EXHIBIT 10.131

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LOAN AGREEMENT
 
Dated as of September 9, 2010
 
Between
 
SDQ FEE, LLC,
as Borrower
 
and
 
GERMAN AMERICAN CAPITAL CORPORATION,
as Lender
 
 

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TABLE OF CONTENTS
 

    Page      
ARTICLE 1 DEFINITIONS; PRINCIPLES OF CONSTRUCTION
1    
Section 1.1
Specific Definitions.
1
Section 1.2
Principles of Construction
20
     
ARTICLE 2 THE LOAN
20
   
Section 2.1
The Loan.
20
2.1.1
Agreement to Lend and Borrow
20
2.1.2
Single Disbursement to Borrower
20
2.1.3
The Note
20
2.1.4
Use of Proceeds
21
Section 2.2
Interest Rate.
21
2.2.1
Interest Rate
21
2.2.2
Intentionally Blank.
21
2.2.3
Default Rate
21
2.2.4
Interest Calculation
21
2.2.5
Usury Savings
21
Section 2.3
Loan Payments.
22
2.3.1
Payments
22
2.3.2
Intentionally Blank.
22
2.3.3
Payments Generally
22
2.3.4
Payment on Maturity Date
22
2.3.5
Late Payment Charge
22
2.3.6
Method and Place of Payment.
23
Section 2.4
Prepayments.
23
2.4.1
Prepayments
23
2.4.2
Intentionally Blank.
23
2.4.3
Open Prepayment
23
2.4.4
Mandatory Prepayments
23
2.4.5
Prepayments After Default
23
2.4.6
Payments in Connection with a Prepayment.
24
2.4.7
Release on Payment in Full
24
Section 2.5
Defeasance.
24
2.5.1
Conditions to Defeasance
24
2.5.2
Release of Property
26
2.5.3
Successor Borrower
26
2.5.4
Appointment as Attorney in Fact
27
2.5.5
Defeasance Costs and Expenses
27
2.5.6
No Violation of Transfer Restrictions
28
2.5.7
Residual Value Payable to Borrower
28

 
 
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TABLE OF CONTENTS
 

  Page    
ARTICLE 3 REPRESENTATIONS AND WARRANTIES
28
   
Section 3.1
Borrower Representations.
28
3.1.1
Organization
28
3.1.2
Proceedings
28
3.1.3
No Conflicts
29
3.1.4
Litigation
29
3.1.5
Agreements
29
3.1.6
Consents
29
3.1.7
Title
29
3.1.8
No Plan Assets
30
3.1.9
Compliance
30
3.1.10
Financial Information
31
3.1.11
Condemnation
31
3.1.12
Easements; Utilities and Public Access
31
3.1.13
Separate Lots
31
3.1.14
Assessments
31
3.1.15
Enforceability
31
3.1.16
Assignment of Leases
32
3.1.17
Insurance
32
3.1.18
Licenses
32
3.1.19
Flood Zone
32
3.1.20
Physical Condition
32
3.1.21
Boundaries
32
3.1.22
Leases
33
3.1.23
Filing and Recording Taxes
33
3.1.24
Single Purpose.
34
3.1.25
Tax Filings
39
3.1.26
Solvency
39
3.1.27
Federal Reserve Regulations
40
3.1.28
Organizational Chart
40
3.1.29
Organizational Status
40
3.1.30
Bank Holding Company
40
3.1.31
No Casualty
40
3.1.32
Purchase Options
40
3.1.33
FIRPTA
40
3.1.34
Investment Company Act
40
3.1.35
Use of Property
41
3.1.36
Fiscal Year
41
3.1.37
No Other Financing
41
3.1.38
Contracts.
41
3.1.39
Full and Accurate Disclosure
41
3.1.40
Other Obligations and Liabilities
41

 
 
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TABLE OF CONTENTS
 

    Page      
3.1.41
Ground Lease
41
3.1.42
REA
42
3.1.43
Intentionally Blank.
42
3.1.44
Illegal Activity
42
Section 3.2
Survival of Representations.
42
   
ARTICLE 4 BORROWER COVENANTS
43
   
Section 4.1
Borrower Affirmative Covenants.
43
4.1.1
Payment and Performance of Obligations
43
4.1.2
Existence; Compliance with Legal Requirements
43
4.1.3
Taxes and Other Charges
43
4.1.4
Litigation
44
4.1.5
Access to Property
44
4.1.6
Further Assurances; Supplemental Mortgage Affidavits
44
4.1.7
Financial Reporting.
45
4.1.8
Title to the Property
46
4.1.9
Estoppel Statement.
46
4.1.10
Leases.
47
4.1.11
Alterations
48
4.1.12
Approval of Major Contracts
49
4.1.13
After Acquired Property
49
4.1.14
Patriot Act Compliance.
49
4.1.15
Intentionally Blank
50
4.1.16
The Ground Lease
50
4.1.17
Intentionally Blank.
51
4.1.18
Notice of Default
51
4.1.19
Cooperate in Legal Proceedings
51
4.1.20
Award and Insurance Benefits
52
4.1.21
Business and Operations
52
4.1.22
Costs of Enforcement
52
4.1.23
Performance by Borrower
52
Section 4.2
Borrower Negative Covenants.
52
4.2.1
Encumbrance; Transfers of Interests
52
4.2.2
Liens
53
4.2.3
Dissolution
53
4.2.4
Change in Business
54
4.2.5
Debt Cancellation
54
4.2.6
Affiliate Transactions
54
4.2.7
Zoning
54
4.2.8
Assets
54
4.2.9
No Joint Assessment
54
4.2.10
Principal Place of Business
54

 
 
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TABLE OF CONTENTS
 

    Page      
4.2.11
Change of Name, Identity or Structure
55
4.2.12
Special Purpose
55
4.2.13
ERISA.
55
4.2.14
Intentionally Blank.
55
4.2.15
Embargoed Person
56
4.2.16
Operating Agreements
56
4.2.17
Intentionally Blank.
56
   
ARTICLE 5 INSURANCE, CASUALTY AND CONDEMNATION
56
   
Section 5.1
Insurance.
56
5.1.1
Insurance Policies.
58
5.1.2
Insurance Company
61
Section 5.2
Casualty.
62
Section 5.3
Condemnation.
63
Section 5.4
Restoration.
64
   
ARTICLE 6 CASH MANAGEMENT AND RESERVE FUNDS
68
   
Section 6.1
Cash Management Arrangements.
68
Section 6.2
Intentionally Blank.
69
Section 6.3
Security Interest In Reserve Funds.
69
6.3.1
Grant of Security Interest
69
6.3.2
Income Taxes; Interest
69
6.3.3
Prohibition Against Further Encumbrance
69
6.3.4
Lender Remedy for Failure to Perform
69
Section 6.4
Application After an Event of Default.
70
6.4.1
Application After Event of Default
70
   
ARTICLE 7 PROPERTY MANAGEMENT
70
   
Section 7.1
The Management Agreement.
70
Section 7.2
Prohibition Against Termination or Modification.
71
Section 7.3
Replacement of Manager.
71
   
ARTICLE 8 PERMITTED TRANSFERS
72
   
Section 8.1
Permitted Transfer of the Property.
72
Section 8.2
Permitted Transfers of Interest in Borrower.
73
Section 8.3
Cost and Expenses.
75
Section 8.4
Timing with Respect to Permitted Transfers.
75
   
ARTICLE 9 SALE AND SECURITIZATION OF MORTGAGE
76
   
Section 9.1
Sale of Security Instrument and Securitization.
76
Section 9.2
Securitization Indemnification.
80

 
 
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TABLE OF CONTENTS
 

    Page      
Section 9.3
Intentionally Blank.
83
Section 9.4
Severance Documentation.
83
Section 9.5
Borrower’s Monetary Obligations under this Article 9.
83
   
ARTICLE 10 DEFAULTS
84
   
Section 10.1
Events of Default.
84
Section 10.2
Remedies
88
Section 10.3
Lender’s Right to Perform.
89
Section 10.4
Remedies Cumulative.
89
   
ARTICLE 11 MISCELLANEOUS
89
   
Section 11.1
Survival; Successors and Assigns.
89
Section 11.2
Lender’s Discretion.
90
Section 11.3
Governing Law.
90
Section 11.4
Modification, Waiver in Writing.
91
Section 11.5
Delay Not a Waiver.
92
Section 11.6
Notices.
92
Section 11.7
Trial by Jury.
93
Section 11.8
Headings.
94
Section 11.9
Severability.
94
Section 11.10
Preferences.
94
Section 11.11
Waiver of Notice.
94
Section 11.12
Remedies of Borrower.
94
Section 11.13
Expenses; Indemnity.
95
Section 11.14
Schedules Incorporated.
96
Section 11.15
Offsets, Counterclaims and Defenses.
96
Section 11.16
No Joint Venture or Partnership; No Third Party Beneficiaries.
96
Section 11.17
Publicity.
97
Section 11.18
Waiver of Marshalling of Assets.
97
Section 11.19
Waiver of Offsets/Defenses/Counterclaims.
97
Section 11.20
Conflict; Construction of Documents; Reliance.
97
Section 11.21
Brokers and Financial Advisors.
98
Section 11.22
Exculpation.
98
Section 11.23
Prior Agreements.
101
Section 11.24
Servicer.
101
Section 11.25
Joint and Several Liability.
102
Section 11.26
Creation of Security Interest.
102
Section 11.27
Assignments and Participations.
102
Section 11.28
Counterparts.
103
Section 11.29
Set-Off.
103
     
Schedule I
Disclosure Schedule
 

 
 
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TABLE OF CONTENTS
 

    Page      
Schedule II
Intentionally Blank
 
Schedule III
Organizational Chart
 
Schedule IV
Borrower Operating Account
 
Schedule V
REA
       
Exhibit A
Legal Description
 
Exhibit B
Certain Updated Information
 

 
 
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LOAN AGREEMENT
 
THIS LOAN AGREEMENT, dated as of September 9, 2010 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this
“Agreement”), between GERMAN AMERICAN CAPITAL CORPORATION, a Maryland
corporation, having an address at 60 Wall Street, 10th Floor, New York, New York
10005 (together with its successors and assigns, collectively, “Lender”), and
SDQ FEE, LLC, a Delaware limited liability company, having an address at c/o
Glimcher Properties Limited Partnership, 180 East Broad Street, 21st Floor,
Columbus, Ohio 43215 (together with its permitted successors and assigns,
collectively, “Borrower”).
 
All capitalized terms used herein shall have the respective meanings set forth
in Article 1 hereof.
 
W I T N E S S E T H :
 
WHEREAS, Borrower desires to obtain the Loan from Lender; and
 
WHEREAS, Lender has advised Borrower that subject to the terms of this Agreement
and the documents to be executed in connection herewith, and based upon the
representations, warranties, covenants and undertakings of Borrower herein and
therein contained, Lender is willing to make the Loan to Borrower on the terms
and conditions set forth herein and therein.
 
NOW, THEREFORE, in consideration of the covenants set forth in this Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree, represent and warrant
as follows:
 
ARTICLE 1
 
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
 
Section 1.1                      Specific Definitions.
 
For all purposes of this Agreement, except as otherwise expressly provided:
 
“Accounts” shall have the meaning set forth in Section 6.1.
 
“Act” shall have the meaning set forth in Section 3.1.24 (s)
 
“Acquired Property Statements” shall have the meaning set forth in
Section 9.1(c)(i).
 
“Affiliate” shall mean, as to any Person, any other Person that (i) owns
directly or indirectly ten percent (10%) or more of all equity interests in such
Person, and/or (ii) is in control of, is controlled by or is under common
ownership or control with such Person, and/or (iii) is a director or officer of
such Person or of an Affiliate of such Person, and/or (iv) is the spouse, issue
or parent of such Person or of an Affiliate of such Person.  As used in this
definition, the term “control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management, policies or
activities of such Person, whether through ownership of voting securities, by
contract or otherwise.
 
 
 

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“ALTA” shall mean American Land Title Association, or any successor thereto.
 
“Alteration Threshold” shall mean $250,000.
 
“Assignment of Leases” shall mean that certain first priority Assignment of
Leases and Rents, dated as of the date hereof, from Borrower, as assignor, to
Lender, as assignee, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
 
“Assignment of Management Agreement” shall mean, if and to the extent a
Management Agreement is in effect with respect to the Property after the date
hereof, an Assignment of Management Agreement and Subordination of Management
Fees (on Lender’s then standard form) among Borrower, Manager and Lender, 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 of all or any portion of the Property, but if and
only to the extent that Borrower is entitled to any such compensation under the
terms of the Ground Lease.
 
“Bankruptcy Code” shall mean Title 11 of the United States Code entitled
“Bankruptcy”, as amended from time to time, and any successor statute or
statutes and all rules and regulations from time to time promulgated thereunder,
and any comparable foreign laws relating to bankruptcy, insolvency or creditors’
rights.
 
“Borrower” shall have the meaning set forth in the introductory paragraph
hereto, together with its successors and permitted assigns.
 
“Borrower Operating Account” shall mean the account specified on Schedule IV
attached hereto.
 
“Borrower’s Recourse Liabilities” shall have the meaning set forth in Section
11.22.
 
“Borrower Specific Portion of a Disclosure Document” shall have the meaning set
forth in Section 9.2(b).
 
“Broker” shall have the meaning set forth in Section 11.21.
 
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal
holiday on which national banks are not open for general business in (i) the
State of New York, (ii) the state where the corporate trust office of the
Trustee is located, or (iii) the state where the servicing offices of the
Servicer are located.
 
“Capital Expenditures” for any period shall mean amounts expended for
replacements and alterations to the Property (excluding tenant improvements) and
required to be capitalized according to GAAP.
 
 
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“Capital Expenditures Work” shall mean any labor performed or materials
installed in connection with any Capital Expenditure.
 
“Cash Management Agreement” shall mean that certain Cash Management Agreement of
even date herewith by and between Lender and Borrower, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.
 
“Casualty” shall have the meaning set forth in Section 5.2.
 
“Casualty and Condemnation Account” shall have the meaning set forth in the Cash
Management Agreement.
 
“Casualty Consultant” shall have the meaning set forth in Section 5.4(b)(iii).
 
“Casualty Retainage” shall have the meaning set forth in Section 5.4(b)(iv).
 
“Certification of Borrower” shall mean that certain Borrower’s Closing
Certificate dated as of the date hereof made by Borrower to Lender.
 
“Clearing Account” shall have the meaning set forth in Section 6.1.
 
“Clearing Account Agreement” shall mean that certain Clearing Account Agreement
dated the date hereof by and among Borrower, Lender and the Clearing Bank.
 
“Clearing Bank” shall have the meaning set forth in Section 6.1.
 
“Closing Date” shall mean the date of the funding of the Loan.
 
“Code” shall mean the Internal Revenue Code of 1986, as amended, and as it may
be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
 
“Condemnation” shall mean a temporary or permanent taking by any Governmental
Authority as the result or in lieu or in anticipation of the exercise of the
right of condemnation or eminent domain, of all or any part of the Property, or
any interest therein or right accruing thereto, including any right of access
thereto or any change of grade affecting the Property or any part thereof.
 
“Condemnation Proceeds” shall have the meaning set forth in Section 5.4(b).
 
“Control” shall mean, with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, through the ownership of voting securities, by contract
or otherwise, and the terms Controlled, Controlling and Common Control shall
have correlative meanings.
 
“Indemnified Title Items” shall have the meaning set forth in the Disclosure
Schedule attached hereto as Schedule I.
 
“DB” shall have the meaning set forth in Section 9.2(b).
 
 
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“Debt” shall mean the Outstanding Principal Balance together with all interest
accrued and unpaid thereon and all other sums (including the Prepayment Fee and
Liquidated Damages Amount, if applicable) due to Lender in respect of the Loan
under the Note, this Agreement, the Security Instrument, the Environmental
Indemnity or any other Loan Document.
 
“Debt Service” shall mean, with respect to any particular period of time, the
aggregate amount of scheduled principal and interest payments due and payable
under the Note.
 
“Debt Service Coverage Ratio” shall mean, as of any date, the ratio, as
reasonably determined by Lender, of (i) the Net Operating Income for the twelve
(12) month period ending with the most recently completed calendar month based
on (1) in place rents, annualized, and (2) trailing twelve (12) month Operating
Expenses to (ii) the Debt Service with respect to such period.
 
“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 constitute an Event of Default.
 
“Default Rate” shall mean, with respect to the Loan, a rate per annum equal to
the lesser of (i) the Maximum Legal Rate or (ii) five percent (5%) above the
Interest Rate.
 
“Defeasance” shall have the meaning set forth in Section 2.5.
 
“Defeasance Collateral” shall have the meaning set forth in Section 2.5.1(c)(i).
 
“Defeasance Lockout Expiration Date” shall have the meaning set forth in
Section 2.5.1.
 
“Defeasance Rights and Obligations” shall have the meaning set forth in Section
2.5.3.
 
“Defeasance Security Agreement” shall have the meaning set forth in
Section 2.5.1(c)(ii).
 
“Deposit Account” shall have the meaning set forth in Section 6.1.  Lender may
in its sole discretion change the Deposit Account from time to time.
 
“Deposit Bank” shall mean the bank or banks selected by Lender to maintain the
Deposit Account.  Lender may in its sole discretion change the Deposit Bank from
time to time.
 
“Disclosure Document” shall have the meaning set forth in Section 9.2(a).
 
“Disclosure Document Date” shall have the meaning set forth in Section
9.1(c)(iv).
 
“Disclosure Schedule” shall have the meaning set forth in Section 3.1.4.
 
“Discount Rate” shall mean the rate which, when compounded monthly, is
equivalent to the Treasury Rate when compounded semi annually.
 
“Easements” shall have the meaning set forth in Section 3.1.12.
 
 
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“Eligible Account” shall mean a separate and identifiable account from all other
funds held by the holding institution that is either (i) an account or accounts
(or subaccounts thereof) maintained with a federal or state-chartered depository
institution or trust company which complies with the definition of Eligible
Institution or (ii) a segregated trust account or accounts (or subaccounts
thereof) 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 any case a combined
capital and surplus of at least Fifty Million and No/100 Dollars
($50,000,000.00) and subject to supervision or examination by federal and state
authorities.  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 Letters of
Credit or accounts in which funds are held for more than thirty (30) days, the
long term unsecured debt obligations of which are rated at least “AA” by Fitch
and S&P and “Aa2” by Moody’s.
 
“Embargoed Person” shall have the meaning set forth in Section 4.2.15.
 
“Environmental Indemnity” shall mean that certain Environmental Indemnity
Agreement dated as of the date hereof executed by Borrower and Guarantor in
connection with the Loan for the benefit of Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
 
“Equipment” shall have the meaning set forth in the granting clause of the
Security Instrument.
 
“ERISA” shall have the meaning set forth in Section 4.2.13.
 
“Event of Default” shall have the meaning set forth in Section 10.1.
 
“Exchange Act” shall have the meaning set forth in Section 9.2(a).
 
“Exchange Act Filing” shall have the meaning set forth in Section 9.1(c)(vi).
 
“Extraordinary Expense” shall have the meaning set forth in Section 4.1.7(g).
 
“Financing Statements” shall mean those certain UCC-1 Financing Statements
identifying Borrower as debtor, in favor of Lender, as secured party, perfecting
Lender’s security interest in the personal property encumbered by the Loan
Documents (including, without limitation, the Security Instrument and the
Assignment of Leases) now owned or hereafter acquired by Borrower, as
applicable. The Financing Statements will be filed with all recording or filing
offices in such jurisdictions as Lender shall reasonably require to perfect
Lender’s security interest or to reflect such security interest in the
appropriate public records.
 
“Fiscal Year” shall mean each twelve (12) month period commencing on January 1
and ending on December 31 during each year of the Term.
 
 
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“Fitch” shall mean Fitch, Inc.
 
“Full Replacement Cost” shall have the meaning set forth in Section 5.1.1(a)(i).
 
“GAAP” shall mean generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or in such
other statements by such entity as may be in general use by significant segments
of the U.S. accounting profession.
 
“Governmental Authority” shall mean any authority, bureau, department,
instrumentality, court, board, agency, commission, office, administrative
tribunal, public utility or authority of any nature whatsoever or any
governmental or quasi-governmental unit (federal, state, commonwealth, county,
district, municipal, city or otherwise) whether now or hereafter in existence.
 
“Government Lists” shall have the meaning set forth in Section 4.1.14(b).
 
“Gross Revenue” shall mean all revenue derived by Borrower from the ownership
and operation of the Property from whatever source, including Rents and any
Insurance Proceeds or Condemnation Proceeds, but only if and to the extent
Lender elects to treat any such Insurance Proceeds as business or rental
interruption Insurance Proceeds pursuant to Section 5.4(e) hereof.
 
“Ground Lease” shall mean that certain First Amended and Restated Ground Lease,
dated December 6, 2006, by and between Prior Ground Landlord and Ground Tenant,
as disclosed by that certain Memorandum of Lease, recorded on December 11, 2006
as Document No. 2006-1613859 in the official records of Maricopa County,
Arizona, as modified by that certain First Amendment to First Amended and
Restated Ground Lease, dated January __, 2008, by and between Prior Ground
Landlord and Ground Tenant, as assigned from Prior Ground Landlord to Borrower
pursuant to that certain Assignment and Assumption of Ground Lease, dated
September 9, 2010 and recorded on or about the date hereof in the official
records of Maricopa County Arizona, as modified by that certain Second Amendment
to First Amended and Restated Ground Lease, dated September 9, 2010, by and
between Ground Landlord and Ground Tenant, as the same may be amended, restated,
replaced, supplemented, transferred or otherwise amended from time to time in
accordance with the terms and conditions of the Loan Documents.
 
“Ground Lease Completion Letter of Credit” shall mean the “Completion Letter of
Credit” as such term is defined in the Ground Lease.
 
“Ground Lease Security Deposit” shall mean the “Security Deposit” as such term
is defined in the Ground Lease.
 
“Ground Tenant” shall mean Kierland Crossing, LLC, a Delaware limited liability
company, or its successors and/or assigns as ground tenant under the Ground
Lease (provided that such successor and/or assign is approved in accordance with
the terms and conditions contained in the Loan Documents).
 
 
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“Ground Tenant Improvements” shall have the meaning set forth in the Security
Instrument.
 
“Ground Tenant Subleases” shall mean any lease, sublease, sub-sublease, letting,
license, concession or other agreement entered into by Ground Tenant, as the
landlord, sub-landlord or sub-sub-landlord, with respect to any Ground Tenant
Improvements located on the Land or any space therein and/or any guarantees of
performance and observance of the covenants, conditions and agreements of the
other party under any of the foregoing.
 
“Ground Tenant’s Sub-Tenants” shall mean (a) any and all tenants, sub-tenants
and/or sub-sub-tenants under any Ground Tenant Sublease, and/or (b) any and all
guarantors under any Ground Tenant Subleases.
 
“Guarantor” shall mean Glimcher Properties Limited Partnership, a Delaware
limited partnership.
 
“Guarantor’s Line of Credit” shall mean that certain revolving credit facility
evidenced by that certain Amended and Restated Credit Agreement dated as of
December 14, 2006, as amended by a Comprehensive Amendment thereto dated as of
March 4, 2010 executed by and between Guarantor and KeyBank National
Association, a national banking association, and the several banks, financial
institutions and other entities from time to time parties to the Agreement, as
lenders, and KeyBank National Association, not individually, but as
“Administrative Agent”, as amended by that certain Second Amendment to Amended
and Restated Credit Agreement, dated as of April 27, 2010, as further amended by
that certain Third Amendment to Amended and Restated Credit Agreement dated as
of July 22, 2010, and as the same may from time to time be further amended,
supplemented or replaced.
 
“Guaranty” shall mean that certain Guaranty of Recourse Obligations of even date
herewith from Guarantor for the benefit of Lender, as the same may be amended,
restated, replaced, supplemented or otherwise amended from time to time.
 
“Improvements” shall have the meaning set forth in the granting clause of the
Security Instrument.
 
“Indebtedness” shall mean, for any Person, without duplication: (i) all
indebtedness of such Person for borrowed money, for amounts drawn under a letter
of credit, or for the deferred purchase price of property for which such Person
or its assets is liable, (ii) all unfunded amounts under a loan agreement,
letter of credit, or other credit facility for which such Person would be liable
if such amounts were advanced thereunder, (iii) all amounts required to be paid
by such Person as a guaranteed payment to partners or a preferred or special
dividend, including any mandatory redemption of shares or interests, (iv) all
indebtedness guaranteed by such Person, directly or indirectly, (v) all
obligations under leases that constitute capital leases for which such Person is
liable, and (vi) all obligations of such Person under interest rate swaps, caps,
floors, collars and other interest hedge agreements, in each case for which such
Person is liable or its assets are liable, whether such Person (or its assets)
is liable contingently or otherwise, as obligor, guarantor or otherwise, or in
respect of which obligations such Person otherwise assures a creditor against
loss.
 
 
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“Indemnified Liabilities” shall have the meaning set forth in Section 11.13(b).
 
“Independent” shall mean, when used with respect to any Person, a Person who:
(i) does not have any direct financial interest or any material indirect
financial interest in Borrower or in any Affiliate of Borrower, (ii) is not
connected with Borrower or any Affiliate of Borrower as an officer, employee,
promoter, underwriter, trustee, partner, member, manager, creditor, director,
supplier, customer or person performing similar functions and (iii) is not a
member of the immediate family of a Person defined in (i) or (ii) above.
 
“Independent Accountant” shall mean a firm of nationally recognized, certified
public accountants which is Independent and which is selected by Borrower and
reasonably acceptable to Lender.
 
“Independent Manager” shall have the meaning set forth in Section 3.1.24(o).
 
“Initial Interest Period” shall have the meaning set forth in Section 2.3.1.
 
“Insolvency Opinion” shall mean that certain bankruptcy non-consolidation
opinion letter dated the date hereof delivered by Squire, Sanders & Dempsey
L.L.P. in connection with the Loan.
 
“Insurance Account” shall have the meaning set forth in Section 6.4.1.
 
“Insurance Premiums” shall have the meaning set forth in
Section 5.1.1(b).  Notwithstanding anything to the contrary contained in this
Agreement or any Loan Document, Lender and Borrower acknowledge and agree that,
for so long as the Ground Lease is in effect and the Ground Tenant is actually
maintaining the insurance required to be maintained by Ground Tenant under the
Ground Lease, Borrower will not be required to obtain or maintain or to cause
the Ground Tenant  to obtain or maintain any insurance policies or coverages
other than those required to be maintained by the Ground Tenant under the Ground
Lease (which insurance policies and coverages shall, in the case of the property
insurance, public liability insurance and rental loss and/or business
interruption insurance carried under the Ground Lease, cover perils of terrorism
and acts of terrorism as required by Lender) (collectively the “Ground Tenant’s
Insurance Policies”), provided that Borrower shall, if and to the extent
permitted under the Ground Lease, require the Ground Tenant to name Lender as an
additional insured under the Ground Tenant’s Insurance Policies.  Lender and
Borrower further acknowledge and agree that, for so long as the Ground Lease
remains in full force and effect, all Insurance Premiums with respect to the
Ground Tenant’s Insurance Policies will be paid in accordance with the terms and
conditions of the Ground Lease.
 
“Insurance Proceeds” shall have the meaning set forth in
Section 5.4(b).  Notwithstanding anything to the contrary contained in this
Agreement or any Loan Document, Lender and Borrower acknowledge and agree that,
for so long as the Ground Lease is in effect and the Ground Tenant is actually
maintaining the insurance required to be maintained by Ground Tenant under the
Ground Lease, Borrower will not be required to obtain or maintain or to cause
its Ground Tenant to obtain or maintain any insurance policies or coverages
other the Ground Tenant’s Insurance Policies, provided that Borrower shall, if
and to the extent permitted under the Ground Lease, require the Ground Tenant to
name Lender as an additional insured under the Ground Tenant’s Insurance
Policies.  Lender and Borrower further acknowledge and agree that the rights,
title and interest of Borrower or any of Borrower’s lenders in and to any
insurance proceeds of Ground Tenant’s Insurance Policies are governed by and
subject to the terms of the Ground Lease.  Therefore, notwithstanding anything
to the contrary contained in this Agreement or any Loan Document, for so long as
the Ground Lease remains in full force and effect and the Ground Tenant is
actually maintaining the insurance required to be maintained by Ground Tenant
under the Ground Lease, the term “Insurance Proceeds”, as used in this Agreement
and/or any Loan Document, shall be limited only to such insurance proceeds from
Ground Tenant’s Insurance Policies to which Borrower and/or Borrower’s lender is
entitled under the terms of the Ground Lease.
 
 
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“Interest Period” shall have the meaning set forth in Section 2.3.3.
 
“Interest Rate” shall mean a rate of four and ninety-one hundredths  percent
(4.91%) per annum.]
 
“Land” shall have the meaning set forth in the Security Instrument.
 
“Lease” shall mean any lease, sublease or sub-sublease, letting, license,
concession or other agreement, including, without limitation, the Ground Lease,
(whether written or oral and whether now or hereafter in effect, and whether
before or after the filing by or against Borrower of any petition for relief
under the Bankruptcy Code), pursuant to which any Person is granted a possessory
interest in, or right to use or occupy, all or any portion of the Land and with
respect to which Borrower is a party and/or has any right, title or interest,
and every modification, amendment or other agreement relating to such lease,
sublease, sub-sublease or other agreement entered into in connection with such
lease, sublease, sub-sublease or other agreement and every guarantee of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto.  Notwithstanding the
foregoing or anything else to the contrary contained in this Agreement or any
Loan Document, Lender hereby acknowledges and agrees that, for so long as the
Ground Lease remains in full force and effect, that no current or future Ground
Tenant Subleases shall constitute (or be deemed to constitute) a “Lease” under
this Agreement or any of the Loan Documents.
 
“Lease Termination Payments” shall have the meaning set forth in
Section 6.6.1(b)(i).
 
“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 Loan, any
Secondary Market Transaction with respect to the Loan, the Borrower or the
Property or any part thereof or the construction, use, alteration or operation
thereof, or any part thereof, whether now or hereafter enacted and in force,
including, without limitation, zoning and land use laws and 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 any which may (i) require repairs, modifications or alterations in or
to the Property or any part thereof, or (ii) in any way limit the use and
enjoyment thereof.
 
 
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“Lender Group” shall have the meaning set forth in Section 9.2(b).
 
