
REPLACEMENT RESERVE ACCOUNT UPON THIRTY (30) DAYS NOTICE TO BORROWER IF LENDER
DETERMINES IN ITS COMMERCIALLY REASONABLE DISCRETION BASED UPON UPDATED
ENGINEERING REPORTS OR INSPECTIONS OF THE PROPERTY THAT AN INCREASE IS NECESSARY
TO MAINTAIN THE PROPER MAINTENANCE AND OPERATION OF THE PROPERTY.  ANY AMOUNT
HELD IN THE REPLACEMENT RESERVE ACCOUNT AND ALLOCATED FOR THE PROPERTY SHALL BE
RETAINED BY LENDER AND CREDITED TOWARD THE FUTURE REPLACEMENT RESERVES MONTHLY
DEPOSITS REQUIRED BY LENDER HEREUNDER IN THE EVENT THE PROPERTY IS RELEASED FROM
THE LIEN OF THE SECURITY INSTRUMENT IN ACCORDANCE WITH SECTION 2.5 HEREOF. 
NOTWITHSTANDING THE FOREGOING, BORROWER’S OBLIGATION TO MAKE MONTHLY DEPOSITS TO
THE REPLACEMENT RESERVE ACCOUNT SHALL BE SUSPENDED PROVIDED THAT NO EVENT OF
DEFAULT OCCURS.

7.3.2       DISBURSEMENTS FROM REPLACEMENT RESERVE ACCOUNT.  (A)  LENDER SHALL
MAKE DISBURSEMENTS FROM THE REPLACEMENT RESERVE ACCOUNT TO PAY BORROWER ONLY FOR
THE COSTS OF THE REPLACEMENTS.  LENDER SHALL NOT BE OBLIGATED TO MAKE
DISBURSEMENTS FROM THE REPLACEMENT RESERVE ACCOUNT TO REIMBURSE BORROWER FOR THE
COSTS OF ROUTINE MAINTENANCE TO THE PROPERTY, REPLACEMENTS OF INVENTORY OR FOR
COSTS WHICH ARE TO BE REIMBURSED FROM THE ROLLOVER RESERVE ACCOUNT.

(B)           LENDER SHALL, UPON WRITTEN REQUEST FROM BORROWER AND SATISFACTION
OF THE REQUIREMENTS SET FORTH IN THIS SECTION 7.3.2, DISBURSE TO BORROWER
AMOUNTS FROM THE REPLACEMENT RESERVE ACCOUNT NECESSARY TO PAY FOR THE ACTUAL
APPROVED COSTS OF REPLACEMENTS OR TO REIMBURSE BORROWER THEREFOR, UPON
COMPLETION OF SUCH REPLACEMENTS (OR, UPON PARTIAL COMPLETION IN THE CASE OF
REPLACEMENTS MADE PURSUANT TO SECTION 7.3.2(E)) AS DETERMINED BY LENDER.  IN NO
EVENT SHALL LENDER BE OBLIGATED TO DISBURSE FUNDS FROM THE REPLACEMENT RESERVE
ACCOUNT IF A DEFAULT OR AN EVENT OF DEFAULT EXISTS.

(C)           EACH REQUEST FOR DISBURSEMENT FROM THE REPLACEMENT RESERVE ACCOUNT
SHALL BE IN A FORM SPECIFIED OR APPROVED BY LENDER AND SHALL SPECIFY (I) THE
SPECIFIC REPLACEMENTS FOR WHICH THE DISBURSEMENT IS REQUESTED, (II) THE QUANTITY
AND PRICE OF EACH ITEM PURCHASED, IF THE REPLACEMENT INCLUDES THE PURCHASE OR
REPLACEMENT OF SPECIFIC ITEMS, (III) THE PRICE OF ALL MATERIALS (GROUPED BY TYPE
OR CATEGORY) USED IN ANY REPLACEMENT OTHER THAN THE PURCHASE OR REPLACEMENT OF
SPECIFIC ITEMS, AND (IV) THE COST OF ALL CONTRACTED LABOR OR OTHER SERVICES
APPLICABLE TO EACH REPLACEMENT FOR WHICH SUCH REQUEST FOR DISBURSEMENT IS MADE. 
WITH

72

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

EACH REQUEST BORROWER SHALL CERTIFY THAT ALL REPLACEMENTS HAVE BEEN MADE IN
ACCORDANCE WITH ALL APPLICABLE LEGAL REQUIREMENTS OF ANY GOVERNMENTAL AUTHORITY
HAVING JURISDICTION OVER THE PROPERTY AND, UNLESS LENDER HAS AGREED TO ISSUE
JOINT CHECKS AS DESCRIBED BELOW, EACH REQUEST SHALL INCLUDE EVIDENCE OF PAYMENT
OF ALL SUCH AMOUNTS.  EACH REQUEST FOR DISBURSEMENT SHALL INCLUDE COPIES OF
INVOICES FOR ALL ITEMS OR MATERIALS PURCHASED AND ALL CONTRACTED LABOR OR
SERVICES PROVIDED.  EXCEPT AS PROVIDED IN SECTION 7.3.2(E), EACH REQUEST FOR
DISBURSEMENT FROM THE REPLACEMENT RESERVE ACCOUNT SHALL BE MADE ONLY AFTER
COMPLETION OF THE REPLACEMENT FOR WHICH DISBURSEMENT IS REQUESTED.  BORROWER
SHALL PROVIDE LENDER EVIDENCE OF COMPLETION OF THE SUBJECT REPLACEMENT
SATISFACTORY TO LENDER IN ITS REASONABLE JUDGMENT.

(D)           BORROWER SHALL PAY ALL INVOICES IN CONNECTION WITH THE
REPLACEMENTS WITH RESPECT TO WHICH A DISBURSEMENT IS REQUESTED PRIOR TO
SUBMITTING SUCH REQUEST FOR DISBURSEMENT FROM THE REPLACEMENT RESERVE ACCOUNT
OR, AT THE REQUEST OF BORROWER, LENDER WILL ISSUE JOINT CHECKS, PAYABLE TO
BORROWER AND THE CONTRACTOR, SUPPLIER, MATERIALMAN, MECHANIC, SUBCONTRACTOR OR
OTHER PARTY TO WHOM PAYMENT IS DUE IN CONNECTION WITH A REPLACEMENT.  IN THE
CASE OF PAYMENTS MADE BY JOINT CHECK, LENDER MAY REQUIRE A WAIVER OF LIEN FROM
EACH PERSON RECEIVING PAYMENT PRIOR TO LENDER’S DISBURSEMENT FROM THE
REPLACEMENT RESERVE ACCOUNT.  IN ADDITION, AS A CONDITION TO ANY DISBURSEMENT,
LENDER MAY REQUIRE BORROWER TO OBTAIN LIEN WAIVERS FROM EACH CONTRACTOR,
SUPPLIER, MATERIALMAN, MECHANIC OR SUBCONTRACTOR WHO RECEIVES PAYMENT IN AN
AMOUNT EQUAL TO OR GREATER THAN $100,000 FOR COMPLETION OF ITS WORK OR DELIVERY
OF ITS MATERIALS.  ANY LIEN WAIVER DELIVERED HEREUNDER SHALL CONFORM TO THE
REQUIREMENTS OF APPLICABLE LAW AND SHALL COVER ALL WORK PERFORMED AND MATERIALS
SUPPLIED (INCLUDING EQUIPMENT AND FIXTURES) FOR THE PROPERTY BY THAT CONTRACTOR,
SUPPLIER, SUBCONTRACTOR, MECHANIC OR MATERIALMAN THROUGH THE DATE COVERED BY THE
CURRENT REIMBURSEMENT REQUEST (OR, IN THE EVENT THAT PAYMENT TO SUCH CONTRACTOR,
SUPPLIER, SUBCONTRACTOR, MECHANIC OR MATERIALMEN IS TO BE MADE BY A JOINT CHECK,
THE RELEASE OF LIEN SHALL BE EFFECTIVE THROUGH THE DATE COVERED BY THE PREVIOUS
RELEASE OF FUNDS REQUEST).

(E)           IF (I) THE COST OF A REPLACEMENT EXCEEDS $100,000, (II) THE
CONTRACTOR PERFORMING SUCH REPLACEMENT REQUIRES PERIODIC PAYMENTS PURSUANT TO
TERMS OF A WRITTEN CONTRACT, AND (III) LENDER HAS APPROVED IN WRITING IN ADVANCE
SUCH PERIODIC PAYMENTS, A REQUEST FOR REIMBURSEMENT FROM THE REPLACEMENT RESERVE
ACCOUNT MAY BE MADE AFTER COMPLETION OF A PORTION OF THE WORK UNDER SUCH
CONTRACT, PROVIDED (A) SUCH CONTRACT REQUIRES PAYMENT UPON COMPLETION OF SUCH
PORTION OF THE WORK, (B) THE MATERIALS FOR WHICH THE REQUEST IS MADE ARE ON SITE
AT THE PROPERTY AND ARE PROPERLY SECURED OR HAVE BEEN INSTALLED IN THE PROPERTY,
(C) ALL OTHER CONDITIONS IN THIS AGREEMENT FOR DISBURSEMENT HAVE BEEN SATISFIED,
(D) FUNDS REMAINING IN THE REPLACEMENT RESERVE ACCOUNT ARE, IN LENDER’S
JUDGMENT, SUFFICIENT TO COMPLETE SUCH REPLACEMENT AND OTHER REPLACEMENTS WHEN
REQUIRED, AND (E) IF REQUIRED BY LENDER, EACH CONTRACTOR OR SUBCONTRACTOR
RECEIVING PAYMENTS UNDER SUCH CONTRACT SHALL PROVIDE A WAIVER OF LIEN WITH
RESPECT TO AMOUNTS WHICH HAVE BEEN PAID TO THAT CONTRACTOR OR SUBCONTRACTOR.

(F)            BORROWER SHALL NOT MAKE A REQUEST FOR DISBURSEMENT FROM THE
REPLACEMENT RESERVE ACCOUNT MORE FREQUENTLY THAN ONCE IN ANY CALENDAR MONTH AND
(EXCEPT IN CONNECTION WITH THE FINAL DISBURSEMENT) THE TOTAL COST OF ALL
REPLACEMENTS IN ANY REQUEST SHALL NOT BE LESS THAN $15,000.00.

7.3.3       PERFORMANCE OF REPLACEMENTS.  (A)  BORROWER SHALL MAKE REPLACEMENTS
WHEN REQUIRED IN ORDER TO KEEP THE PROPERTY IN CONDITION AND REPAIR

73

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

CONSISTENT WITH OTHER SIMILAR PROPERTIES IN THE SAME MARKET SEGMENT IN THE
METROPOLITAN AREA IN WHICH THE PROPERTY IS LOCATED, AND TO KEEP THE PROPERTY OR
ANY PORTION THEREOF FROM DETERIORATING.  BORROWER SHALL COMPLETE ALL
REPLACEMENTS IN A GOOD AND WORKMANLIKE MANNER AS SOON AS PRACTICABLE FOLLOWING
THE COMMENCEMENT OF MAKING EACH SUCH REPLACEMENT.

(B)           LENDER RESERVES THE RIGHT, AT ITS OPTION, TO APPROVE ALL CONTRACTS
OR WORK ORDERS WITH MATERIALMEN, MECHANICS, SUPPLIERS, SUBCONTRACTORS,
CONTRACTORS OR OTHER PARTIES PROVIDING LABOR OR MATERIALS UNDER CONTRACTS FOR AN
AMOUNT IN EXCESS OF $100,000 IN CONNECTION WITH THE REPLACEMENTS PERFORMED BY
BORROWER.  UPON LENDER’S REQUEST, BORROWER SHALL ASSIGN ANY CONTRACT OR
SUBCONTRACT TO LENDER.

(C)           IN THE EVENT LENDER DETERMINES IN ITS REASONABLE DISCRETION THAT
ANY REPLACEMENT IS NOT BEING PERFORMED IN A WORKMANLIKE OR TIMELY MANNER OR THAT
ANY REPLACEMENT HAS NOT BEEN COMPLETED IN A WORKMANLIKE OR TIMELY MANNER, AND
SUCH FAILURE CONTINUES TO EXIST FOR MORE THAN THIRTY (30) DAYS AFTER NOTICE FROM
LENDER TO BORROWER, LENDER SHALL HAVE THE OPTION, UPON TEN (10) DAYS NOTICE TO
BORROWER (EXCEPT IN THE CASE OF AN EMERGENCY), TO WITHHOLD DISBURSEMENT FOR SUCH
UNSATISFACTORY REPLACEMENT AND TO PROCEED UNDER EXISTING CONTRACTS OR TO
CONTRACT WITH THIRD PARTIES TO COMPLETE SUCH REPLACEMENT AND TO APPLY THE
REPLACEMENT RESERVE FUNDS TOWARD THE LABOR AND MATERIALS NECESSARY TO COMPLETE
SUCH REPLACEMENT, AND TO EXERCISE ANY AND ALL OTHER REMEDIES AVAILABLE TO LENDER
UPON AN EVENT OF DEFAULT HEREUNDER.

(D)           IN ORDER TO FACILITATE LENDER’S COMPLETION OR MAKING OF THE
REPLACEMENTS PURSUANT TO SECTION 7.3.3(C) ABOVE, BORROWER GRANTS LENDER THE
RIGHT TO ENTER ONTO THE PROPERTY AND PERFORM ANY AND ALL WORK AND LABOR
NECESSARY TO COMPLETE OR MAKE THE REPLACEMENTS AND/OR EMPLOY WATCHMEN TO PROTECT
THE PROPERTY FROM DAMAGE, SUBJECT TO THE RIGHTS OF TENANTS.  ALL SUMS SO
EXPENDED BY LENDER, TO THE EXTENT NOT FROM THE REPLACEMENT RESERVE FUNDS, SHALL
BE DEEMED TO HAVE BEEN ADVANCED UNDER THE LOAN TO BORROWER AND SECURED BY THE
SECURITY INSTRUMENT.  FOR THIS PURPOSE BORROWER CONSTITUTES AND APPOINTS LENDER
ITS TRUE AND LAWFUL ATTORNEY-IN-FACT WITH FULL POWER OF SUBSTITUTION TO COMPLETE
OR UNDERTAKE THE REPLACEMENTS IN THE NAME OF BORROWER.  SUCH POWER OF ATTORNEY
SHALL BE DEEMED TO BE A POWER COUPLED WITH AN INTEREST AND CANNOT BE REVOKED BUT
SHALL ONLY BE EFFECTIVE FOLLOWING AN EVENT OF DEFAULT.  BORROWER EMPOWERS SAID
ATTORNEY-IN-FACT AS FOLLOWS:  (I) TO USE ANY FUNDS IN THE REPLACEMENT RESERVE
ACCOUNT FOR THE PURPOSE OF MAKING OR COMPLETING THE REPLACEMENTS; (II) TO MAKE
SUCH ADDITIONS, CHANGES AND CORRECTIONS TO THE REPLACEMENTS AS SHALL BE
NECESSARY OR DESIRABLE TO COMPLETE THE REPLACEMENTS; (III) TO EMPLOY SUCH
CONTRACTORS, SUBCONTRACTORS, AGENTS, ARCHITECTS AND INSPECTORS AS SHALL BE
REQUIRED FOR SUCH PURPOSES; (IV) TO PAY, SETTLE OR COMPROMISE ALL EXISTING BILLS
AND CLAIMS WHICH ARE OR MAY BECOME LIENS AGAINST THE PROPERTY, OR AS MAY BE
NECESSARY OR DESIRABLE FOR THE COMPLETION OF THE REPLACEMENTS, OR FOR CLEARANCE
OF TITLE; (V) TO EXECUTE ALL APPLICATIONS AND CERTIFICATES IN THE NAME OF
BORROWER WHICH MAY BE REQUIRED BY ANY OF THE CONTRACT DOCUMENTS; (VI) TO
PROSECUTE AND DEFEND ALL ACTIONS OR PROCEEDINGS IN CONNECTION WITH THE PROPERTY
OR THE REHABILITATION AND REPAIR OF THE PROPERTY; AND (VII) TO DO ANY AND EVERY
ACT WHICH BORROWER MIGHT DO IN ITS OWN BEHALF TO FULFILL THE TERMS OF THIS
AGREEMENT.

(E)           NOTHING IN THIS SECTION 7.3.3 SHALL:  (I) MAKE LENDER RESPONSIBLE
FOR MAKING OR COMPLETING THE REPLACEMENTS; (II) REQUIRE LENDER TO EXPEND FUNDS
IN ADDITION TO THE REPLACEMENT RESERVE FUNDS TO MAKE OR COMPLETE ANY
REPLACEMENT; (III) OBLIGATE LENDER TO

74

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

PROCEED WITH THE REPLACEMENTS; OR (IV) OBLIGATE LENDER TO DEMAND FROM BORROWER
ADDITIONAL SUMS TO MAKE OR COMPLETE ANY REPLACEMENT.

(F)            BORROWER SHALL PERMIT LENDER AND LENDER’S AGENTS AND
REPRESENTATIVES (INCLUDING, WITHOUT LIMITATION, LENDER’S ENGINEER, ARCHITECT, OR
INSPECTOR) OR THIRD PARTIES MAKING REPLACEMENTS PURSUANT TO THIS SECTION 7.3.3
TO ENTER ONTO THE PROPERTY DURING NORMAL BUSINESS HOURS (SUBJECT TO THE RIGHTS
OF TENANTS UNDER THEIR LEASES) TO INSPECT THE PROGRESS OF ANY REPLACEMENTS AND
ALL MATERIALS BEING USED IN CONNECTION THEREWITH, TO EXAMINE ALL PLANS AND SHOP
DRAWINGS RELATING TO SUCH REPLACEMENTS WHICH ARE OR MAY BE KEPT AT THE PROPERTY,
AND TO COMPLETE ANY REPLACEMENTS MADE PURSUANT TO THIS SECTION 7.3.3.  BORROWER
SHALL 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 7.3.3(F) OR THE COMPLETION OF
REPLACEMENTS PURSUANT TO THIS SECTION 7.3.3.

(G)           LENDER MAY REQUIRE AN INSPECTION OF THE PROPERTY AT BORROWER’S
EXPENSE PRIOR TO MAKING A MONTHLY DISBURSEMENT IN EXCESS OF $100,000 FROM THE
REPLACEMENT RESERVE ACCOUNT IN ORDER TO VERIFY COMPLETION OF THE REPLACEMENTS
FOR WHICH REIMBURSEMENT IS SOUGHT.  LENDER MAY REQUIRE THAT SUCH INSPECTION BE
CONDUCTED BY AN APPROPRIATE INDEPENDENT QUALIFIED PROFESSIONAL SELECTED BY
LENDER AND/OR MAY REQUIRE A COPY OF A CERTIFICATE OF COMPLETION BY AN
INDEPENDENT QUALIFIED PROFESSIONAL ACCEPTABLE TO LENDER PRIOR TO THE
DISBURSEMENT OF ANY AMOUNTS FROM THE REPLACEMENT RESERVE ACCOUNT.  BORROWER
SHALL PAY THE EXPENSE OF THE INSPECTION AS REQUIRED HEREUNDER, WHETHER SUCH
INSPECTION IS CONDUCTED BY LENDER OR BY AN INDEPENDENT QUALIFIED PROFESSIONAL.

(H)           THE REPLACEMENTS AND ALL MATERIALS, EQUIPMENT, FIXTURES, OR ANY
OTHER ITEM COMPRISING A PART OF ANY REPLACEMENT SHALL BE CONSTRUCTED, INSTALLED
OR COMPLETED, AS APPLICABLE, FREE AND CLEAR OF ALL MECHANIC’S, MATERIALMAN’S OR
OTHER LIENS (EXCEPT FOR THOSE LIENS EXISTING ON THE DATE OF THIS AGREEMENT WHICH
HAVE BEEN APPROVED IN WRITING BY LENDER).

(I)            BEFORE EACH DISBURSEMENT IN EXCESS OF $100,000 FROM THE
REPLACEMENT RESERVE ACCOUNT, LENDER MAY REQUIRE BORROWER TO PROVIDE LENDER WITH
A SEARCH OF TITLE TO THE PROPERTY EFFECTIVE TO THE DATE OF THE DISBURSEMENT,
WHICH SEARCH SHOWS THAT NO MECHANIC’S OR MATERIALMEN’S LIENS OR OTHER LIENS OF
ANY NATURE HAVE BEEN PLACED AGAINST THE PROPERTY SINCE THE DATE OF RECORDATION
OF THE RELATED SECURITY INSTRUMENT AND THAT TITLE TO THE PROPERTY IS FREE AND
CLEAR OF ALL LIENS (OTHER THAN THE LIEN OF THE RELATED SECURITY INSTRUMENT AND
ANY OTHER LIENS PREVIOUSLY APPROVED IN WRITING BY LENDER, IF ANY).

(J)            ALL REPLACEMENTS SHALL COMPLY WITH ALL APPLICABLE LEGAL
REQUIREMENTS OF ALL GOVERNMENTAL AUTHORITIES HAVING JURISDICTION OVER THE
PROPERTY AND APPLICABLE INSURANCE REQUIREMENTS INCLUDING, WITHOUT LIMITATION,
APPLICABLE BUILDING CODES, SPECIAL USE PERMITS, ENVIRONMENTAL REGULATIONS, AND
REQUIREMENTS OF INSURANCE UNDERWRITERS.

(K)           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 LAW IN CONNECTION WITH A PARTICULAR REPLACEMENT.  ALL
SUCH POLICIES SHALL BE IN FORM AND AMOUNT REASONABLY SATISFACTORY TO LENDER. 
ALL SUCH POLICIES WHICH CAN BE ENDORSED WITH STANDARD

75

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

MORTGAGEE CLAUSES MAKING LOSS PAYABLE TO LENDER OR ITS ASSIGNS SHALL BE SO
ENDORSED.  CERTIFIED COPIES OF SUCH POLICIES SHALL BE DELIVERED TO LENDER.

7.3.4       FAILURE TO MAKE REPLACEMENTS.  (A)  IT SHALL BE AN EVENT OF DEFAULT
UNDER THIS AGREEMENT IF BORROWER FAILS TO COMPLY WITH ANY PROVISION OF THIS
SECTION 7.3 AND SUCH FAILURE IS NOT CURED WITHIN THIRTY (30) DAYS AFTER NOTICE
FROM LENDER; PROVIDED, HOWEVER, IF SUCH FAILURE IS NOT CAPABLE OF BEING CURED
WITHIN SAID THIRTY (30) DAY PERIOD, THEN PROVIDED THAT BORROWER COMMENCES ACTION
TO COMPLETE SUCH CURE AND THEREAFTER DILIGENTLY PROCEEDS TO COMPLETE SUCH CURE,
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 FAILURE,
BUT SUCH ADDITIONAL PERIOD OF TIME SHALL NOT EXCEED NINETY (90) DAYS.  UPON THE
OCCURRENCE OF SUCH AN EVENT OF DEFAULT, LENDER MAY USE THE REPLACEMENT RESERVE
FUNDS (OR ANY PORTION THEREOF) FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO
COMPLETION OF THE REPLACEMENTS AS PROVIDED IN SECTION 7.3.3, OR FOR ANY OTHER
REPAIR OR REPLACEMENT TO THE PROPERTY OR TOWARD PAYMENT OF THE DEBT IN SUCH
ORDER, PROPORTION AND PRIORITY AS LENDER MAY DETERMINE IN ITS SOLE DISCRETION. 
LENDER’S RIGHT TO WITHDRAW AND APPLY THE REPLACEMENT RESERVE FUNDS SHALL BE IN
ADDITION TO ALL OTHER RIGHTS AND REMEDIES PROVIDED TO LENDER UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.

(B)           NOTHING IN THIS AGREEMENT SHALL OBLIGATE LENDER TO APPLY ALL OR
ANY PORTION OF THE REPLACEMENT RESERVE FUNDS ON ACCOUNT OF AN EVENT OF DEFAULT
TO PAYMENT OF THE DEBT OR IN ANY SPECIFIC ORDER OR PRIORITY.

7.3.5       BALANCE IN THE REPLACEMENT RESERVE ACCOUNT.  THE INSUFFICIENCY OF
ANY BALANCE IN THE REPLACEMENT RESERVE ACCOUNT SHALL NOT RELIEVE BORROWER FROM
ITS OBLIGATION TO FULFILL ALL PRESERVATION AND MAINTENANCE COVENANTS IN THE LOAN
DOCUMENTS.

7.3.6       INDEMNIFICATION.  BORROWER SHALL INDEMNIFY LENDER AND HOLD LENDER
HARMLESS FROM AND AGAINST ANY AND ALL ACTIONS, SUITS, CLAIMS, DEMANDS,
LIABILITIES, LOSSES, DAMAGES, OBLIGATIONS AND COSTS AND EXPENSES (INCLUDING
LITIGATION COSTS AND REASONABLE ATTORNEYS FEES AND EXPENSES) ARISING FROM OR IN
ANY WAY CONNECTED WITH THE PERFORMANCE OF THE REPLACEMENTS UNLESS THE SAME ARE
SOLELY DUE TO GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LENDER.  BORROWER SHALL
ASSIGN TO LENDER ALL RIGHTS AND CLAIMS BORROWER MAY HAVE AGAINST ALL PERSONS OR
ENTITIES SUPPLYING LABOR OR MATERIALS IN CONNECTION WITH THE REPLACEMENTS;
PROVIDED, HOWEVER, THAT LENDER MAY NOT PURSUE ANY SUCH RIGHT OR CLAIM UNLESS AN
EVENT OF DEFAULT HAS OCCURRED AND REMAINS UNCURED.