“Letter of Credit” shall mean an irrevocable, unconditional, transferable
(without payment of any transfer fee), clean sight draft letter of credit
acceptable to Lender and the Rating Agencies (either an evergreen letter of
credit or one which does not expire until at least thirty (30) Business Days
after the Stated Maturity Date) in favor of Lender and entitling Lender to draw
thereon in New York, New York, issued by a domestic Eligible Institution or the
U.S. agency or branch of a foreign Eligible Institution.  If at any time the
bank issuing any such Letter of Credit shall cease to be an Eligible
Institution, Lender shall have the right immediately to draw down the same in
full and hold the proceeds of such draw in accordance with the applicable
provisions hereof.
 
“Liabilities” shall have the meaning set forth in Section 9.2(b).
 
“Lien” shall mean any mortgage, deed of trust, lien (statutory or otherwise),
pledge, hypothecation, easement, restrictive covenant, preference, assignment,
security interest, or any other encumbrance, charge or transfer of, or any
agreement to enter into or create any of the foregoing, on or affecting all or
any portion of the Property or any interest therein, or any direct interest in
Borrower or Sole Member, including 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.
 
“Liquidated Damages Amount” shall have the meaning set forth in Section
2.4.6(d).
 
“Loan” shall mean the loan in the original principal amount of Seventy Million
and No/100 Dollars ($70,000,000.00) made by Lender to Borrower pursuant to this
Agreement.
 
“Loan Documents” shall mean, collectively, this Agreement, the Note, the
Security Instrument, the Assignment of Leases, the Cash Management Agreement,
the Clearing Account Agreement, the Environmental Indemnity, the Assignment of
Management Agreement (if applicable), the Guaranty, the Financing Statements,
the Certificate of Borrower and any other documents, agreements and instruments
now or hereafter evidencing, securing or delivered to Lender in connection with
the Loan.
 
“Loan to Value Ratio” shall mean the ratio, as of a particular date, in which
the numerator is equal to the Outstanding Principal Balance and the denominator
is equal to the appraised value of the Property as shown in an MAI appraisal
obtained by Lender and acceptable to Lender in its sole but good faith
discretion.
 
“Lockout Period” shall mean the period from the date hereof to but excluding the
Open Prepayment Date, during which time, no prepayment of the Loan shall be
permitted, although a Defeasance shall be permitted in accordance with the terms
and conditions of Section 2.5 of this Agreement after of the Defeasance Lockout
Expiration Date.
 
“Major Contract” shall mean (i) any management, brokerage or leasing agreement
to which Borrower is a party, or (ii) any cleaning, maintenance, service or
other Lease, contract or agreement of any kind (other than the Ground Lease and
the REA) of a material nature (materiality for these purposes to include,
without limitation, contracts which extend beyond one year (unless cancelable on
thirty (30) days or less notice without requiring the payment of termination
fees or payments of any kind)) and to which Borrower is a party, in either case
relating to the ownership, leasing, management, use, operation, maintenance,
repair or restoration of the Property, whether written or oral.  Notwithstanding
anything to the contrary contained in this Agreement or in any Loan Document,
for so long as the Ground Lease remains in full force and effect, the term
“Major Contract” shall not include any Ground Tenant Subleases or any agreement,
contract, document or instrument whatsoever to which Borrower is not a party.
 
 
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“Management Agreement” shall mean any management agreement entered into by and
between Borrower and a Manager after the date hereof in accordance with the
terms and conditions of the Loan Documents, pursuant to which the Manager is to
provide management and other services with respect to the Property.
Notwithstanding the foregoing or anything else to the contrary contained in this
Agreement or any Loan Document, Borrower and Lender acknowledge and agree that
Borrower is currently self-managing the Property as of the date of this
Agreement and that Borrower shall not hire/retain a Manager or execute any
Management Agreement without the prior written consent of Lender, which consent
may be granted or withheld in Lender’s reasonable discretion).
 
“Manager” shall mean, if and only to the extent that Borrower requests and
Lender approves (in its reasonable discretion) a future Management Agreement,
any property manager approved by Lender in accordance with the terms and
conditions of this Agreement and any Loan Documents.
 
“Material Alteration” shall have the meaning set forth in Section 4.1.11.
 
“Maturity Date” shall mean the date on which the final payment of principal of
the Note becomes due and payable as herein and therein provided, whether at the
Stated Maturity Date, by declaration of acceleration, extension 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 Governmental
Authority 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 constant monthly payment of
$371,934.29.
 
“Monthly Payment Date” shall mean the first (1st) day of every calendar month
occurring during the Term.
 
“Moody’s” shall mean Moody’s Investors Service, Inc.
 
“Net Operating Income” shall mean the amount obtained by subtracting Operating
Expenses from Operating Income.
 
 
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“Net Proceeds” shall have the meaning set forth in Section 5.4(b).
 
“Net Proceeds Deficiency” shall have the meaning set forth in
Section 5.4(b)(vi).
 
“Note” shall have the meaning set forth in Section 2.1.3.
 
“Notice” shall have the meaning set forth in Section 11.6.
 
“Obligations” shall mean, collectively, Borrower’s obligations for the payment
of the Debt and the performance of the Other Obligations.
 
“OFAC” shall have the meaning set forth in Section 4.1.14(b).
 
“Officer’s Certificate” shall mean a certificate delivered to Lender by Borrower
which is signed by an authorized senior officer of Guarantor.
 
“Open Prepayment Date” shall mean April 1, 2015.
 
“Operating Agreements” shall mean the REA, and any other covenants,
restrictions, easements, declarations or agreements of record relating to the
construction, operation or use of the Property.  Notwithstanding the foregoing
or anything else to the contrary contained in this Agreement or any Loan
Document, for so long as the Ground Lease remains in full force and effect, the
term “Operating Agreement” shall not include any Ground Tenant Subleases or any
covenants, restrictions, easements, declarations or agreements which relate
solely to the construction, operation or use of the Ground Tenant Improvements
and to which neither Borrower or any of its predecessors in interest were a
party.
 
“Operating Expenses” shall mean, for any period, without duplication, all
expenses actually paid or payable by Borrower during such period in connection
with the operation, management, maintenance, repair and use of the Property,
determined on an accrual basis, and, except to the extent otherwise provided in
this definition, in accordance with GAAP.  Operating Expenses specifically shall
include (i) all expenses incurred in the immediately preceding twelve (12) month
period based on quarterly financial statements delivered to Lender in accordance
with Section 4.1.7 hereof to the extent actually paid or payable by Borrower,
(ii) all payments required to be made pursuant to any Operating Agreements,
(iii) property management fees in an amount equal to the management fees
actually paid under the Management Agreement (if applicable), (iv)
administrative, payroll, security and general expenses for the Property, (v) the
cost of utilities, inventories and fixed asset supplies consumed in the
operation of the Property, (vi) a reasonable reserve for uncollectible accounts,
(vii) costs and fees of independent professionals (including, without
limitation, legal, accounting, consultants and other professional expenses),
technical consultants, operational experts (including quality assurance
inspectors) or other third parties retained to perform services required or
permitted hereunder, (viii) cost of attendance by employees at training and
manpower development programs, (ix) association dues, (x) computer processing
charges, (xi) operational equipment and other lease payments as reasonably
approved by Lender, (xii) Taxes and Other Charges (other than income taxes or
Other Charges in the nature of income taxes and/or any Taxes and Other Charges
paid by the Ground Tenant under the Ground Lease) and any insurance premiums
(other than any insurance premiums paid by Ground Tenant under the Ground Lease)
and (xiii) all underwritten reserves required by Lender hereunder (without
duplication).  Notwithstanding the foregoing or anything else to the contrary
contained in this Agreement or in any Loan Document, Operating Expenses shall
not include (1) depreciation or amortization, (2) income taxes or Other Charges
in the nature of income taxes, (3) any expenses (including legal, accounting and
other professional fees, expenses and disbursements) incurred in connection with
the making of the Loan or the sale, exchange, transfer, financing or refinancing
of all or any portion of the Property or in connection with the recovery of
Insurance Proceeds or Awards which are applied to prepay the Note, (4) Capital
Expenditures, (5) Debt Service, and (6) any item of expense of any type, kind or
nature whatsoever (including any Taxes and Other Charges, any insurance premiums
and/or any payments of utilities) which would otherwise be considered within
Operating Expenses pursuant to the provisions above but is paid directly by
Ground Tenant, Ground Tenant’s Sub-Tenants or any other Tenant.
 
 
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“Operating Income” shall mean, for any period, all income of Borrower during
such period from the use, ownership or operation of the Property, including:
 
(a)           all amounts payable to Borrower by any Person as Rent and other
amounts under Leases (including the Ground Lease) or other agreements relating
to the Property;
 
(b)           business interruption insurance proceeds allocable to the
applicable reporting period, but only to the extent Lender elects to treat such
insurance proceeds as business or rental interruption Insurance Proceeds
pursuant to Section 5.4(e) hereof and only to the extent that Borrower is
entitle to such business interruption proceeds and same are actually paid to
Borrower (collectively, “Business Interruption Insurance Proceeds”); and
 
(c)           all other amounts which in accordance with GAAP, are included in
Borrower’s annual financial statements as operating income attributable to the
Property.
 
Notwithstanding the foregoing or anything else to the contrary contained in this
Agreement or any Loan Document, Operating Income shall not include (a) any
Insurance Proceeds (other than Business Interruption Insurance Proceeds and only
to the extent allocable to the applicable reporting period), (b) any proceeds
resulting from the Transfer of all or any portion of the Property, (c) any Rent
attributable to a Lease (including the Ground Lease) prior to the date in which
the Tenant thereunder has taken occupancy or in which the actual payment of rent
is required to commence thereunder, (d) any item of income otherwise included in
Operating Income but paid directly by Ground Tenant or any other Tenant to a
Person other than Borrower as an offset or deduction against Rent payable by
Ground Tenant or such other Tenant, provided such item of income is for payment
of an item of expense and such expense is otherwise excluded from the definition
of Operating Expenses pursuant to clause “(6)” of the definition thereof, (e)
security deposits received from Ground Tenant or any other Tenants until
forfeited or applied, (f) any Rents and/or other amount paid by or on behalf of
Ground Tenant or any other Tenant under the Ground Lease or any other Lease
which is the subject of any proceeding or action relating to its bankruptcy,
reorganization or other arrangement pursuant to federal bankruptcy law or any
similar federal or state law or which has been adjudicated a bankrupt or
insolvent unless such Ground Lease or other Lease has been assumed by the
trustee in such proceeding or action, (g) straightline rent adjustments required
in accordance with GAAP, and (h) above/below market rent adjustments required in
accordance with GAAP.  Operating Income shall be calculated on the accrual basis
of accounting and, except to the extent otherwise provided in this definition,
in accordance with GAAP.
 
 
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“Other Charges” shall mean all maintenance charges, impositions other than Taxes
and any other charges, including vault charges and license fees for the use of
vaults, chutes and similar areas adjoining the Property, now or hereafter levied
or assessed or imposed against the Property or any part thereof and payable by
Borrower.  Notwithstanding the foregoing or anything else to the contrary
contained in this Agreement or in any Loan Document, for so long as the Ground
Lease remains in full force and effect, the term “Other Charges” shall not
include any maintenance charges, impositions other than Taxes and any other
charges, including vault charges and license fees for the use of vaults, chutes
and similar areas adjoining the Property, now or hereafter levied or assessed or
imposed against the Property or any part thereof that arise out of or relate to
the Ground Tenant Subleases or the Ground Tenant Improvements and are payable by
Persons other than Borrower and for which Borrower has no obligation or
liability with respect to the payment of same.
 
“Other Obligations” shall mean (a) the performance of all obligations of
Borrower contained herein; (b) the performance of each obligation of Borrower
contained in any other Loan Document; and (c) the performance of each obligation
of Borrower contained in any renewal, extension, amendment, modification,
consolidation, change of, or substitution or replacement for, all or any part of
this Agreement, the Note or any other Loan Document.
 
“Outstanding Principal Balance” shall mean, as of any date, the outstanding
principal balance of the Loan.
 
“Patriot Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT
ACT) of 2001, as the same may be amended from time to time, and corresponding
provisions of future laws.
 
“Patriot Act Offense” shall have the meaning set forth in Section 4.1.14(b).
 
“Permitted Encumbrances” shall mean, collectively, (i) the Liens and security
interests created or expressly permitted by the Loan Documents, (ii) all
encumbrances and other matters disclosed in the Title Insurance Policy, (iii)
Liens, if any, for Taxes or Other Charges imposed by any Governmental Authority
not yet due or delinquent (but in the case of property Taxes, Liens, if any, for
such property Taxes imposed by any Governmental Authority not yet delinquent),
and (iv) such other title and survey exceptions as Lender has approved or may
approve in writing in Lender’s sole but good faith discretion (or as otherwise
expressly provided in Section 4.2.2 of this Agreement).
 
“Permitted Indebtedness” shall have the meaning set forth in Section 3.1.24(d).
 
“Permitted Investments” shall have the meaning set forth in the Cash Management
Agreement.
 
“Permitted Transfer” shall have the meaning set forth in Section 8.2(a).
 
 
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“Permitted Transferee” shall mean a corporation, partnership or limited
liability company (i) acceptable to Lender in its sole but good faith discretion
unless such Person is a Qualified Transferee in which case Lender shall not
unreasonably withhold, condition or delay its acceptance of such Person under
this clause (i), (ii) that qualifies as a single purpose, bankruptcy remote
entity under the criteria established by the Rating Agencies, (iii) whose
counsel has delivered to Lender a non-consolidation opinion acceptable to Lender
and the Rating Agencies in their sole discretion, and (iv) such entity, together
with the direct and indirect owners of such entity, are reputable Persons of
good character, creditworthy and with sufficient financial worth considering the
obligations assumed and undertaken, as evidenced by financial statements and
other information reasonably requested by Lender.  NOTWITHSTANDING THE
FOREGOING, AS PART OF GRANTING OR WITHHOLDING CONSENT OVER ANY PERMITTED
TRANSFEREE PROPOSED BY BORROWER, NEITHER LENDER NOR LENDER’S SERVICER MAY
REQUIRE THE PAYMENT OF ADDITIONAL TRANSFER/ASSUMPTION FEES (OTHER THAN THOSE
EXPRESSLY REFERENCED IN ARTICLE 8 OF THIS AGREEMENT) AS A CONDITION PRECEDENT TO
GRANTING ITS CONSENT OR PROCESSING THE TRANSACTION.
 
“Person” shall mean any individual, corporation, partnership, limited liability
company, joint venture, estate, trust, unincorporated association, any other
entity, any Governmental Authority and any fiduciary acting in such capacity on
behalf of any of the foregoing.
 
“Policies” shall have the meaning set forth in Section 5.1.1(b).
 
“Prepayment Date” shall mean the date of a prepayment of the Loan pursuant to
the provisions of Section 2.4 hereof.
 
“Prepayment Fee” shall mean an amount equal to the greater of (i) the Yield
Maintenance Amount, or (ii) two percent (2%) of the unpaid principal balance of
the Note as of the applicable Prepayment Date.
 
“Prepayment Notice” shall mean a prior irrevocable written notice to Lender
specifying the proposed Business Day on which a prepayment is to be made
pursuant to Section 2.4 hereof, which date must be a Monthly Payment Date and
shall be no earlier than thirty (30) days after the date of such Prepayment
Notice and no later than sixty (60) days after the date of such Prepayment
Notice.
 
“Prior Ground Landlord” means Sucia Scottsdale, LLC.
 
“Property” shall mean the Land, as defined in the Security Instrument and
described on Exhibit A attached hereto and made a part hereof, and any
Improvements, Equipment, Fixtures (as defined in the Security Instrument) and
Personal Property of Borrower and encumbered by the Security Instrument,
together with all rights of Borrower pertaining to the foregoing, all as more
particularly described in the Granting Clauses of the Security Instrument, but
for so long as the Ground Lease remains in full force and effect, expressly
excludes any right, title or interest of any Tenant (including Ground Tenant) or
any of Ground Tenant’s Sub-Tenants.
 
“Qualified Transferee” shall mean any one of the following Persons:
 
 
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(a)           a pension fund, pension trust, or pension account that has total
real estate equity assets of at least $1 Billion; or
 
(b)           a pension fund advisor who immediately prior to such transfer,
controls at least $1 Billion of real estate equity assets; or
 
(c)           an insurance company which is subject to supervision by the
insurance commissioner, or a similar official or agency, of a state or territory
of the United States (including the District of Columbia) (a) with a net worth,
as of a date no more than six (6) months prior to the date of the transfer of at
least $500 Million and (b) who, immediately prior to such transfer, controls
real estate equity assets of at least $1 Billion; or
 
(d)           a corporation organized under the banking laws of the United
States or any state or territory of the United States (including the District of
Columbia) with a combined capital and surplus of at least $500 Million; or
 
(e)           any Person with an Investment Grade Rating from at least one (1)
of the Rating Agencies (provided that none of the Rating Agencies have assigned
a rating which is not an Investment Grade Rating to such Person) who (A) owns or
operates, together with its Affiliates, at least twelve (12) regional or super
regional malls totaling at least 6,000,000 square feet of gross leasable area of
space and (B) immediately prior to such transfer, controls real estate equity
assets of at least $1 Billion; or
 
(f)           any Person who (A) owns or operates, together with its Affiliates,
at least three (3) regional or super regional malls totaling at least 2,500,000
square feet of gross leasable area of space as of a date no more than ten (10)
years prior to the date of such transfer, (B) has a net worth, as of a date no
more than six (6) months prior to the date of such transfer, of at least $250
Million and (C) immediately prior to such transfer, controls real estate equity
assets of at least $600 Million.
 
“Rating Agencies” shall mean, prior to the final Securitization of the Loan,
each of S&P, Moody’s, Fitch, Realpoint LLC and DBRS, Inc. or any other
nationally-recognized statistical rating agency which has been designated by
Lender and, after the final Securitization of the Loan, shall mean any of the
foregoing that have rated any of the Securities.
 
“Rating Agency Confirmation” shall mean a written affirmation from each of the
Rating Agencies that the credit rating of the Securities by such Rating Agency
immediately prior to the occurrence of the event with respect to which such
Rating Agency Confirmation is sought will not be qualified, downgraded or
withdrawn as a result of the occurrence of such event, which affirmation may be
granted or withheld in such Rating Agency’s sole and absolute discretion.
 
“REA” shall mean, collectively, those certain agreements more particularly
described on Schedule V attached hereto and made a part hereof, as the same may
be amended, restated, supplemented or otherwise modified from time to time.
 
“Registration Statement” shall have the meaning set forth in Section 9.2(b).
 
 
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“Regulation AB” shall mean Regulation AB under the Securities Act and the
Exchange Act, as such Regulation may be amended from time to time.
 
“Related Loan” shall mean a loan to an Affiliate of Borrower or Guarantor or
secured by a Related Property, that is included in a Securitization with the
Loan, and any other loan that is cross-collateralized with the Loan.
 
“Related Property” shall mean a parcel of real property, together with
improvements thereon and personal property related thereto, that is “related"
within the meaning of the definition of Significant Obligor, to the Property.
 
“Release Date” shall have the meaning set forth in Section 2.5.1(a).
 
“REMIC Trust” shall mean a “real estate mortgage investment conduit” within the
meaning of Section 860D of the Code that holds the Note.
 
“Rents” shall mean all rents, rent equivalents, moneys payable as damages
(including payments by reason of the rejection of a Lease (including the Ground
Lease) in a bankruptcy proceeding) or in lieu of rent or rent equivalents,
royalties (including all oil and gas or other mineral royalties and bonuses),
income, fees, receivables, receipts, revenues, deposits (including security,
utility and other deposits), accounts, cash, issues, profits, charges for
services rendered, and other payment and consideration of whatever form or
nature received by or paid to or for the account of or benefit of Borrower,
Manager (if applicable) or any of their respective agents or employees from any
and all sources arising from or pursuant to the Ground Lease or any other Lease
in effect from time to time, together with any receivables, customer
obligations, installment payment obligations and other obligations now existing
or hereafter arising or created out of the sale, lease, sublease, license,
concession or other grant of the right of the use and possession of the Property
or rendering of services by Borrower, Manager (if applicable) or any of their
respective agents or employees, and Insurance Proceeds, if any, from business
interruption or other loss of income insurance, but only to the extent Lender
elects to treat such Insurance Proceeds as business or rental interruption
Insurance Proceeds pursuant to Section 5.4(e) hereof (it being understood and
agreed, however, that if the Ground Lease is no longer in full force and effect,
“Rents” shall include all rents, rent equivalents, moneys payable as damages
(including payments by reason of the rejection of a Lease in a bankruptcy
proceeding) or in lieu of rent or rent equivalents, royalties (including all oil
and gas or other mineral royalties and bonuses), income, fees, receivables,
receipts, revenues, deposits (including security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and other
payment and consideration of whatever form or nature received by or paid to or
for the account of or benefit of Borrower, Manager (if applicable) or any of
their respective agents or employees from any and all sources whatsoever arising
from or attributable to the Property and the Improvements generally, and not
just pursuant to Leases).  Notwithstanding the foregoing or anything else to the
contrary contained in this Agreement or any Loan Document, for so long as the
Ground Lease remains in full force and effect, the term “Rents”, as used herein
or in any Loan Document, shall not include any of the above- referenced items
that arise out of or relate to any Ground Tenant Sublease or the sale, lease,
sublease, license, concession or other grant of any right, title or interest of
the Ground Tenant or any of its successors or assigns in and to any Ground
Tenant Improvement.
 
 
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“Reserve Funds” shall mean, collectively, all funds deposited by Borrower with
Lender or Deposit Bank pursuant to Article 6 of this Agreement.
 
“Reserve Items” shall have the meaning set forth in Section 6.3.4.
 
“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. Notwithstanding the foregoing or anything
else to the contrary contained in this Agreement or any Loan Document, Lender
acknowledges that Articles 13 and 14 of the Ground Lease contain certain
provisions governing the repair and restoration of the Property following any
casualty, damage, destruction or condemnation of or to the Property, and, in the
event of any Casualty or Condemnation, Borrower may cause the Ground Tenant to
repair and restore the Property in accordance with the terms of the Ground Lease
in lieu of performing the Restoration itself so long as Restoration occurs.
 
“RICO” shall have the meaning set forth in Section 11.22.
 
“S&P” shall mean Standard & Poor’s Ratings Group, a division of the McGraw-Hill
Companies.
 
“Secondary Market Transaction” shall have the meaning set forth in
Section 9.1(a).
 
“Securities” shall have the meaning set forth in Section 9.1(a).
 
“Securities Act” shall have the meaning set forth in Section 9.2(a).
 
“Securitization” shall have the meaning set forth in Section 9.1(a).
 
“Security Instrument” shall mean that certain first priority Deed of Trust,
Assignment of Leases and Rents and Security Agreement and Fixture Filing, dated
the date hereof, executed and delivered by Borrower as security for the Loan and
encumbering the Property, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
 
“Servicer” shall have the meaning set forth in Section 11.24.
 
“Servicing Agreement” shall have the meaning set forth in Section 11.24.
 
“Severed Loan Documents” shall have the meaning set forth in Section 10.2(c).
 
“Significant Obligor” shall have the meaning set forth in Item 1101(k) of
Regulation AB under the Securities Act.
 
“Sole Member” shall mean SDQ Fee Holdings, LLC, a Delaware limited liability
company, the sole member of Borrower.
 
“Special Member” shall have the meaning set forth in Section 3.1.24(q).
 
“Springing Recourse Event” shall have the meaning set forth in Section 11.22.
 
 
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“Standard Statements” shall have the meaning set forth in Section 9.1(c)(i).
 
“State” shall mean the State of Arizona.
 
“Stated Maturity Date” shall mean October 1, 2015.
 
“Successor Borrower” shall have the meaning set forth in Section 2.5.3.
 
“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.
 
“Sweep Event” shall mean the occurrence of an Event of Default.
 
“Taxes” shall mean all real estate and personal property taxes, assessments,
water rates or sewer rents, now or hereafter levied or assessed or imposed
against the Property or part thereof, together with all interest and penalties
thereon.  Notwithstanding anything to the contrary contained in this Agreement
or any Loan Document, Lender acknowledges and agrees that, for so long as the
Ground Lease remains in effect, all Taxes are required to be paid by Ground
Tenant in accordance with the terms of the Lease.
 
“Tenant” shall mean any Person (including Ground Tenant) obligated by contract
or otherwise to pay monies (including a percentage of gross income, revenue or
profits) under the Ground Lease or any other Lease now or hereafter affecting
all or any part of the Property.   Notwithstanding the foregoing or anything
else to the contrary contained in this Agreement or any Loan Document, Lender
hereby acknowledges and agrees that none of Ground Tenant’s Sub-Tenants (whether
current or future) shall constitute (or be deemed to constitute) a “Tenant”
under this Agreement or any of the Loan Documents.
 
“Term” shall mean the entire term of this Agreement, which shall expire upon
repayment in full of the Debt and full performance of each and every obligation
to be performed by Borrower pursuant to the Loan Documents.
 
“Title Insurance Policy” shall mean an ALTA mortgagee title insurance policy in
the form acceptable to Lender (including evidence of payments of all premiums
therefor) issued with respect to the Property and insuring the Lien of the
Security Instrument.  The Title Insurance Policy shall be assignable, to the
extent permitted thereunder and under applicable State law.
 
“Transfer” shall have the meaning set forth in Section 4.2.1.
 
“Treasury 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 Prepayment Date, 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.)
 
“Trustee” shall mean any trustee holding the Loan in a Securitization.
 
 
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“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in
effect in the State.
 
“Underwriter Group” shall have the meaning set forth in Section 9.2(b).
 
“Updated Information” shall have the meaning set forth in Section 9.1(b)(i).
 
“U.S. Obligations” shall mean securities evidencing an obligation to timely pay
principal and/or interest in a full and timely manner that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged, and (ii) not subject to prepayment, call or early
redemption.
 
“U.S. Person” shall mean any Person that is (i) a citizen or resident of the
United States, (ii) a corporation, partnership or other entity created or
organized under the laws of the United States or any state, commonwealth or
district thereof, or (iii) any estate or trust that is subject to United States
federal income taxation, regardless of the source of its income.
 
“Yield Maintenance Amount” shall mean the present value, as of the Prepayment
Date, of the remaining scheduled payments of principal and interest from the
Prepayment Date through the Maturity Date (including any balloon payment)
determined by discounting such payments at the Discount Rate, less the amount of
principal 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.  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 and the word “including” shall mean “including but not limited
to”.  Unless otherwise specified, all meanings attributed to defined terms
herein shall be equally applicable to both the singular and plural forms of the
terms so defined.
 
ARTICLE 2
 
THE LOAN
 
Section 2.1                      The Loan.
 
2.1.1                 Agreement to Lend and Borrow.  Subject to and upon the
terms and conditions set forth herein, Lender shall make the Loan to Borrower
and Borrower shall accept the Loan from Lender on the Closing Date.
 
2.1.2                 Single Disbursement to Borrower.  Borrower shall receive
only one 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.  The Loan shall be evidenced by that certain
Promissory Note of even date herewith, in the stated principal amount of Seventy
Million and No/100 Dollars ($70,000,000.00) executed by Borrower and payable to
the order of Lender in evidence of the Loan (as the same may hereafter be
amended, supplemented, restated, increased, extended or consolidated from time
to time, the “Note”) and shall be repaid in accordance with the terms of this
Agreement and the Note.
 
 
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2.1.4                 Use of Proceeds.  Borrower shall use proceeds of the Loan
to (i) acquire the Property and/or pay and discharge any existing loans or Liens
relating to the Property, (ii) pay all past-due Taxes, Insurance Premiums (or
cause the insurance premiums for the insurance required under the Ground Lease
to be paid) and Other Charges, if any, in respect of the Property, (iii) make
initial deposits of the Reserve Funds (if any), (iv) pay costs and expenses
incurred in connection with the closing of the Loan, and (v) to the extent any
proceeds remain after satisfying clauses (i) through (iv) above, for such other
general corporate purposes as Borrower shall designate.
 
Section 2.2                      Interest Rate.
 
2.2.1                 Interest Rate.  Interest on the Outstanding Principal
Balance shall accrue throughout the Term at the Interest Rate.
 
2.2.2                 Intentionally Blank.
 
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 and, to the extent permitted by law, overdue interest in
respect of the Loan, shall accrue interest at the Default Rate, calculated from
the date such payment was due without regard to any grace or cure periods
contained herein.  Interest at the Default Rate shall be paid immediately upon
demand, which demand may be made as frequently as Lender shall elect.
 
2.2.4                 Interest Calculation.  Interest on the Outstanding
Principal Balance shall be calculated by multiplying (A) the actual number of
days elapsed in the period for which the calculation is being made by (B) a
daily rate based on a three hundred sixty (360) day year (that is, the Interest
Rate or the Default Rate, as then applicable, expressed as an annual rate
divided by 360) by (C) the Outstanding Principal Balance.  The accrual period
for calculating interest due on each Monthly Payment Date shall be the Interest
Period immediately prior to such Monthly Payment Date.
 
2.2.5                 Usury Savings.  This Agreement and the other Loan
Documents are subject to the express condition that at no time shall Borrower be
required to pay interest on the principal balance of the Loan at a rate which
could subject Lender to either civil or criminal liability as a result of being
in excess of the Maximum Legal Rate.  If by the terms of this Agreement or the
other Loan Documents, Borrower is at any time required or obligated to pay
interest on the principal balance due hereunder at a rate in excess of the
Maximum Legal Rate, the Interest Rate or the Default Rate, as the case may be,
shall be deemed to be immediately reduced to the Maximum Legal Rate and all
previous payments in excess of the Maximum Legal Rate shall be deemed to have
been payments in reduction of principal and not on account of the interest due
hereunder.  All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the sums due under the Loan, shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate from time to time in effect and applicable to the Loan for so long as
the Loan is outstanding.
 
 
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Section 2.3                      Loan Payments.
 
2.3.1                 Payments.  Borrower shall pay to Lender (a) on the date
hereof, an amount equal to interest only on the Outstanding Principal Balance
from the Closing Date up to and including September 30, 2010 (the “Initial
Interest Period”), (b) on each Monthly Payment Date thereafter beginning on
November 1, 2010 up to and including the Maturity Date, a payment of principal
and interest 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 the Outstanding Principal Balance, and (c) all amounts required in
respect of Reserve Funds (if any) as set forth in Article 6 hereof.
 