SECTION 7.4            ROLLOVER RESERVE.

7.4.1       DEPOSITS TO ROLLOVER RESERVE FUNDS.  BORROWER SHALL PAY TO LENDER ON
EACH PAYMENT DATE THE SUM OF $25,948.00 (THE “ROLLOVER RESERVE MONTHLY
DEPOSIT”), WHICH AMOUNTS SHALL BE DEPOSITED WITH AND HELD BY LENDER FOR TENANT
IMPROVEMENT AND LEASING COMMISSION OBLIGATIONS INCURRED FOLLOWING THE DATE
HEREOF.  NOTWITHSTANDING THE FOREGOING, IF THE ROLLOVER RESERVE FUNDS SHALL AT
ANY TIME EQUAL OR EXCEED $934,122.00, EXCLUSIVE OF THE ANY LEASE TERMINATION
FEES (THE “ROLLOVER RESERVE CAP”), THEN BORROWER’S OBLIGATION TO MAKE THE
ROLLOVER RESERVE MONTHLY DEPOSIT SHALL BE SUSPENDED UNTIL SUCH TIME AS THE
ROLLOVER RESERVE FUNDS ARE LESS THAN THE ROLLOVER

76

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

RESERVE CAP. ADDITIONALLY, BORROWER SHALL DEPOSIT WITH LENDER ANY LEASE
TERMINATION FEES.  AMOUNTS SO DEPOSITED SHALL HEREINAFTER BE REFERRED TO AS THE
“ROLLOVER RESERVE FUNDS” AND THE ACCOUNT IN WHICH SUCH AMOUNTS ARE HELD SHALL
HEREINAFTER BE REFERRED TO AS BORROWER’S “ROLLLOVER RESERVE ACCOUNT”. 
NOTWITHSTANDING THE FOREGOING, BORROWER’S OBLIGATION TO MAKE MONTHLY DEPOSITS TO
THE ROLLOVER RESERVE ACCOUNT SHALL BE SUSPENDED PROVIDED THAT NO EVENT OF
DEFAULT OCCURS.

7.4.2       WITHDRAWAL OF ROLLOVER RESERVE FUNDS.  LENDER SHALL MAKE
DISBURSEMENTS FROM THE ROLLOVER RESERVE FUNDS FOR TENANT IMPROVEMENT AND LEASING
COMMISSION OBLIGATIONS INCURRED BY BORROWER.  ALL SUCH EXPENSES SHALL BE
APPROVED BY LENDER IN ITS COMMERCIALLY REASONABLE DISCRETION, EXCEPT THAT
LENDER’S APPROVAL OF SUCH EXPENSES SHALL NOT BE REQUIRED (A) IF LENDER HAS
SEPARATELY APPROVED (BUT WAS NOT DEEMED TO HAVE APPROVED) THE RELATED LEASE IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.1.20 OF THIS AGREEMENT OR (B) WITH
RESPECT TO TENANT IMPROVEMENT EXPENSES THAT ARE LESS THAN $30.00 PER SQUARE
FOOT.  LENDER SHALL MAKE DISBURSEMENTS AS REQUESTED BY BORROWER ON A MONTHLY
BASIS IN INCREMENTS OF NO LESS THAN $5,000.00 UPON DELIVERY BY BORROWER OF
LENDER’S STANDARD FORM OF DRAW REQUEST ACCOMPANIED BY COPIES OF PAID INVOICES
FOR THE AMOUNTS REQUESTED AND, IF REQUIRED BY LENDER, LIEN WAIVERS AND RELEASES
FROM ALL PARTIES FURNISHING MATERIALS AND/OR SERVICES IN CONNECTION WITH THE
REQUESTED PAYMENT.  LENDER MAY REQUIRE AN INSPECTION OF THE PROPERTY AT
BORROWER’S EXPENSE PRIOR TO MAKING A MONTHLY DISBURSEMENT IN ORDER TO VERIFY
COMPLETION OF IMPROVEMENTS FOR WHICH REIMBURSEMENT IS SOUGHT.  ANY LEASE
TERMINATION FEE SHALL BE APPLIED FIRST TO TENANT IMPROVEMENT AND LEASING
COMMISSION OBLIGATIONS INCURRED IN CONNECTION WITH THE RELETTING OF THE SPACE
FOR WHICH SUCH LEASE TERMINATION FEE WAS PAID PURSUANT TO A LEASE APPROVED BY
LENDER IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT, AND ANY REMAINING
PORTION OF SUCH LEASE TERMINATION FEE SHALL BE RELEASED TO BORROWER PROVIDED
THAT NO EVENT OF DEFAULT EXISTS AND LENDER SHALL HAVE RECEIVED A TENANT ESTOPPEL
CERTIFICATE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO LENDER.  
NOTWITHSTANDING THE FOREGOING, THE RSUI TERMINATION FEE MAY ALSO BE USED TO PAY
A PORTION OF THE MONTHLY DEBT SERVICE PAYMENT AMOUNT RELATIVE TO THE AMOUNT OF
RENT THAT IS NO LONGER BEING GENERATED UNDER THE RSUI LEASE.

SECTION 7.5            DEPOSITS TO ADDITIONAL COLLATERAL FUNDS. BORROWER SHALL
PAY TO LENDER ON THE DATE HEREOF THE SUM OF $5,000,000.00 (THE “ADDITIONAL
COLLATERAL DEPOSIT”), WHICH AMOUNTS SHALL BE DEPOSITED WITH AND HELD BY LENDER
AS ADDITIONAL COLLATERAL FOR THE LOAN.    AMOUNTS SO DEPOSITED SHALL HEREINAFTER
BE REFERRED TO AS THE “ADDITIONAL COLLATERAL RESERVE FUNDS” AND THE ACCOUNT IN
WHICH SUCH AMOUNTS ARE HELD SHALL HEREINAFTER BE REFERRED TO AS BORROWER’S
“ADDITIONAL COLLATERAL RESERVE ACCOUNT”.

7.5.1       RELEASE OF ADDITIONAL COLLATERAL FUNDS.  PROVIDED NO EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING, AND BORROWER HAS DELIVERED A FULLY
EXECUTED GROUND LEASE ESTOPPEL AND AGREEMENT TO LENDER IN THE FORM REQUIRED
UNDER THE TERMS OF THE POST CLOSING AGREEMENT, THEN LENDER SHALL DISBURSE THE
ADDITIONAL COLLATERAL FUNDS TO BORROWER.  IF BORROWER FAILS TO DELIVER A FULLY
EXECUTED GROUND LEASE ESTOPPEL AND AGREEMENT TO LENDER PURSUANT TO THE TERMS OF
THE POST CLOSING AGREEMENT, THEN LENDER MAY, IN ITS SOLE DISCRETION, (A)
CONTINUE TO HOLD THE ADDITIONAL COLLATERAL FUNDS AS ADDITIONAL COLLATERAL FOR
THE LOAN UNTIL SUCH TIME AS LENDER REASONABLY BELIEVES THAT ITS WILL

77

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

NOT GET AN ACCEPTABLE FORM OF THE GROUND LEASE ESTOPPEL AND AGREEMENT EXECUTED
OR (B)  APPLY THE ADDITIONAL COLLATERAL FUNDS TO PAYDOWN THE LOAN; PROVIDED,
HOWEVER, THAT UPON LENDER’S REASONABLE BELIEF THAT AN ACCEPTABLE FORM OF THE
GROUND LEASE ESTOPPEL AND AGREEMENT WILL NOT BE EXECUTED, LENDER SHALL APPLY THE
ADDITIONAL COLLATERAL FUNDS TO PAYDOWN THE LOAN.   ANY ADDITIONAL COLLATERAL
FUNDS REMAINING AFTER THE DEBT HAS BEEN PAID IN FULL SHALL BE RETURNED TO
BORROWER.   IF LENDER ELECTS TO PAYDOWN THE LOAN, PURSUANT TO THIS SECTION, NO
YIELD MAINTENANCE PREMIUM SHALL BE DUE IN CONNECTION WITH SUCH PAYDOWN.

SECTION 7.6            DEPOSITS OF GROUND RENT FUNDS. ANY AMOUNTS DEPOSITED INTO
THE GROUND RENT ESCROW ACCOUNT PURSUANT TO THE TERMS OF THE CASH MANAGEMENT
AGREEMENT SHALL HEREINAFTER BE REFERRED TO AS THE “GROUND RENT FUNDS”).

7.6.1       RELEASE OF GROUND RENT FUNDS.  DURING A CASH SWEEP PERIOD, PROVIDED
NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, LENDER SHALL APPLY THE
GROUND RENT FUNDS TO PAYMENTS OF GROUND RENT.  IN MAKING ANY PAYMENT RELATING TO
GROUND RENT, LENDER MAY DO SO ACCORDING TO ANY BILL OR STATEMENT GIVEN BY THE
GROUND LESSOR WITHOUT INQUIRY INTO THE ACCURACY OF SUCH BILL OR STATEMENT OR
INTO THE VALIDITY OF ANY RENT, ADDITIONAL RENT OR OTHER CHARGE THEREOF.  ANY
GROUND RENT FUNDS REMAINING AFTER THE DEBT HAS BEEN PAID IN FULL SHALL BE
RETURNED TO BORROWER.

SECTION 7.7            DEPOSITS TO TI ALLOWANCE RESERVE FUNDS. BORROWER SHALL
PAY TO LENDER ON THE DATE HEREOF THE SUM OF $3,301,480.35 (THE “TI ALLOWANCE
DEPOSIT”), WHICH AMOUNTS SHALL BE DEPOSITED WITH AND HELD BY LENDER FOR THE
TENANT IMPROVEMENT ALLOWANCE SET FORTH ON SCHEDULE VI ATTACHED HERETO AND MADE A
PART HEREOF.   AMOUNTS SO DEPOSITED SHALL HEREINAFTER BE REFERRED TO AS THE “TI
ALLOWANCE RESERVE FUNDS” AND THE ACCOUNT IN WHICH SUCH AMOUNTS ARE HELD SHALL
HEREINAFTER BE REFERRED TO AS BORROWER’S “TI ALLOWANCE RESERVE ACCOUNT”.

7.7.1       WITHDRAWAL OF TI ALLOWANCE RESERVE FUNDS.  LENDER SHALL DISBURSE TO
BORROWER A PORTION OF THE TI ALLOWANCE  RESERVE FUNDS ALLOCABLE TO EACH
APPLICABLE TENANT (EACH, A “TI RESERVE TENANT”) LISTED ON SCHEDULE VI ATTACHED
HERETO IN AN AMOUNT NOT TO EXCEED THE AMOUNT ALLOCABLE TO SUCH TI RESERVE TENANT
AS SET FORTH SCHEDULE VI ATTACHED HERETO UPON SATISFACTION BY BORROWER OF EACH
OF THE FOLLOWING CONDITIONS: (I) BORROWER SHALL SUBMIT A REQUEST FOR PAYMENT TO
LENDER AT LEAST FIFTEEN (15) DAYS PRIOR TO THE DATE ON WHICH BORROWER REQUESTS
SUCH PAYMENT BE MADE AND SPECIFIES THE TENANT IMPROVEMENT COSTS 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; (III) LENDER
SHALL  HAVE RECEIVED A CERTIFICATE FROM BORROWER (A) STATING THAT ALL TENANT
IMPROVEMENTS AT THE PROPERTY TO BE FUNDED BY THE REQUESTED DISBURSEMENT HAVE
BEEN COMPLETED IN GOOD AND WORKMANLIKE MANNER AND IN ACCORDANCE WITH ALL
APPLICABLE FEDERAL, STATE AND LOCAL LAWS, RULES AND REGULATIONS, SUCH
CERTIFICATE TO BE ACCOMPANIED BY A COPY OF ANY LICENSE, PERMIT OR OTHER APPROVAL
BY ANY GOVERNMENTAL AUTHORITY REQUIRED IN CONNECTION WITH THE TENANT
IMPROVEMENTS, (B) IDENTIFYING EACH PERSON THAT SUPPLIED MATERIALS OR LABOR IN
CONNECTION WITH THE TENANT IMPROVEMENTS TO BE FUNDED BY THE REQUESTED
DISBURSEMENT AND (C) STATING THAT EACH SUCH PERSON HAS BEEN PAID IN FULL OR WILL
BE PAID IN FULL UPON SUCH DISBURSEMENT, SUCH CERTIFICATE TO BE ACCOMPANIED BY
LIEN WAIVERS

78

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

OR OTHER EVIDENCE OF PAYMENT SATISFACTORY TO LENDER; AND (IV) 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 TI ALLOWANCE RESERVE FUNDS
MORE FREQUENTLY THAN ONCE EACH CALENDAR MONTH NOR IN AN AMOUNT LESS THAN THE
$5,000.00 (OR A LESSER AMOUNT IF THE TOTAL AMOUNT OF TI ALLOWANCE RESERVE FUNDS
ARE LESS THAN THE $5,000.00, IN WHICH CASE ONLY ONE DISBURSEMENT OF THE AMOUNT
REMAINING IN THE ACCOUNT SHALL BE MADE).

SECTION 7.8            RESERVE FUNDS, GENERALLY.  BORROWER GRANTS TO LENDER A
FIRST-PRIORITY PERFECTED SECURITY INTEREST IN EACH OF THE RESERVE FUNDS AND ANY
AND ALL MONIES NOW OR HEREAFTER DEPOSITED IN EACH RESERVE FUND AS ADDITIONAL
SECURITY FOR PAYMENT OF THE DEBT.  UNTIL EXPENDED OR APPLIED IN ACCORDANCE
HEREWITH, THE RESERVE FUNDS SHALL CONSTITUTE ADDITIONAL SECURITY FOR THE DEBT. 
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, LENDER MAY, IN ADDITION TO ANY AND
ALL OTHER RIGHTS AND REMEDIES AVAILABLE TO LENDER, APPLY ANY SUMS THEN PRESENT
IN ANY OR ALL OF THE RESERVE FUNDS TO THE PAYMENT OF THE DEBT IN ANY ORDER IN
ITS SOLE DISCRETION.  THE RESERVE FUNDS SHALL NOT CONSTITUTE TRUST FUNDS AND MAY
BE COMMINGLED WITH OTHER MONIES HELD BY LENDER.  AMOUNTS DEPOSITED IN THE
REPLACEMENT RESERVE ACCOUNT, THE PROPERTY RESERVE ACCOUNT, THE ADDITIONAL
COLLATERAL RESERVE ACCOUNT, THE TI IMPROVEMENT RESERVE ACCOUNT AND THE ROLLOVER
RESERVE ACCOUNT SHALL BEAR INTEREST AT THE THIRTY DAY MONEY MARKET RATE
PUBLISHED BY THE BANK USED BY LENDER TO HOLD ESCROW DEPOSITS, AND SHALL BE HELD
AND RELEASED BY LENDER, AND USED BY BORROWER, IN ACCORDANCE WITH THE TERMS AND
CONDITIONS OF THIS AGREEMENT.  LENDER SHALL BE ENTITLED TO A SERVICING FEE IN
THE AMOUNT OF .25% PER ANNUM MULTIPLIED BY THE AVERAGE DAILY BALANCE ON DEPOSIT
IN THE REPLACEMENT RESERVE ACCOUNT, THE PROPERTY RESERVE ACCOUNT, THE ADDITIONAL
COLLATERAL RESERVE ACCOUNT, THE TI IMPROVEMENT ALLOWANCE ACCOUNT AND THE
ROLLOVER RESERVE ACCOUNT (BUT IN NO EVENT SHALL LENDER BE ENTITLED TO A
SERVICING FEE IN AN AMOUNT GREATER THAN THE AMOUNT OF INTEREST EARNED THEREON),
AND LENDER IS HEREBY AUTHORIZED TO DEDUCT SUCH SERVICING FEE FROM THE
REPLACEMENT RESERVE FUNDS, THE PROPERTY RESERVE FUNDS, THE ADDITIONAL COLLATERAL
RESERVE FUNDS, THE TI ALLOWANCE RESERVE FUNDS AND THE ROLLOVER RESERVE FUNDS ON
A MONTHLY BASIS.  ALL INTEREST OR OTHER INCOME IN CONNECTION WITH THE DEPOSIT OR
PLACEMENT OF THE REPLACEMENT RESERVE FUNDS, THE PROPERTY RESERVE FUNDS, THE
ADDITIONAL COLLATERAL RESERVE FUNDS, THE TI ALLOWANCE RESERVE FUNDS AND THE
ROLLOVER RESERVE FUNDS, LESS THE SERVICING FEE, SHALL BE REPORTED UNDER
BORROWER’S TAX IDENTIFICATION NUMBER, AND SHALL ONLY BE DISBURSED AS SET FORTH
IN THIS AGREEMENT.  ALL INTEREST ON ANY RESERVE FUNDS OTHER THAN THE REPLACEMENT
RESERVE FUNDS, THE PROPERTY RESERVE FUNDS, THE ADDITIONAL COLLATERAL RESERVE
FUNDS, THE TI ALLOWANCE RESERVE FUNDS AND THE ROLLOVER RESERVE FUNDS SHALL NOT
BE ADDED TO OR BECOME A PART THEREOF AND SHALL BE THE SOLE PROPERTY OF AND SHALL
BE PAID TO LENDER.  BORROWER SHALL BE RESPONSIBLE FOR PAYMENT OF ANY FEDERAL,
STATE OR LOCAL INCOME OR OTHER TAX APPLICABLE TO THE INTEREST EARNED ON THE
RESERVE FUNDS CREDITED OR PAID TO BORROWER.  BORROWER SHALL NOT, WITHOUT
OBTAINING THE PRIOR WRITTEN CONSENT OF LENDER, FURTHER PLEDGE, ASSIGN OR GRANT
ANY SECURITY INTEREST IN ANY RESERVE FUND OR THE MONIES DEPOSITED THEREIN 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.  LENDER SHALL NOT BE LIABLE FOR
ANY LOSS SUSTAINED ON THE INVESTMENT OF ANY FUNDS CONSTITUTING THE RESERVE
FUNDS.  BORROWER SHALL INDEMNIFY LENDER AND HOLD LENDER HARMLESS FROM AND
AGAINST ANY AND ALL ACTIONS, SUITS, CLAIMS, DEMANDS, LIABILITIES, LOSSES,
DAMAGES, OBLIGATIONS AND COSTS AND EXPENSES (INCLUDING LITIGATION COSTS AND
REASONABLE ATTORNEYS FEES AND EXPENSES) ARISING FROM OR IN ANY WAY CONNECTED

79

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

WITH THE PERFORMANCE OF THE OBLIGATIONS FOR WHICH THE RESERVE FUNDS WERE
ESTABLISHED.  BORROWER SHALL ASSIGN TO LENDER ALL RIGHTS AND CLAIMS BORROWER MAY
HAVE AGAINST ALL PERSONS OR ENTITIES SUPPLYING LABOR, MATERIALS OR OTHER
SERVICES WHICH ARE TO BE PAID FROM OR SECURED BY THE RESERVE FUNDS; PROVIDED,
HOWEVER, THAT LENDER MAY NOT PURSUE ANY SUCH RIGHT OR CLAIM UNLESS AN EVENT OF
DEFAULT HAS OCCURRED AND REMAINS UNCURED.

SECTION 7.9            LETTER OF CREDIT RIGHTS.  ANY LETTER OF CREDIT DELIVERED
TO LENDER PURSUANT TO THIS AGREEMENT SHALL BE HELD BY LENDER AS ADDITIONAL
SECURITY FOR THE LOAN.  LENDER SHALL HAVE THE RIGHT TO DRAW UPON ANY LETTER OF
CREDIT IMMEDIATELY AND WITHOUT FURTHER NOTICE:

(A)           UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT;

(B)           IF BORROWER FAILS TO DELIVER TO LENDER, NO LESS THAN THIRTY (30)
DAYS PRIOR TO THE EXPIRATION OF ANY LETTER OF CREDIT (INCLUDING ANY RENEWAL OR
EXTENSION THEREOF), A RENEWAL OR EXTENSION OF SUCH LETTER OF CREDIT OR A
REPLACEMENT LETTER OF CREDIT; OR

(C)           IF THE INSTITUTION ISSUING THE LETTER OF CREDIT CEASES TO BE AN
ELIGIBLE INSTITUTION AND BORROWER FAILS TO DELIVER TO LENDER A REPLACEMENT
LETTER OF CREDIT FROM AN ELIGIBLE INSTITUTION WITHIN THIRTY (30) DAYS OF THE
DATE THAT BORROWER IS NOTIFIED OR OTHERWISE BECOMES AWARE THAT SUCH INSTITUTION
CEASED TO BE AN ELIGIBLE INSTITUTION.

SECTION 7.10         APPLICATION OF LETTER OF CREDIT PROCEEDS.  IN THE EVENT OF
A DRAW UPON A LETTER OF CREDIT DUE TO THE EXISTENCE OF AN EVENT OF DEFAULT,
LENDER MAY APPLY SUCH AMOUNTS IN SUCH ORDER AND IN SUCH AMOUNTS AS LENDER SHALL
ELECT, IN ITS SOLE AND ABSOLUTE DISCRETION, TO PAYMENT OF THE DEBT.  IN THE
EVENT OF A DRAW UPON A LETTER OF CREDIT DUE TO THE OCCURRENCE OF AN EVENT
DESCRIBED IN SECTION 7.9(B) OR (C) ABOVE, LENDER SHALL DEPOSIT THE PROCEEDS OF
SUCH LETTER OF CREDIT INTO A RESERVE ACCOUNT DESIGNATED BY LENDER AND SUCH
PROCEEDS SHALL BE HELD AND RELEASED IN THE SAME MANNER APPLICABLE TO THE RELEASE
OF THE LETTER OF CREDIT.

VIII.                        DEFAULTS

SECTION 8.1            EVENT OF DEFAULT.  (A)  EACH OF THE FOLLOWING EVENTS
SHALL CONSTITUTE AN EVENT OF DEFAULT HEREUNDER (AN “EVENT OF DEFAULT”):

(I)          IF ANY PORTION OF THE DEBT IS NOT PAID PRIOR TO THE FIFTH (5TH)
CALENDAR DAY AFTER THE SAME IS DUE OR IF THE ENTIRE DEBT IS NOT PAID ON THE
MATURITY DATE, ALONG WITH APPLICABLE PREPAYMENT PREMIUMS, IF ANY;

(II)         IF ANY OF THE TAXES OR OTHER CHARGES ARE NOT PAID PRIOR TO THE DATE
WHEN THE SAME BECOME DELINQUENT, EXCEPT TO THE EXTENT THAT BORROWER IS
CONTESTING SAME IN ACCORDANCE WITH THE TERMS OF SECTION 5.1.2 HEREOF, OR THERE
ARE SUFFICIENT FUNDS IN THE TAX AND INSURANCE ESCROW FUND TO PAY SUCH TAXES OR
OTHER CHARGES AND LENDER FAILS TO OR REFUSES TO RELEASE THE SAME FROM THE TAX
AND INSURANCE ESCROW FUND;

(III)        IF THE POLICIES ARE NOT KEPT IN FULL FORCE AND EFFECT, OR IF
CERTIFIED COPIES OF THE POLICIES ARE NOT DELIVERED TO LENDER WITHIN TEN (10)
DAYS OF REQUEST;

80

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

(IV)        IF BORROWER TRANSFERS OR ENCUMBERS ANY PORTION OF THE PROPERTY
WITHOUT LENDER’S PRIOR WRITTEN CONSENT (TO THE EXTENT SUCH CONSENT IS REQUIRED)
OR OTHERWISE VIOLATES THE PROVISIONS OF THIS AGREEMENT AND ARTICLE 6 OF THE
SECURITY INSTRUMENT;

(V)         IF ANY MATERIAL 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;

(VI)        IF BORROWER, PRINCIPAL OR GUARANTOR SHALL MAKE AN ASSIGNMENT FOR THE
BENEFIT OF CREDITORS;

(VII)       IF A RECEIVER, LIQUIDATOR OR TRUSTEE SHALL BE APPOINTED FOR
BORROWER, PRINCIPAL OR GUARANTOR OR IF BORROWER, PRINCIPAL OR GUARANTOR 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, PRINCIPAL OR GUARANTOR, OR IF ANY PROCEEDING FOR THE
DISSOLUTION OR LIQUIDATION OF BORROWER, PRINCIPAL OR GUARANTOR SHALL BE
INSTITUTED; PROVIDED, HOWEVER, IF SUCH APPOINTMENT, ADJUDICATION, PETITION OR
PROCEEDING WAS INVOLUNTARY AND NOT CONSENTED TO BY BORROWER, PRINCIPAL OR
GUARANTOR, UPON THE SAME NOT BEING DISCHARGED, STAYED OR DISMISSED WITHIN ONE
HUNDRED EIGHTY (180) DAYS;

(VIII)      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;

(IX)         IF BORROWER BREACHES ANY OF ITS RESPECTIVE NEGATIVE COVENANTS
CONTAINED IN SECTION 5.2 OR ANY COVENANT CONTAINED IN SECTION 4.1.30 HEREOF;

(X)          WITH RESPECT TO ANY TERM, COVENANT OR PROVISION SET FORTH HEREIN
WHICH SPECIFICALLY CONTAINS A NOTICE REQUIREMENT OR GRACE PERIOD, IF BORROWER
SHALL BE IN DEFAULT UNDER SUCH TERM, COVENANT OR CONDITION AFTER THE GIVING OF
SUCH NOTICE OR THE EXPIRATION OF SUCH GRACE PERIOD;