2.3.2                 Intentionally Blank.
 
2.3.3                 Payments Generally.  After the Initial Interest Period,
each interest accrual period thereafter (each, an “Interest Period”) shall
commence on the first (1st) day of each calendar month during the Term and shall
end on and include the last day 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.  Lender shall have the right from time to time, in its sole discretion,
upon not less than ten (10) days prior written notice to Borrower, to change the
Monthly Payment Date to a different calendar day and, if requested by Lender,
Borrower shall promptly execute an amendment to this Agreement to evidence such
change; provided, however, that if Lender shall have elected to change the
Monthly Payment Date as aforesaid, Lender shall have the option, but not the
obligation, to adjust the Interest Period accordingly.  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 pursuant to this
Agreement and the other Loan Documents shall be payable without setoff,
counterclaim, defense or any other deduction whatsoever.
 
2.3.4                 Payment on Maturity Date.  Borrower shall pay to Lender on
the Maturity Date the Outstanding Principal Balance, all accrued and unpaid
interest and all other amounts due hereunder and under the Note, the Security
Instrument and the other Loan Documents.
 
2.3.5                 Late Payment Charge.  If any principal, interest or any
other sum due under the Loan Documents (other than the Outstanding Principal
Balance due and payable on the Maturity Date) is not paid by Borrower within
five (5) calendar days following the date on which it is due, Borrower shall pay
to Lender upon demand an amount equal to the lesser of five percent (5.00%) of
such unpaid sum or the maximum amount permitted by applicable law 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 law.
 
 
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2.3.6                 Method and Place of Payment.
 
(a)           Except as otherwise specifically provided herein, all payments and
prepayments under this Agreement and the Note shall be made to Lender not later
than 12:00 noon, 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 at such other place as Lender shall from time to time
designate, and any funds received by Lender after such time shall, for all
purposes hereof, be deemed to have been paid on the next succeeding Business
Day.
 
(b)           Whenever any payment to be made hereunder or under any other Loan
Document shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be the immediately preceding Business Day.
 
(c)           All payments required to be made by Borrower hereunder or under
the Note or the other Loan Documents shall be made irrespective of, and without
deduction for, any setoff, claim or counterclaim and shall be made irrespective
of any defense thereto.
 
Section 2.4                      Prepayments.
 
2.4.1                 Prepayments.  Except as otherwise provided herein,
Borrower shall not have the right to prepay the Loan in whole, or in part, prior
to the Stated Maturity Date.
 
2.4.2                 Intentionally Blank.
 
2.4.3                 Open Prepayment.  Provided that Borrower shall deliver to
Lender a Prepayment Notice, Borrower may prepay the entire principal balance of
the Note and any other amounts outstanding under the Note, this Agreement, or
any of the other Loan Documents (including, without limitation, all amounts
pursuant to Section 2.4.6(a) and Section 2.4.6(c) hereof), without payment of
the Prepayment Fee or any other prepayment premium or fee, on any Payment Date
on or after the Open Prepayment Date.
 
2.4.4                 Mandatory Prepayments.  If Lender is not obligated to make
Net Proceeds available to Borrower for Restoration, on the next occurring
Monthly Payment Date following the date on which (a) Lender actually receives
any Net Proceeds, and (b) Lender has determined that such Net Proceeds shall be
applied against the Outstanding Principal Balance, (1) Borrower shall prepay, or
authorize Lender to apply Net Proceeds as a prepayment of, the Outstanding
Principal Balance in an amount equal to one hundred percent (100%) of such Net
Proceeds and (2) Borrower shall comply with the provisions set forth in Section
2.4.6.  Notwithstanding anything herein to the contrary, so long as no Event of
Default has occurred and is continuing, no Prepayment Fee or Liquidated Damages
Amount, as applicable, shall be due in connection with any prepayment made
pursuant to this Section 2.4.4.  Any partial prepayment under this Section 2.4.4
shall be applied to the last payments of principal due under the Loan.
 
2.4.5                 Prepayments After Default.  If after the occurrence and
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 (including through
application of any Reserve Funds), such tender or recovery shall be deemed (a)
to have been made on the next occurring Monthly Payment Date together with the
Monthly Debt Service Payment Amount, and (b) to be 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, (i) an
amount equal to the Prepayment Fee (unless same occurs on or after the Open
Prepayment Date), and (ii) in the event the payment occurs prior to the
Defeasance Lockout Expiration Date, the Liquidated Damages Amount.
 
 
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2.4.6                 Payments in Connection with a Prepayment.
 
(a)           On the date on which a prepayment, voluntary or mandatory, is made
under the Note or as required under this Agreement, which date must be a
Business Day, Borrower shall pay to Lender all unpaid interest on the portion of
the Outstanding Principal Balance prepaid plus, if the Prepayment Date is not a
Monthly Payment Date, all interest accruing for the full Interest Period in
which the Prepayment Date falls.
 
(b)           On the Prepayment Date, Borrower shall pay to Lender (i) the
Prepayment Fee (if applicable) and (ii) all other sums, excluding scheduled
interest payments, then due under the Note, this Agreement, the Security
Instrument, and the other Loan Documents.
 
(c)           Borrower shall pay all out-of-pocket costs and expenses of Lender
paid to unrelated third parties and incurred in connection with the prepayment
(including without limitation, any costs and expenses associated with a release
of the Lien of the Security Instrument (if applicable) as set forth in Section
2.4.7 below and reasonable attorneys’ fees and expenses).
 
(d)           IF FOLLOWING THE ACCELERATION OF THE NOTE BY LENDER AFTER THE
OCCURRENCE OF AN EVENT OF DEFAULT, ALL OR ANY PART OF THE LOAN IS REPAID PRIOR
TO THE DEFEASANCE LOCKOUT EXPIRATION DATE, THEN BORROWER SHALL PAY TO LENDER, AS
LIQUIDATED DAMAGES AND NOT AS A PENALTY, AND IN ADDITION TO ANY AND ALL OTHER
SUMS AND FEES PAYABLE UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AN
AMOUNT EQUAL TO FIVE PERCENT (5%) OF THE PRINCIPAL AMOUNT BEING REPAID (THE
“LIQUIDATED DAMAGES AMOUNT”).
 
2.4.7                 Release on Payment in Full.  Lender shall, upon the
written request and at the expense of Borrower, upon payment in full of all
principal and interest due on the Loan and all other amounts due and payable
under the Loan Documents in accordance with the terms and provisions of the Note
and this Agreement, release the Lien of the Security Instrument.
 
Section 2.5                      Defeasance.
 
2.5.1                 Conditions to Defeasance. Provided no Event of Default has
occurred and is continuing, at any time after the date which is (A) two (2)
years after the “startup day,” within the meaning of Section 860G(a)(9) of the
Code, of the final “real estate mortgage investment conduit,” established within
the meaning of Section 860D of the Code, that holds any note that evidences all
or any portion of the Loan or (B) three and one-half (3 1/2) years after the
date hereof, whichever shall occur first (the “Defeasance Lockout Expiration
Date”), Borrower may cause the release of the Property (in whole but not in
part) from the Lien of the Security Instrument and the other Loan Documents upon
the satisfaction of the following conditions (a “Defeasance”):
 
 
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(a)           not less than sixty (60) days prior written notice shall be given
to Lender specifying a date (the “Release Date”) on which the Defeasance
Collateral is to be delivered, such Release Date to occur only on a Monthly
Payment Date;
 
(b)           all accrued and unpaid interest and all other sums due under the
Note and under the other Loan Documents up to the Release Date, including,
without limitation, all costs and expenses incurred by Lender or its agents in
connection with such release (including, without limitation, the fees and
expenses incurred by attorneys and accountants in connection with the review of
the proposed Defeasance Collateral and the preparation of the Defeasance
Security Agreement and related documentation), shall be paid in full on or prior
to the Release Date; and
 
(c)           Borrower shall deliver to Lender on or prior to the Release Date:
 
(i)                 an amount equal to that which is sufficient to purchase U.S.
Obligations that provide for payments (1) on or prior to, but as close as
possible to and including, all successive scheduled Monthly Payment Dates after
the Release Date through the Open Prepayment Date, and (2) in amounts equal to
or greater than the Monthly Debt Service Payment Amount through and including
the Open Prepayment Date together with payment in full of the Outstanding
Principal Balance as of the Open Prepayment Date (the “Defeasance Collateral”),
each of which shall be duly endorsed by the holder thereof as directed by Lender
or accompanied by a written instrument of transfer in form and substance wholly
satisfactory to Lender (including, without limitation, such instruments as may
be required by the depository institution holding such securities to effectuate
book-entry transfers and pledges through the book-entry facilities of such
institution) in order to create a first priority security interest therein in
favor of the Lender in conformity with all applicable state and federal laws
governing granting of such security interests;
 
(ii)                 a pledge and security agreement, in form and substance
satisfactory to Lender in its sole discretion, creating a first priority
security interest in favor of Lender in the Defeasance Collateral (the
“Defeasance Security Agreement”), which shall provide, among other things, that
any payments generated by the Defeasance Collateral shall be paid directly to
Lender and applied by Lender in satisfaction of all amounts then due and payable
hereunder and any excess received by Lender from the Defeasance Collateral over
the amounts payable by Borrower hereunder or under the Note shall be refunded to
Borrower promptly after each Monthly Payment Date;
 
(iii)                 a certificate of Borrower certifying that all of the
requirements set forth in this Section 2.5 have been satisfied;
 
(iv)                 an opinion of counsel for Borrower in form and substance
and delivered by counsel satisfactory to Lender in its sole discretion stating,
among other things, that (1) Lender has a perfected first priority security
interest in the Defeasance Collateral and that the Defeasance Security Agreement
is enforceable against Borrower in accordance with its terms; and (2) 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;
 
 
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(v)                 Borrower shall deliver evidence in writing from the
applicable Rating Agencies to the effect that the defeasance of the Loan and
collateral substitution (including the structure described in Section 2.5.7
below) will not result in a downgrading, withdrawal or qualification of the
respective ratings in effect immediately prior to such defeasance event for any
securities issued in connection with the Securitization which are then
outstanding;
 
(vi)                 a certificate from a firm of independent public accountants
acceptable to Lender certifying that the Defeasance Collateral is sufficient to
satisfy the provisions of Section 2.5.1(c)(i) above;
 
(vii)                such other certificates, documents or instruments as Lender
may reasonably require; and
 
(viii)                in connection with the conditions set forth in
Section 2.5.1(c) above, Borrower hereby appoints Lender as its agent and
attorney in fact for the purpose of using the amounts delivered pursuant to
Section 2.5.1(c)(i) above to purchase the Defeasance Collateral.
 
2.5.2                 Release of Property.  Upon the completion of a Defeasance
in compliance with the requirements of this Section 2.5, the Property shall be
released from the Lien of the Security Instrument and the other Loan Documents,
and the Defeasance Collateral shall constitute the only collateral which shall
secure the Note and all other Obligations.  Lender will, at Borrower’s expense,
execute and deliver any agreements reasonably requested by Borrower to release
the Lien of the Security Instrument from the Property.  Borrower, pursuant to
the Defeasance Security Agreement, shall authorize and direct that the payments
received from Defeasance Collateral be made directly to Lender and applied to
satisfy the Obligations, including payment in full of the Outstanding Principal
Balance as of the Open Prepayment Date.
 
2.5.3                 Successor Borrower.  In connection with a Defeasance,
Borrower shall assign all its Obligations, together with the pledged Defeasance
Collateral, to a successor entity designated by Lender in its sole discretion
or, at the option of Lender, designated by Borrower and approved by Lender (in
each case, the “Successor Borrower”).  Lender shall have the right to establish
or designate the Successor Borrower and to purchase, or cause to be purchased,
the Defeasance Collateral (the “Defeasance Rights and Obligations”), which
rights may be exercised in Lender’s sole discretion and shall be retained by the
Lender named herein notwithstanding the transfer or securitization of the Loan
(but subject to the payment of any residual value to Borrower or Guarantor in
accordance with Section 2.5.7 below).  Such successor entity shall execute an
assumption agreement in form and substance satisfactory to Lender in its sole
discretion pursuant to which it shall assume and agree to pay (as applicable)
Borrower’s Obligations and the Defeasance Security Agreement.  As conditions to
such assignment and assumption, Borrower shall (i) deliver to Lender an opinion
of counsel in form and substance and delivered by counsel satisfactory to Lender
in its sole discretion stating, among other things, that such assumption
agreement is enforceable against Borrower and such successor entity in
accordance with its terms and that the Note, the Defeasance Security Agreement
and the other Loan Documents, as so assumed, are enforceable against such
successor entity in accordance with their respective terms, and (ii) pay all
costs and expenses incurred by Lender or its agents in connection with such
assignment and assumption (including, without limitation, the review of the
proposed transferee and the preparation of the assumption agreement and related
documentation).  Additionally, Borrower shall pay all actual, out-of-pocket
costs and expenses incurred by Successor Borrower, including reasonable
attorneys’ fees and expenses, incurred in connection with the preparation of
assignment and assumption agreement.  In connection with a transfer of the
Defeasance Collateral to the Successor Borrower, Borrower shall, as a condition
to such Defeasance, deliver or cause to be delivered a non-consolidation opinion
in form and substance satisfactory to Lender and the Rating Agencies.  Upon such
assumption, Borrower shall be relieved of its Obligations hereunder, under the
other Loan Documents and under the Defeasance Security Agreement other than
those Obligations which are specifically stated to survive the termination,
satisfaction or assignment of this Agreement or the exercise of Lender’s rights
and remedies hereunder, and Guarantor shall be released from and relieved of any
liability under the Guaranty and other Loan Documents on a “go-forward” basis to
the extent (and only to the extent) that such liability first arose and accrued
solely and entirely following the Release Date (but, in the case of Hazardous
Substances (as defined in the Environmental Indemnity) related indemnities, to
the extent (and only to the extent) that such claims arose solely from Hazardous
Substances that (A) were not present in, on, under or migrating from, or a
threat to the Property prior to the date of the closing of such conveyance, and
(B) were not the result of any act or negligence of Borrower, Guarantor or any
of their respective Affiliates, agents or contractors).  Notwithstanding the
foregoing, this exclusion from liability shall not apply in the case of clause
(xiii) of the Borrower’s Recourse Liabilities in Section 11.22 of this
Agreement.
 
 
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2.5.4                 Appointment as Attorney in Fact.  Upon the release of the
Property in accordance with Section 2.5.2, Borrower shall have no further right
to prepay the Note pursuant to the other provisions of this Section 2.5 or
otherwise. In connection with the conditions set forth in this Section 2.5,
Borrower hereby appoints Lender as its agent and attorney-in-fact for the
purpose of purchasing the Defeasance Collateral with funds provided by
Borrower.  Borrower shall pay any and all actual, out-of-pocket costs and
expenses incurred in the purchase of the Defeasance Collateral, including
reasonable attorneys’ fees and expenses, 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 this Section
2.5.
 
2.5.5                 Defeasance Costs and Expenses.  Borrower shall pay all
reasonable costs and expenses incurred by Lender in connection with a
Defeasance, which payment is required whether or not such Defeasance is
completed.  Such expenses include, without limitation, the cost incurred by
Lender to obtain a Rating Agency Confirmation contemplated by
Section 2.5.1(c)(v) and the reasonable fees and disbursements of Lender’s legal
counsel.  Lender reserves the right to require that Borrower post a deposit to
cover costs which Lender reasonably anticipates will be incurred in connection
with a Defeasance.
 
 
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2.5.6                 No Violation of Transfer Restrictions.  Any Defeasance
hereunder or compliance by Borrower with any of the provisions contained in this
Section 2.5 shall not constitute a violation of any restrictions on Transfer
under this Agreement or any Loan Document.
 
2.5.7                 Residual Value Payable to Borrower.  Borrower or
Guarantor, or an entity designated by Borrower or Guarantor, shall be entitled
to the payment of any residual value remaining with respect to any Defeasance
Collateral after the payment of all amounts and related costs and expenses
required in connection with a Defeasance hereunder, including (a) payments of
all amounts required under Section 2.5.1(c) and (without duplication) any other
amounts outstanding under the Loan Documents which are required to be paid in
connection with a Defeasance as set forth in this Article 5, and (b) the amounts
described in Section 2.5.5 above, and the assumption agreement and pledge
agreement required in connection with such Defeasance, as more particularly
described in this Article 5, shall expressly provide that Borrower or Guarantor,
or an entity designated by Borrower or Guarantor, shall be entitled to the
payment of any such residual value.  In order to accomplish the foregoing,
Lender reserves the right to require that the Successor Borrower be one-hundred
percent (100%) owned by Borrower.
 
ARTICLE 3
 
REPRESENTATIONS AND WARRANTIES
 
Section 3.1                      Borrower Representations.
 
Borrower represents and warrants that as of the date hereof:
 
3.1.1                 Organization.  Each of Borrower and Sole Member is duly
organized, validly existing and in good standing with full power and authority
to own its assets and conduct its business, and is duly qualified and in good
standing in all jurisdictions in which the ownership or lease of its property or
the conduct of its business requires such qualification, and Borrower has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement and the other Loan Documents by it, and has the power and
authority to execute, deliver and perform under this Agreement, the other Loan
Documents and all the transactions contemplated hereby.  Borrower possesses all
rights, licenses, permits and authorizations, governmental or otherwise,
necessary to entitle it to own its properties and to transact the businesses in
which it is now engaged, and the sole business of Borrower is the ownership,
management and operation of the Property.
 
3.1.2                 Proceedings.  This Agreement and the other Loan Documents
have been duly authorized, executed and delivered by Borrower and constitute a
legal, valid and binding obligation of Borrower, enforceable against Borrower in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally, and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
 
 
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3.1.3                 No Conflicts.  The execution and delivery of this
Agreement and the other Loan Documents by Borrower and the performance of its
Obligations hereunder and thereunder will not conflict with any provision of any
law or regulation to which Borrower is subject, or conflict with, result in a
breach of, or constitute a default under, any of the terms, conditions or
provisions of any of Borrower’s organizational documents or any agreement or
instrument to which Borrower is a party or by which it is bound, or any statute,
ordinance, rule, regulation, order or decree applicable to Borrower, or result
in the creation or imposition of any Lien on any of Borrower’s assets or
property (other than pursuant to the Loan Documents).
 
3.1.4                 Litigation.  Except as disclosed on Schedule I attached
hereto (the “Disclosure Schedule”), there is no action, suit, proceeding or
investigation pending or, to the best of Borrower’s knowledge, threatened
against Borrower, Sole Member, Guarantor, the Manager (if applicable) or the
Property in any court or by or before any other Governmental Authority which, if
adversely determined, might materially and adversely affect the condition
(financial or otherwise) or business of Borrower (including the ability of
Borrower to carry out the transactions contemplated by this Agreement), Sole
Member, Guarantor, Manager (if applicable) or the condition or ownership of the
Property.
 
3.1.5                 Agreements.  Except as may be expressly disclosed in the
Title Insurance Policy or the Disclosure Schedule, 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.  Borrower
is not in default with respect to any order or decree of any court or any order,
regulation or demand of any Governmental Authority, which default might have
consequences that would materially and adversely affect the condition (financial
or other) or operations of Borrower or its properties or might have consequences
that would adversely affect its performance hereunder.  Borrower is not in
default in any material respect in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any Permitted
Encumbrance or any other agreement or instrument to which it is a party or by
which it or the Property is bound.  Borrower has no material financial
obligation (contingent or otherwise) 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)
Permitted Indebtedness and (b) obligations under the Loan Documents.
 
3.1.6                 Consents.  No consent, approval, authorization or order
of, nor notice or filing with, any court or Governmental Authority or any other
Person is required for the execution, delivery and performance by Borrower of,
or compliance by Borrower with, this Agreement or the other Loan Documents or
the consummation of the transactions contemplated hereby, other than those which
have been obtained or made by Borrower, as applicable.
 
3.1.7                 Title.  Borrower has good, marketable and insurable fee
simple title to the real property comprising part of the Property and good and
marketable title to the balance of the Property owned by it, free and clear of
all Liens whatsoever except the Permitted Encumbrances and as otherwise
disclosed in this Agreement or any Loan Documents.  The Security Instrument,
when properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection
therewith, will create (i) a valid, first priority, perfected Lien on Borrower’s
interest in the Property, subject only to Permitted Encumbrances, and (ii)
perfected security interests in and to, and perfected collateral assignments of,
all personalty (including the Leases), all in accordance with the terms thereof,
in each case subject only to the Permitted Encumbrances.  Except as may be
expressly disclosed in the Title Insurance Policy or the Disclosure Schedule,
there are no mechanics’, materialman’s or other similar Liens or claims which
have been filed for work, labor or materials affecting the Property which are or
may be Liens prior to, or equal or coordinate with, the Lien of the Security
Instrument.  None of the Permitted Encumbrances, individually or in the
aggregate, (a) materially interfere with the benefits of the security intended
to be provided by the Security Instrument and this Agreement, (b) materially and
adversely affect the value of the Property, (c) impair the use or operations of
the Property (as currently used), or (d) impair Borrower’s ability to pay its
Obligations in a timely manner.
 
 
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3.1.8                 No Plan Assets.  As of the date hereof and throughout the
Term (i) Borrower does not sponsor, is not obligated to contribute to, and is
not itself and will not be an “employee benefit plan,” as defined in Section
3(3) of ERISA, subject to Title I of ERISA or Section 4975 of the Code, (ii)
none of the assets of Borrower constitutes or will constitute “plan assets” of
one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101, (iii)
Borrower is not and will not be a “governmental plan” within the meaning of
Section 3(32) of ERISA, and (iv) transactions by or with Borrower are not and
will not be subject to state statutes regulating investment of, and fiduciary
obligations with respect to, governmental plans 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.
 
3.1.9                 Compliance.  To the best of Borrower’s knowledge, Borrower
and the Property (including, but not limited to the Improvements) and the use
thereof comply in all material respects with all applicable Legal Requirements,
including parking, building and zoning and land use laws, ordinances,
regulations and codes.  Borrower is not in default or violation of any order,
writ, injunction, decree or demand of any Governmental Authority, the violation
of which might materially adversely affect the condition (financial or
otherwise) or business of Borrower.  Borrower has not committed any act which
may give any Governmental Authority the right to cause Borrower to forfeit the
Property or any part thereof or any monies paid in performance of Borrower’s
Obligations under any of the Loan Documents.  The Property is used exclusively
for retail and office uses and other appurtenant and related uses.  In the event
that all or any part of the Improvements are destroyed or damaged, said
Improvements can be legally reconstructed to their condition prior to such
damage or destruction, and thereafter exist for the same use without violating
any zoning or other ordinances applicable thereto and without the necessity of
obtaining any variances or special permits.  No legal proceedings are pending
or, to the knowledge of Borrower, threatened with respect to the zoning of the
Property.  Neither the zoning nor any other right to construct, use or operate
the Property is in any way dependent upon or related to any property other than
the Property.  The use being made of the Property is in conformity with the
certificate of occupancy issued for the Property and all other restrictions,
covenants and conditions affecting the Property.
 
 
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3.1.10                 Financial Information.  All reports, documents,
instruments, information, financial data, including the statements of cash flow
and income and operating expense, that have been delivered to Lender in
connection with the Loan (i) are true, complete and correct in all material
respects, (ii) accurately represent the financial condition of the Property as
of the date of such reports, (iii) have been prepared in accordance with GAAP
throughout the periods covered, except as disclosed therein, and (iv) are
accurate, correct and sufficiently complete in all material respects to give
Lender true and accurate knowledge of their subject matter and do not contain
any material misrepresentation or omission.  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, except as referred to or
reflected in said financial statements.  Since the date of the financial
statements, there has been no material adverse change in the financial
condition, operations or business of Borrower or the Property from that set
forth in said financial statements.
 
3.1.11                 Condemnation.  No Condemnation or other proceeding has
been commenced or, to the best of 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.
 
3.1.12                 Easements; Utilities and Public Access.  To the best of
Borrower’s knowledge, all easements, cross easements, licenses, air rights and
rights-of-way or other similar property interests (collectively, “Easements”),
if any, necessary for the full utilization of the Improvements for their
intended purposes have been obtained, are in full force and effect without
default thereunder.  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.  All public utilities necessary or
convenient to the full use and enjoyment of the Property are located in the
public right-of-way abutting the Property, and all such utilities are connected
so as to serve the Property without passing over other property absent a valid
irrevocable easement.  All roads necessary for the use of the Property for its
current purpose have been completed and dedicated to public use and accepted by
all Governmental Authorities.
 
3.1.13                 Separate Lots.  The Property is comprised of one (1) or
more parcels which constitute separate tax lots and do not constitute a portion
of any other tax lot not a part of the Property.
 
3.1.14                 Assessments.  Except as may be expressly disclosed in the
Title Insurance Policy or the Disclosure Schedule, there are no pending or, to
the best of 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.
 
3.1.15                 Enforceability.  The Loan Documents are not subject to
any right of rescission, set-off, counterclaim or defense by Borrower, Sole
Member 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,
render the Loan Documents unenforceable, and none of Borrower, Sole Member or
Guarantor have asserted any right of rescission, set-off, counterclaim or
defense with respect thereto.
 
 
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3.1.16                 Assignment of Leases.  The Assignment of Leases creates a
valid assignment of, or a valid first-priority, perfected security interest in,
certain rights under the Leases (including the Ground Lease), subject only to a
license granted to Borrower to exercise certain rights and to perform certain
obligations of the lessor under the Leases (including the Ground Lease),
including the right to operate the Property.  No Person other than Lender has
any interest in or assignment of the Leases or any portion of the Rents due and
payable or to become due and payable thereunder.
 
3.1.17                 Insurance.  Borrower caused the Ground Tenant to obtain
and has delivered to Lender evidence of insurance coverages, with all premiums
prepaid thereunder, reflecting the insurance coverages, amounts and other
requirements set forth in this Agreement.  No claims have been made under any of
the Policies, none of Borrower nor any Affiliate of Borrower, nor, to the best
of Borrower’s knowledge, any other Person, has done, by act or omission,
anything which would impair the coverage of any of the Policies.
 
3.1.18                 Licenses.  Except for certificates of occupancy which
will be required from time to time as and when Ground Tenant’s Sub-Tenants take
occupancy of their demised premises within the Ground Tenant Improvements, all
certifications, permits, licenses and approvals, including without limitation,
certificates of completion and occupancy permits required of Borrower and Ground
Tenant for the legal use, occupancy and operation of the Property and any Ground
Tenant Improvements constructed thereon as a retail and office project
(collectively, the “Licenses”), have been obtained and are in full force and
effect.  Borrower shall keep and maintain all Licenses necessary for the
operation of the Property and any Ground Tenant Improvements constructed thereon
as a retail and office project.  The use being made of the Property is in
conformity with the certificate of occupancy issued for the Property.
 
3.1.19                 Flood Zone.  None of the Improvements on the Property is
located in an area identified by the Federal Emergency Management Agency as a
special flood hazard area, or, if so located the flood insurance required
pursuant to Section 5.1.1(a) hereof is in full force and effect with respect to
the Property.
 
3.1.20               Physical Condition.  Except as may be expressly disclosed
to Lender in writing, to the best of Borrower’s knowledge, the Property,
including (to the extent constructed as of the date of this Agreement) all
buildings, improvements, parking facilities, sidewalks, storm drainage systems,
roofs, plumbing systems, HVAC systems, fire protection systems, electrical
systems, equipment, elevators, exterior sidings and doors, landscaping,
irrigation systems and all structural components, are in good condition, order
and repair in all material respects; there exists no structural or other
material defects or damages in the Property, whether latent or otherwise, and
Borrower has not received notice from any insurance company or bonding company
of any defects or inadequacies in the Property, or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond.
 
3.1.21                 Boundaries.  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 affecting the Property encroach upon any of the Improvements, so as
to affect the value or marketability of the Property in any material respect,
except those which are set forth on the Survey and insured against by the Title
Insurance Policy.
 
 
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3.1.22                 Leases.  The Property is not subject to any Leases other
than the Ground Lease.  Borrower has delivered to Lender a true, correct and
complete list of the Ground Tenant Subleases and Ground Tenant’s Sub-Tenants
(and to Borrower’s knowledge, certain prospective Ground Tenant’s Sub-Tenants
who are in various stages of space lease negotiations with Ground Tenant) as of
the date of this Agreement.  Borrower is the owner and lessor of landlord’s
interest in the Ground Lease.  No Person has any possessory interest in the
Property or right to occupy the same except under and pursuant to the provisions
of the Ground Lease and any Ground Tenant Subleases.  The Ground Lease is in
full force and effect and 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.  The copies of the Ground Lease
delivered to Lender is true and complete, and there are no oral agreements with
respect thereto.  No Rent (including security deposits) has been paid more than
one (1) month in advance of its due date under the Ground Lease.  All work to be
performed by Borrower (if any) under the Ground Lease has been performed as
required and has been accepted by the Ground Tenant.  Any payments, free rent,
partial rent, rebate of rent or other payments, credits, allowances or
abatements required to be given by Borrower to Ground Tenant under the Ground
Lease has already been received by Ground Tenant.  The Ground Tenant under the
Ground Lease have accepted possession of and are in occupancy of all of its
demised premises and have commenced the payment of full, unabated rent under the
Ground Lease.  Borrower has delivered to Lender a true, correct and complete
description of the security deposit, if any, made by Ground Tenant under the
Ground Lease.  Ground Tenant is free from bankruptcy or reorganization
proceedings.  Except for Ground Tenant under the Ground Lease, no Tenant under
any Lease (or any sublease) is an Affiliate of Borrower.  There are no brokerage
fees or commissions due and payable in connection with the Ground Lease, except
as has been previously disclosed to Lender in writing, and no such fees or
commissions will become due and payable in the future in connection with the
Ground lease, including by reason of any extension of such Ground Lease or
expansion of the space leased thereunder, except as has previously been
disclosed to Lender in writing.  There has been no prior sale, transfer or
assignment, hypothecation or pledge of Borrower’s interest under the Ground
Lease or of Borrower’s interest in the Rents received therein which is still in
effect.  Ground Tenant does not have a right or option pursuant to the Ground
Lease or otherwise to purchase all or any part of the demised premises or the
building of which the leased premises are a part.
 