(XI)         IF ANY OF THE ASSUMPTIONS CONTAINED IN THE INSOLVENCY OPINION
DELIVERED TO LENDER IN CONNECTION WITH THE LOAN, OR IN ANY ADDITIONAL INSOLVENCY
OPINION DELIVERED SUBSEQUENT TO THE CLOSING OF THE LOAN, IS OR SHALL BECOME
UNTRUE IN ANY MATERIAL RESPECT;

(XII)        [INTENTIONALLY OMITTED];

(XIII)       IF BORROWER SHALL CONTINUE TO BE IN DEFAULT UNDER ANY OF THE TERMS,
COVENANTS OR CONDITIONS OF SECTION 9.1 HEREOF (UNLESS BORROWER IS UNABLE TO
SATISFY SUCH TERM, COVENANTS OR CONDITIONS DUE TO CIRCUMSTANCES BEYOND ITS
CONTROL, SUCH AS THE UNAVAILABILITY OF INFORMATION REQUESTED BY LENDER), OR

81

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

WILLFULLY FAILS TO COOPERATE WITH LENDER IN CONNECTION WITH A SECURITIZATION
PURSUANT TO THE PROVISIONS OF SECTION 9.1 HEREOF, FOR FIVE (5) BUSINESS DAYS
AFTER NOTICE TO BORROWER FROM LENDER;

(XIV)      IF BORROWER SHALL CONTINUE TO BE IN DEFAULT UNDER ANY OF THE OTHER
TERMS, COVENANTS OR CONDITIONS OF THIS AGREEMENT NOT SPECIFIED IN
SUBSECTIONS (I) TO (XII) 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 ONE HUNDRED EIGHTY  (180)
DAYS;

(XV)       IF (A) BORROWER SHALL FAIL IN THE PAYMENT OF ANY RENT, ADDITIONAL
RENT OR OTHER CHARGE MENTIONED IN OR MADE PAYABLE BY THE GROUND LEASE AS AND
WHEN SUCH RENT OR OTHER CHARGE IS DUE AND PAYABLE, SUBJECT TO ANY SPECIFIC GRACE
PERIODS  (UNLESS WAIVED BY THE LANDLORD UNDER THE GROUND LEASE), (B) THERE SHALL
OCCUR ANY DEFAULT (AFTER THE EXPIRATION OF ANY NOTICE AND CURE PERIODS CONTAINED
THEREIN) BY BORROWER, UNDER THE GROUND LEASE OR THE DEVELOPMENT AGREEMENT, IN
THE OBSERVANCE OR PERFORMANCE OF ANY TERM, COVENANT OR CONDITION OF THE GROUND
LEASE (UNLESS WAIVED BY THE LANDLORD UNDER THE GROUND LEASE), (C) IF ANY ONE OR
MORE OF THE EVENTS REFERRED TO IN THE GROUND LEASE SHALL OCCUR WHICH WOULD CAUSE
THE GROUND LEASE TO TERMINATE WITHOUT NOTICE OR ACTION BY THE LANDLORD UNDER THE
GROUND LEASE OR WHICH WOULD ENTITLE THE LANDLORD TO TERMINATE THE GROUND LEASE
AND THE TERM THEREOF BY GIVING NOTICE TO BORROWER, AS TENANT THEREUNDER (UNLESS
WAIVED BY THE LANDLORD UNDER THE GROUND LEASE), (D) IF THE LEASEHOLD ESTATE
CREATED BY THE GROUND LEASE SHALL BE SURRENDERED OR THE GROUND LEASE SHALL BE
TERMINATED OR CANCELED FOR ANY REASON OR UNDER ANY CIRCUMSTANCES WHATSOEVER OR
(E) IF ANY OF THE TERMS, COVENANTS OR CONDITIONS OF THE GROUND LEASE SHALL IN
ANY MANNER BE MODIFIED, CHANGED, SUPPLEMENTED, ALTERED, OR AMENDED WITHOUT THE
CONSENT OF LENDER EXCEPT AS OTHERWISE PERMITTED BY THIS AGREEMENT;

(XVI)      IF BORROWER SHALL PERMIT ANY EVENT WITHIN ITS CONTROL TO OCCUR THAT
WOULD CAUSE ANY MATERIAL (AS TO USE OR VALUE) REA TO TERMINATE WITHOUT NOTICE OR
ACTION BY ANY PARTY THERETO OR WOULD ENTITLE ANY PARTY TO TERMINATE ANY REA AND
THE TERM THEREOF BY GIVING NOTICE TO BORROWER; OR ANY MATERIAL (AS TO USE OR
VALUE) REA SHALL BE SURRENDERED, TERMINATED, OR CANCELED FOR ANY REASON OR UNDER
ANY CIRCUMSTANCE WHATSOEVER; OR ANY TERM OF A MATERIAL (AS TO USE OR VALUE) REA
SHALL BE MATERIALLY MODIFIED OR SUPPLEMENTED WITHOUT LENDER’S PRIOR WRITTEN
CONSENT; OR BORROWER SHALL FAIL, WITHIN TEN (10) BUSINESS DAYS AFTER WRITTEN
DEMAND BY LENDER, TO EXERCISE ITS OPTION TO RENEW OR EXTEND THE TERM OF ANY
MATERIAL (AS TO USE OR VALUE) REA OR SHALL FAIL OR NEGLECT TO PURSUE DILIGENTLY
ALL ACTIONS NECESSARY TO EXERCISE (IF THEN EXERCISABLE) SUCH RENEWAL RIGHTS
PURSUANT TO SUCH REA;

82

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

(XVII)     IF THERE SHALL BE DEFAULT UNDER ANY OF THE OTHER LOAN DOCUMENTS
BEYOND ANY APPLICABLE CURE PERIODS CONTAINED IN SUCH DOCUMENTS, WHETHER AS TO
BORROWER OR THE PROPERTY, OR IF ANY OTHER SUCH EVENT SHALL OCCUR OR CONDITION
SHALL EXIST, IF THE EFFECT OF SUCH EVENT OR CONDITION IS TO ACCELERATE THE
MATURITY OF ANY PORTION OF THE DEBT OR TO PERMIT LENDER TO ACCELERATE THE
MATURITY OF ALL OR ANY PORTION OF THE DEBT.

(B)           UPON THE OCCURRENCE OF AN EVENT OF DEFAULT (OTHER THAN AN EVENT OF
DEFAULT DESCRIBED IN CLAUSES (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, LENDER MAY TAKE SUCH ACTION, WITHOUT NOTICE OR DEMAND, THAT LENDER DEEMS
ADVISABLE TO PROTECT AND ENFORCE ITS RIGHTS AGAINST BORROWER AND 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 ANY OR ALL OF THE PROPERTY,
INCLUDING, WITHOUT LIMITATION, ALL RIGHTS OR REMEDIES AVAILABLE AT LAW OR IN
EQUITY; AND UPON ANY EVENT OF DEFAULT DESCRIBED IN CLAUSES (VI), (VII) OR (VIII)
ABOVE, THE DEBT AND 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 8.2            REMEDIES. (A)  UPON THE OCCURRENCE 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 ALL OR ANY PART OF 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, BORROWER AGREES THAT IF AN EVENT OF DEFAULT IS CONTINUING (I) LENDER
IS NOT SUBJECT TO ANY “ONE ACTION” OR “ELECTION OF REMEDIES” LAW OR RULE (TO THE
EXTENT WAIVEABLE BY BORROWER), 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 SECURITY
INSTRUMENT HAS BEEN FORECLOSED, SOLD AND/OR OTHERWISE REALIZED UPON IN
SATISFACTION OF THE DEBT OR THE DEBT HAS BEEN PAID IN FULL.

(B)           WITH RESPECT TO BORROWER AND THE PROPERTY, NOTHING CONTAINED
HEREIN OR IN ANY OTHER LOAN DOCUMENT SHALL BE CONSTRUED AS REQUIRING LENDER TO
RESORT TO THE PROPERTY FOR THE SATISFACTION OF ANY OF THE DEBT IN ANY PREFERENCE
OR PRIORITY TO ANY OTHER PROPERTY, AND LENDER MAY SEEK SATISFACTION OUT OF THE
PROPERTY, OR ANY PART THEREOF, IN ITS ABSOLUTE DISCRETION IN RESPECT OF THE
DEBT.  IN ADDITION, TO THE EXTENT PERMITTED BY APPLICABLE LAW, LENDER SHALL HAVE
THE RIGHT FROM TIME TO TIME TO PARTIALLY FORECLOSE THE SECURITY INSTRUMENT IN
ANY MANNER AND FOR ANY

83

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

AMOUNTS SECURED BY THE SECURITY INSTRUMENT THEN DUE AND PAYABLE AS DETERMINED BY
LENDER IN ITS SOLE DISCRETION INCLUDING, WITHOUT LIMITATION, THE FOLLOWING
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 SECURITY INSTRUMENT 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
SECURITY INSTRUMENT TO RECOVER SO MUCH OF THE PRINCIPAL BALANCE OF THE LOAN AS
LENDER MAY ACCELERATE AND SUCH OTHER SUMS SECURED BY THE SECURITY INSTRUMENT AS
LENDER MAY ELECT.  NOTWITHSTANDING ONE OR MORE PARTIAL FORECLOSURES, THE
PROPERTY SHALL REMAIN SUBJECT TO THE SECURITY INSTRUMENT TO SECURE PAYMENT OF
SUMS SECURED BY THE SECURITY INSTRUMENT AND NOT PREVIOUSLY RECOVERED.

(C)           DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, LENDER SHALL HAVE
THE RIGHT FROM TIME TO TIME TO SEVER THE NOTE AND THE OTHER LOAN DOCUMENTS INTO
ONE OR MORE SEPARATE NOTES, MORTGAGES AND OTHER SECURITY DOCUMENTS (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 FOLLOWING
THE OCCURRENCE OF AN EVENT OF DEFAULT 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.  BORROWER SHALL BE OBLIGATED TO PAY ANY
COSTS OR EXPENSES INCURRED IN CONNECTION WITH THE PREPARATION, EXECUTION,
RECORDING OR FILING OF THE SEVERED LOAN DOCUMENTS IN CONNECTION WITH AN EVENT OF
DEFAULT AND 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.

SECTION 8.3            REMEDIES CUMULATIVE; WAIVERS.  THE RIGHTS, POWERS AND
REMEDIES OF LENDER UNDER THIS AGREEMENT SHALL BE CUMULATIVE AND NOT EXCLUSIVE OF
ANY OTHER RIGHT, POWER OR REMEDY WHICH LENDER MAY HAVE AGAINST BORROWER 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.

84

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

IX.                                SPECIAL PROVISIONS

SECTION 9.1            SECURITIZATION.

9.1.1       SALE OF NOTES AND SECURITIZATION.  BORROWER ACKNOWLEDGES AND AGREES
THAT LENDER MAY SELL ALL OR ANY PORTION OF THE LOAN AND THE LOAN DOCUMENTS, OR
ISSUE ONE OR MORE PARTICIPATIONS THEREIN, OR CONSUMMATE ONE OR MORE PRIVATE OR
PUBLIC SECURITIZATIONS OF RATED SINGLE- OR MULTI-CLASS SECURITIES (THE
“SECURITIES”) SECURED BY OR EVIDENCING OWNERSHIP INTERESTS IN ALL OR ANY PORTION
OF THE LOAN AND THE LOAN DOCUMENTS OR A POOL OF ASSETS THAT INCLUDE THE LOAN AND
THE LOAN DOCUMENTS (SUCH SALES, PARTICIPATIONS AND/OR SECURITIZATIONS,
COLLECTIVELY, A “SECURITIZATION”).  AT THE REQUEST OF LENDER, AND TO THE EXTENT
NOT ALREADY REQUIRED TO BE PROVIDED BY OR ON BEHALF OF BORROWER UNDER THIS
AGREEMENT, BORROWER SHALL USE REASONABLE EFFORTS TO PROVIDE INFORMATION NOT IN
THE POSSESSION OF LENDER OR WHICH MAY BE REASONABLY REQUIRED BY LENDER OR TAKE
OTHER ACTIONS REASONABLY REQUIRED BY LENDER, IN EACH CASE IN ORDER TO SATISFY
THE MARKET STANDARDS TO WHICH LENDER CUSTOMARILY ADHERES OR WHICH MAY BE
REASONABLY REQUIRED BY PROSPECTIVE INVESTORS AND/OR THE RATING AGENCIES IN
CONNECTION WITH ANY SUCH SECURITIZATION INCLUDING, WITHOUT LIMITATION, TO:

(A)           PROVIDE ADDITIONAL AND/OR UPDATED PROVIDED INFORMATION, TOGETHER
WITH APPROPRIATE VERIFICATION AND/OR CONSENTS RELATED TO THE PROVIDED
INFORMATION THROUGH LETTERS OF AUDITORS OR OPINIONS OF COUNSEL OF INDEPENDENT
ATTORNEYS REASONABLY ACCEPTABLE TO LENDER, PROSPECTIVE INVESTORS AND/OR THE
RATING AGENCIES;

(B)           ASSIST IN PREPARING DESCRIPTIVE MATERIALS FOR PRESENTATIONS TO ANY
OR ALL OF THE RATING AGENCIES, AND WORK WITH, AND IF REQUESTED, SUPERVISE,
THIRD-PARTY SERVICE PROVIDERS ENGAGED BY BORROWER AND APPROVED BY LENDER,
PRINCIPAL AND THEIR RESPECTIVE AFFILIATES TO OBTAIN, COLLECT, AND DELIVER
INFORMATION REQUESTED OR REQUIRED BY LENDER, PROSPECTIVE INVESTORS AND/OR THE
RATING AGENCIES;

(C)           DELIVER REVISED ORGANIZATIONAL DOCUMENTS FOR BORROWER, WHICH
COUNSEL OPINIONS AND ORGANIZATIONAL DOCUMENTS SHALL BE REASONABLY SATISFACTORY
TO LENDER, PROSPECTIVE INVESTORS AND/OR THE RATING AGENCIES;

(D)           IF REQUIRED BY ANY PROSPECTIVE INVESTOR AND/OR ANY RATING AGENCY,
USE COMMERCIALLY REASONABLE EFFORTS TO DELIVER SUCH ADDITIONAL TENANT ESTOPPEL
LETTERS, SUBORDINATION AGREEMENTS OR OTHER AGREEMENTS FROM PARTIES TO AGREEMENTS
THAT AFFECT THE PROPERTY, WHICH ESTOPPEL LETTERS, SUBORDINATION AGREEMENTS OR
OTHER AGREEMENTS SHALL BE REASONABLY SATISFACTORY TO LENDER, PROSPECTIVE
INVESTORS AND/OR THE RATING AGENCIES;

(E)           MAKE SUCH REPRESENTATIONS AND WARRANTIES AS OF THE CLOSING DATE OF
THE SECURITIZATION WITH RESPECT TO THE PROPERTY, BORROWER, PRINCIPAL, GUARANTOR
AND THE LOAN DOCUMENTS AS MAY BE REASONABLY REQUESTED BY LENDER, PROSPECTIVE
INVESTORS AND/OR THE RATING AGENCIES AND CONSISTENT WITH THE FACTS COVERED BY
SUCH REPRESENTATIONS AND WARRANTIES AS THEY EXIST ON THE DATE THEREOF, INCLUDING
THE REPRESENTATIONS AND WARRANTIES MADE IN THE LOAN DOCUMENTS;

(F)            EXECUTE SUCH AMENDMENTS TO THE LOAN DOCUMENTS AND ORGANIZATIONAL
DOCUMENTS AS MAY BE REASONABLY REQUESTED BY THE HOLDER OF THE NOTE OR THE RATING
AGENCIES OR

85

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

OTHERWISE TO EFFECT THE SECURITIZATION; PROVIDED, HOWEVER, THAT BORROWER SHALL
NOT BE REQUIRED TO MODIFY OR AMEND ANY LOAN DOCUMENT IF SUCH MODIFICATION OR
AMENDMENT WOULD (I) CHANGE THE INTEREST RATE, THE STATED MATURITY OR THE
AMORTIZATION OF PRINCIPAL SET FORTH IN THE NOTE, OR (II) MODIFY OR AMEND ANY
OTHER MATERIAL TERM OF THE LOAN;

(G)           IF REQUESTED BY LENDER, REVIEW ANY INFORMATION REGARDING THE
PROPERTY, BORROWER, PRINCIPAL, GUARANTOR, PROPERTY MANAGER AND THE LOAN WHICH IS
CONTAINED IN A PRELIMINARY OR FINAL PRIVATE PLACEMENT MEMORANDUM, PROSPECTUS,
PROSPECTUS SUPPLEMENT (INCLUDING ANY AMENDMENT OR SUPPLEMENT TO EITHER THEREOF),
OR OTHER DISCLOSURE DOCUMENT TO BE USED BY LENDER OR ANY AFFILIATE THEREOF; AND

(H)           SUPPLY TO LENDER SUCH DOCUMENTATION, FINANCIAL STATEMENTS AND
REPORTS IN FORM AND SUBSTANCE REQUIRED IN ORDER TO COMPLY WITH ANY APPLICABLE
SECURITIES LAWS.

9.1.2       LOAN COMPONENTS.  BORROWER COVENANTS AND AGREES THAT IN CONNECTION
WITH ANY SECURITIZATION OF THE LOAN, UPON LENDER’S REQUEST BORROWER SHALL
DELIVER ONE OR MORE NEW COMPONENT NOTES TO REPLACE THE ORIGINAL NOTE OR MODIFY
THE ORIGINAL NOTE TO REFLECT MULTIPLE COMPONENTS OF THE LOAN OR CREATE ONE OR
MORE MEZZANINE LOANS (INCLUDING AMENDING BORROWER’S ORGANIZATIONAL STRUCTURE TO
PROVIDE FOR ONE OR MORE MEZZANINE BORROWERS) (EACH A “RESIZING EVENT”).  LENDER
AGREES THAT SUCH NEW NOTES OR MODIFIED NOTE OR MEZZANINE NOTES SHALL HAVE THE
SAME WEIGHTED AVERAGE COUPON AS THE ORIGINAL NOTE PRIOR TO SUCH RESIZING EVENT
AND SHALL OTHERWISE COMPLY WITH THE PROVISIONS OF SECTION 9.1.1(F).

9.1.3       SECURITIZATION COSTS.  ALL REASONABLE THIRD PARTY COSTS AND EXPENSES
INCURRED BY BORROWER IN CONNECTION WITH BORROWER’S COMPLYING WITH REQUESTS MADE
UNDER THIS SECTION 9.1 (INCLUDING, WITHOUT LIMITATION, THE FEES AND EXPENSES OF
THE RATING AGENCIES) SHALL BE PAID BY LENDER.

9.1.4       REGULATION AB.   IF REQUESTED BY LENDER, BORROWER SHALL PROVIDE
LENDER WITH THE FOLLOWING FINANCIAL STATEMENTS:

(A)           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 RELATED PROPERTIES 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 WITH RESPECT TO BORROWER, THE RELEVANT AFFILIATES OF BORROWER AND
THE PROPERTY, IF LENDER EXPECTS THAT THE PRINCIPAL AMOUNT OF THE LOAN TOGETHER
WITH ANY RELATED LOANS AS OF THE CUT-OFF DATE FOR SUCH SECURITIZATION MAY, OR IF
THE PRINCIPAL AMOUNT OF THE LOAN TOGETHER WITH ANY RELATED LOANS AS OF THE
CUT-OFF DATE FOR SUCH SECURITIZATION AND AT ANY TIME DURING WHICH THE LOAN AND
ANY RELATED LOANS ARE INCLUDED IN A SECURITIZATION DOES, EQUAL OR EXCEED TEN
PERCENT (10%) (BUT LESS THAN TWENTY PERCENT (20%)) OF THE AGGREGATE PRINCIPAL
AMOUNT OF ALL MORTGAGE LOANS INCLUDED OR EXPECTED TO BE INCLUDED, AS APPLICABLE,
IN THE SECURITIZATION OR (II) THE FINANCIAL STATEMENTS REQUIRED UNDER ITEM
1112(B)(2) OF REGULATION AB WITH RESPECT TO BORROWER, THE RELEVANT AFFILIATES OF
BORROWER AND THE PROPERTY, IF LENDER EXPECTS THAT THE PRINCIPAL AMOUNT OF THE
LOAN TOGETHER WITH ANY RELATED LOANS AS OF THE CUT-OFF DATE FOR SUCH
SECURITIZATION MAY, OR IF

86

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

THE PRINCIPAL AMOUNT OF THE LOAN TOGETHER WITH ANY RELATED LOANS AS OF THE
CUT-OFF DATE FOR SUCH SECURITIZATION AND AT ANY TIME DURING WHICH THE LOAN AND
ANY RELATED LOANS ARE INCLUDED IN A SECURITIZATION DOES, EQUAL OR EXCEED 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 A
REASONABLE PERIOD OF TIME AFTER NOTICE FROM LENDER IN CONNECTION WITH THE
PREPARATION OF DISCLOSURE DOCUMENTS FOR THE SECURITIZATION, (B) NOT LATER THAN
FORTY-FIVE (45) DAYS AFTER THE END OF EACH FISCAL QUARTER OF BORROWER AND (C)
NOT LATER THAN ONE HUNDRED TWENTY (120) 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 EXCHANGE
ACT IN CONNECTION WITH OR RELATING TO THE SECURITIZATION (AN “EXCHANGE ACT
FILING”) IS NOT REQUIRED.  IF REQUESTED BY LENDER, BORROWER SHALL FURNISH TO
LENDER FINANCIAL DATA AND/OR FINANCIAL STATEMENTS FOR ANY TENANT OF THE 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
THE SECURITIZATION SUCH THAT SUCH TENANT OR GROUP OF AFFILIATED TENANTS WOULD
CONSTITUTE A SIGNIFICANT OBLIGOR.

(B)           IF REQUESTED BY LENDER, BORROWER SHALL PROVIDE LENDER, PROMPTLY
UPON REQUEST, WITH SUMMARIES OF THE FINANCIAL STATEMENTS REFERRED TO IN SECTION
9.1.4(A) HEREOF IF, AT THE TIME A DISCLOSURE DOCUMENT IS BEING PREPARED FOR A
SECURITIZATION, IT IS EXPECTED THAT THE PRINCIPAL AMOUNT OF THE LOAN AND ANY
AFFILIATED LOANS AT THE TIME OF SUCH SECURITIZATION MAY, OR IF THE PRINCIPAL
AMOUNT OF THE LOAN AND ANY AFFILIATED LOANS AT ANY TIME DURING WHICH THE LOAN
AND ANY AFFILIATED LOANS ARE INCLUDED IN A SECURITIZATION DOES, EQUAL OR EXCEED
TEN PERCENT (10%) (BUT IS LESS THAN TWENTY PERCENT (20%)) OF THE AGGREGATE
PRINCIPAL AMOUNT OF ALL MORTGAGE LOANS INCLUDED OR EXPECTED TO BE INCLUDED, AS
APPLICABLE, IN A SECURITIZATION.  SUCH SUMMARIES SHALL MEET THE REQUIREMENTS FOR
“SUMMARIZED FINANCIAL INFORMATION,” AS DEFINED IN SECTION 210.1-02(BB) OF
REGULATION S-X, OR SUCH OTHER REQUIREMENTS AS MAY BE DETERMINED TO BE NECESSARY
OR APPROPRIATE BY LENDER.

(C)           ALL FINANCIAL DATA AND FINANCIAL STATEMENTS PROVIDED BY BORROWER
HEREUNDER PURSUANT TO SECTION 9.1.4(A) HEREOF SHALL BE PREPARED IN ACCORDANCE
WITH GAAP, AND SHALL MEET THE REQUIREMENTS OF REGULATION AB AND SUCH OTHER
APPLICABLE LEGAL REQUIREMENTS AS LENDER MAY SPECIFY IN ITS REQUEST TO BORROWER. 
ALL FINANCIAL DATA AND FINANCIAL STATEMENTS PROVIDED BY BORROWER UNDER SECTION
9.1.4(A) SHALL BE ACCOMPANIED BY AN OFFICER’S CERTIFICATE, WHICH SHALL STATE
THAT SUCH FINANCIAL STATEMENTS MEET THE REQUIREMENTS SET FORTH IN THE FIRST
SENTENCE OF THIS SECTION 9.1.4(C).

(D)           IF REQUESTED BY LENDER, BORROWER SHALL PROVIDE LENDER, PROMPTLY
UPON REQUEST, WITH ANY OTHER OR ADDITIONAL FINANCIAL STATEMENTS, OR FINANCIAL,
STATISTICAL OR OPERATING INFORMATION, IN EACH CASE RELATING TO BORROWER, ANY
AFFILIATES OF BORROWER OR THE PROPERTY, AS LENDER SHALL DETERMINE TO BE REQUIRED
PURSUANT TO REGULATION AB OR ANY AMENDMENT, MODIFICATION OR REPLACEMENT THERETO
OR OTHER LEGAL REQUIREMENTS IN CONNECTION WITH ANY DISCLOSURE DOCUMENT OR ANY
EXCHANGE ACT FILING OR AS SHALL OTHERWISE BE REASONABLY REQUESTED BY LENDER.