3.1.23                 Filing and Recording Taxes.  All transfer taxes, deed
stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid under applicable Legal Requirements in connection with the
transfer of the Property to Borrower have been paid or are being paid
simultaneously herewith.  All mortgage, mortgage recording, stamp, intangible or
other similar tax required to be paid under applicable Legal Requirements in
connection with the execution, delivery, recordation, filing, registration,
perfection or enforcement of any of the Loan Documents, including the Security
Instrument, have been paid or are being paid simultaneously herewith.  All taxes
and governmental assessments due and owing in respect of the Property have been
paid, or an escrow of funds in an amount sufficient to cover such payments has
been established hereunder or are insured against by the Title Insurance Policy.
 
 
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3.1.24                 Single Purpose.  Borrower hereby represents and warrants
to, and covenants with, Lender that since the date of its formation and at all
times on and after the date hereof and until such time as the Obligations shall
be paid and performed in full:
 
(a)           Borrower (i) has been, is, and will be organized solely for the
purpose of acquiring, developing, owning, holding, selling, leasing,
transferring, exchanging, managing and operating the Property, entering into
this Agreement with the 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, and (ii) has
not owned, does not own, and will not own any asset or property other than (A)
the Property, and (B) incidental personal property necessary for the ownership
or operation of the Property.
 
(b)           Borrower has not engaged and will not engage in any business other
than the ownership, management and operation of the Property and Borrower will
conduct and operate its business as presently conducted and operated.
 
(c)           Borrower has not and will not enter into any contract or agreement
with any Affiliate of Borrower, any constituent party of Borrower or any
Affiliate of any constituent party, except upon terms and conditions that are
intrinsically fair, commercially reasonable, and no less favorable to it than
would be available on an arms-length basis with third parties other than any
such party.
 
(d)           Borrower has not incurred and will not incur any Indebtedness
other than (i) the Debt, and (ii) unsecured trade payables and operational debt
not evidenced by a note and in an aggregate amount not exceeding one percent
(1%) of the original principal amount of the Loan at any one time; provided that
any Indebtedness incurred pursuant to subclause (ii) shall be (A) outstanding
not more than sixty (60) days, and (B) incurred in the ordinary course of
business (the Indebtedness described in the foregoing clauses (i) and (ii) is
referred to herein, collectively, as “Permitted Indebtedness”).  No Indebtedness
other than the Debt may be secured (senior, subordinate or pari passu) by the
Property or the direct interests in Borrower without Lender’s prior written
consent, which consent may be granted or withheld in Lender’s sole and absolute
discretion.
 
(e)           Borrower has not made and will not make any loans or advances to
any third party (including any Affiliate or constituent party), and has not and
shall not acquire obligations or securities of its Affiliates.
 
(f)           Borrower has been, is, and will remain solvent and Borrower has
paid and will pay its debts and liabilities (including, as applicable, shared
personnel and overhead expenses) from its assets as the same shall become due.
 
(g)           Borrower has done or caused to be done, and will do, all things
necessary to observe organizational formalities and preserve its existence, and
Borrower has not, will not (i) terminate or fail to comply with the provisions
of its organizational documents, or (ii) unless (A) Lender has consented and (B)
following a Securitization of the Loan, the applicable Rating Agencies have
issued a Rating Agency Confirmation, amend, modify or otherwise change its
operating agreement or other organizational documents.
 
 
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(h)           Borrower has maintained and will maintain all of its books,
records, financial statements and bank accounts separate from those of its
Affiliates and any other Person.  Borrower’s assets will not be listed as assets
on the financial statement of any other Person, provided, however, that
Borrower’s assets may be included in a consolidated financial statement of its
Affiliates provided that (i) appropriate notation shall be made on such
consolidated financial statements to indicate the separateness of Borrower and
such Affiliates and to indicate that Borrower’s assets and credit are not
available to satisfy the debts and other obligations of such Affiliates or any
other Person, and (ii) such assets shall be listed on Borrower’s own separate
balance sheet.  Borrower may file consolidated tax returns with those of its
Affiliates to the extent any applicable tax laws or regulations so
require.  Borrower has maintained and shall maintain its books, records,
resolutions and agreements as official records.
 
(i)           Borrower has been, will be, and at all times has held and will
hold itself out to the public as, a legal entity separate and distinct from any
other entity (including any Affiliate of Borrower or any constituent party of
Borrower), shall correct any known misunderstanding regarding its status as a
separate entity, shall conduct business in its own name, shall not identify
itself or any of its Affiliates as a division or department or part of the other
and shall maintain and utilize separate stationery, invoices and checks bearing
its own name.
 
(j)           Borrower has maintained and will maintain adequate capital for the
normal obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations.
 
(k)           Neither Borrower nor any constituent party of Borrower has sought
or will seek or effect the liquidation, dissolution, winding up, consolidation,
asset sale or merger, in whole or in part, of Borrower.
 
(l)            Borrower has not and will not commingle the funds and other
assets of Borrower with those of any Affiliate or constituent party or any other
Person, and has held and will hold all of its assets in its own name.
 
(m)           Borrower has and will maintain its assets in such a manner that it
will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any Affiliate or constituent party or any other
Person.
 
(n)           Borrower has not and will not assume or guarantee or become
obligated for the debts of any other Person and does not and will not hold
itself out to be responsible for or have its credit available to satisfy the
debts or obligations of any other Person.
 
(o)           The organizational documents of Borrower shall provide that the
business and affairs of Borrower shall be managed by or under the direction of
Sole Member, and at all times there shall be at least two (2) duly appointed
managers  (each, an “Independent Manager”) of Borrower, who each have at least
three (3) years prior employment experience and continue to be employed as an
independent director, independent manager or independent member by CT
Corporation, Corporation Service Company, National Registered Agents, Inc.,
Wilmington Trust Company, Stewart Management Company, Lord Securities
Corporation or, if none of those companies is then providing professional
Independent Managers, another nationally-recognized company that provides such
services and which is reasonably approved by Lender, who are not on the board of
directors or managers of more than two (2) Affiliates of Borrower, and who are
not, and have never been, and will not while serving as Independent Manager be,
any of the following: (i) a stockholder, director, manager, officer, employee,
partner, equityholder, member, attorney or counsel of Borrower or any Affiliate
of Borrower or any direct or indirect equity holder of Borrower or any Affiliate
of Borrower (other than (x) as an Independent Manager of an Affiliate of
Borrower that is not in the direct chain of ownership of Borrower and that is
required by a creditor to be a single purpose bankruptcy remote entity, provided
that such Independent Manager is employed by a company that routinely provides
professional Independent Managers or directors or (y) pursuant to an express
provision in Borrower’s operating agreement providing for the appointment of
such Independent Manager to become a “special member” upon Sole Member ceasing
to be a member of Borrower), (ii) a creditor, customer, supplier, service
provider (including provider of professional services) or other Person who
derives any of its purchases or revenues from its activities with Borrower or
any Affiliate of Borrower (other than a nationally-recognized company that
routinely provides professional Independent Managers and other corporate
services to Borrower or any of its Affiliates in the ordinary course of its
business), (iii) a member of the immediate family of any such stockholder,
director, manager, officer, employee, partner, equityholder, member, creditor,
customer, supplier, service provider or other Person, or (iv) a Person or other
entity controlling or under common control with any of (i), (ii) or (iii)
above.  A natural person who otherwise satisfies the foregoing definition and
satisfies subsection (i) by reason of being the Independent Manager of a
“special purpose entity” affiliated with Borrower shall be qualified to serve as
an Independent Manager of Borrower, provided that the fees that such individual
earns from serving as Independent Managers of Affiliates of the Borrower in any
given year constitute in the aggregate less than five percent (5%) of such
individual’s annual income for that year.  In addition, the organizational
documents of Borrower shall provide that no Independent Manager of Borrower may
be removed or replaced unless Borrower provides Lender with not less than three
(3) Business Days’ prior written notice of (a) any proposed removal of an
Independent Manager, together with a statement as to the reasons for such
removal, and (b) the identity of the proposed replacement Independent Manager,
together with a certification that such replacement satisfies the requirements
set forth in the organizational documents for an Independent Manager.  As used
in this paragraph, the term “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management,
policies or activities of such Person, whether through ownership of voting
securities, by contract or otherwise.  In addition, the organizational documents
of Borrower shall also provide an express acknowledgment that Lender is an
intended third-party beneficiary of the “special purpose” provisions of such
organizational documents.
 
 
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(p)           The organizational documents of Borrower shall provide that the
Borrower shall not take any action which, under the terms of any certificate of
formation, limited liability company operating agreement or any voting trust
agreement, requires an unanimous vote of the members of Borrower unless at the
time of such action there shall be at least two (2) members of the board of
directors who are Independent Managers (and such Independent Managers have
participated in such vote).  The organizational documents of the Borrower shall
provide that Borrower will not and Borrower agrees that it will not, without the
unanimous written consent of its members including the Independent Managers (i)
file or consent to the filing of any petition, either voluntary or involuntary,
to take advantage of any applicable insolvency, bankruptcy, liquidation or
reorganization statute, (ii) seek or consent to the appointment of a receiver,
liquidator or any similar official of Borrower or a substantial part of its
business, (iii) take any action that might cause such entity to become
insolvent, (iv) make an assignment for the benefit of creditors, (v) admit in
writing its inability to pay debts generally as they become due, (vi) declare or
effectuate a moratorium on the payment of any obligations, or (vii) take any
action in furtherance of the foregoing.  In addition, the organizational
documents of Borrower shall provide that, when voting with respect to any
matters set forth in the immediately preceding sentence of this Section
3.1.24(p), the Independent Managers shall consider only the interests of
Borrower, including its creditors.
 
 
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(q)           The organizational documents of Borrower shall provide that, as
long as any portion of the Obligations remains outstanding, upon the occurrence
of any event that causes Sole Member to cease to be a member of Borrower (other
than (i) upon an assignment by Sole Member of all of its limited liability
company interest in Borrower and the admission of the transferee, if permitted
pursuant to the organizational documents of Borrower and the Loan Documents, or
(ii) the resignation of Sole Member and the admission of an additional member of
Borrower, if permitted pursuant to the organizational documents of Borrower and
the Loan Documents), each of the persons acting as an Independent Manager of
Borrower shall, without any action of any Person and simultaneously with Sole
Member ceasing to be a member of Borrower, automatically be admitted as members
of Borrower (in each case, individually, a “Special Member” and collectively,
the “Special Members”) and shall preserve and continue the existence of Borrower
without dissolution.  The organizational documents of Borrower shall further
provide that for so long as any portion of the Obligations is outstanding, no
Special Member may resign or transfer its rights as Special Member unless (i) a
successor Special Member has been admitted to Borrower as a Special Member
following delivery to Lender of reasonable prior written notice of same (but in
any event, not less than two (2) days prior written notice), and (ii) such
successor Special Member has also accepted its appointment as an Independent
Manager in a writing delivered to Lender.
 
(r)           The organizational documents of Borrower shall provide that, as
long as any portion of the Obligations remains outstanding, except as expressly
permitted pursuant to the terms of this Agreement, (i) Sole Member may not
resign, and (ii) no additional member shall be admitted to Borrower.
 
(s)           The organizational documents of Borrower shall provide that, as
long as any portion of the Obligations remains outstanding: (i) Borrower shall
be dissolved, and its affairs shall be wound up, only upon the first to occur of
the following: (A) the termination of the legal existence of the last remaining
member of Borrower or the occurrence of any other event which terminates the
continued membership of the last remaining member of Borrower in Borrower unless
the business of Borrower is continued in a manner permitted by its operating
agreement or the Delaware Limited Liability Company Act (the “Act”), or (B) the
entry of a decree of judicial dissolution under Section 18-802 of the Act; (ii)
upon the occurrence of any event that causes the last remaining member of
Borrower to cease to be a member of Borrower or that causes Sole Member to cease
to be a member of Borrower (other than (A) upon an assignment by Sole Member of
all of its limited liability company interest in Borrower and the admission of
the transferee, if permitted pursuant to the organizational documents of
Borrower and the Loan Documents, or (B) the resignation of Sole Member and the
admission of an additional member of Borrower, if permitted pursuant to the
organizational documents of Borrower and the Loan Documents), to the fullest
extent permitted by law, the personal representative of such last remaining
member shall be authorized to, and shall, within ninety (90) days after the
occurrence of the event that terminated the continued membership of such member
in Borrower, agree in writing (I) to continue the existence of Borrower, and
(II) to the admission of the personal representative or its nominee or designee,
as the case may be, as a substitute member of Borrower, effective as of the
occurrence of the event that terminated the continued membership of such member
in Borrower; (iii) the bankruptcy of Sole Member or a Special Member shall not
cause such Sole Member or Special Member, respectively, to cease to be a member
of Borrower and upon the occurrence of such an event, the business of Borrower
shall continue without dissolution; (iv) in the event of the dissolution of
Borrower, Borrower shall conduct only such activities as are necessary to wind
up its affairs (including the sale of the assets of Borrower in an orderly
manner), and the assets of Borrower shall be applied in the manner, and in the
order of priority, set forth in Section 18-804 of the Act; and (v) to the
fullest extent permitted by law, each of Sole Member and the Special Members
shall irrevocably waive any right or power that they might have to cause
Borrower or any of its assets to be partitioned, to cause the appointment of a
receiver for all or any portion of the assets of Borrower, to compel any sale of
all or any portion of the assets of Borrower pursuant to any applicable law or
to file a complaint or to institute any proceeding at law or in equity to cause
the dissolution, liquidation, winding up or termination of Borrower.
 
 
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(t)           Borrower shall conduct its business so that the assumptions made
with respect to Borrower in the Insolvency Opinion shall be true and correct in
all respects.  In connection with the foregoing, Borrower hereby covenants and
agrees that it will comply with or cause the compliance with, (i) all of the
facts and assumptions (whether regarding Borrower or any other Person) set forth
in the Insolvency Opinion, (ii) all of the representations, warranties and
covenants in this Section 3.1.24, and (iii) all of the organizational documents
of Borrower.
 
(u)           Borrower has not permitted and will not permit any Affiliate or
constituent party independent access to its bank accounts.
 
(v)           Borrower has paid and shall pay its own liabilities and expenses,
including the salaries of its own employees (if any) only from its own funds,
and has maintained and shall maintain a sufficient number of employees (if any)
in light of its contemplated business operations.
 
(w)           Borrower has compensated and shall compensate each of its
consultants and agents from its funds for services provided to it and pay from
its own assets all obligations of any kind incurred.
 
(x)           Borrower has not, and without the unanimous consent of all of
its  members (including all Independent Managers), as applicable, will not (i)
file a bankruptcy, insolvency or reorganization petition or otherwise institute
insolvency proceedings or otherwise seek any relief under any laws relating to
the relief from debts or the protection of debtors generally, (ii) seek or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for such entity or for all or
any portion of Borrower’s properties, (iii) make any assignment for the benefit
of Borrower’s creditors, or (iv) take any action that might cause Borrower to
become insolvent.
 
 
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(y)            Borrower has maintained and will maintain an arm’s-length
relationship with its Affiliates.
 
(z)             Borrower and its Affiliates have allocated and will allocate
fairly and reasonably any overhead expenses that they share, including shared
office space.
 
(aa)           Except in connection with the Loan, Borrower has not pledged and
will not pledge its assets for the benefit of any other Person.
 
(bb)           has a certificate of formation and/or an operating agreement, as
applicable, that provides that such entity will not:  (A) dissolve, merge,
liquidate, consolidate; (B) sell, transfer, dispose, or encumber (except with
respect to the Loan Documents) all or substantially all of its assets or acquire
all or substantially all of the assets of any Person; or (C) engage in any other
business activity, or amend its organizational documents with respect to the
matters set forth in this Section 3.1.24 without the consent of the Lender.
 
(cc)           Borrower has and will have no obligation to indemnify its
officers, directors, members or Special Members, as the case may be, or has such
an obligation that is fully subordinated to the Debt and will not constitute a
claim against it if cash flow in excess of the amount required to pay the Debt
is insufficient to pay such obligation.
 
(dd)           Borrower and the Independent Managers will consider the interests
of Borrower’s creditors in connection with all limited liability company
actions.
 
(ee)           Except for any guaranties and indemnities expressly contemplated
by this Agreement and the other Loan Documents in favor of Lender, Borrower has
not, does not, and will not have any of its obligations guaranteed by an any
Affiliate.
 
3.1.25                 Tax Filings.  To the extent required, Borrower has filed
(or has obtained effective extensions for filing) all federal, state,
commonwealth, district and local tax returns required to be filed and has paid
or made adequate provision for the payment of all federal, state, commonwealth,
district and local taxes, charges and assessments payable by
Borrower.  Borrower’s tax returns (if any) properly reflect the income and taxes
of Borrower for the periods covered thereby, subject only to reasonable
adjustments required by the Internal Revenue Service or other applicable tax
authority upon audit.
 
3.1.26                 Solvency.  Borrower (i) has not entered into the
transaction or any Loan Document with the actual intent to hinder, delay, or
defraud any creditor, and (ii) received reasonably equivalent value in exchange
for its Obligations under the Loan Documents.  Giving effect to the Loan, the
fair saleable value of Borrower’s assets exceeds and will, immediately following
the making of the Loan, exceed Borrower’s total liabilities, including
subordinated, unliquidated, disputed and contingent liabilities.  The fair
saleable value of Borrower’s assets is, and immediately following the making of
the Loan, will be, greater than Borrower’s probable liabilities, including the
maximum amount of its contingent liabilities on its debts as such debts become
absolute and matured.  Borrower’s assets do not and, immediately following the
making of the Loan will not, constitute unreasonably small capital to carry out
its business as conducted or as proposed to be conducted.  Borrower does not
intend to, and does not believe that it will, incur Indebtedness and liabilities
(including contingent liabilities and other commitments) beyond its ability to
pay such Indebtedness and liabilities as they mature (taking into account the
timing and amounts of cash to be received by Borrower and the amounts to be
payable on or in respect of the obligations of Borrower).  No petition in
bankruptcy has been filed against Borrower or any constituent Person of
Borrower, and neither Borrower nor any constituent Person of Borrower 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 properties, and Borrower has no
knowledge of any Person contemplating the filing of any such petition against it
or such constituent Persons.
 
 
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3.1.27                 Federal Reserve Regulations.  No part of the proceeds of
the Loan will be used for the purpose of purchasing or acquiring any “margin
stock” within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or for any other purpose which would be inconsistent with
such Regulation U or any other Regulations of such Board of Governors, or for
any purposes prohibited by Legal Requirements or by the terms and conditions of
this Agreement or the other Loan Documents.
 
3.1.28                 Organizational Chart.  The organizational chart attached
as Schedule III, relating to Borrower and certain Affiliates and other parties,
is true, complete and correct on and as of the date hereof.  No Person other
than those Persons shown on Schedule III have any ownership interest in, or
right of control, directly or indirectly, in Borrower.
 
3.1.29                 Organizational Status.  Borrower’s exact legal name is:
SDQ Fee, LLC.  Borrower is of the following organizational type: limited
liability company, and the jurisdiction in which Borrower is organized is:
Delaware.  Borrower’s Tax I.D. number is 27-3244339 and Borrower’s Delaware
Organizational I.D. number is 4859624.
 
3.1.30                 Bank Holding Company.  Borrower is not a “bank holding
company” or a direct or indirect subsidiary of a “bank holding company” as
defined in the Bank Holding Company Act of 1956, as amended, and Regulation Y
thereunder of the Board of Governors of the Federal Reserve System.
 
3.1.31                 No Casualty.  The Improvements have suffered no material
casualty or damage which has not been fully repaired and the cost thereof fully
paid.
 
3.1.32                 Purchase Options.  Neither the Property nor any part
thereof are subject to any purchase options, rights of first refusal, rights of
first offer or other similar rights in favor of any Person.
 
3.1.33                 FIRPTA.  Borrower is not a “foreign person” within the
meaning of Sections 1445 or 7701 of the Code.
 
3.1.34                 Investment Company Act.  Borrower is not (i) an
“investment company” or a company “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940, as amended, or (ii) subject
to any other United States federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.
 
 
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3.1.35                 Use of Property.  The Property consists solely of an
office and retail project and related operations and is used for no other
purpose.
 
3.1.36                 Fiscal Year.  Each fiscal year of Borrower commences on
January 1.
 
3.1.37                 No Other Financing.  Borrower has not borrowed any funds
which have not heretofore been repaid in full, except for the Loan.
 
3.1.38                 Contracts.
 
(a)           Borrower has not entered into, and is not bound by, any Major
Contract which continues in existence, except those previously disclosed in
writing to Lender.
 
(b)           Each of the Major Contracts is in full force and effect, there are
no monetary or other material defaults by Borrower thereunder and, to the best
knowledge of Borrower, there are no monetary or other material defaults
thereunder by any other party thereto.  None of Borrower, Manager (if
applicable) or any other Person acting on Borrower’s behalf has given or
received any notice of default under any of the Major Contracts that remains
uncured or in dispute.
 
(c)           Borrower has delivered true, correct and complete copies of the
Major Contracts (including all amendments and supplements thereto) to Lender.
 
(d)           No Major Contract has as the other party an Affiliate of
Borrower.  All fees and other compensation for services previously performed
under the Management Agreement (if applicable) have been paid in full.
 
3.1.39                 Full and Accurate Disclosure. 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 that
would have a material and adverse effect on the Loan, taken as a whole. There is
no material fact presently known to Borrower which has not been disclosed to
Lender which materially and adversely affects the Loan, taken as a whole.
 
3.1.40                 Other Obligations and Liabilities.  Borrower has no
liabilities or other obligations that arose or accrued prior to the date hereof
that, either individually or in the aggregate, could have a material adverse
effect on Borrower, the Property and/or Borrower’s ability to pay the
Debt.  Borrower has no known contingent liabilities.
 
3.1.41                 Ground Lease.  Borrower hereby represents and warrants to
Lender the following with respect to the Ground Lease:
 
(a)           Recording; Modification.  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 copies of which otherwise
provided to Lender.
 
 
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(b)           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 and/or the giving of
notice, could result in a default under the terms of the Ground Lease.  All
rents, additional rents and other sums due and payable under the Ground Lease
have been paid in full.  Neither Borrower nor the Ground Tenant under the Ground
Lease has commenced any action or given or received any notice for the purpose
of terminating the Ground Lease.
 
(c)           Term.  The Ground Lease has a stated term which extends not less
than ten (10) years beyond the Stated Maturity Date.
 
(d)           Insurance Proceeds.  Under the terms of the Ground Lease and this
Agreement, taken together, any related insurance and condemnation proceeds will
be applied either to the repair or restoration of all or part of the Property,
with Lender or Ground Tenant’s mortgagee having the right to hold and disburse
the proceeds as the repair or restoration progresses, or to the payment of the
Outstanding Principal Balance together with any accrued interest thereon, or to
the payment of amounts outstanding under any mortgage loan held by Ground
Tenant’s mortgagee.
 
(e)           Intentionally Blank.
 
(f)           Substantial Completion.  “Substantial Completion” (as defined in
the Ground Lease) has occurred under the Ground Lease and the Ground Lease
Completion Letter of Credit Has been fully released.
 
3.1.42                 REA.  To the best of Borrower’s knowledge, the REA is in
full force and effect and neither Borrower nor, to Borrower’s knowledge, any
other party to the REA, 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.  To Borrower’s
knowledge, except as set forth on Schedule V, the REA has not been modified,
amended or supplemented.
 
3.1.43                 Intentionally Blank.
 
3.1.44                 Illegal Activity.  No portion of the Property has been or
will be purchased with proceeds of any illegal activity.
 
Section 3.2                      Survival of Representations.
 
The representations and warranties set forth in Section 3.1 and elsewhere in
this Agreement and the other Loan Documents shall survive until the Obligations
have been indefeasibly paid and performed in full.
 
 
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ARTICLE 4
 
BORROWER COVENANTS
 
Section 4.1                      Borrower Affirmative Covenants.
 
Borrower hereby covenants and agrees with Lender that throughout the Term:
 
4.1.1                 Payment and Performance of Obligations.  Borrower shall
pay and otherwise perform the Obligations in accordance with the terms of this
Agreement and the other Loan Documents.
 
4.1.2                 Existence; Compliance with Legal Requirements.  Each of
Borrower and Sole Member 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.  There shall never be committed by Borrower
and Borrower shall not 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
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.  To the extent applicable, Borrower
shall at all times maintain, preserve and protect all franchises and trade names
and preserve all the remainder of its property used or useful in the conduct of
its business and shall keep (or use diligent efforts to cause the Ground Tenant
to keep) the Property in good working order and repair, and from time to time
make, or use reasonable, diligent efforts to cause the Ground Tenant to make,
all reasonably necessary repairs, renewals, replacements, betterments and
improvements thereto, all as more fully provided in the Security
Instrument.  Borrower shall keep (or cause Ground Tenant to 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.
 
4.1.3                 Taxes and Other Charges.  Borrower shall pay, or shall
cause the Ground Tenant to pay, all Taxes and Other Charges now or hereafter
levied, assessed or imposed as the same become due and payable, and shall
furnish to Lender receipts for the payment of the Taxes and the Other Charges
prior to the date the same shall become delinquent.  Borrower will deliver to
Lender receipts for payment or other evidence reasonably satisfactory to Lender
that the Taxes and Other Charges have been so paid no later than ten (10) days
prior to the date on which the Taxes and/or Other Charges would be delinquent if
not paid.  Borrower shall not permit or suffer, and shall promptly discharge,
any Lien or charge against the Property (other than the Permitted Encumbrances),
and shall promptly pay for, or cause Ground Tenant to pay for, all utility
services provided to the Property.  After prior notice to Lender, Borrower, at
its own expense, may contest by appropriate legal proceeding, conducted in good
faith and with due diligence, the amount or validity of any Taxes or Other
Charges, provided that (i) no Default or Event of Default has occurred and
remains uncured; (ii) such proceeding shall be permitted under and 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 danger of being
sold, forfeited, terminated, canceled 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) Borrower shall pay any Taxes or Other Charges under
protest unless such proceeding shall suspend the collection of Taxes or Other
Charges from the Property; (vi) unless paid under protest, Borrower shall
deposit with Lender cash, or other security as may be approved reasonably by
Lender, in an amount equal to one hundred twenty-five percent (125%) of the
contested amount, to insure the payment of any such Taxes or Other Charges,
together with all interest and penalties thereon, (vii) failure to pay such
Taxes or Other Charges will not subject Lender to any civil or criminal
liability, (viii) such contest shall not affect the ownership, use or occupancy
of the Property, and (ix) Borrower shall, upon request by Lender, give Lender
prompt notice of the status of such proceedings and/or confirmation of the
continuing satisfaction of the conditions set forth in clauses (i) – (viii) of
this Section 4.1.3.  Lender may pay over any such cash or other security 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 any part thereof or interest therein) shall be in 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.  Notwithstanding anything to the contrary contained in this Agreement or
the Loan Documents, Lender acknowledges that Borrower currently holds the fee
interest in the Land and landlord’s interest under the Ground Lease, and so long
as the Ground Lease is in full force and effect, Borrower does not hold any
right, title or interest in the Ground Tenant Improvements or the Ground Tenant
Subleases (other than Landlord’s residual right, title and interest in and to
the Ground Tenant Improvements to the extent the Ground Lease expires or is
terminated).
 
 
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4.1.4                 Litigation.  Borrower shall give prompt notice to Lender
of any litigation or governmental proceedings pending or threatened against the
Property, Borrower, Sole Member or Guarantor which might materially adversely
affect the Property or Borrower’s, Sole Member’s or Guarantor’s condition
(financial or otherwise) or business (including Borrower’s ability to perform
its Obligations hereunder or under the other Loan Documents).
 
4.1.5                 Access to Property.  Borrower shall permit agents,
representatives, consultants and employees of Lender to inspect the Property or
any part thereof, subject to the rights of any Tenant under the Leases or any
Ground Tenant’s Sub-Tenants under any Ground Tenant Subleases, at reasonable
business hours upon reasonable advance notice (which may be given
verbally).  Lender or its agents, representatives, consultants and employees as
part of any inspection may take soil, air, water, building material and other
samples from the Property, subject to the rights of Tenants under Leases.
 
4.1.6                 Further Assurances; Supplemental Mortgage
Affidavits.  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 which are reasonably
requested by Lender in connection therewith;
 
 
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(b)           execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts reasonably
necessary or desirable, to evidence, preserve and/or protect the collateral at
any time securing or intended to secure the Obligations, 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.
 
4.1.7                 Financial Reporting.
 
(a)           Borrower shall keep and maintain or will cause to be kept and
maintained proper and accurate books and records, in accordance with GAAP and
the requirements of Regulation AB, reflecting 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 during normal business
hours upon reasonable notice (which may be given verbally) to Borrower to
examine such books and records at the office of Borrower or other Person
maintaining such books and records and to make such copies or extracts thereof
as Lender shall desire.  After an Event of Default, Borrower shall pay any costs
incurred by Lender to examine such books, records and accounts, as Lender shall
determine to be necessary or appropriate in the protection of Lender’s interest.
 
(b)           Not later than forty-five (45) days following the end of each
fiscal quarter, Borrower shall deliver to Lender unaudited financial statements,
internally prepared on a cash basis including a balance sheet and profit and
loss statement as of the end of such quarter and for the corresponding quarter
of the previous year, and a statement of revenues and expenses for the year to
date, a statement of Net Operating Income for such quarter, and a comparison of
the year to date results with (i) the results for the same period of the
previous year, and (ii) the results that had been projected by Borrower for such
period.  Such statements for each quarter shall be accompanied by an Officer’s
Certificate certifying to the best of the signer’s knowledge, (A) that such
statements fairly represent the financial condition and results of operations of
Borrower, (B) that as of the date of such Officer’s Certificate, no Default
exists under this Agreement, the Note or any other Loan Document or, if so,
specifying the nature and status of each such Default and the action then being
taken by Borrower or proposed to be taken to remedy such Default, and (C) that
as of the date of each Officer’s Certificate, no litigation exists involving
Borrower or the Property in which the amount involved is $500,000 (in the
aggregate) or more or in which all or substantially all of the potential
liability is not covered by insurance, or, if so, specifying such litigation and
the actions being taking in relation thereto.  Such financial statements shall
contain such other information as shall be reasonably requested by Lender.
 
(c)           Not later than ninety (90) days after the end of each Fiscal Year
of Borrower’s operations, Borrower shall deliver to Lender audited financial
statements certified by an Independent Accountant in accordance with GAAP and
the requirements of Regulation AB, covering the Property, including a balance
sheet as of the end of such year, a statement of Net Operating Income for the
year and a statement of revenues and expenses for such year.
 