87

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

(E)           NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS SECTION 9.1.4,
BORROWER’S OBLIGATIONS WITH RESPECT TO THE DELIVERY OF INFORMATION (I) WITH
RESPECT TO PERIODS PREDATING BORROWER’S ACQUISITION OF THE PROPERTY, (II)
RELATING TO TENANTS OF THE PROPERTY, OR (III) OTHERWISE RELATING TO PERSONS OR
PROPERTY NOT OWNED BY BORROWER OR WITHIN ITS REASONABLE CONTROL (OR IN THE
CONTROL OF ONE OR MORE OF ITS AFFILIATES) SHALL BE LIMITED TO USING COMMERCIALLY
REASONABLE EFFORTS TO (A) ENFORCE BORROWER’S CONTRACTUAL RIGHTS, IF ANY, TO THE
DELIVERY OF SUCH INFORMATION (E.G. BY ITS SELLER, PURSUANT TO THE APPLICABLE
PURCHASE AND SALE AGREEMENT, OR BY A TENANT PURSUANT TO ITS LEASE) OR (B)
OTHERWISE OBTAIN SUCH INFORMATION.  LENDER SHALL NOTIFY BORROWER IN THE EVENT
THE LOAN IS INTENDED TO BE INCLUDED IN A SECURITIZATION IN WHICH BORROWER ALONE
OR BORROWER AND ONE OR MORE AFFILIATES OF BORROWER COLLECTIVELY, OR THE PROPERTY
ALONE OR THE PROPERTY AND RELATED PROPERTIES COLLECTIVELY, WILL BE A SIGNIFICANT
OBLIGOR AND, IN SUCH EVENT, LENDER SHALL CREDIT BORROWER $20,000.00 FOR EXPENSES
INCURRED BY BORROWER IN CONNECTION WITH ITS COMPLIANCE WITH REGULATION AB PRIOR
TO THE CUT-OFF DATE FOR SUCH SECURITIZATION.

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, AN “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, MANAGER, SPONSOR, GUARANTOR AND ALL OTHER
ASPECTS OF THE LOAN, 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;
PROVIDED, HOWEVER, THAT BORROWER’S CERTIFICATION WITH RESPECT TO ANY MATERIALS
PREPARED AND PROVIDED BY THIRD PARTIES MAY BE LIMITED TO BORROWER’S ACTUAL
KNOWLEDGE, (B) INDEMNIFYING LENDER (AND FOR PURPOSES OF THIS SECTION 9.2, LENDER
HEREUNDER SHALL INCLUDE ITS OFFICERS AND DIRECTORS), THE AFFILIATE OF KEYBANK
NATIONAL ASSOCIATION (“KEYBANK”) 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 “KEYBANK
GROUP”), AND KEYBANK, AND ANY OTHER PLACEMENT AGENT OR UNDERWRITER WITH RESPECT
TO THE SECURITIZATION, EACH OF THEIR RESPECTIVE DIRECTORS AND EACH PERSON WHO
CONTROLS KEYBANK 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 KEYBANK GROUP
OR THE UNDERWRITER GROUP MAY BECOME SUBJECT INSOFAR AS THE LIABILITIES ARISE OUT
OF OR ARE BASED

88

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

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 SECTIONS, IN LIGHT
OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING AND (C) AGREEING
TO REIMBURSE LENDER, THE KEYBANK GROUP AND/OR THE UNDERWRITER GROUP FOR ANY
LEGAL OR OTHER EXPENSES REASONABLY INCURRED BY LENDER, THE KEYBANK 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.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION
9.2(B), NOTHING CONTAINED HEREIN SHALL IMPOSE LIABILITY UPON BORROWER FOR ANY
LIABILITIES ARISING OUT OF OR BASED UPON AN UNTRUE STATEMENT OF ANY MATERIAL
FACT CONTAINED IN ANY STATEMENT, REPORT OR DOCUMENT PROVIDED TO LENDER ON BEHALF
OF BORROWER BY A PARTY WHO IS NOT AN AFFILIATE OF A BORROWER (A “THIRD PARTY
REPORT”), UNLESS BORROWER HAD ACTUAL KNOWLEDGE AT THE TIME BORROWER PROVIDED
SUCH STATEMENT, REPORT OR DOCUMENT TO LENDER THAT SUCH THIRD PARTY REPORT
CONTAINS SUCH UNTRUE STATEMENT.

(C)           IN CONNECTION WITH EXCHANGE ACT FILINGS, BORROWER SHALL (I)
INDEMNIFY LENDER, THE KEYBANK GROUP AND THE UNDERWRITER GROUP FOR LIABILITIES TO
WHICH LENDER, THE KEYBANK 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 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 KEYBANK GROUP OR THE UNDERWRITER
GROUP FOR ANY LEGAL OR OTHER EXPENSES REASONABLY INCURRED BY LENDER, THE KEYBANK
GROUP OR THE UNDERWRITER GROUP IN CONNECTION WITH DEFENDING OR INVESTIGATING THE
LIABILITIES.

(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,

89

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

HOWEVER, IF THE DEFENDANTS IN ANY SUCH ACTION INCLUDE BOTH THE INDEMNIFIED PARTY
AND THE INDEMNIFYING PARTY AND THE INDEMNIFIED PARTY SHALL HAVE REASONABLY
CONCLUDED THAT THERE ARE ANY LEGAL DEFENSES AVAILABLE TO IT AND/OR OTHER
INDEMNIFIED PARTIES THAT ARE DIFFERENT FROM OR ADDITIONAL TO THOSE AVAILABLE TO
THE INDEMNIFYING PARTY, THE INDEMNIFIED PARTY OR PARTIES SHALL HAVE THE RIGHT TO
SELECT SEPARATE COUNSEL TO ASSERT SUCH LEGAL DEFENSES AND TO OTHERWISE
PARTICIPATE IN THE DEFENSE OF SUCH ACTION ON BEHALF OF SUCH INDEMNIFIED PARTY 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) KEYBANK’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.

9.2.2    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. EXCULPATION. 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 SECURITY
INSTRUMENT 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 AGREEMENT, THE SECURITY INSTRUMENT AND THE OTHER LOAN
DOCUMENTS, OR IN THE PROPERTY, THE RENTS FOLLOWING AN EVENT OF DEFAULT, 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 FOLLOWING AN EVENT OF DEFAULT
AND IN ANY OTHER COLLATERAL GIVEN TO LENDER, AND LENDER, BY ACCEPTING THE NOTE,
THIS AGREEMENT, THE SECURITY INSTRUMENT AND THE OTHER LOAN DOCUMENTS, AGREES
THAT IT 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 SECURITY INSTRUMENT 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 SECURITY INSTRUMENT; (C) AFFECT THE VALIDITY OR ENFORCEABILITY OF OR
ANY GUARANTY MADE IN

90

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

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 FOLLOWING AN EVENT OF
DEFAULT; (F) CONSTITUTE A PROHIBITION AGAINST LENDER COMMENCING ANY OTHER
APPROPRIATE ACTION OR PROCEEDING IN ORDER FOR LENDER TO EXERCISE ITS REMEDIES
AGAINST THE PROPERTY.  IN ADDITION, THE FOREGOING SHALL NOT BE DEEMED A WAIVER
OF THE RIGHT OF LENDER TO ENFORCE THE LIABILITY AND OBLIGATION OF BORROWER, BY
MONEY JUDGMENT OR OTHERWISE, TO THE EXTENT OF ANY LOSS, DAMAGE, COST, EXPENSE,
LIABILITY, CLAIM OR OTHER OBLIGATION INCURRED BY LENDER (INCLUDING ATTORNEYS’
FEES AND COSTS REASONABLY INCURRED) ARISING OUT OF OR IN CONNECTION WITH THE
FOLLOWING:

(I)          THE MISAPPLICATION OR MISAPPROPRIATION OF RENTS;

(II)         THE MISAPPLICATION OR MISAPPROPRIATION OF INSURANCE PROCEEDS OR
AWARDS;

(III)        BORROWER’S FAILURE TO RETURN OR TO REIMBURSE LENDER FOR ALL
PERSONAL PROPERTY (OTHER THAN PERSONAL PROPERTY NOT MATERIAL TO THE OPERATION OR
VALUE OF THE PROPERTY) TAKEN FROM THE PROPERTY BY OR ON BEHALF OF BORROWER AND
NOT REPLACED WITH PERSONAL PROPERTY OF THE SAME UTILITY AND OF THE SAME OR
GREATER VALUE;

(IV)        ANY ACT OF ACTUAL WASTE OR ARSON BY BORROWER, ANY PRINCIPAL,
AFFILIATE, GENERAL PARTNER OR MEMBER THEREOF OR BY GUARANTOR;

(V)         ANY FEES OR COMMISSIONS PAID BY BORROWER TO ANY PRINCIPAL,
AFFILIATE, GENERAL PARTNER OR MEMBER OF BORROWER OR ANY GUARANTOR IN VIOLATION
OF THE TERMS OF THIS GUARANTY, THE OTHER LOAN DOCUMENTS;

(VI)        BORROWER’S FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 9.4 OF
THE SECURITY INSTRUMENT; OR

(VII)       ANY FRAUD, WILLFUL MISCONDUCT OR INTENTIONAL MATERIAL
MISREPRESENTATION BY BORROWER, PRINCIPAL, GUARANTOR OR ANY OF THEIR RESPECTIVE
AFFILIATES IN CONNECTION WITH THE LOAN; OR

(VIII)      ANY BREACH OR DEFAULT OF ANY MATERIAL PROVISION OF SECTION 4.1.30 OF
THIS AGREEMENT (OTHER THAN BREACHES OF THE REQUIREMENTS SET FORTH IN CLAUSES
(XII) OR (XXIII) OF THE DEFINITION OF SPECIAL PURPOSE ENTITY).

(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 SECURED BY THE SECURITY INSTRUMENT 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 OR: (I) A VOLUNTARY BREACH OR DEFAULT UNDER SECTION 5.2.10 OF THIS
AGREEMENT, (II) BORROWER OR PRINCIPAL FILING A VOLUNTARY PETITION UNDER THE
BANKRUPTCY CODE OR ANY OTHER FEDERAL OR STATE BANKRUPTCY OR INSOLVENCY LAW;
(III) BORROWER OR PRINCIPAL FILING AN

91

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

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) BORROWER OR PRINCIPAL CONSENTING TO OR ACQUIESCING IN OR JOINING IN AN
APPLICATION FOR THE APPOINTMENT OF A CUSTODIAN, RECEIVER, TRUSTEE, OR EXAMINER
FOR BORROWER, PRINCIPAL OR ANY PORTION OF THE PROPERTY; OR (V) BORROWER OR
PRINCIPAL MAKING AN ASSIGNMENT FOR THE BENEFIT OF CREDITORS.

Section 9.4            Matters Concerning Property Manager.  If (a) an Event of
Default has occurred, (b) Property Manager shall become bankrupt or insolvent or
(c) a default occurs under the Property Management Agreement and continues
beyond all applicable notice and cure periods, Borrower shall, at the request of
Lender, terminate the Property Management Agreement and replace the Property
Manager with a Qualifying Property Manager pursuant to a Replacement Management
Agreement, it being understood and agreed that the management fee for such
Qualifying Property Manager shall not exceed then prevailing market rates.

Section 9.5            Servicer.  At the option of Lender, the Loan may be
serviced by a servicer/trustee (any such servicer/trustee, together with its
agents, nominees or designees, are collectively referred to as “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.  Borrower shall be responsible for any reasonable set-up
fees or any other initial costs relating to or arising under the Servicing
Agreement; provided, however, that Borrower shall not be responsible for payment
of the monthly servicing fee due to Servicer under the Servicing Agreement.

X.                                    MISCELLANEOUS

 

Section 10.1         Survival.  This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by Lender of the Loan and the execution
and delivery to Lender of the Note, and shall continue in full force and effect
so long as all or any of the Debt is outstanding and unpaid unless a longer
period is expressly set forth herein or in the other Loan Documents.  Whenever
in this Agreement any of the parties hereto is referred to, such reference shall
be deemed to include the legal representatives, successors and assigns of such
party.  All covenants, promises and agreements in this Agreement, by or on
behalf of Borrower, shall inure to the benefit of the legal representatives,
successors and assigns of Lender.

 

Section 10.2         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.

Section 10.3         Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the state in which the Property is
located (without

92

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

regard to any conflict of laws or principles) and the applicable laws of the
United States of America.

Section 10.4         Modification, Waiver in Writing.  No modification,
amendment, extension, discharge, termination or waiver of any provision of this
Agreement, or of the Note, or of any other Loan Document, nor consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in a 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 10.5         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 the Note or under any other Loan Document, or any other
instrument given as security therefor, shall operate as or constitute a waiver
thereof, nor shall a single or partial exercise thereof preclude any other
future exercise, or the exercise of any other right, power, remedy or
privilege.  In particular, and not by way of limitation, by accepting payment
after the due date of any amount payable under this Agreement, the Note or any
other Loan Document, Lender shall not be deemed to have waived any right either
to require prompt payment when due of all other amounts due under this
Agreement, the Note or the other Loan Documents, or to declare a default for
failure to effect prompt payment of any such other amount.

Section 10.6         Notices.  All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing and shall be effective for all purposes if hand delivered or sent by
(a) certified or registered United States mail, postage prepaid, return receipt
requested or (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, and by telecopier (with
answer back acknowledged), addressed as follows (or at such other address and
Person as shall be designated from time to time by any party hereto, as the case
may be, in a written notice to the other parties hereto in the manner provided
for in this Section):

If to Lender:

 

KeyBank National Association.