 
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(d)           Intentionally Blank.
 
(e)           To the extent (and only to the extent) that the Ground Lease is no
longer in effect, Borrower shall, within ninety (90) days after the end of each
calendar year during the term of the Note, deliver to Lender an annual summary
of any and all Capital Expenditures made at the Property during the prior twelve
(12) month period.
 
(f)           If and only to the extent that a Manager is managing the Property
pursuant to a Management Agreement after the date hereof (it being understood
and agreed, however, that Borrower is self-managing the Property as of the date
of this Agreement and that Borrower shall not hire/retain a Manager or execute a
Management Agreement without the prior written consent of Lender, which consent
may be granted or withheld in Lender’s reasonable discretion), Borrower shall
deliver to Lender, within ten (10) Business Days of the receipt thereof by
Borrower, a copy of all reports prepared by Manager pursuant to the Management
Agreement.
 
(g)           Intentionally Blank.
 
(h)           Borrower shall, promptly after written request by Lender or, if a
Securitization shall have occurred, the Rating Agencies, furnish or cause to be
furnished to Lender, in such manner and in such detail as may be reasonably
requested by Lender, such reasonable additional information as may be reasonably
requested with respect to the Property.
 
4.1.8                 Title to the Property.  Borrower shall warrant and defend
(a) its title to the Property and every part thereof, subject only to Permitted
Encumbrances and (b) the validity and priority of the Liens of the Security
Instrument and the Assignment of Leases on the Property, subject only to
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 (provided, however, that Lender shall not be entitled
to double recovery from both Borrower and under the Title Insurance Policy).
 
4.1.9                 Estoppel Statement.
 
(a)           After written request by Lender, Borrower shall within five (5)
Business Days furnish Lender with a statement, duly acknowledged and certified,
stating (i) the Outstanding Principal Balance of the Note, (ii) the Interest
Rate, (iii) the date installments of interest and/or principal were last paid,
(iv) any offsets or defenses to the payment and performance of the Obligations,
if any, and (v) that this Agreement and the other Loan Documents have not been
modified or if modified, giving particulars of such modification.
 
(b)           Intentionally Blank.
 
(c)           Borrower shall use diligent efforts to deliver to Lender, upon
request, an estoppel certificate from Ground Tenant under the Ground Lease in
form and substance reasonably satisfactory to Lender, provided that Ground
Tenant is required under the Ground Lease to deliver such estoppel certificate
to Borrower.
 
 
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(d)           Borrower shall use diligent efforts to deliver to Lender, upon
request, estoppel certificates from each party under the REA, in form and
substance reasonably satisfactory to Lender, provided, however, that such other
parties to the REA are required under the applicable REA to deliver such
estoppel certificates to Borrower, and provided that Borrower shall not be
required to deliver such certificates more than three (3) times during the Term
and not more frequently than once per calendar year (or twice during any
calendar year in which a Securitization occurs).
 
4.1.10                 Leases.
 
(a)           Borrower shall not enter into any Lease, other than the Ground
Lease without the prior written consent of Lender.
 
(b)           With respect to all Leases in effect from time to time, including
the Ground Lease, 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 Tenants thereunder to be observed or performed in a commercially
reasonable manner, provided, however, Borrower shall not terminate or accept a
surrender of a Lease without Lender’s prior approval; (iii) shall not collect
any of the Rents more than one (1) month in advance (other than security
deposits); and (iv) shall not execute any assignment of lessor’s interest in the
Leases or the Rents (except as contemplated by the Loan Documents)  Upon
request, Borrower shall furnish Lender with executed copies of all Leases in
effect from time to time.  Borrower shall promptly send copies to Lender of all
written notices of default which Borrower shall receive under any of the Leases.
 
All security deposits of Tenants, whether held in cash or any other form, shall
be held in compliance with all Legal Requirements, shall not be commingled with
any other funds of Borrower and, if cash, shall be deposited by Borrower at a
separately designated account under Borrower’s control at the Clearing
Bank.  After the occurrence of an Event of Default, Borrower shall, upon
Lender’s request, if permitted by applicable Legal Requirements, cause all such
security deposits (and any interest theretofore earned thereon) to be
transferred into the Deposit Account (which shall then be held by Deposit Bank
in a separate Account), which shall be held by Deposit Bank subject to the terms
of the Leases.  Any bond or other instrument which Borrower is permitted to hold
in lieu of cash security deposits under any applicable Legal Requirements (i)
shall be maintained in full force and effect in the full amount of such deposits
unless replaced by cash deposits as herein above described, (ii) shall be issued
by an institution reasonably satisfactory to Lender, (iii) shall, if permitted
pursuant to any Legal Requirements, name Lender as payee or mortgagee thereunder
(or at Lender’s option, be fully assignable to Lender), and (iv) shall in all
respects comply with any applicable Legal Requirements and otherwise be
reasonably satisfactory to Lender.  Borrower shall, upon request, provide Lender
with evidence satisfactory to Lender of Borrower’s compliance with the
foregoing.
 
Notwithstanding the foregoing, so long as no Default or Event of Default then
exists, Lender shall not unreasonably withhold, condition or delay its consent
with respect to approving any Lease related transaction described in Section
4.1.10 above which is proposed by Borrower with respect to the Property so long
as such proposed Lease transaction, (a) is ordinary and customary when
considering the ownership and operation of the Property, (b) will not materially
interfere with the benefits of the security intended to be provided by the
Security Instrument and this Agreement, (c) will not materially and adversely
affect the value of the Property, (d) will not impair the use or operations of
the Property (as currently used), and (e) will not impair Borrower’s ability to
pay its Obligations in a timely manner.  IN CONNECTION WITH ANY REQUEST WITH
RESPECT TO A LEASE TRANSACTION MEETING THE CRITERIA OUTLINED ABOVE, LENDER OR
LENDER’S SERVICER, AS APPLICABLE, MUST GRANT OR WITHHOLD ITS APPROVAL IN A
PROMPT AND REASONABLE TIME FRAME FOLLOWING ITS RECEIPT OF ANY REQUIRED MATERIALS
RELATING TO THE PROPOSED LEASE TRANSACTION (I.E., LENDER OR LENDER’S SERVICER,
AS APPLICABLE, MAY NOT UNREASONABLY DELAY THE TIMING OF THE APPROVAL PROCESS).
 
 
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4.1.11                 Alterations.  Lender’s prior written approval shall be
required in connection with any alterations to any Improvements or the Land (i)
that may have a material adverse effect on Borrower’s financial condition, the
value of the Property or the ongoing revenues and expenses of the Property, (ii)
the cost of which (including any related alteration, improvement or replacement)
is reasonably anticipated to exceed the Alteration Threshold, or (iii) that
adversely affects any structural component of any Improvements, any utility or
HVAC system contained in the Improvements or the exterior of any building
constituting a part of any Improvements (any of the foregoing, a “Material
Alteration”).  If the total unpaid amounts incurred and to be incurred with
respect to such alterations to the Improvements shall at any time exceed the
Alteration Threshold, Borrower shall promptly deliver to Lender as security for
the payment of such amounts and as additional security for Borrower’s
Obligations under the Loan Documents any of the following: (i) cash, (ii) a
Letter of Credit, (iii) U.S. Obligations, or (iv) other securities acceptable to
Lender, provided that Lender shall have received a Rating Agency Confirmation as
to the form and issuer of same.  Such security shall be in an amount equal to
the excess of the total unpaid amounts incurred and to be incurred with respect
to such alterations to the Improvements (other than such amounts to be paid or
reimbursed by Ground Tenant under the Ground Lease) over the Alteration
Threshold, and Lender may apply such security from time to time at the option of
Lender to pay for such alterations.  Upon substantial completion of any Material
Alteration, Borrower shall provide evidence reasonably satisfactory to Lender
that (i) the Material Alteration was constructed in accordance with applicable
Legal Requirements, (ii) all contractors, subcontractors, materialmen and
professionals who provided work, materials or services in connection with the
Material Alteration have been paid in full and have delivered unconditional
releases of liens, and (iii) all material licenses and permits necessary for the
use, operation and occupancy of the Material Alteration (other than those which
depend on the performance of tenant improvement work) have been
issued.  Notwithstanding anything to the contrary contained in this Agreement or
the Loan Documents, this Section 4.1.11 shall not apply to any alterations made
or performed by Persons other than Borrower under the Ground Tenant Subleases or
with respect to the Ground Tenant Improvements in accordance with the terms and
conditions of the Ground Lease.
 
Notwithstanding the foregoing, so long as no Default or Event of Default then
exists, Lender shall not unreasonably withhold, condition or delay its consent
with respect to approving any alterations related transaction described in
Section 4.1.11 above which is proposed by Borrower with respect to the Property
so long as such proposed alterations related transaction, (a) is ordinary and
customary when considering the ownership and operation of the Property, (b) will
not materially interfere with the benefits of the security intended to be
provided by the Security Instrument and this Agreement, (c) will not materially
and adversely affect the value of the Property, (d) will not impair the use or
operations of the Property (as currently used), and (e) will not impair
Borrower’s ability to pay its Obligations in a timely manner.  IN CONNECTION
WITH ANY REQUEST WITH RESPECT TO AN ALTERATIONS RELATED TRANSACTION MEETING THE
CRITERIA OUTLINED ABOVE, LENDER OR LENDER’S SERVICER, AS APPLICABLE, MUST GRANT
OR WITHHOLD ITS APPROVAL IN A PROMPT AND REASONABLE TIME FRAME FOLLOWING ITS
RECEIPT OF ANY REQUIRED MATERIALS RELATING TO THE PROPOSED ALTERATIONS RELATED
TRANSACTION (I.E., LENDER OR LENDER’S SERVICER, AS APPLICABLE, MAY NOT
UNREASONABLY DELAY THE TIMING OF THE APPROVAL PROCESS).
 
 
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4.1.12                 Approval of Major Contracts.  Borrower shall be required
to obtain Lender’s prior written approval of any and all Major Contracts
affecting the Property, which approval may be granted or withheld in Lender’s
sole but good faith discretion.
 
4.1.13                 After Acquired Property.  Borrower will grant to Lender a
first Lien security interest in and to all Equipment and Personal Property owned
by Borrower, whether or not used in the construction, maintenance and/or
operation of the Improvements, immediately upon acquisition of same or any part
of same following the date hereof.
 
4.1.14                 Patriot Act Compliance.
 
(a)           Borrower will comply with the Patriot Act and all applicable
requirements of Governmental Authorities having jurisdiction over Borrower
and/or the Property, including those relating to money laundering and
terrorism.  Lender shall have the right to audit Borrower’s compliance with the
Patriot Act and all applicable requirements of Governmental Authorities having
jurisdiction over Borrower and/or the Property, including those relating to
money laundering and terrorism.  In the event that Borrower fails to comply with
the Patriot Act or any such requirements of Governmental Authorities, then
Lender may, at its option, exercise any remedies provided for or permissible
under applicable law including, if permitted, causing Borrower to comply
therewith, and any and all costs and expenses incurred by Lender in connection
therewith shall be secured by the Security Instrument and the other Loan
Documents and shall be immediately due and payable.
 
(b)           Neither Borrower nor any owner of a direct or indirect interest in
Borrower (i) is listed on any Government Lists, (ii) is a person who has been
determined by competent authority to be subject to the prohibitions contained in
Presidential Executive Order No. 13224 (Sept. 23, 2001) or any other similar
prohibitions contained in the rules and regulations of OFAC or in any enabling
legislation or other Presidential Executive Orders in respect thereof, (iii) has
been previously indicted for or convicted of any felony involving a crime or
crimes of moral turpitude or for any Patriot Act Offense, or (iv) is currently
under investigation by any Governmental Authority for alleged criminal
activity.  For purposes hereof, the term “Patriot Act Offense” means any
violation of the criminal laws of the United States of America or of any of the
several states, or that would be a criminal violation if committed within the
jurisdiction of the United States of America or any of the several states,
relating to terrorism or the laundering of monetary instruments, including any
offense under (A) the criminal laws against terrorism; (B) the criminal laws
against money laundering, (C) the Bank Secrecy Act, as amended, (D) the Money
Laundering Control Act of 1986, as amended, or (E) the Patriot Act.  “Patriot
Act Offense” also includes the crimes of conspiracy to commit, or aiding and
abetting another to commit, a Patriot Act Offense.  For purposes hereof, the
term “Government Lists” means (1) the Specially Designated Nationals and Blocked
Persons Lists maintained by the Office of Foreign Assets Control (“OFAC”), (2)
any other list of terrorists, terrorist organizations or narcotics traffickers
maintained pursuant to any of the Rules and Regulations of OFAC that Lender
notified Borrower in writing is now included in “Government Lists”, or (3) any
similar lists maintained by the United States Department of State, the United
States Department of Commerce or any other Governmental Authority or pursuant to
any Executive Order of the President of the United States of America that Lender
notified Borrower in writing is now included in “Government Lists”.
 
 
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4.1.15                 Intentionally Blank.
 
4.1.16                 The Ground Lease.  Borrower shall (i) diligently perform
and observe all of the terms, covenants and conditions of the Ground Lease on
the part of Borrower, as landlord thereunder, to be performed and observed, and
(ii) promptly notify Lender of the giving of any written notice by the Ground
Tenant under the Ground Lease to Borrower of any default by Borrower in the
performance or observance of any of the terms, covenants or conditions of the
Ground Lease on the part of Borrower, as landlord thereunder, to be performed or
observed, and deliver to Lender a true copy of each such notice.  Borrower shall
not, without the prior consent of Lender, assign, terminate or cancel the Ground
Lease or modify, change, supplement, alter or amend the Ground Lease, either
orally or in writing, and Borrower hereby assigns to Lender, as further security
for the payment and performance of the Obligations and for the performance and
observance of the terms, covenants and conditions of the Security Instrument,
this Agreement and the other Loan Documents, all of the rights, privileges and
prerogatives of Borrower, as landlord under the Ground Lease, to assign,
terminate, cancel, modify, change, supplement, alter or amend the Ground Lease
in any material respect, and any such assignment, termination, cancellation,
modification, change, supplement, alteration or amendment of the Ground Lease
without the prior consent of Lender shall be void and of no force and
effect.  If Borrower shall default in the performance or observance of any
material term, covenant or condition of the Ground Lease on the part of
Borrower, as landlord thereunder, to be performed or observed, then, without
limiting the generality of the other provisions of the Security Instrument, this
Agreement and the other Loan Documents, and without waiving or releasing
Borrower from any of its Obligations hereunder, to the fullest extent permitted
under the Ground Lease, Lender shall have the right (upon the expiration of any
of Borrower’s notice and cure rights under the Ground Lease [other than in the
case of (x) an emergency or (y) imminent risk to the Property or Lender’s
Collateral under the Loan Documents in which cases Lender may act prior to the
expiration of any applicable notice or cure rights of Borrower under the Ground
Lease, and/or (z) during the existence of an Event of Default]), but shall be
under no obligation, to pay any sums and to perform any act or take any action
as may be appropriate to cause all of the material terms, covenants and
conditions of the Ground Lease on the part of Borrower, as landlord thereunder,
to be performed or observed or to be promptly performed or observed on behalf of
Borrower, to the end that the rights of Borrower in, to and under the Ground
Lease shall be kept unimpaired as a result thereof and free from default, even
though the existence of such event of default or the nature thereof be
questioned or denied by Borrower or by any party on behalf of Borrower.  If
Lender shall make any payment or perform any act or take action in accordance
with the preceding sentence, Lender will notify Borrower of the making of any
such payment, the performance of any such act or the taking of any such
action.  In any such event, subject to the rights of Tenants, subtenants and
other occupants under the Leases or of parties to any REA, Lender and any Person
designated as Lender’s agent by Lender shall have, and are hereby granted, the
right to enter upon the Property at any reasonable time, on reasonable notice
(which may be given verbally) and from time to time for the purpose of taking
any such action.  Lender may pay and expend such sums of money as Lender
reasonably deems necessary for any such purpose.  Borrower hereby agrees to pay
to Lender within five (5) days after demand, all such sums so paid and expended
by Lender, together with interest thereon from the day of such payment at the
Default Rate.  All sums so paid and expended by Lender and the interest thereon
shall be secured by the legal operation and effect of the Security
Instrument.  If the Ground Tenant under the Ground Lease shall deliver to Lender
a copy of any notice of default sent by said Ground Tenant to Borrower, as
landlord under the Ground Lease, such notice shall constitute full protection to
Lender for any reasonable action taken or omitted to be taken by Lender, in good
faith, in reliance thereon.
 
 
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Notwithstanding the foregoing, so long as no Default or Event of Default then
exists, Lender shall not unreasonably withhold, condition or delay its consent
with respect to approving any Ground Lease related transaction described in
Section 4.1.16 above (other than assignments or any termination or cancellation
of the Ground Lease which shall, in all cases, remain subject to Lender’s sole
and absolute prior approval) which is proposed by Borrower with respect to the
Property so long as such proposed Ground Lease related transaction, (a) is
ordinary and customary when considering the ownership and operation of the
Property, (b) will not materially interfere with the benefits of the security
intended to be provided by the Security Instrument and this Agreement, (c) will
not materially and adversely affect the value of the Property, (d) will not
impair the use or operations of the Property (as currently used), and (e) will
not impair Borrower’s ability to pay its Obligations in a timely manner.  IN
CONNECTION WITH ANY REQUEST WITH RESPECT TO A GROUND LEASE RELATED TRANSACTION
MEETING THE CRITERIA OUTLINED ABOVE, LENDER OR LENDER’S SERVICER, AS APPLICABLE,
MUST GRANT OR WITHHOLD ITS APPROVAL IN A PROMPT AND REASONABLE TIME FRAME
FOLLOWING ITS RECEIPT OF ANY REQUIRED MATERIALS RELATING TO THE PROPOSED GROUND
LEASE RELATED TRANSACTION (I.E., LENDER OR LENDER’S SERVICER, AS APPLICABLE, MAY
NOT UNREASONABLY DELAY THE TIMING OF THE APPROVAL PROCESS).
 
4.1.17                 Intentionally Blank.
 
4.1.18                 Notice of Default.  Borrower shall promptly advise Lender
of any material adverse change in Borrower’s, Sole Member’s or Guarantor’s
condition, financial or otherwise, or of the occurrence of any Default or Event
of Default of which Borrower has actual knowledge.
 
4.1.19                 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.
 
 
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4.1.20                 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 to Borrower in connection with the
Property, and Lender shall be reimbursed for any expenses incurred in connection
therewith (including 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 and Awards.
 
4.1.21                 Business and Operations.  For so long as Borrower owns
the Property, 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 each jurisdiction
as and to the extent the same are required for the ownership, maintenance,
management and operation of the Property.
 
4.1.22                 Costs of Enforcement.  In the event (a) that the Security
Instrument 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 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 reasonable costs of
collection and defense, 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.
 
4.1.23                 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.
 
Section 4.2                      Borrower Negative Covenants.
 
Borrower covenants and agrees with Lender that throughout the Term:
 
4.2.1                 Encumbrance; Transfers of Interests.  Except as otherwise
expressly permitted under this Agreement or any Loan Document, without the prior
written consent of Lender, but, in each instance, subject to the provisions of
Article 8:  (i) Borrower shall not sell, convey, mortgage, grant, bargain,
encumber, pledge, assign or transfer the Property or any part thereof, and (ii)
neither Borrower nor Sole Member nor any other Person having a direct or
indirect ownership or beneficial interest in Borrower or Sole Member shall sell,
convey, mortgage, grant, bargain, encumber, pledge, assign or transfer the
Property or any part thereof, or any interest, direct or indirect, in Borrower,
Sole Member, whether voluntarily or involuntarily (individually or collectively,
a “Transfer”).  Except as otherwise permitted under this Agreement or any Loan
Documents, a Transfer within the meaning of this Section 4.2.1 shall be deemed
to include (i) an installment sales agreement wherein Borrower agrees to sell
the Property or any part thereof for a price to be paid in installments; (ii) an
agreement by Borrower for the leasing of all or a substantial part of the
Property for any purpose other than the actual occupancy by a space tenant
thereunder or  (iii) a sale, assignment or other transfer of, or the grant of a
security interest in, Borrower’s right, title and interest in and to any Leases
or any Rents; (iv) if Borrower, Guarantor or any general partner, managing
member or controlling shareholder of Borrower or Guarantor is a corporation, the
voluntary or involuntary sale, conveyance or transfer of such corporation’s
stock (or the stock of any corporation directly or indirectly controlling such
corporation by operation of law or otherwise) or the creation or issuance of new
stock; (v) if Borrower, Sole Member or any general partner, managing member or
controlling shareholder of Borrower, Sole Member, or any Guarantor is a limited
or general partnership, joint venture or limited liability company, the change,
removal, resignation or addition of a general partner, managing partner, limited
partner, joint venturer or member or the transfer of the partnership interest of
any general partner, managing partner or limited partner or the transfer of the
interest of any joint venturer or member; and (vi) any pledge, hypothecation,
assignment, transfer or other encumbrance of any direct ownership interest in
Borrower or Sole Member.  Notwithstanding the foregoing or anything else to the
contrary contained in this Agreement or in any Loan Document, in no event shall
(A) a Condemnation of the Property or any part thereof, or (B) any foreclosure,
forfeiture or deed in lieu of foreclosure of the Property or any portion
thereof, constitute or be deemed to constitute a Transfer prohibited under this
Agreement or any Loan Document.
 
 
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4.2.2                 Liens.  Except as otherwise expressly permitted under this
Agreement or any Loan Document, Borrower shall not create, incur, assume or
affirmatively permit to exist any Lien on any direct or indirect interest in
Borrower or Sole Member or any portion of the Property, except for the Permitted
Encumbrances.  Notwithstanding the foregoing, so long as no Default or Event of
Default then exists, Lender shall not unreasonably withhold, condition or delay
its consent with respect to approving any new Easement (i.e., easements, cross
easements, licenses, air rights and rights-of-way or other similar property
interest) proposed by Borrower with respect to the Property so long as such
proposed new Easement, (a) is ordinary and customary when considering the
ownership and operation of the Property, (b) will not materially interfere with
the benefits of the security intended to be provided by the Security Instrument
and this Agreement, (c) will not materially and adversely affect the value of
the Property, (d) will not impair the use or operations of the Property (as
currently used), and (e) will not impair Borrower’s ability to pay its
Obligations in a timely manner.  If such new easement is so approved by Lender,
then it shall become a “Permitted Encumbrance” for the purposes of this
Agreement and the other Loan Documents.  IN CONNECTION WITH ANY REQUEST WITH
RESPECT TO A NEW EASEMENT MEETING THE CRITERIA OUTLINED ABOVE, LENDER OR
LENDER’S SERVICER, AS APPLICABLE, MUST GRANT OR WITHHOLD ITS APPROVAL IN A
PROMPT AND REASONABLE TIME FRAME FOLLOWING ITS RECEIPT OF ANY REQUIRED MATERIALS
RELATING TO THE PROPOSED NEW EASEMENT (I.E., LENDER OR LENDER’S SERVICER, AS
APPLICABLE, MAY NOT UNREASONABLY DELAY THE TIMING OF THE APPROVAL PROCESS).
 
4.2.3                 Dissolution.  Borrower shall not (i) engage in any
dissolution, liquidation or consolidation or merger with or into any other
business entity, (ii) engage in any business activity not related to the
ownership and operation of the Property, (iii) transfer, lease or sell, in one
transaction or any combination of transactions, all or substantially all of the
property or assets of Borrower except to the extent expressly permitted by the
Loan Documents, or (iv) cause, permit or suffer Sole Member to (A) dissolve,
wind up or liquidate or take any action, or omit to take any action, as a result
of which such Sole Member would be dissolved, wound up or liquidated in whole or
in part, or (B) amend, modify, waive or terminate the operating agreement of
Sole Member, in each case without obtaining the prior consent of Lender.
 
 
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4.2.4                 Change in Business.  Borrower shall not enter into any
line of business other than the ownership and operation of the Property.  To the
extent within Borrower’s control under the Ground Lease, any other Lease
approved in accordance with the terms and conditions contained in this Agreement
and/or under the Permitted Encumbrances, Borrower shall not change the current
use of the Property in any material respect.
 
4.2.5                 Debt Cancellation.  Borrower shall not cancel or otherwise
forgive or release any claim or debt (other than the 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.
 
4.2.6                 Affiliate Transactions.  Borrower shall not enter into, or
be a party to, any transaction with an Affiliate of Borrower or any of the
partners, members or shareholders, as applicable, of Borrower except in the
ordinary course of business and on terms which are fully disclosed to Lender in
advance and are no less favorable to Borrower or such Affiliate than would be
obtained in a comparable arm’s-length transaction with an unrelated third party.
 
4.2.7                 Zoning.  To the extent the following is within Borrower’s
control under the Ground Lease, any other Lease and/or under the Permitted
Encumbrances, 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.
 
4.2.8                 Assets.  Borrower shall not purchase or own any property
other than the Property and any other property necessary or incidental for the
operation of the Property.
 
4.2.9                 No Joint Assessment.  Without the prior consent of Lender,
Borrower shall not affirmatively suffer, permit or initiate the joint assessment
of the Property (i) with any other real property constituting a tax lot separate
from the Property, and (ii) with any portion of the Property which may be deemed
to constitute personal property, or any other procedure whereby the lien of any
taxes which may be levied against such personal property shall be assessed or
levied or charged to the Property.
 
4.2.10                 Principal Place of Business.  Borrower shall not change
its principal place of business from the address set forth on the first page of
this Agreement without first giving Lender thirty (30) days’ prior written
notice.
 
 
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4.2.11                 Change of Name, Identity or Structure.  Borrower shall
not change Borrower’s name, identity (including its trade name or names) or, if
not an individual, Borrower’s corporate, partnership or other structure without
notifying Lender of such change in writing at least thirty (30) days prior to
the effective date of such change and without first obtaining the prior written
consent of Lender.  Borrower shall execute and deliver to Lender, prior to or
contemporaneously with the effective date of any such change, any financing
statement or financing statement change required by Lender to establish or
maintain the validity, perfection and priority of the security interest granted
herein.  At the request of Lender, Borrower shall execute a certificate in form
reasonably satisfactory to Lender listing the trade names under which Borrower
intends to operate the Property, and representing and warranting that Borrower
does business under no other trade name with respect to the Property.
 
4.2.12                 Special Purpose.  Without in any way limiting the
provisions of this Article 4, Borrower shall not take or permit any action that
would result in Borrower or Sole Member not being in compliance with the
representations, warranties and covenants set forth in Section 3.1.24.
 
4.2.13                 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 the Employee Retirement Income Security Act of
1974, as amended (“ERISA”).
 
(b)           Borrower shall deliver to Lender such certifications or other
evidence from time to time throughout the Term, as requested by Lender in its
sole discretion, that (A) Borrower is not and does not maintain an “employee
benefit plan” as defined in Section 3(32) of ERISA, which is subject to Title I
of ERISA, or a “governmental plan” within the meaning of Section 3(32) of ERISA;
(B) Borrower is not subject to state statutes regulating investments and
fiduciary obligations with respect to governmental plans; and (C) one or more of
the following circumstances is true:
 
(i)                 Equity interests in Borrower are publicly offered
securities, within the meaning of 29 C.F.R §2510.3-101(b)(2);
 
(ii)                 Less than twenty-five percent (25%) of each outstanding
class of equity interests in Borrower are held by “benefit plan investors”
within the meaning of 29 C.F.R §2510.3-101(f)(2);
 
(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);
or
 
(iv)                 The assets of Borrower are not otherwise “plan assets” of
one or more “employee benefit plans” (as defined in Section 3(3) of ERISA)
subject to Title I of ERISA, within the meaning of 29 C.F.R. §2510.3-101.
 
4.2.14                 Intentionally Blank.
 
 
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4.2.15                 Embargoed Person.  At all times throughout the term of
the Loan, including after giving effect to any Transfers permitted pursuant to
the Loan Documents, (a) none of the funds or other assets of Borrower or
Guarantor shall constitute property of, or shall be beneficially owned, directly
or indirectly, by any Person subject to trade restrictions under United States
law, including, but not limited to, the International Emergency Economic Powers
Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1
et seq., and any Executive Orders or regulations promulgated thereunder, with
the result that the investment in Borrower or Guarantor, as applicable (whether
directly or indirectly), would be prohibited by law (each, an “Embargoed
Person”), or the Loan made by Lender would be in violation of law, (b) no
Embargoed Person shall have any interest of any nature whatsoever in Borrower or
Guarantor, as applicable, with the result that the investment in Borrower or
Guarantor, as applicable (whether directly or indirectly), would be prohibited
by law or the Loan would be in violation of law, and (c) none of the funds of
Borrower or Guarantor, as applicable, shall be derived from any unlawful
activity with the result that the investment in Borrower or Guarantor, as
applicable (whether directly or indirectly), would be prohibited by law or the
Loan would be in violation of law.
 
4.2.16                 Operating Agreements.  Borrower shall at all times comply
in all material respects with all Operating Agreements.  Borrower agrees that
without the prior written consent of Lender, Borrower will not amend, modify or
terminate any of the Operating Agreements.
 
Notwithstanding the foregoing, so long as no Default or Event of Default then
exists, Lender shall not unreasonably withhold or delay its consent with respect
to approving any Operating Agreement related transaction described in Section
4.2.16 above which is proposed by Borrower with respect to the Property so long
as such proposed alterations transaction, (a) is ordinary and customary when
considering the ownership and operation of the Property, (b) will not materially
interfere with the benefits of the security intended to be provided by the
Security Instrument and this Agreement, (c) will not materially and adversely
affect the value of the Property, (d) will not impair the use or operations of
the Property (as currently used), and (e) will not impair Borrower’s ability to
pay its Obligations in a timely manner.  IN CONNECTION WITH ANY REQUEST WITH
RESPECT TO A OPERATING AGREEMENT RELATED TRANSACTION MEETING THE CRITERIA
OUTLINED ABOVE, LENDER OR LENDER’S SERVICER, AS APPLICABLE, MUST GRANT OR
WITHHOLD ITS APPROVAL IN A PROMPT AND REASONABLE TIME FRAME FOLLOWING ITS
RECEIPT OF ANY REQUIRED MATERIALS RELATING TO THE PROPOSED OPERATING AGREEMENT
RELATED TRANSACTION (I.E., LENDER OR LENDER’S SERVICER, AS APPLICABLE, MAY NOT
UNREASONABLY DELAY THE TIMING OF THE APPROVAL PROCESS).
 
4.2.17                 Intentionally Blank.
 
ARTICLE 5
 
INSURANCE, CASUALTY AND CONDEMNATION
 
Section 5.1                      Insurance.
 
 
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Notwithstanding anything to the contrary contained in this Agreement or any Loan
Document, at all times during the Term of the Loan that the Ground Lease remains
in full force and effect, (i) the provisions of Section 5.1 below shall not
apply, (ii) Borrower’s sole obligation with respect to insurance coverage shall
be either to obtain and maintain, or to cause the Ground Tenant to obtain and
maintain, the insurance coverage required under Ground Tenant’s Insurance
Policies and to cause Borrower and Lender to be named as additional insureds
under such Ground Tenant’s Insurance Policies in accordance with the terms of
the Ground Lease, and (iii) Borrower shall comply with the following:
 
 
(I)
Certified copies of certificates of insurance evidencing the Ground Tenant’s
Insurance Policies (and, upon the written request of Lender, copies of such
policies) shall be delivered to Lender, c/o GERMAN AMERICAN CAPITAL CORPORATION,
60 Wall Street, 10th Floor, New York, NY 10005, Attn: Mary Brundage, on the date
hereof with respect to the current policies and within thirty (30) days after
the effective date thereof with respect to all renewal policies.

 
 
(II)
Not less than ten (10) days prior to the expiration dates of the Ground Tenant’s
Insurance Policies theretofore furnished to Lender, certificates of insurance
evidencing the Ground Tenant’s Insurance Policies (and, upon the written request
of Lender, copies of such policies) accompanied by evidence reasonably
satisfactory to Lender of payment of the premiums then due thereunder, shall be
delivered by Borrower to Lender.

 
 
(III)
If at any time Lender is not in receipt of written evidence that all insurance
required under the Ground Lease 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 obtaining all or a
portion of the insurance required under the Ground Tenant’s Insurance
Policies as Lender in its sole discretion deems appropriate and all premiums
incurred by Lender in connection with such action or in obtaining such insurance
and keeping it in effect shall be paid by Borrower to Lender upon demand and
until paid shall be secured by the Security Instrument and shall bear interest
at the Default Rate.

 
 
(IV)
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 Obligations,
all right, title and interest of Borrower in and to the Ground Tenant’s
Insurance 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.

 
 
(V)
For the purpose of this Agreement other than Section 5.1.1, “Policy(ies)” shall
mean the Ground Tenant Insurance Policies, and “Insurance Premiums” shall mean
the premiums due and payable under the Ground Tenant Insurance Policies.

 
Notwithstanding the foregoing, at any time during the Term of this Loan that the
Ground Lease ceases to be in full force and effect, the provisions of Section
5.1 below shall apply.
 
 
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5.1.1                 Insurance Policies.
 
(a)           Borrower, at its sole cost and expense, shall obtain and maintain
during the entire Term, or cause to be maintained, insurance policies for
Borrower and the Property providing at least the following coverages:
 
(i)                 Property insurance against loss or damage by fire, lightning
and such other perils as are included in a standard “special form” policy
(formerly known as an “all-risk” policy), including terrorism, riot and civil
commotion, vandalism, malicious mischief, burglary and theft (A) in an amount no
less than one hundred percent (100%) of the “Full Replacement Cost” of the
Property, which for purposes of this Agreement shall mean actual replacement
value (exclusive of costs of excavations, foundations, underground utilities and
footings); (B) containing an agreed amount endorsement with respect to the
Improvements and personal property at the Property waiving all co-insurance
provisions; and (C) containing an “Ordinance or Law” ” endorsement if any of the
Improvements or the use of the Property shall at any time constitute legal
non-conforming structures or uses, and compensating for loss resulting from
operation of law and the cost of demolition and the increased cost of
construction in amounts as required by Lender.  In addition, Borrower shall
obtain: (y) if any portion of the Improvements is currently or at any time in
the future located in a federally designated “special flood hazard area”, flood
hazard insurance in an amount equal to the lesser of (1) the Outstanding
Principal Balance or (2) the maximum amount of such insurance available under
the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of
1973 or the National Flood Insurance Reform Act of 1994, as each may be amended,
or such greater amount as Lender shall require; 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, provided
that the insurance pursuant to clauses (y) and (z) hereof shall be on terms
consistent with the property insurance policy required under this
subsection (i);
 
(ii)                 commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon, in or
about the Property, such insurance (A) to be on an “occurrence” form and
containing minimum limits per occurrence of One Million and No/100 Dollars
($1,000,000.00), with an aggregate limit per policy year, excluding umbrella
coverage, of not less than Two Million and No/100 Dollars ($2,000,000.00); (B)
to continue at not less than the aforesaid limit until required to be changed by
Lender by reason of changed economic conditions making such protection
inadequate; and (C) to cover at least the following hazards: (1) Property and
operations; (2) products and completed operations on an “if any” basis;
(3) independent contractors; (4) blanket contractual liability for all legal
contracts; and (5) contractual liability covering the indemnities contained in
Article 9 of the Security Instrument to the extent the same is available;
 
(iii)                 rental loss and/or business income interruption insurance
(A) [Intentionally Blank]; (B) covering the perils required to be covered by the
insurance provided for in subsection (i) above and Section 5.1.1(h) below; (C)
covering a period of restoration of eighteen (18) months and 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 six (6) months from the
date that the Property is repaired or replaced and operations are resumed,
whichever first occurs, and notwithstanding that the policy may expire prior to
the end of such period; and (D) in an amount equal to one hundred percent (100%)
of the projected Gross Revenue from the Property for a period of twenty-four
(24) months from the date that the Property is repaired or replaced and
operations are resumed.  The amount of such business income insurance shall be
determined prior to the date hereof and at least once each year thereafter based
on Borrower’s reasonable estimate of the Gross Revenue from the Property for the
succeeding twenty-four (24) month period.  All proceeds payable to Lender
pursuant to this subsection shall be held by Lender and shall be applied to the
Obligations secured by the Loan Documents from time to time due and payable
hereunder and under the Note; provided, however, that nothing herein contained
shall be deemed to relieve Borrower of its Obligations to pay the Debt on the
respective dates of payment provided for in the Note and the other Loan
Documents except to the extent such amounts are actually paid out of the
proceeds of such business income insurance;
 
 
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(iv)                 at all times during which structural construction, repairs
or alterations are being made with respect to the Improvements, and only if the
Property coverage form does not otherwise apply, (A) owner’s contingent or
protective liability insurance covering claims not covered by or under the terms
or provisions of the above-mentioned commercial general liability insurance
policy; and (B) the insurance provided for in subsection (i) above written in a
so-called builder’s risk completed value form (1) on a non-reporting basis, (2)
against all risks insured against pursuant to subsection (i) above, (3)
including permission to occupy the Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;
 
(v)                 workers’ compensation, subject to the statutory limits of
the state in which the Property is located, and employer’s liability insurance
with limits which are  required from time to time by Lender in respect of any
work or operations on or about the Property, or in connection with the Property
or its operation (if applicable);
 
(vi)                 comprehensive boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by Lender on terms
consistent with the commercial property insurance policy required under
subsection (i) above;
 
(vii)                 umbrella liability insurance in addition to primary
coverage in an amount not less than Twenty-Five Million and No/100 Dollars
($25,000,000.00) per occurrence on terms consistent with the commercial general
liability insurance policy required under subsection (ii) above and (viii)
below;
 
 
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(viii)              motor vehicle liability coverage for all owned and non-owned
vehicles, including rented and leased vehicles containing minimum limits per
occurrence, including umbrella coverage, with limits which are required from
time to time by Lender;
 
(ix)                 windstorm insurance in an amount equal to the Outstanding
Principal Balance or such lesser amount as agreed to by Lender in writing;
 
(x)                  insurance against employee dishonesty in an amount not less
than one (1) month of Gross Revenue from the Property and with a deductible not
greater than Ten Thousand and No/100 Dollars ($10,000.00); and
 
(xi)                 upon sixty (60) days’ notice, such other reasonable
insurance and in such reasonable amounts as Lender from time to time may
reasonably request against such other insurable hazards which at the time are
commonly insured against for properties similar to the Property located in or
around the region in which the Property is located.
 
(b)           All insurance provided for in Section 5.1.1(a) shall be obtained
under valid and enforceable policies (collectively, the “Policies” or in the
singular, the “Policy”) and shall be subject to the reasonable approval of
Lender (to the extent not specified herein) as to form and substance, including
insurance companies, amounts, deductibles, loss payees and insureds.  Not less
than ten (10) days prior to the expiration dates of the Policies theretofore
furnished to Lender, certificates of insurance evidencing the Policies (and,
upon the written request of Lender, copies of such Policies) accompanied by
evidence satisfactory to Lender of payment of the premiums then due thereunder
(the “Insurance Premiums”), shall be delivered by Borrower to Lender.
 
(c)           Intentionally Blank.
 
(d)           All Policies of insurance provided for or contemplated by
Section 5.1.1(a), except for the Policy referenced in Section 5.1.1(a)(v), shall
name Borrower as the insured and Lender and its successors and/or assigns as the
additional insured, as its interests may appear, and in the case of property
damage, boiler and machinery, flood and earthquake insurance, shall contain a
standard non-contributing mortgagee clause in favor of Lender providing that the
loss thereunder shall be payable to Lender.  Additionally, if Borrower obtains
property insurance coverage in addition to or in excess of that required by
Section 5.1.1(a)(i), then such insurance policies shall also contain a 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 5.1.1(a), except
for the Policies referenced in Section 5.1.1(a)(v) and (a)(viii), shall contain
clauses or endorsements to the effect that:
 
(i)                 no act or negligence of Borrower, or anyone acting for
Borrower, or of any Tenant or other occupant, or failure to comply with the
provisions of any Policy, which might otherwise result in a forfeiture of the
insurance or any part thereof, shall in any way affect the validity or
enforceability of the insurance insofar as Lender is concerned;
 
 
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(ii)                 the Policy shall not be canceled without at least thirty
(30) days’ written notice to Lender and any other party named therein as an
additional insured and shall not be materially changed (other than to increase
the coverage provided thereby) without such a thirty (30) day notice;
 
(iii)                 Lender shall not be liable for any Insurance Premiums
thereon or subject to any assessments thereunder; and
 
(iv)                 the issuers thereof shall give notice to Lender if the
Policies have not been renewed fifteen (15) days prior to its expiration; and
 
(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 the obtaining of
such insurance coverage as Lender in its sole discretion deems appropriate and
all premiums incurred by Lender in connection with such action or in obtaining
such insurance and keeping it in effect shall be paid by Borrower to Lender upon
demand and until paid shall be secured by the Security Instrument and shall bear
interest at the Default Rate.
 
(g)           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
Obligations, all right, title and interest of Borrower in and to the Policies
that are not blanket Policies then in force concerning the Property and all
proceeds payable thereunder shall thereupon vest in the purchaser at such
foreclosure or Lender or other transferee in the event of such other transfer of
title.
 
(h)           The property insurance, public liability insurance and rental loss
and/or business interruption insurance required under Sections 5.1.1(a)(i), (ii)
and (iii) above shall cover perils of terrorism and acts of terrorism and
Borrower shall maintain property insurance, public liability insurance and
rental loss and/or business interruption insurance for loss resulting from
perils and acts of terrorism on terms (including amounts) consistent with those
required under Sections 5.1.1(a)(i), (ii) and (iii) above at all times during
the term of the Loan;
 
5.1.2                 Insurance Company.  All Policies required pursuant to
Section 5.1.1 (i) shall be issued by companies licensed to do business in the
state where the Property is located, with a financial strength and claims paying
ability rating of at least A:X from A.M. Best Company and “AA” or better by S&P;
(ii) shall, with respect to all property insurance policies, name Lender and its
successors and/or assigns as their interest may appear as the Lender and
Mortgagee; (iii) shall, with respect to all property insurance policies and
rental loss and/or business interruption insurance policies, contain a Standard
Mortgagee Clause and a Lender’s Loss Payable Endorsement, or their equivalents,
naming Lender; (iv) shall, with respect to all liability policies, name Lender
and its successors and/or assigns as an additional insured; (v) shall contain a
waiver of subrogation against Lender; (vi) shall contain such provisions as
Lender deems reasonably necessary or desirable to protect its interest including
endorsements providing (A) that neither Borrower, Lender nor any other party
shall be a co-insurer under said Policies, (B) that Lender shall receive at
least thirty (30) days prior written notice of any modification, reduction or
cancellation, and (C) for a deductible per loss of an amount not more than that
which is customarily maintained by prudent owners of properties with a standard
of operation and maintenance comparable to and in the general vicinity of the
Property, but in no event in excess of an amount reasonably acceptable to
Lender; and (vii) shall be reasonably satisfactory in form and substance (to the
extent not specified herein) to Lender and shall be reasonably approved by
Lender as to amounts, form, risk coverage, deductibles, loss payees and insureds
(to the extent not specified herein).  No insurance policy required hereunder
shall include any so called "terrorist exclusion" or similar exclusion or
exception to insurance coverage relating to the acts of terrorist groups or
individuals.  At Lender’s written request, certified copies of the Policies
shall be delivered to Lender, c/o GERMAN AMERICAN CAPITAL CORPORATION, 60 Wall
Street, 10th Floor, New York, NY 10005, Attn: Mary Brundage, on the date hereof
with respect to the current Policies and within thirty (30) days after the
effective date thereof with respect to all renewal Policies.  Borrower shall pay
the Insurance Premiums annually in advance as the same become due and payable
and shall furnish to Lender evidence of the renewal of each of the Policies with
receipts for the payment of the Insurance Premiums or other evidence of such
payment reasonably satisfactory to Lender.  In addition to the insurance
coverages described in Section 5.1.1 above, Borrower shall obtain such other
insurance as may from time to time be reasonably required by Lender in order to
protect its interests.  Within thirty (30) days after request by Lender,
Borrower shall obtain such increases in the amounts of coverage required
hereunder as may be reasonably requested by Lender, taking into consideration
changes in the value of money over time, changes in liability laws, changes in
prudent customs and practices, and the like.
 
 
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Section 5.2                      Casualty.
 
If the Property shall be damaged or destroyed, in whole or in part, by fire or
other casualty (a “Casualty”), Borrower shall give prompt notice of such damage
to Lender and shall either (i) promptly commence and diligently prosecute the
completion of the Restoration of the Property 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 5.4, or (ii) pursuant to the terms and conditions of the Ground
Lease, cause Ground Tenant to promptly commence and diligently prosecute the
completion of the Restoration of the Property in accordance with the Ground
Lease, with such alterations as may be reasonably approved by Lender (to the
extent that Borrower has such approval rights under the Ground Lease) and
otherwise in accordance with Section 5.4 (if applicable).  Borrower shall either
(i) pay all costs of such Restoration whether or not such costs are covered by
insurance, or (ii) pursuant to the terms and conditions of the Ground Lease,
cause Ground Tenant to pay all costs of such Restoration whether or not such
costs are covered by insurance.  Lender may, but shall not be obligated to make
proof of loss if not made promptly by Borrower (but only to the fullest extent
permitted under the Ground Lease while the Ground Lease is in effect).  In
addition, Lender may participate in any settlement discussions with any
insurance companies (and shall approve any final settlement in its sole but good
faith discretion) with respect to any Casualty (x) in which the Net Proceeds or
the costs of completing the Restoration are equal to or greater than Two Hundred
Fifty Thousand and No/100 Dollars ($250,000.00) or (y) if an Event of Default
has occurred and is continuing, and Borrower shall deliver to Lender all
instruments required by Lender to permit such participation (but only to the
fullest extent permitted under the Ground Lease while the Ground Lease is in
effect).  Any Insurance Proceeds in connection with any Casualty (whether or not
Lender elects to settle and adjust the claim or Borrower settles such claim)
shall be due and payable solely to Lender and held by Lender in accordance with
the terms of this Agreement (but only to the fullest extent permitted under the
Ground Lease while the Ground Lease is in effect (i.e., Borrower is entitled to
take receipt of any Insurance Proceeds)).  In the event Borrower or any party
other than Lender is a payee on any check representing Insurance Proceeds with
respect to any Casualty, to the extent that Borrower has the right to do so
under the Ground Lease, Borrower shall immediately endorse, and cause all such
third parties to endorse, such check payable to the order of Lender and Borrower
hereby irrevocably appoints Lender as its attorney-in-fact, coupled with an
interest, to endorse any such check payable to the order of Lender.  The
expenses incurred by Lender in the adjustment and collection of Insurance
Proceeds shall become part of the Obligations, shall be secured by the Loan
Documents and shall be reimbursed by Borrower to Lender upon demand.  Borrower
hereby releases Lender from any and all liability with respect to the settlement
and adjustment by Lender of any claims in respect of any Casualty.
 
 
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Section 5.3                      Condemnation.
 
Borrower shall promptly give Lender notice of the actual or threatened
commencement of any proceeding for the Condemnation of all or any portion of the
Property and shall deliver to Lender copies of any and all papers served in
connection with such proceedings.  Lender may participate in any such
proceedings, and Borrower shall from time to time deliver to Lender all
instruments requested by it to permit such participation (but only to the
fullest extent permitted under the Ground Lease while the Ground Lease is in
effect).  Borrower shall either (i) at its expense, diligently prosecute any
such proceedings, or (ii) pursuant to the terms and conditions of the Ground
Lease, cause Ground Tenant to diligently prosecute such proceedings, and shall
consult with Lender, its attorneys and experts, and to the fullest extent
permitted under the Ground Lease cooperate with them in the carrying on or
defense of any such proceedings.  Notwithstanding any taking by any public or
quasi-public authority through Condemnation or otherwise (including, but not
limited to, any transfer made in lieu of or in anticipation of the exercise of
such taking), Borrower shall continue to pay the Debt at the time and in the
manner provided for its payment in the Note and in this Agreement and the Debt
shall not be reduced until any Award shall have been actually received and
applied by Lender, after the deduction of expenses of collection, to the
reduction or discharge of the Debt.  Lender shall not be limited to the interest
paid on the Award by the condemning authority but shall be entitled to receive
out of the Award interest at the rate or rates provided herein or in the
Note.  If the Property or any portion thereof is taken by a condemning
authority, Borrower shall either (i) promptly commence and diligently prosecute
the Restoration of the Property and otherwise comply with the provisions of
Section 5.4, or (ii) pursuant to the terms and conditions of the Ground Lease,
cause Ground Tenant to promptly commence and diligently prosecute the
Restoration of the Property in accordance with the Ground Lease, and otherwise
in accordance with Section 5.4, whether or not an Award is available.  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.  Notwithstanding the
foregoing or anything to the contrary contained in this Agreement or in any Loan
Document, the provisions of this Section 5.3 and any other provisions of this
Agreement or any Loan Document pertaining to a Condemnation shall apply if and
only to the extent that such provisions are not inconsistent with the terms and
provisions of the Ground Lease (or any Lease in substitution therefor), and, in
any event of such inconsistency, the terms of the Ground Lease (or any Lease in
substitution therefor, if applicable) shall control.
 
 
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Section 5.4                      Restoration.
 
Notwithstanding anything to the contrary contained in this Agreement or in any
Loan Document, the following provisions of this Section 5.4 (and any similar
provisions of this Agreement or any Loan Document pertaining to Restoration)
shall only apply in the event that either (i) the Ground Lease (or any Lease in
substitution thereof) is no longer in effect, and/or (ii) Lender is entitled to
take receipt of Insurance Proceeds or Awards pursuant to the terms of the Ground
Lease or control the restoration process following a Casualty or Condemnation;
otherwise the terms of such Ground Lease, with respect to any restoration of the
property subject thereto, shall control:
 
(a)           If (i) the Net Proceeds shall be less than One Million and No/100
Dollars ($1,000,000) and the costs of completing the Restoration shall be less
than One Million and No/100 Dollars ($1,000,000) and (ii) no Event of Default
has occurred and is continuing, the Net Proceeds will be disbursed by Lender to
Borrower upon receipt, provided that all of the conditions set forth in Section
5.4(b)(i) are met and Borrower delivers to Lender a written undertaking to
expeditiously commence and to satisfactorily complete with due diligence the
Restoration in accordance with the terms of this Agreement.
 
(b)           If the Net Proceeds are equal to or greater than One Million and
No/100 Dollars ($1,000,000) or the costs of completing the Restoration is equal
to or greater than One Million and No/100 Dollars ($1,000,000), the Net Proceeds
will be held by Lender and Lender shall make the Net Proceeds available for the
Restoration in accordance with the provisions of this Section 5.4.  The term
“Net Proceeds” for purposes of this Section 5.4 shall mean:  (i) the net amount
of all insurance proceeds received by Lender pursuant to Section 5.1.1 (a)(i),
(iv), and (vi) and Section 5.1.1(h) 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 (ii) 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.  Notwithstanding the foregoing or anything else to the contrary contained in
this Agreement or any Loan Document, the term “Insurance Proceeds” shall not
include any insurance proceeds to which Ground Tenant is entitled to under the
Ground Lease.
 
(i)                 The Net Proceeds shall be made available to Borrower for
Restoration upon the approval of Lender in its reasonable discretion that 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 perimeter or periphery of the Property, and no
portion of the Improvements is located on such land;
 
 
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(C)           The Ground Lease shall remain in full force and effect during and
after the completion of the Restoration without abatement of rent beyond the
time required for Restoration, notwithstanding the occurrence of any such
Casualty or Condemnation, whichever the case may be, and will make all necessary
repairs and restorations thereto at their sole cost and expense;
 
(D)           Restoration shall commence as soon as reasonably practicable (but
in no event later than sixty (60) days after such Net Proceeds have been
recovered by Lender, 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
5.1.1(a)(iii), 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) the date six (6) months prior to the
Stated Maturity Date, (2) the earliest date required for such completion under
the terms of the applicable Leases, (3) such time as may be required under
applicable Legal Requirements or (4) three (3) months prior to the expiration of
the insurance coverage referred to in Section 5.1.1(a)(iii);
 
(G)           the Property and the use thereof after the Restoration will be in
compliance with and permitted under all applicable Legal Requirements;
 
(H)           the Restoration shall be done and completed by Borrower in a
reasonably expeditious and diligent fashion and in compliance with all
applicable Legal Requirements;
 
(I)            such Casualty or Condemnation, as applicable, does not result in
the loss of access to the Property or the related Improvements;
 
(J)            the cash available to Borrower under leases at the Property,
after giving effect to the Restoration, shall be satisfactory to Lender in its
sole but good faith discretion;
 
(K)           the Loan to Value Ratio after giving effect to the Restoration,
shall be satisfactory to Lender;
 
 
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(L)           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
acceptable to Lender; and
 
(M)           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 the Casualty
and Condemnation Account and, until disbursed in accordance with the provisions
of this Section 5.4(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 reasonably 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, 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
reasonable 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 shall be subject to the prior reasonable approval of Lender and
an independent consulting engineer selected by Lender (the “Casualty
Consultant”).  Lender shall have the use of the plans and specifications and all
permits, licenses and approvals required or obtained in connection with the
Restoration.  The identity of the contractors, subcontractors and materialmen
engaged in the Restoration, as well as the contracts under which they have been
engaged, shall be subject to the reasonable approval of Lender and the Casualty
Consultant.  All costs and expenses incurred by Lender in connection with
recovering, holding and advancing the Net Proceeds for the Restoration
including, without limitation, reasonable attorneys’ fees and disbursements and
the Casualty Consultant’s fees and disbursements, shall be paid by Borrower.
 
(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, less the Casualty Retainage.  The term “Casualty
Retainage” shall mean, as to each contractor, subcontractor or materialman
engaged in the Restoration, an amount equal to ten percent (10%) of the costs
actually incurred for work in place as part of the Restoration, as certified by
the Casualty Consultant, until the Restoration has been completed.  The Casualty
Retainage shall in no event, and notwithstanding anything to the contrary set
forth above in this Section 5.4(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 5.4(b) and that all approvals
necessary for the re-occupancy and use of the Property have been obtained from
all appropriate Governmental Authorities, and Lender receives evidence
reasonably satisfactory to Lender that the costs of the Restoration have been
paid in full or will be paid in full out of the Casualty Retainage; provided,
however, that Lender will release the portion of the Casualty Retainage being
held with respect to any contractor, subcontractor or materialman engaged in the
Restoration as of the date upon which (i) the Casualty Consultant certifies to
Lender that such contractor, subcontractor or materialman has reasonably and
satisfactorily completed all work and has supplied all materials in accordance
with the provisions of such contractor’s, subcontractor’s or materialman’s
contract, (ii) 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 (iii) 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.
 
 
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(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 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 (for deposit into the Casualty and
Condemnation Account) before any further disbursement of the Net Proceeds shall
be made.  The Net Proceeds Deficiency deposited with Lender shall be deposited
by Lender into the Casualty and Condemnation Account and shall be disbursed for
costs actually incurred in connection with the Restoration on the same
conditions applicable to the disbursement of the Net Proceeds, and until so
disbursed pursuant to this Section 5.4(b) shall constitute additional security
for the Obligations.
 
(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 5.4(b), and the receipt by
Lender of evidence reasonably satisfactory to Lender that all costs incurred in
connection with the Restoration have been paid in full, shall be remitted by
Lender to Borrower, provided no Event of Default shall have occurred and shall
be continuing.
 
 
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(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 5.4(b)(vii) may be retained and applied by Lender in accordance with
Section 2.4.4 hereof toward the payment of the Debt whether or not then due and
payable in such order, priority and proportions as Lender in its sole discretion
shall deem proper, or, at the discretion of Lender, the same may be paid, either
in whole or in part, to Borrower for such purposes as Lender shall approve, in
its discretion.  Additionally, throughout the term of the Loan if an Event of
Default then exists, then the Borrower shall pay to Lender, with respect to any
payment of the Debt pursuant to this Section 5.4(c), an additional amount equal
to the Prepayment Fee and the Liquidated Damages Amount (as applicable);
provided, however, that if an Event of Default does not then exist, then the
Prepayment Fee and the Liquidated Damages Amount, as applicable, shall not be
payable.
 
(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)           Notwithstanding anything to the contrary contained herein, if in
connection with a Casualty any insurance company makes a payment under a
property insurance policy that Borrower proposes be treated as business or
rental interruption insurance, then, notwithstanding any designation (or lack of
designation) by the insurance company as to the purpose of such payment, as
between Lender and Borrower, such payment shall not be treated as business or
rental interruption Insurance Proceeds unless Borrower has demonstrated to
Lender’s satisfaction that the remaining Net Proceeds that have been received
from the property insurance companies are sufficient to pay 100% of the cost of
the Restoration or, if such Net Proceeds are to be applied to repay the
Obligations in accordance with the terms hereof, that such remaining Net
Proceeds will be sufficient to satisfy the Obligations in full.
 
ARTICLE 6
 
CASH MANAGEMENT AND RESERVE FUNDS
 
Section 6.1                      Cash Management Arrangements.
 
Borrower shall cause any Rents to be transmitted directly by Ground Tenant (or
any other Tenants of Borrower, if applicable) into a trust account (the
“Clearing Account”) established and maintained by Borrower at a local bank
selected by Borrower and reasonably approved by Lender (the “Clearing Bank”) as
more fully described in the Clearing Account Agreement.  Without in any way
limiting the foregoing, if Borrower or Manager (if applicable) receives any
Gross Revenue from the Property, then (i) such amounts shall be deemed to be
collateral for the Obligations and shall be held in trust for the benefit and
under the control of Lender, (ii) such amounts shall not be commingled with any
other funds or property of Borrower or Manager (if applicable), and (iii)
Borrower or Manager (if applicable) shall deposit such amounts in the Clearing
Account within two (2) Business Days of receipt.  Funds deposited into the
Clearing Account shall be swept by the Clearing Bank on a daily basis into
Borrower’s operating account at the Clearing Bank for use by Borrower in
connection with Borrower’s operations and any other purpose not prohibited by
the express terms of this Agreement or any Loan Document, unless a Sweep Event
has occurred, in which event such funds shall be swept on a daily basis into an
Eligible Account at the Deposit Bank controlled by Lender (the “Deposit
Account”) and applied and disbursed in accordance with this Agreement and the
Cash Management Agreement.  Funds in the Deposit Account shall be invested in
Permitted Investments, as more particularly set forth in the Cash Management
Agreement.  Lender may also establish subaccounts of the Deposit Account which
shall at all times be Eligible Accounts (and may be ledger or book entry
accounts and not actual accounts) (such subaccounts are referred to herein as
“Accounts”).  The Deposit Account and all other Accounts at the Deposit Bank
will be under the sole control and dominion of Lender, and Borrower shall have
no right of withdrawal therefrom.  Borrower shall pay for all expenses of
opening and maintaining all of the above accounts.
 
 
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Section 6.2                      Intentionally Blank.
 
Section 6.3                      Security Interest In Reserve Funds.
 
6.3.1                 Grant of Security Interest.  Borrower shall be the owner
of the Reserve Funds.  Borrower hereby pledges, assigns and grants to Lender a
first-priority perfected security interest to Lender, as security for the
payment and performance of the Obligations, in all of Borrower’s right, title
and interest in and to the Reserve Funds.  The Reserve Funds shall be under the
sole dominion and control of Lender.  The Reserve Funds shall not constitute a
trust fund and may be commingled with other monies held by Lender.
 
6.3.2                 Income Taxes; Interest.  Borrower shall report on its
federal, state, commonwealth, district and local income tax returns all interest
or income accrued on the Reserve Funds.  No earnings or interest on the Reserve
Funds shall be payable to Borrower.
 
6.3.3                 Prohibition Against Further Encumbrance.  Borrower shall
not, without the prior consent of Lender, further pledge, assign or grant any
security interest in the Reserve Funds or permit any Lien or encumbrance (other
than the Permitted Encumbrances, including a the Lien created by the Loan
Documents) to attach thereto or any levy to be made thereon or any UCC-1
financing statements to be filed with respect thereto, except those naming
Lender as the secured party.
 