 

 

[                          ]

 

 

Attention: [                          ]

 

 

 

With a copy to:

 

NorthMarq Capital Inc.

 

 

3500 American Boulevard West, Suite 500

 

 

Bloomington, Minnesota 55431

 

 

Attention: Karen Pribnow

 

 

 

With a copy to:

 

Alston & Bird LLP

 

 

90 Park Avenue

 

 

New York, New York 10016

 

 

Attention: Joseph P. Forte, Esq.

 

93

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

 

If to Borrower:

 

c/o Behringer Harvard Funds

 

 

15601 Dallas Parkway, Suite 600

 

 

Addison, Texas 75001

 

 

Attention: Gerald J. Reihsen, III

 

 

 

With a copy to:

 

Luce, Forward, Hamilton & Scripps LLP

 

 

600 West Broadway

 

 

Suite 2600

 

 

San Diego, CA 92101-3391

 

 

Attention: Darryl Steinhause, Esq.

 

A notice shall be deemed to have been given:  in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
expedited prepaid delivery and telecopy, upon the first attempted delivery on a
Business Day.

SECTION 10.7         TRIAL BY JURY.

BORROWER AND LENDER HEREBY AGREE 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 ACCRUE.  LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH
IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER AND LENDER.

Section 10.8         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 10.9         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 10.10       Preferences.  Lender shall have the continuing and exclusive
right to apply or reverse and reapply any and all payments by Borrower during
the existence of an Event of Default 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

94

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

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 10.11       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 10.12       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, Borrower agrees that neither Lender
nor its agents shall be liable for any monetary damages, and Borrower’s sole
remedies shall be limited to commencing an action seeking injunctive relief or
declaratory judgment.  The parties hereto agree that any action or proceeding to
determine whether Lender has acted reasonably shall be determined by an action
seeking declaratory judgment.

Section 10.13       Expenses; Indemnity.  (a)  Borrower covenants and agrees to
pay or, if Borrower fails to pay, to reimburse, Lender upon receipt of written
notice from Lender for all reasonable costs and expenses (including reasonable
attorneys’ fees and disbursements) incurred by Lender in connection with (i) the
preparation, negotiation, execution and delivery of this Agreement and the other
Loan Documents and the consummation of the transactions contemplated hereby and
thereby and all the costs of furnishing all opinions by counsel for Borrower
(including without limitation any opinions requested by Lender as to any legal
matters arising under this Agreement or the other Loan Documents with respect to
the Property); (ii) Borrower’s ongoing performance of and compliance with
Borrower’s respective agreements and covenants contained in this Agreement and
the other Loan Documents on its part to be performed or complied with after the
Closing Date, including, without limitation, confirming compliance with
environmental and insurance requirements; (iii) Lender’s ongoing performance and
compliance with all agreements and conditions contained in this Agreement and
the other Loan Documents on its part to be performed or complied with after the
Closing Date; (iv) except as otherwise provided in this Agreement, 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 reasonably requested by
Lender; (v) securing Borrower’s compliance with any requests made pursuant to
the provisions of this Agreement; (vi) the filing and recording fees and
expenses, title insurance and reasonable fees and expenses of counsel for
providing to Lender all required legal opinions, and other similar expenses
incurred in creating and perfecting the Lien in favor of Lender pursuant to this
Agreement and the other Loan Documents; (vii) enforcing or preserving any
rights, in response to third party claims or the prosecuting or defending of any
action or proceeding or other

95

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

litigation, 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 (viii) enforcing any obligations of or collecting any payments due
from Borrower under this Agreement, the other Loan Documents or with respect to
the Property (including any fees incurred by Servicer in connection with the
transfer of the Loan to a special servicer prior to a Default or Event of
Default) 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. 

(B)           BORROWER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS LENDER FROM AND
AGAINST ANY AND ALL OTHER 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 LENDER IN CONNECTION WITH ANY INVESTIGATIVE,
ADMINISTRATIVE OR JUDICIAL PROCEEDING COMMENCED OR THREATENED, WHETHER OR NOT
LENDER SHALL BE DESIGNATED A PARTY THERETO), THAT MAY BE IMPOSED ON, INCURRED
BY, OR ASSERTED AGAINST LENDER 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 LENDER HEREUNDER TO THE EXTENT THAT SUCH
INDEMNIFIED LIABILITIES ARISE FROM THE GROSS NEGLIGENCE, ILLEGAL ACTS, FRAUD OR
WILLFUL MISCONDUCT OF LENDER.  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
LENDER.

(C)           BORROWER COVENANTS AND AGREES TO PAY FOR OR, IF BORROWER FAILS TO
PAY, TO REIMBURSE LENDER FOR, ANY FEES AND EXPENSES INCURRED BY ANY RATING
AGENCY IN CONNECTION WITH ANY RATING AGENCY REVIEW OF THE LOAN, THE LOAN
DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY OR ANY CONSENT, APPROVAL,
WAIVER OR CONFIRMATION OBTAINED FROM SUCH RATING AGENCY PURSUANT TO THE TERMS
AND CONDITIONS OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND LENDER SHALL BE
ENTITLED TO REQUIRE PAYMENT OF SUCH FEES AND EXPENSES AS A CONDITION PRECEDENT
TO THE OBTAINING OF ANY SUCH CONSENT, APPROVAL, WAIVER OR CONFIRMATION.

Section 10.14       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 10.15       Offsets, Counterclaims and Defenses.  Any assignee of
Lender’s interest in and to this Agreement, the Note and the other Loan
Documents shall take the same free and clear of all offsets, counterclaims or
defenses which are unrelated to such documents which Borrower may otherwise have
against any assignor of such documents, and no such unrelated counterclaim or
defense shall be interposed or asserted by Borrower in any action or proceeding
brought by any such assignee upon such documents and any such right to interpose

96

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

or assert any such unrelated offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by Borrower.

Section 10.16       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 BORROWER AND NOTHING CONTAINED IN THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS SHALL BE DEEMED TO CONFER UPON ANYONE OTHER THAN LENDER AND
BORROWER ANY RIGHT TO INSIST UPON OR TO ENFORCE THE PERFORMANCE OR OBSERVANCE OF
ANY OF THE OBLIGATIONS CONTAINED HEREIN OR THEREIN.  ALL CONDITIONS TO THE
OBLIGATIONS OF LENDER TO MAKE THE LOAN HEREUNDER ARE IMPOSED SOLELY AND
EXCLUSIVELY FOR THE BENEFIT OF LENDER AND NO OTHER PERSON SHALL HAVE STANDING TO
REQUIRE SATISFACTION OF SUCH CONDITIONS IN ACCORDANCE WITH THEIR TERMS OR BE
ENTITLED TO ASSUME THAT LENDER WILL REFUSE TO MAKE THE LOAN IN THE ABSENCE OF
STRICT COMPLIANCE WITH ANY OR ALL THEREOF 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 10.17       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 their Affiliates shall be subject to the prior
written approval of Lender.

Section 10.18       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, or to a sale in inverse
order of alienation in the event of foreclosure of the Security Instrument, and
agrees not to assert any right under any laws pertaining to the marshalling of
assets, the sale in inverse order of alienation, homestead exemption, the
administration of estates of decedents, or any other matters whatsoever to
defeat, reduce or affect the right of Lender under the Loan Documents to a sale
of 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 10.19       Waiver of Counterclaim.  Borrower hereby waives the right to
assert a counterclaim, other than a compulsory counterclaim, in any action or
proceeding brought against it by Lender or its agents.

Section 10.20       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

97

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

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 10.21       Brokers and Financial Advisors.  Borrower hereby represents
that it has dealt with no financial advisors, brokers, underwriters, placement
agents, agents or finders in connection with the transactions contemplated by
this Agreement other than NorthMarq Capital.  Borrower hereby agrees to
indemnify, defend and hold Lender harmless from and against any and all claims,
liabilities, costs and expenses of any kind (including Lender’s reasonable
attorneys’ fees and expenses) in any way relating to or arising from a claim by
any Person that such Person acted on behalf of Borrower in connection with the
transactions contemplated herein.  The provisions of this Section 10.21 shall
survive the expiration and termination of this Agreement and the payment of the
Debt.

Section 10.22       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 or understandings among or between such parties, whether oral or
written, are superseded by the terms of this Agreement and the other Loan
Documents and unless specifically set forth in a writing contemporaneous
herewith the terms, conditions and provisions of such prior agreement do not
survive execution of this Agreement.

Section 10.23       Transfer of Loan.  In the event that Lender transfers the
Loan, Borrower shall continue to make payments at the place set forth in the
Note (and its obligation to make such payments shall be deemed satisfied upon
the making of such payments) until such time that Borrower is notified in
writing by Lender that payments are to be made at another place.

Section 10.24       Joint and Several Liability.  If Borrower consists of more
than one (1) Person the obligations and liabilities of each Person shall be
joint and several. 

Section 10.25       Attorneys Fees.  Notwithstanding any provision to the
contrary in this Agreement or any of the Loan Documents, whenever Borrower or
any Guarantor is

98

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

obligated in any of the Loan Documents, including the Guaranty or indemnity
agreement, to pay the legal fees and expenses (however phrased) of Lender or any
other party, such obligations shall mean the reasonable legal fees actually
incurred by Lender or such other party at the standard hourly rates of Lender’s
or such party’s legal counsel and the out-of-pocket expenses actually incurred
by Lender or such other party, and not the statutory legal fees specified in
O.C.G.A. Section 13-1-11(a)(2).  Neither Borrower nor Guarantor shall be liable
under any circumstances for any additional legal fees or expenses under O.C.G.A.
Section 13-1-11(a)(2), and to the extent Lender or such other party may be
permitted to charge or receive additional legal fees or expenses under O.C.G.A.
Section 13-1-11(a)(2), Lender and such other party hereby waive such right.

(THE BALANCE OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.)

99

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

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

 

 

BORROWER:

 

 

 

BEHRINGER HARVARD 945 EAST PACES
FERRY ROAD, LLC, a Delaware limited liability
company

 

 

 

 

 

By:

 

 

 

Name: Gerald J. Reihsen, III

 

Title: Secretary

 

 

LENDER:

 

 

 

KEYBANK NATIONAL ASSOCIATION, a
national association

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

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

SCHEDULE I

REA

Agreement between City of Atlanta and Resurgens Plaza South Associates, dated
May 11, 1987, recorded in Deed Book 10812, Page 1 in the Fulton County, Georgia
real property records.

I-1

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

SCHEDULE II

Rent Roll

II-1

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

SCHEDULE III

(Required Repairs—Deadlines For Completion)

Required Repair:

 

Time to complete:

 

 

 

 

 

 

 

 

III-1

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

SCHEDULE IV

(Organizational Chart of Borrower)

IV-1

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

SCHEDULE V

(Exceptions to Representations)

SUMMARY OF ACTIVE SUBLEASES
AS OF NOVEMBER 30, 2006

1.             Fisher & Phillips

a.             Brosnahan, Castan, Lecca & Spillers LLC dated May 3, 2002 – 2,443
rentable square feet (Suite 1770)

b.             Crowther & Ward, LLC dated October 24, 2003 – 1,243 rentable
square feet (Suite 1755)

c.             Georgia Foundation for Independent Colleges dated June 15, 2001 –
1,211 rentable square feet (Suite 1730)

2.             SSI, Inc.  (Spencer Stuart)

a.             Raley & Sandifer, P.C. dated March 11, 2002 – 3,382 rentable
square feet (26th floor)

b.             Hewitt, Katz, Stepp & Wright dated April 2001 – 3,222 rentable
square feet (Suite 2610)

SUMMARY OF OUTSTANDING TI OBLIGATIONS

1.                                       RSUI = $2,740,776.00

2.                                       RSUI = $100,000.00

3.                                       RSUI = $119,364,26

4.                                       Jack Phillips = $17,000.00

5.                                       Epstein Becker & Green =$204,482.19

6.                                       Fisher & Phillips =$119,857.90

VI-1

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

SCHEDULE VI

(Tenant Improvement Obligations)

NAME OF TENANT

 

NATURE OF
IMPROVEMENTS

 

AMOUNT OF
ALLOWANCE

 

 

 

 

 

 

 

RSUI

 

Pursuant to 11th Amendment

 

$

2,740,776.00

 

RSUI

 

Bathroom Work

 

$

100,000.00

 

RSUI

 

Pursuant to 10th Amendment

 

$

119,364.26

 

JACK PHILLIPS

 

Carpet & Paint

 

$

17,000.00

 

EPSTEIN BECKER & GREEN

 

TI

 

$

204,482.19

 

FISHER & PHILLIPS`

 

TI

 

$

119, 857.90

 

TOTAL:

 

 

 

$

3,301,480.35

 

 

III-2

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