6.3.4                 Lender Remedy for Failure to Perform.  In addition to
Lender’s remedies following an Event of Default, Borrower acknowledges that
Lender shall have the right (but not the obligation) to complete or perform any
required repairs, capital expenditures, tenant improvements, and leasing
commissions to the extent required of Borrower under the Ground Lease (for so
long as the Ground Lease remains in force and effect) or any other Leases to
which Borrower is a party (individually and collectively, as the context
requires, the “Reserve Items”) (or pay the leasing commissions as applicable),
if applicable, and for such purpose, Borrower hereby appoints Lender its
attorney-in-fact with full power of substitution (and which shall be deemed to
be coupled with an interest and irrevocable until the Loan is paid in full and
the Security Instrument is discharged of record, with Borrower hereby ratifying
all that its said attorney shall do by virtue thereof):  (i) to complete or
undertake such work in the name of Borrower; (ii) to proceed under existing
contracts or to terminate existing contracts (even where a termination penalty
may be incurred) and employ such contractors, subcontractors, watchman, agents,
architects and inspectors as Lender determines necessary or desirable for
completion of such work; (iii) to make any additions, changes and corrections to
the scope of the work as Lender deems necessary or desirable for timely
completion; (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 completion of such work; (v) to execute all applications and
certificates in the name of Borrower which may be required to obtain permits and
approvals for such work or completion of such work with respect to the Property;
(vi) to prosecute and defend all actions or proceedings in connection with the
repair or improvements to the Property; and (vii) to do any and every act which
Borrower might do in its own behalf to fulfill the terms of Borrower’s
Obligations under this Agreement.  Amounts expended by Lender which exceed
amounts held in the Accounts shall be added to the Outstanding Principal
Balance, shall be immediately due and payable, and shall bear interest at the
Default Rate from the date of disbursement until paid in full.  In addition, in
order to perform inspections or, following an Event of Default, to complete
Reserve Items which Borrower has failed to perform, Borrower hereby grants
Lender and its agents the right, from time to time, to enter onto the Property.
 
 
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Section 6.4                      Application After an Event of Default.
 
6.4.1                 Application After Event of Default.  Notwithstanding
anything to the contrary contained in this Article 6, upon the occurrence of an
Event of Default, Lender, at its option, may withdraw the Reserve Funds and any
other funds of Borrower then in the possession of Lender, Servicer or Deposit
Bank (including any Gross Revenue) and apply such funds to the items for which
the Reserve Funds were established or to the 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 any of the foregoing funds
shall be in addition to all other rights and remedies provided to Lender under
the Loan Documents.
 
ARTICLE 7
 
PROPERTY MANAGEMENT
 
If, and only to the extent that, a Manager is managing the Property pursuant to
a Management Agreement in effect after the date hereof, the following provisions
contained in this Article 7 shall apply (it being understood and agreed,
however, that Borrower is self-managing the Property as of the date of this
Agreement and that Borrower shall not hire/retain any Manager or execute a
Management Agreement without the prior written consent of Lender, which consent
may be granted or withheld in Lender’s reasonable discretion):
 
Section 7.1                      The Management Agreement.
 
Borrower shall use its reasonable, diligent efforts to (i) cause Manager to
manage the Property in accordance with the Management Agreement, (ii) diligently
perform and observe all of the terms, covenants and conditions of the Management
Agreement on the part of Borrower to be performed and observed, (iii) promptly
notify Lender of any default under the Management Agreement of which it is
aware, (iv) promptly deliver to Lender a copy of each financial statement,
business plan, capital expenditures plan, report and estimate received by it
under the Management Agreement, and (v) promptly enforce the performance and
observance of all of the covenants required to be performed and observed by
Manager under the Management Agreement.  If Borrower shall default in the
performance or observance of any material term, covenant or condition of the
Management Agreement on the part of Borrower to be performed or observed, then,
without limiting Lender’s other rights or remedies under this Agreement or the
other Loan Documents, and without waiving or releasing Borrower from any of its
Obligations hereunder or under the Management Agreement, Lender shall have the
right, but shall be under no obligation, to pay any sums and to perform any act
as may be appropriate to cause all the material terms, covenants and conditions
of the Management Agreement on the part of Borrower to be performed or observed.
 
 
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Section 7.2                      Prohibition Against Termination or
Modification.
 
Borrower shall not (i) surrender, terminate, cancel, modify, renew or extend the
Management Agreement, (ii) enter into any other agreement relating to the
management or operation of the Property with Manager or any other Person, (iii)
consent to the assignment by the Manager of its interest under the Management
Agreement, or (iv) waive or release any of its rights and remedies under the
Management Agreement, in each case without the express consent of Lender;
provided, however, with respect to a new manager such consent may be conditioned
upon Borrower delivering a Rating Agency Confirmation as to such new manager and
management agreement.  If at any time Lender consents to the appointment of a
new manager, such new manager and Borrower shall, as a condition of Lender’s
consent, execute (i) a management agreement in form and substance reasonably
acceptable to Lender, and (ii) a subordination of management agreement in a form
reasonably acceptable to Lender.
 
Notwithstanding the foregoing, so long as no Default or Event of Default then
exists, Lender shall not unreasonably withhold or delay its consent with respect
to approving any Management Agreement related transaction described in Section
7.2 above which is proposed by Borrower with respect to the Property so long as
such proposed Management Agreement transaction, (a) is ordinary and customary
when considering the ownership and operation of the Property, (b) will not
materially interfere with the benefits of the security intended to be provided
by the Security Instrument and this Agreement, (c) will not materially and
adversely affect the value of the Property, (d) will not impair the use or
operations of the Property (as currently used), and (e) will not impair
Borrower’s ability to pay its Obligations in a timely manner.  IN CONNECTION
WITH ANY REQUEST WITH RESPECT TO A MANAGEMENT AGREEMENT RELATED TRANSACTION
MEETING THE CRITERIA OUTLINED ABOVE, LENDER OR LENDER’S SERVICER, AS APPLICABLE,
MUST GRANT OR WITHHOLD ITS APPROVAL IN A PROMPT AND REASONABLE TIME FRAME
FOLLOWING ITS RECEIPT OF ANY REQUIRED MATERIALS RELATING TO THE PROPOSED
MANAGEMENT AGREEMENT RELATED TRANSACTION (I.E., LENDER OR LENDER’S SERVICER, AS
APPLICABLE, MAY NOT UNREASONABLY DELAY THE TIMING OF THE APPROVAL PROCESS).
 
Section 7.3                      Replacement of Manager.
 
Lender shall have the right to require Borrower to replace the Manager with a
Person chosen by Borrower and approved by Lender (provided, that such approval
may be conditioned upon Borrower delivering a Rating Agency Confirmation as to
such new manager and management agreement) upon the occurrence of any one or
more of the following events: (i) at any time following the occurrence of an
Event of Default, (ii) if Manager shall be in default under the Management
Agreement beyond any applicable notice and cure period, (iii) if Manager shall
become insolvent or a debtor in any bankruptcy or insolvency proceeding, or (iv)
if at any time the Manager has engaged in gross negligence, fraud, willful
misconduct or misappropriation of funds.
 
 
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ARTICLE 8
 
PERMITTED TRANSFERS
 
Section 8.1                      Permitted Transfer of the Property.
 
Lender shall not withhold its consent to the one-time conveyance of the Property
to a Permitted Transferee provided that (a) Borrower shall give Lender written
notice of such Transfer request not less than sixty (60) days prior to the
proposed date of such Transfer, (b) Lender has received a Rating Agency
Confirmation as to the conveyance of the Property to the Permitted Transferee,
(c) Lender has received an agreement, acceptable to it in its sole discretion,
pursuant to which Permitted Transferee assumes all of Borrower’s obligations
under the Loan Documents, (d) Lender receives a transfer fee equal to
$100,000.00 (it being understood and agreed that Lender’s servicer, following a
Securitization of the Loan, shall not have the ability to unilaterally increase
such transfer fee), (e) Lender shall have received such documents, certificates
and legal opinions as it may reasonably request, (f) no Event of Default or
event which with the giving of notice or the passage of time or both would
constitute an Event of Default shall have occurred and remain uncured; (g) the
Permitted Transferee and its property manager (if applicable) shall have
sufficient experience in the ownership and management of properties similar to
the Property, and Lender shall be provided with reasonable evidence thereof (and
Lender reserves the right to reasonably approve the Permitted Transferee without
approving the substitution of the property manager (if applicable)); (h) the
Permitted Transferee shall have executed and delivered to Lender an assumption
agreement in form and substance acceptable to Lender, evidencing such Permitted
Transferee’s agreement to abide and be bound by the terms of the Note, this
Agreement and the other Loan Documents, together with such legal opinions and
title insurance endorsements as may be reasonably requested by Lender; (i) prior
to any go-forward release of the Guarantor, a substitute guarantor acceptable to
Lender in its sole discretion shall have assumed the Guaranty executed by
Guarantor or executed a replacement guaranty reasonably satisfactory to Lender;
and (j) Lender may, as a condition to evaluating any requested consent to a
transfer, require that Borrower post a cash deposit with Lender in an amount
equal to Lender’s anticipated costs and expenses in evaluating any such request
for consent.  Upon any conveyance of the Property to a Permitted Transferee in
accordance with this Section 8.1, Borrower and Guarantor shall be released from
and relieved of any liability under the Loan Documents on a “go-forward” basis
to the extent (and only to the extent) that such liability first arose and
accrued solely and entirely following the date of the closing of such conveyance
(but, in the case of Hazardous Substances (as defined in the Environmental
Indemnity) related indemnities, to the extent (and only to the extent) that such
claims arose solely from Hazardous Substances that (A) were not present in, on,
under or migrating from, or a threat to the Property prior to the date of the
closing of such conveyance, and (B) were not the result of any act or negligence
of Borrower, Guarantor or any of their respective Affiliates, agents or
contractors).  Notwithstanding the foregoing, this exclusion from liability
shall not apply in the case of clause (xiii) of the Borrower’s Recourse
Liabilities in Section 11.22 of this Agreement.
 
 
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Section 8.2                      Permitted Transfers of Interest in Borrower.
 
(a)           Notwithstanding anything to the contrary contained in Section
4.2.1, the following Transfers (herein, the “Permitted Transfers”) shall be
deemed to be permitted hereunder without the consent of Lender or the payment of
any transfer fees or other fees (but subject to the terms and conditions of
Section 8.3 below with respect to the payment of costs and expenses):
 
(i)                 Transfers of direct or indirect interests in Sole Member to,
between and/or among Persons that are directly or indirectly one hundred percent
(100%) owned and Controlled by Guarantor provided that (A) no Default or Event
of Default shall have occurred and remain uncured, (B) to the extent any such
transferee owns (in the aggregate with the direct and indirect ownership
interests in Borrower owned by its Affiliates) more than 49% of the direct or
indirect ownership interests in Borrower immediately following such Transfer and
did not own (in the aggregate with the direct and indirect ownership interests
in Borrower owned by its Affiliates) more than 49% of the direct or indirect
ownership interests in Borrower as of the Closing Date, Borrower, at Borrower’s
sole cost and expense, shall first deliver (or cause to be delivered) a
substantive non-consolidation opinion (or an update to the Insolvency Opinion)
to Lender and the Rating Agencies with respect to Borrower and such transferee
in form and substance satisfactory to Lender and the Rating Agencies, (C) to the
extent such transferee owns twenty percent (20%) or more of the direct or
indirect interests in Borrower immediately following such Transfer (provided
such transferee did not own 20% or more of the direct or indirect ownership
interests in Borrower as of the Closing Date), Borrower shall deliver, at
Borrower’s sole cost and expense, customary searches (credit, judgment, lien,
etc.) acceptable to Lender with respect to such transferee, (D) such Transfer
shall not result in Borrower or Sole Member no longer being Controlled by
Guarantor, (E) the management of the Property remains unchanged, (F) Borrower
shall give Lender notice of such Transfer, together with copies of all
instruments effecting such Transfer and copies of any organizational documents
that Lender shall require, not less than thirty (30) days prior to the date of
such Transfer, and (G) the legal and financial structure of Borrower and its
members or partners, as applicable, and the single purpose nature and bankruptcy
remoteness of Borrower and its members or partners, as applicable, after such
Transfer, shall satisfy Lender’s then current applicable underwriting criteria
and requirements; and
 
(ii)                 Guarantor shall be permitted, at any time after the Closing
Date, to pledge up to 49% of the direct equity interests in Sole Member to a
Permitted Transferee as security for Guarantor’s Line of Credit, provided that
(A) Guarantor’s Line of Credit is fully recourse to Guarantor, (B) Guarantor’s
Line of Credit is secured by substantial assets of Guarantor in addition to such
pledge of direct equity interests in Sole Member, (C) the existence of, and the
exercise of remedies under, the related pledge will not result in Borrower or
Sole Member no longer being Controlled by Guarantor, (D) in connection with the
exercise of remedies under the related pledge, Borrower shall deliver to Lender
deliver (or cause to be delivered) a substantive non-consolidation opinion (or
an update to the Insolvency Opinion) to Lender and the Rating Agencies with
respect to Borrower and such new ownership structure in form and substance
satisfactory to Lender and the Rating Agencies reflecting (E) Borrower shall
deliver, at Borrower’s sole cost and expense, customary searches (credit,
judgment, lien, etc.) acceptable to Lender with respect to such Permitted
Transferee (both at Closing and, if applicable, concurrently with any
enforcement action under the related pledge), (F) the management of the Property
remains unchanged, (G) Borrower shall give Lender notice of such Transfer,
together with copies of all instruments effecting such Transfer and copies of
any organizational documents that Lender shall require, not less than thirty
(30) days prior to the date of such Transfer, and (H) the legal and financial
structure of Borrower and its members or partners, as applicable, and the single
purpose nature and bankruptcy remoteness of Borrower and its members or
partners, as applicable, after such Transfer, shall satisfy Lender’s then
current applicable underwriting criteria and requirements.
 
 
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(iii)                 Transfers of up to forty-nine percent (49%) of the direct
or indirect ownership interests in Sole Member and/or Guarantor provided that
the following conditions are satisfied: (A) no Default or Event of Default shall
have occurred and remain uncured, (B) such Transfer shall not (1) cause the
transferee (together with its Affiliates) to acquire Control of Borrower, Sole
Member or Guarantor, (2) result in Borrower or Sole Member no longer being
Controlled by Guarantor, or (3) cause the transferee (together with its
Affiliates) to increase its direct or indirect interest in Borrower to an amount
which exceeds forty-nine percent (49%), (C) to the extent such transferee owns
twenty percent (20%) or more of the direct or indirect interests in Borrower
immediately following such Transfer (provided such transferee did not own 20% or
more of the direct or indirect ownership interests in Borrower as of the Closing
Date), Borrower shall deliver, at Borrower’s sole cost and expense, customary
searches (credit, judgment, lien, etc.) acceptable to Lender with respect to
such transferee, (D) after giving effect to such Transfer, Guarantor shall
continue to own at least fifty-one percent (51%) of all equity interests (direct
or indirect) in Borrower, (E) the management of the Property shall remain
unchanged, (F) Borrower shall give Lender notice of such Transfer request,
together with copies of all instruments effecting such Transfer and copies of
any organizational documents that Lender shall require, not less than thirty
(30) days prior to the date of such Transfer, and (G) the legal and financial
structure of Borrower and its members or partners, as applicable, and the single
purpose nature and bankruptcy remoteness of Borrower and its members or
partners, as applicable, after such Transfer, shall satisfy Lender’s then
current applicable underwriting criteria and requirements.
 
(b)           Any requested Transfer by Borrower of more than forty-nine percent
(49%) of the direct or indirect interests in Borrower (other than Permitted
Transfers) shall be conditioned upon satisfaction of the following conditions:
(i) no Default or Event of Default shall have occurred and remain uncured, (ii)
such Transfer is first approved by Lender in writing in its sole and absolute
discretion, (iii) to the extent such transferee owns twenty percent (20%) or
more of the direct or indirect interests in Borrower immediately following such
Transfer (provided such transferee did not own 20% or more of the direct or
indirect ownership interests in Borrower as of the Closing Date), Borrower shall
deliver, at Borrower’s sole cost and expense, customary searches (credit,
judgment, lien, etc.) acceptable to Lender with respect to such transferee, (iv)
Borrower, at Borrower’s sole cost and expense, shall first deliver (or cause to
be delivered) (A) a substantive non-consolidation opinion (or update to the
Insolvency Opinion) to Lender and the Rating Agencies with respect to Borrower
and such transferee in form and substance satisfactory to Lender and the Rating
Agencies), and (B) if such Transfer occurs after a Securitization, a Rating
Agency Confirmation to Lender that such Transfer will not result in a
qualification, downgrade or withdrawal of the then applicable ratings, (v) the
management of the Property shall remain unchanged, (vi) Borrower shall give
Lender notice of such Transfer request, together with copies of all instruments
effecting such Transfer and copies of any organizational documents that Lender
shall require, not less than thirty (30) days prior to the date of such
Transfer, and (vii) the legal and financial structure of Borrower and its
members or partners, as applicable, and the single purpose nature and bankruptcy
remoteness of Borrower and its members or partners, as applicable, after such
Transfer, shall satisfy Lender’s then current applicable underwriting criteria
and requirements.
 
 
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(c)           Notwithstanding the foregoing provisions of this Section 8.2,
nothing contained in this Agreement or in any other Loan Document shall restrict
the right of any shareholder in Glimcher Realty Trust (so long as its shares are
traded on the New York Stock Exchange) to sell, assign, convey, transfer,
pledge, hypothecate, create a security interest in or otherwise dispose of such
shares.
 
(d)           Notwithstanding (and without limiting) the foregoing provisions of
this Section 8.2, no Transfer of any direct or indirect ownership interests in
Borrower may be made such that the transferee owns, in the aggregate with the
direct or indirect ownership interests in Borrower owned by such transferee’s
Affiliates, more than forty-nine percent (49%) of the direct or indirect
ownership interests in Borrower unless such Transfer is conditioned upon the
delivery of a substantive non-consolidation opinion (or update to the Insolvency
Opinion) to Lender and the Rating Agencies with respect to Borrower and such
transferee in form and substance reasonably satisfactory to Lender and otherwise
satisfactory to the Rating Agencies.
 
Section 8.3                      Cost and Expenses.
 
Borrower shall pay all costs and expenses of Lender in connection with any
Transfer, whether or not such Transfer is deemed to be a Permitted Transfer,
including, without limitation, all fees and expenses of Lender’s counsel,
whether internal or outside, and the cost of any required counsel opinions
related to REMIC or other securitization or tax issues and any Rating Agency
fees, and all transfer taxes, sales taxes and other taxes or fees of any kind.
 
Section 8.4                      Timing with Respect to Permitted Transfers.
 
IN CONNECTION WITH ANY PERMITTED TRANSFER, IF AND TO THE EXTENT THAT LENDER OR
LENDER’S SERVICER, AS APPLICABLE, HAS CONSENT RIGHTS WITH RESPECT TO SUCH
PERMITTED TRANSFER, LENDER OR LENDER’S SERVICER, AS APPLICABLE, MUST GRANT OR
WITHHOLD ITS APPROVAL IN A PROMPT AND REASONABLE TIME FRAME FOLLOWING ITS
RECEIPT OF ANY REQUIRED MATERIALS RELATING THE PERMITTED TRANSFER (I.E., LENDER
OR LENDER’S SERVICER, AS APPLICABLE, MAY NOT UNREASONABLY DELAY THE TIMING OF
THE APPROVAL PROCESS OR CONSUMMATION OF THE PERMITTED TRANSFER IN QUESTION).
 
 
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ARTICLE 9
 
SALE AND SECURITIZATION OF MORTGAGE
 
Section 9.1                      Sale of Security Instrument and Securitization.
 
(a)           Lender shall have the right (i) to sell or otherwise transfer the
Loan or any portion thereof as a whole loan, (ii) to sell participation
interests in the Loan, or (iii) to securitize the Loan or any portion thereof in
a single asset securitization or a pooled loan securitization.  (The
transactions referred to in clauses (i), (ii) and (iii) shall hereinafter be
referred to collectively as “Secondary Market Transactions” and the transactions
referred to in clause (iii) shall hereinafter be referred to as a
“Securitization”.  Any certificates, notes or other securities issued in
connection with a Securitization are hereinafter referred to as “Securities”).
 
(b)           If requested by Lender, Borrower shall assist Lender (provided
that such assistance shall be provided by Borrower on commercially reasonable
terms) in satisfying the market standards to which Lender customarily adheres or
which may be required in the marketplace or by the Rating Agencies in connection
with any Secondary Market Transactions, including to:
 
(i)                 (A) provide updated financial and other information with
respect to the Property, the business operated at the Property, Borrower and the
Manager (if applicable), including, without limitation, the information set
forth on Exhibit B attached hereto, (B) provide updated budgets relating to the
Property, and (C) provide updated appraisals, market studies, environmental
reviews and reports (Phase I’s and, if appropriate, Phase II’s), property
condition reports and other due diligence investigations of the Property (the
“Updated Information”), together, if customary, with appropriate verification of
the Updated Information through letters of auditors or opinions of counsel
acceptable to Lender and the Rating Agencies;
 
(ii)                 provide opinions of counsel, which may be relied upon by
Lender, the Rating Agencies and their respective counsel, agents and
representatives, as to non-consolidation, fraudulent conveyance and true sale or
any other opinion customary in Secondary Market Transactions or required by the
Rating Agencies with respect to the Property and Borrower and its Affiliates,
which counsel and opinions shall be reasonably satisfactory to Lender and the
Rating Agencies;
 
(iii)                 provide updated, as of the closing date of the Secondary
Market Transaction, representations and warranties made in the Loan Documents
and such additional representations and warranties as the Rating Agencies may
require; and
 
 
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(iv)                 execute amendments to the Loan Documents and Borrower’s
organizational documents requested by Lender; provided, however, that Borrower
shall not be required to modify or amend any Loan Document if such modification
or amendment would (A) change the interest rate, the stated maturity or the
amortization of principal as set forth herein or in the Note, or (B) modify or
amend any other material economic term of the Loan, or (C) materially and
adversely affect Borrower, Sole Member or Guarantor.
 
(c)           If requested by Lender, Borrower shall provide Lender with the
following financial statements (it being understood that Lender shall request
(i) full financial statements if it anticipates that the principal amount of the
Loan at the time of a Securitization may, or if the principal amount of the Loan
at any time during which the Loan is included in a Securitization does, equal or
exceed twenty percent (20%) of the aggregate principal amount of all mortgage
loans included in the Securitization, and (ii) summaries of such financial
statements if the principal amount of the Loan at any such time equals or
exceeds ten percent (10%) of such aggregate principal amount) (all references to
Regulation S-X in this Section 9.1(c) referring to Regulation S-X of the
Securities Act)
 
(i)                 As of the Closing Date, a balance sheet with respect to the
Property for the two most recent Fiscal Years, meeting the requirements of
Section 210.3-01 of Regulation S-X, and statements of income and statements of
cash flows with respect to the Property for the three most recent Fiscal Years,
meeting the requirements of Section 210.3-02 of Regulation S-X, for any interim
period between the last audited balance sheet and the date of the most recent
interim financial statements, interim financial statements of the Property
meeting the requirements of Section 210.3-01 and 210.3-02 of Regulation S-X (all
of such financial statements, collectively, the “Standard Statements”);
provided, however, that (A) if the Property would be deemed to constitute a
business and not real estate under Regulation S-X that has been acquired by
Borrower from an unaffiliated third party, as to which the other conditions set
forth in Section 210.3-05 of Regulation S-X for provision of financial
statements in accordance with such Section have been met, at Lender’s election
in lieu of or in addition to the Standard Statements otherwise required by this
Section 9.1(c)(i), Borrower shall instead provide the financial statements
required by such Section 210.3-05 of Regulation S-X, and (B) with respect to any
portion of the Property (other than properties that are hotels, nursing homes,
or other properties that would be deemed to constitute a business and not real
estate under Regulation S-X or other legal requirements) that has been acquired
by Borrower from an unaffiliated third party, as to which the other conditions
set forth in Section 210.3-14 of Regulation S-X for provision of financial
statements in accordance with such Section have been med, in lieu of the
Standard Statements otherwise required by this section, Borrower shall instead
provide the financial statements required by Section 210.3-14 of Regulation S-X
(any such statements described in (A) or (B) (“Acquired Property Statements”).
 
 
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(ii)                 Not later than thirty (30) days after the end of each
fiscal quarter following the Closing Date, a balance sheet of the Property as of
the end of such fiscal quarter, meeting the requirements of Section 210.3-01 of
Regulation S-X, and statements of income and statements of cash flows of the
Property for the period commencing on the day following the last day of the most
recent Fiscal Year and ending on the date of such balance sheet and for the
corresponding period of the most recent Fiscal Year, meeting the requirements of
Section 210.3-02 of Regulation S-X (provided, that if for such corresponding
period of the most recent Fiscal Year Acquired Property Statements were
permitted to be provided hereunder pursuant to paragraph (i) above, Borrower
shall instead provide Acquired Property Statements for such corresponding
period).  If requested by Lender, Borrower shall also provide “summarized
financial information,” as defined in Section 210.1-02(bb) of Regulation S-X,
with respect to such quarterly financial statements.
 
(iii)                 Not later than sixty (60) days after the end of each
Fiscal Year following the Closing Date, a balance sheet of the Property as of
the end of such Fiscal Year, meeting the requirements of Section 210.3-01 of
Regulation S-X, and statements of income and statements of cash flows of the
Property for such Fiscal Year, meeting the requirements of Section 210.3-02 of
Regulation S-X.  If requested by Lender, Borrower shall provide summarized
financial information with respect to such annual financial statements.
 
(iv)                 Upon ten (10) Business Days after notice from Lender in
connection with the Securitization of the Loan, such additional financial
statements, such that, as of the date (each a “Disclosure Document Date”) of
each Disclosure Document, Borrower shall have provided Lender with all financial
statements as described in paragraph (i) above; provided that the Fiscal Year
and interim periods for which such financial statements shall be provided shall
be determined as of such Disclosure Document Date.
 
(v)                 In the event Lender determines, in connection with a
Securitization, that the financial statements required in order to comply with
Regulation S-X or any Legal Requirements are other than as provided herein, then
notwithstanding the provisions of this Section, Lender may request, and Borrower
shall promptly provide, such combination of Acquired Property Statements and/or
Standard Statements as may be necessary for such compliance.
 
(vi)                 If, at the time a Disclosure Document is being prepared for
a Securitization, Lender expects that Borrower alone or Borrower and one or more
Affiliates of any Borrower collectively, or the Property alone or the Property
and Related Properties collectively, will be a Significant Obligor, the Borrower
shall furnish to Lender upon request (i) the selected financial data and/or Net
Operating Income for the Borrower and the Property for the most recent fiscal
year and interim period (or such longer period as may be required by Regulation
S-K if the Loan is not treated as a non-recourse loan under Instruction 3 for
Item 1101(k) of Regulation AB) meeting the requirements and covering the time
periods specified in Section 301 of Regulation S-K and Item 1112 of Regulation
AB, 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, 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 twenty percent (20%) of the aggregate principal amount of all mortgage
loans included or expected to be included, as applicable, in the
Securitization.  Such financial data or financial statements shall be furnished
to Lender (A) within ten (10) Business Days after notice from Lender in
connection with the preparation of Disclosure Documents for the Securitization,
(B) not later than thirty (30) days after the end of each fiscal quarter of
Borrower and (C) not later than seventy-five (75) 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, and to the extent in
Borrower’s possession and provided Borrower is not prohibited to release such
information, 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.
 
 
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(vii)                 If requested by Lender, Borrower shall provide Lender,
promptly upon request, with any other or additional financial statements, or
financial, statistical or operating information, as Lender shall reasonably
determine to be required pursuant to Regulation S-K or Regulation S-X, as
applicable, Regulation AB, or any amendment, modification or replacement thereto
or other legal requirements in connection with any Disclosure Document or any
Exchange Act filing in connection with or relating to a Securitization or as
shall otherwise be reasonably requested by the Lender.
 
(viii)                 In the event Lender determines, in connection with a
Securitization, that the financial statements required in order to comply with
Regulation S-K or Regulation S-X, as applicable, Regulation AB, or other legal
requirements are other than as provided herein, then notwithstanding the
provisions of Section 9.1(b) hereof, Lender may request, and each Borrower shall
promptly provide, such combination of Acquired Property Statement and/or
Standard Statements or such other financial statements as Lender determines to
be necessary or appropriate for such compliance.
 
 
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(ix)                 If requested by Lender, the Borrowers shall provide Lender,
promptly upon request, a list of tenants (including all affiliates of such
tenants) that in the aggregate (1) occupy 10% or more (but less than 20%) of the
total floor area of the improvements or represent 10% or more (but less than
20%) of aggregate base rent, and (2) occupy 20% or more of the total floor area
of the improvements or represent 20% or more of aggregate base rent.  In
addition, if requested by Lender and to the extent such information is in the
possession or control of Borrower, the Borrower shall provide Lender, promptly
upon request, with financial information regarding any of the tenants identified
in the list prepared pursuant to the preceding sentence in form and substance
sufficient to satisfy the requirements of Item 1112 of Regulation AB.
 
All financial statements provided by Borrower pursuant to this Section 9.1(c)
shall be prepared in accordance with GAAP, and shall meet the requirements of
Regulation S-K or Regulation S-X, as applicable, Regulation AB, and other
applicable Legal Requirements.  All financial statements relating to a Fiscal
Year shall be audited by independent accountants in accordance with generally
accepted auditing standards, Regulation S-X or Regulation S-K, as applicable,
Regulation AB, and all other applicable Legal Requirements, shall be accompanied
by the manually executed report of the independent accountants thereon, which
report shall meet the requirements of Regulation S-K or Regulation S-X, as
applicable, Regulation AB, and all other applicable Legal Requirements, and
shall be further accompanied by a manually executed written consent of the
independent accountants, in form and substance acceptable to Lender, to the
inclusion of such financial statements in any Disclosure Document and any
Exchange Act Filing and to the use of the name of such independent accountants
and the reference to such independent accountants as “experts” in any Disclosure
Document and Exchange Act Filing, all of which shall be provided at the same
time as the related financial statements are required to be provided.  All other
financial statements shall be certified by the chief financial officer of
Borrower, which certification shall state that such financial statements meet
the requirements set forth in the first sentence of this paragraph.
 
Section 9.2                      Securitization Indemnification.
 
(a)           Borrower understands that information provided to Lender by
Borrower and its agents, counsel and representatives, including information
contained in the Certification of Borrower may be included in disclosure
documents in connection with the Securitization, including an offering circular,
a prospectus, prospectus supplement, private placement memorandum or other
offering document (each, a “Disclosure Document”) and may also be included in
filings with the Securities and Exchange Commission pursuant to the Securities
Act of 1933, as amended (the “Securities Act”), or the Securities and Exchange
Act of 1934, as amended (the “Exchange Act”), and may be made available to
investors or prospective investors in the Securities, the Rating Agencies, and
service providers relating to the Securitization.
 
(b)           Borrower shall provide in connection with each of (i) a
preliminary and a final private placement memorandum or (ii) a preliminary and
final prospectus or prospectus supplement, as applicable, an agreement (A)
certifying that Borrower has examined such Disclosure Documents specified by
Lender and that each such Disclosure Document, as it relates to Borrower,
Guarantor, Borrower’s Affiliates, the Property, Manager (if applicable) and all
other aspects of the Loan (but not aspects of any other loans which may be
included in any such Secondary Market Transactions or Securitization) (as
applicable, “Borrower Specific Portion of a Disclosure Document”), 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 light of the circumstances
under which they were made, not misleading, (B) indemnifying Lender (and for
purposes of this Section 9.2, Lender hereunder shall include its officers and
directors), the Affiliate of Lender (“DB”) that has filed the registration
statement relating to the Securitization (the “Registration Statement”), each of
its directors, each of its officers who have signed the Registration Statement
and each Person that controls the Affiliate within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (collectively, the “Lender
Group”), DB, and any other placement agent or underwriter with respect to the
Securitization, each of their respective directors and each Person who controls
DB or any other placement agent or underwriter within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act (collectively, the
“Underwriter Group”) for any losses, claims, damages or liabilities, subject to
any limitations set forth below (collectively, the “Liabilities”), to which
Lender, the Lender Group or the Underwriter Group may become subject insofar as
the Liabilities arise out of, or are based upon, any untrue statement of any
material fact contained in  any Borrower Specific Portion of a Disclosure
Document or arise out of, or are based upon, the omission to state therein a
material fact required to be stated in any Borrower Specific Portion of a
Disclosure Document or necessary in order to make the statements in any Borrower
Specific Portion of a Disclosure Document, in light of the circumstances under
which they were made, not misleading, and (C) agreeing to reimburse Lender, the
Lender Group and/or the Underwriter Group for any legal or other expenses
reasonably incurred by Lender, the Lender Group and/or 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 Liability arises out of, or is based upon, any
actual 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 Borrower Specific Portion of a Disclosure
Document or in connection with the underwriting or closing of the Loan,
including financial statements of Borrower, operating statements and rental
summary with respect to the Ground Lease.  This indemnity agreement will be in
addition to any liability which Borrower may otherwise have.
 
 
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(c)           In connection with any Exchange Act Filing, Borrower shall (i)
indemnify Lender, the Lender Group and the Underwriter Group for Liabilities to
which Lender, the Lender Group and/or the Underwriter Group may become subject
insofar as such Liabilities arise out of, or are based upon, the actual omission
to state in the Borrower Specific Portion of a Disclosure Document a material
fact required to be stated in the Borrower Specific Portion of a Disclosure
Document in order to make the statements in the Borrower Specific Portion of a
Disclosure Document, in light of the circumstances under which they were made,
not misleading, and (ii) reimburse Lender, the Lender Group and/or the
Underwriter Group for any legal or other expenses reasonably incurred by Lender,
the Lender Group and/or the Underwriter Group in connection with defending or
investigating the actual 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 such
failure to notify causes prejudice to the indemnifying party.  In the event that
any action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, jointly with any other indemnifying party, to participate therein and,
to the extent that it (or they) may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party.  After notice from the indemnifying party to such
indemnified party under this Section 9.2, such indemnified party shall pay for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, if the defendants in any such action include
both the indemnified party and the 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 the indemnifying party.
 
 
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(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 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 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) DB’s and Borrower’s relative knowledge and access to information
concerning the matter with respect to which the claim was asserted; (ii) the
opportunity to correct and prevent any statement or omission; and (iii) any
other equitable considerations appropriate in the circumstances.  Lender and
Borrower hereby agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation.
 
(f)           The liabilities and obligations of both Borrower and Lender under
this Section 9.2 shall survive the termination of this Agreement and the
satisfaction and discharge of the Debt.
 
 
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Section 9.3                      Intentionally Blank.
 
Section 9.4                      Severance Documentation.
 
Lender, without in any way limiting Lender’s other rights hereunder, in its sole
and absolute discretion, shall have the right, at any time (whether prior to or
after any sale, participation or Securitization of all or any portion of the
Loan), to require the Borrower to execute and deliver “component” notes and/or
modify the Loan in order to create one or more senior and subordinate notes
(i.e., an A/B or A/B/C structure) and/or one or more additional components of
the Note or Notes (including the implementation of a mezzanine loan structure),
reduce the number of components of the Note or Notes, revise the interest rate
for each component, reallocate the principal balances of the Notes and/or the
components, increase or decrease the monthly debt service payments for each
component or eliminate the component structure and/or the multiple note
structure of the Loan (including the elimination of the related allocations of
principal and interest payments), provided that (i) the Outstanding Principal
Balance of all components immediately after the effective date of such
modification equals the Outstanding Principal Balance immediately prior to such
modification, (ii) the weighted average of the interest rates for all components
immediately after the effective date of such modification equals the interest
rate of the original Note immediately prior to such modification, and (iii) such
transaction does not have material and adverse effect on Borrower, Sole Member
or Guarantor (it being understood and agreed, however, that the actual
structuring of such transaction [e.g., participation or Securitization of all or
a portion of the Loan, the creation of an A/B or A/B/C structure, the creation
of a mezzanine structure, etc.], in and of itself, shall in no way be deemed to
have a material and adverse effect on any such Person).  At Lender’s election,
each note comprising the Loan may be subject to one or more
Securitizations.  Lender shall have the right to modify the Note and/or Notes
and any components in accordance with this Section 9.4 and, provided that such
modification shall comply with the terms of this Section 9.4, it shall become
immediately effective.  If requested by Lender, Borrower shall promptly execute
an amendment to the Loan Documents to evidence any such modification.  Subject
to the limitations described above, Borrower shall (1) cooperate with all
reasonable requests of Lender in order to establish the “component” notes, and
(2) execute and deliver such documents as shall be required by Lender and any
Rating Agency in connection therewith, all in form and substance satisfactory to
Lender and satisfactory to any Rating Agency, including, without limitation, the
severance of security documents if requested.  In the event Borrower fails to
execute and deliver such documents to Lender within ten (10) Business Days
following such request by Lender, Borrower hereby absolutely and irrevocably
appoints Lender as its true and lawful attorney, coupled with an interest, in
its name and stead to make and execute all documents necessary or desirable to
effect such transactions, Borrower hereby ratifying all that such attorney shall
do by virtue thereof.  It shall be an Event of Default under this Agreement, the
Note, the Security Instrument and the other Loan Documents if Borrower fails to
comply with any of the terms, covenants or conditions of this Section 9.4 after
expiration of ten (10) Business Days after notice thereof.
 
Section 9.5                      Borrower’s Monetary Obligations under this
Article 9.
 
Notwithstanding anything to the contrary contained in Article 9, neither
Borrower nor Guarantor shall be required to incur any material cost or expense
in connection with a Secondary Market Transaction referenced in Section 9.1.  In
addition, neither Borrower nor Guarantor shall be required to incur any material
cost or expense in connection with any severance transaction referenced in
Section 9.4 above (a “Severance Transaction”) over and above the aggregate
amount of $10,000 (it being understood and agreed that Borrower shall be
responsible for out-of-pocket costs and expenses up to such $10,000
threshold).  Notwithstanding the foregoing, in connection either a Secondary
Market Transaction or a Severance Transaction, as applicable, Borrower and
Guarantor shall remain solely responsible for the payment of their own legal
fees.
 
 
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ARTICLE 10
 
DEFAULTS
 
Section 10.1                      Events of Default.
 
(a)           Each of the following events shall constitute an event of default
hereunder (an “Event of Default”):
 
(i)                 if (A) the Obligations are not paid in full on the Maturity
Date, (B) any regularly scheduled monthly payment of interest, and, if
applicable, principal due under the Note is not paid in full within five (5)
calendar days following the applicable Monthly Payment Date, (C) any prepayment
of principal required under this Agreement or under the Note that is not paid
when and if due,  (D)  any Prepayment Fee is not paid when and if due, (E) any
Liquidated Damages Amount is not paid when and if due, or (F) any deposit to the
Reserve Funds is not made within five (5) calendar days following the required
deposit date therefor;
 
(ii)                 if any other amount payable pursuant to this Agreement, the
Note or any other Loan Document (other than as set forth in the foregoing clause
(i)) is not paid in full when due and payable in accordance with the provisions
of the applicable Loan Document, with such failure continuing for ten (10)
Business Days after Lender delivers written notice thereof to Borrower;
 
(iii)                 if any of the Taxes or Other Charges are not paid when
due;
 
(iv)                 if the Policies or Ground Tenant’s Insurance Policies, as
applicable, are not (A) delivered to Lender and (B) kept in full force and
effect, each in accordance with the terms and conditions hereof and subject to
the terms of Section 5.1;
 
(v)                 if Borrower breaches or permits or suffers a breach of the
provisions of Section 4.2.1;
 
(vi)                 if any certification, representation or warranty made by
Borrower or Guarantor herein or in any other Loan Document, or in any report,
certificate, financial statement or other instrument, agreement or document
furnished to Lender, including but not limited to the Certification of Borrower,
shall have been materially false or materially misleading as of the date such
representation or warranty was made; provided, however, that Borrower shall have
ten (10) days following Borrower’s receipt of written notice from Lender to cure
same so long as Lender determines, in Lender’s sole but good faith discretion,
that (A) such representation or warranty was not intentionally false or
misleading when made, and (B) such default will not have a materially adverse
effect on the Loan or Lender’s collateral under the Loan Documents;
 
 
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(vii)                 if Borrower, Sole Member or Guarantor shall make an
assignment for the benefit of creditors;
 
(viii)                 if a receiver, liquidator or trustee shall be appointed
for Borrower, Sole Member or Guarantor or if Borrower, Sole Member 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, Sole Member or Guarantor, or if any proceeding for the
dissolution or liquidation of Borrower, Sole Member or Guarantor shall be
instituted; provided, however, if such appointment, adjudication, petition or
proceeding was involuntary and not consented to by Borrower, Sole Member,
Guarantor or any Affiliate of the foregoing, upon the same not being discharged,
stayed or dismissed within sixty (60) days following its filing;
 
(ix)                 if Borrower attempts to assign its rights under this
Agreement or any of the other Loan Documents or any interest herein or therein
in contravention of the Loan Documents;
 
(x)                 if any of the assumptions contained in the Insolvency
Opinion, or in any other non-consolidation opinion delivered to Lender in
connection with the Loan, or in any other non-consolidation opinion delivered
subsequent to the closing of the Loan, is or shall become untrue in any material
respect; provided, however, that Borrower shall have ten (10) days following
Borrower’s receipt of written notice from Lender to cure same so long as Lender
determines, in Lender’s sole but good faith discretion, that (A) such default
was not intentional or material, and (B) such default will not have a materially
adverse effect on the Loan or Lender’s collateral under the Loan Documents if
such cure period is provided;
 
(xi)                 if Borrower breaches any representation, warranty or
covenant contained in Section 3.1.24 hereof; provided, however, that Borrower
shall have ten (10) days following Borrower’s receipt of written notice from
Lender to cure same so long as Lender determines, in Lender’s sole but good
faith discretion, that (A) such default was not intentional or material, and (B)
such default will not have a materially adverse effect on the Loan or Lender’s
collateral under the Loan Documents if such cure period is provided;
 
(xii)                 if Borrower shall be in default beyond any applicable
notice, grace and/or cure period under any mortgage or security agreement
covering any part of the Property  whether it be superior, pari passu or junior
in Lien to the Security Instrument;
 
 
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(xiii)                 subject to Borrower’s right to contest as provided in
Section 3.6 of the Security Instrument, if Borrower creates, incurs, assumes or
affirmatively permits the Property to become subject to any mechanic’s or
materialman’s liens or other Liens, except (A) a Lien for Taxes or Other Charges
not then due and payable (or not then delinquent in the case of property Taxes),
(B) the Permitted Encumbrances, and/or (C) as otherwise disclosed in or
permitted by this Agreement or any other Loan Document;
 
(xiv)                 Intentionally Blank;
 
(xv)                 except as expressly permitted or required in this
Agreement, any other Loan Document, the Ground Lease, or any Ground Tenant
Sublease, Borrower causes or affirmatively permits the alteration, improvement,
demolition or removal of any of the Improvements without the prior consent of
Lender;
 
(xvi)                 If and only to the extent that a Manager is managing the
Property pursuant to a Management Agreement after the date hereof, the following
shall apply (it being understood and agreed, however, that Borrower is
self-managing the Property as of the date of this Agreement and that Borrower
shall not hire/retain a Manager or execute a Management Agreement without the
prior written consent of Lender, which consent may be granted or withheld in
Lender’s reasonable discretion): if, without Lender’s prior written consent, (i)
the Management Agreement is terminated due to a default by Borrower, (ii) there
is a material modification to the Management Agreement, or (iii) if there shall
otherwise be a material default by Borrower under the Management Agreement;
 
(xvii)                 if Borrower defaults under the Ground Lease (which
default continues beyond any applicable notice and cure period), and such
default causes Ground Tenant to cease to continuously operate the Ground Tenant
Improvements as a retail and office property (other than temporary cessation in
connection with any repair or renovation thereof undertaken with the consent of
Lender);
 
(xviii)                 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 (xvi) above, and such Default shall continue for ten (10)
days after written notice to Borrower from Lender, in the case of any such
Default which can be cured by the payment of a sum of money, or for thirty (30)
days after written notice to Borrower from Lender in the case of any other such
Default; provided, however, that if such non-monetary Default is susceptible of
cure but cannot reasonably be cured within such 30-day period, and provided
further that Borrower shall have commenced to cure such Default within such
30-day period shall and thereafter diligently and expeditiously proceed to cure
the same, such 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 twenty (120) days;
 
 
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(xix)                 if Borrower or any Person owning a direct or indirect
ownership interest in Borrower shall be convicted of a Patriot Act Offense by a
court of competent jurisdiction;
 
(xx)                 if Borrower materially breaches any covenant contained
Section 4.1.7 hereof;
 
(xxi)                 except as expressly permitted pursuant to the Loan
Documents, the Ground Lease or any Ground Tenant Sublease, if Borrower grants
any easement, covenant or restriction (other than the Permitted Encumbrances)
over the Property;
 
(xxii)                 if Borrower breaches the negative covenant contained in
Section 4.2.16 hereof or acts or neglects to act in such a manner as to be
considered a default under any of the Operating Agreements, subject to any
applicable notice and cure period thereunder;
 
(xxiii)                 if Borrower breaches its representations, warranties
and/or covenants contained in Section 3.1.41 or Section 4.1.16 hereof with
respect to the Ground Lease, subject to any applicable notice and cure period
thereunder; or
 
(xxiv)                 Intentionally Blank;
 
(xxv)                 Intentionally Blank;
 
(xxvi)                 if there shall be a default under any of the other Loan
Documents beyond any applicable cure periods contained in such Loan Documents,
whether as to Borrower, Guarantor 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 Obligations or to permit
Lender to accelerate the maturity of all or any portion of the Obligations.
 
(b)           Upon the occurrence of an Event of Default (other than an Event of
Default described in clauses (vii), (viii) or (ix) above) and at any time
thereafter, Lender may, in addition to any other rights or remedies available to
it pursuant to this Agreement and the other Loan Documents or at law or in
equity, take such action, without notice or demand, that Lender deems advisable
to protect and enforce its rights against Borrower and in and to the Property,
including declaring the Obligations to be immediately due and payable, and
Lender may enforce or avail itself of any or all rights or remedies provided in
the Loan Documents against Borrower and the Property, including all rights or
remedies available at law or in equity; and upon any Event of Default described
in clauses (vii), (viii) or (ix) above, the 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.  Notwithstanding anything to the
contrary, the rights contained in this Section 10.4 are subject to the
limitations of Section 11.22 hereof and/or any other limitations expressly
contained in the Loan Documents.
 
 
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Section 10.2                      Remedies.  Except as otherwise provided in
this Agreement (including Section 11.22 hereof) and/or any other Loan Document,
Lender shall have the following 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
Obligations shall be declared due and payable, and whether or not Lender shall
have commenced any foreclosure proceeding or other action for the enforcement of
its rights and remedies under any of the Loan Documents with respect to the
Property.  Any such actions taken by Lender shall be cumulative and concurrent
and may be pursued independently, singly, successively, together or otherwise,
at such time and in such order as Lender may determine in its sole discretion,
to the fullest extent permitted by law, without impairing or otherwise affecting
the other rights and remedies of Lender permitted by law, equity or contract or
as set forth herein or in the other Loan Documents.  Without limiting the
generality of the foregoing, to the fullest extent permitted by law, if an Event
of Default is continuing (i) Lender shall not be subject to any “one action” or
“election of remedies” law or rule, and (ii) all Liens and other rights,
remedies or privileges provided to Lender shall remain in full force and effect
until Lender has exhausted all of its remedies against the Property and any
direct or indirect interest therein, and each of the Security Instrument and any
other documents or instruments evidencing and/or securing the Loan has been
foreclosed, sold and/or otherwise realized upon in satisfaction of the
Obligations or the Obligations have been paid in full.
 
(b)           Lender shall have the right from time to time to partially
foreclose the Security Instrument in any manner and for any amounts secured by
the Security Instrument then due and payable as determined by Lender in its sole
discretion, including the following circumstances: (i) in the case of an Event
of Default by Borrower 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, 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 the sums secured
by the Security Instrument and not previously recovered.
 
(c)           Lender shall have the right from time to time to sever the Note
and the other Loan Documents into one or more separate notes, mortgages and
other security documents (the “Severed Loan Documents”) in such denominations as
Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder.  Borrower shall execute
and deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order to
effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender.  Borrower hereby absolutely and
irrevocably appoints Lender as its true and lawful attorney, coupled with an
interest, in its name and stead to make and execute all documents necessary or
desirable to effect the aforesaid severance, Borrower ratifying all that its
said attorney shall do by virtue thereof; provided, however, Lender shall not
make or execute any such documents under such power until three (3) days after
notice has been given to Borrower by Lender of Lender’s intent to exercise its
rights under such power.
 
 
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(d)           Any amounts recovered from the Property or any other collateral
for the Loan after an Event of Default may be applied by Lender toward the
payment of any interest and/or principal of the Loan and/or any other amounts
due under the Loan Documents, in such order, priority and proportions as Lender
in its sole discretion shall determine.
 
Section 10.3                      Lender’s Right to Perform.
 
In the case of an Event of Default by Borrower resulting from the failure of
Borrower to perform any covenant or obligation contained herein, and provided
that such failure shall continue for a period of five (5) Business Days after
Borrower’s receipt of written notice thereof from Lender, without in any way
limiting Lender’s right to exercise any of its rights, powers or remedies as
provided hereunder, or under any of the other Loan Documents, Lender may, but
shall have no obligation to, perform, or cause the performance of, such covenant
or obligation, and all costs, expenses, liabilities, penalties and fines of
Lender incurred or paid in connection therewith shall be payable by Borrower to
Lender upon demand and if not paid shall be added to the Obligations (and to the
extent permitted under applicable laws, secured by the Security Instrument and
the other Loan Documents) and shall bear interest thereafter at the Default
Rate.  Notwithstanding anything to the contrary, the rights contained in this
Section 10.3 are subject to the limitations of Section 11.22 hereof and/or any
other limitations expressly contained in the Loan Documents.
 
Section 10.4                      Remedies Cumulative.
 
The rights, powers and remedies of Lender under this Agreement shall be
cumulative and not exclusive of any other right, power or remedy which Lender
may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise.  Lender’s rights,
powers and remedies may be pursued singly, concurrently or otherwise, at such
time and in such order as Lender may determine in Lender’s sole discretion.  No
delay or omission to exercise any remedy, right or power accruing upon an Event
of Default shall impair any such remedy, right or power or shall be construed as
a waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient.  A waiver of one Default or
Event of Default with respect to Borrower shall not be construed to be a waiver
of any subsequent Default or Event of Default by Borrower or to impair any
remedy, right or power consequent thereon.  Notwithstanding anything to the
contrary, the rights contained in this Section 10.4 are subject to the
limitations of Section 11.22 hereof and/or any other limitations expressly
contained in the Loan Documents.
 
ARTICLE 11
 
MISCELLANEOUS
 
Section 11.1                      Survival; Successors and Assigns.
 
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 until the Obligations have
been indefeasibly paid, 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.
 
 
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Section 11.2                      Lender’s Discretion.
 
Whenever pursuant to this Agreement or any of the other Loan Documents Lender
exercises any right given to it to consent to, approve or disapprove any matter,
or any arrangement or term is to be satisfactory to Lender, the decision of
Lender to consent to, approve or disapprove such matter or to decide whether
arrangements or terms are satisfactory or not satisfactory shall (except as is
otherwise specifically herein or therein provided) be in the sole discretion of
Lender.  Prior to a Securitization, whenever pursuant to this Agreement the
Rating Agencies are given any right to approve or disapprove any matter, or any
arrangement or term is to be satisfactory to the Rating Agencies, the decision
of Lender to approve or disapprove such matter or to decide whether arrangements
or terms are satisfactory or not satisfactory, based upon Lender’s determination
of Rating Agency criteria, shall be substituted therefor.
 
Section 11.3                      Governing Law.
 
(a)           THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE
BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF
THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK,
WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND
TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED
STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION,
PERFECTION, PRIORITY, VALIDITY AND ENFORCEMENT OF THE LIEN AND SECURITY INTEREST
CREATED PURSUANT TO THE SECURITY INSTRUMENT AND ASSIGNMENT OF LEASE SHALL BE
GOVERNED BY, AND CONSTRUED ACCORDING TO, THE LAW OF THE STATE, COMMONWEALTH OR
DISTRICT, AS APPLICABLE, IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD
THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, COMMONWEALTH OR
DISTRICT, AS APPLICABLE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE
CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE
OBLIGATIONS ARISING HEREUNDER OR THEREUNDER.  EXCEPT AS OTHERWISE PROVIDED IN
THIS AGREEMENT, TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY
OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND
THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.
 
 
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(b)           ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER
ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER’S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW
YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY SUCH COURT IN
ANY SUIT, ACTION OR PROCEEDING.  BORROWER DOES HEREBY DESIGNATE AND APPOINT:
 
NATIONAL REGISTERED AGENTS, INC.
875 AVENUE OF THE AMERICAS, SUITE 501
NEW YORK, NY 10001
 
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND BORROWER AGREES THAT
SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID
SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH
SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK.  BORROWER (I) SHALL GIVE
PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT
AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF
PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED
AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT
LEAVING A SUCCESSOR.
 
Section 11.4                      Modification, Waiver in Writing.
 
No modification, amendment, extension, discharge, termination or waiver of any
provision of this Agreement or of any other Loan Document, nor consent to any
departure by Borrower or Lender therefrom, shall in any event be effective
unless the same shall be in a writing signed by the party or parties 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 or
Lender, shall entitle Borrower or Lender to any other or future notice or demand
in the same, similar or other circumstances.
 
 
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Section 11.5                      Delay Not a Waiver.
 
Neither any failure nor any delay on the part of Lender in insisting upon strict
performance of any term, condition, covenant or agreement, or exercising any
right, power, remedy or privilege hereunder or under any other Loan Document,
shall operate as or constitute a waiver thereof, nor shall a single or partial
exercise thereof preclude any other future exercise, or the exercise of any
other right, power, remedy or privilege.  In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under
this Agreement or any other Loan Document, Lender shall not be deemed to have
waived any right either to require prompt payment when due of all other amounts
due under this Agreement or the other Loan Documents, or to declare a default
for failure to effect prompt payment of any such other amount.  Lender shall
have the right to waive or reduce any time periods that Lender is entitled to
under the Loan Documents in its sole and absolute discretion.
 
Section 11.6                      Notices.
 
All notices, demands, requests, consents, approvals or other communications (any
of the foregoing, a “Notice”) required, permitted or desired to be given
hereunder shall be in writing and shall be sent by telefax (with answer back
acknowledged) or by registered or certified mail, postage prepaid, return
receipt requested, or delivered by hand or by reputable overnight courier,
addressed to the party to be so notified at its address hereinafter set forth,
or to such other address as such party may hereafter specify in accordance with
the provisions of this Section 11.6.  Any Notice shall be deemed to have been
received: (a) three (3) days after the date such Notice is mailed, (b) on the
date of sending by telefax if sent during business hours on a Business Day
(otherwise on the next Business Day), (c) on the date of delivery by hand if
delivered during business hours on a Business Day (otherwise on the next
Business Day), and (d) on the next Business Day if sent by an overnight
commercial courier, in each case addressed to the parties as follows:
 
 
If to Lender:
German American Capital Corporation

 
60 Wall Street, 10th Floor

 
New York, NY 10005

 
Attention:  Kevin Pivnick

 
Facsimile No.:  (212) 797-4496

 
 
with a copy to:
Gibson, Dunn & Crutcher LLP

 
333 South Grand Avenue

 
Los Angeles, CA 90071

 
Attention:  Mark Osher

 
Facsimile No.:  (213) 229-6694

 
 
with a copy to:
KeyBank Real Estate Capital

Loan Servicing & Conversions
911 Main Street, Suite 1500
Kansas City, MO 64105
Attention:  Diane Haislip, Senior Vice President
Facsimile No.: (216) 357-6543
 
 
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If to Borrower:
SDQ Fee, LLC

 
c/o Glimcher Properties Limited Partnership

 
180 East Broad Street, 21st Floor

 
Columbus, OH 43215

 
Attention:  General Counsel

 
Facsimile No.:  614-621-8863

 
 
with a copy to:
SDQ Fee, LLC

 
c/o Glimcher Properties Limited Partnership

 
180 East Broad Street, 21st Floor

 
Columbus, OH 43215

 
Attention:  Treasurer

 
Facsimile No.:  614-621-9321

 
Any party may change the address to which any such Notice is to be delivered by
furnishing ten (10) days written notice of such change to the other parties in
accordance with the provisions of this Section 11.6.  Notices shall be deemed to
have been given on the date as set forth above, even if there is an inability to
actually deliver any such Notice because of a changed address of which no Notice
was given, or there is a rejection or refusal to accept any Notice offered for
delivery.  Notice for any party may be given by its respective
counsel.  Additionally, Notice from Lender may also be given by Servicer and
Lender hereby acknowledges and agrees that Borrower shall be entitled to rely on
any Notice given by Servicer as if it had been sent by Lender.
 
Section 11.7                      Trial by Jury.
 
BORROWER AND LENDER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE
EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN
DOCUMENTS OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY BORROWER AND LENDER AND IS INTENDED TO ENCOMPASS INDIVIDUALLY
EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE.  EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.
 
 
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Section 11.8                      Headings.
 
The Article and/or Section headings and the Table of Contents in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
 
Section 11.9                      Severability.
 
Wherever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
 
Section 11.10                    Preferences.
 
Except as otherwise provided in this Agreement and/or any other Loan Document,
Lender shall have the continuing and exclusive right to apply any and all
payments by Borrower to any portion of the Obligations of Borrower
hereunder.  To the extent Borrower makes a payment or payments to Lender, which
payment or proceeds or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then, to the extent of such payment or
proceeds received, the Obligations hereunder or part thereof intended to be
satisfied shall be revived and continue in full force and effect, as if such
payment or proceeds had not been received by Lender.
 
Section 11.11                     Waiver of Notice.
 
Borrower shall not be entitled to any notices of any nature whatsoever from
Lender except with respect to matters for which this Agreement or the other Loan
Documents specifically and expressly provide for the giving of notice by Lender
to Borrower and except with respect to matters for which Borrower is not,
pursuant to applicable Legal Requirements, permitted to waive the giving of
notice.  Borrower hereby expressly waives the right to receive any notice from
Lender with respect to any matter for which this Agreement or the other Loan
Documents do not specifically and expressly provide for the giving of notice by
Lender to Borrower.
 
Section 11.12                     Remedies of Borrower.
 
In the event that a claim or adjudication is made that Lender or its agents have
acted unreasonably or unreasonably delayed acting in any case where, by law or
under this Agreement or the other Loan Documents, Lender or such agent, as the
case may be, has an obligation to act reasonably or promptly, neither Lender nor
its agents shall be liable for any monetary damages (including, without
limitation, special, consequential and/or punitive damages) and Borrower’s sole
remedy shall be limited to commencing an action seeking injunctive relief or
declaratory judgment.  Any action or proceeding to determine whether Lender has
acted reasonably shall be determined by an action seeking declaratory judgment.
 
 
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Section 11.13                      Expenses; Indemnity.
 
(a)           Borrower shall pay or, if Borrower fails to pay, reimburse Lender
upon receipt of notice from Lender, for all out-of-pocket costs and expenses
(including reasonable attorneys’ fees and disbursements) incurred by Lender in
connection with (i) Borrower’s ongoing performance of and compliance with
Borrower’s agreements and covenants contained in this Agreement and the other
Loan Documents on its part to be performed or complied with after the Closing
Date, including confirming compliance with environmental and insurance
requirements; (ii) Intentionally Blank; (iii) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or
other modifications to this Agreement and the other Loan Documents and any other
documents or matters requested by Borrower; (iv) the filing and recording fees
and expenses, title insurance and reasonable fees and expenses of counsel for
providing to Lender all required legal opinions, and other similar expenses
incurred in creating and perfecting the Liens in favor of Lender pursuant to
this Agreement and the other Loan Documents; (v) enforcing or preserving any
rights, in response to third party claims or the prosecuting or defending of any
action or proceeding or other litigation, in each case against, under or
affecting Borrower, this Agreement, the other Loan Documents, the Property or
any other security given for the Loan; (vi) enforcing any Obligations of or
collecting any payments due from Borrower under this Agreement, the other Loan
Documents or with respect to the Property or in connection with any refinancing
or restructuring of the credit arrangements provided under this Agreement in the
nature of a “work-out” or of any insolvency or bankruptcy proceedings and (vii)
Borrower's failure to comply with Borrower’s obligations under Section 9.1
hereof (but subject to (A) the qualification contained in Section 9.1 that
Borrower’s assistance will be provided by Borrower on commercially reasonable
terms and (B) the cap on costs and expenses to be incurred by Borrower under
Section 9.1 and Section 9.4 as more particularly described in Section 9.5
hereof); 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 active
gross negligence, illegal acts, fraud or willful misconduct of Lender.  Any
costs due and payable to Lender may be paid, at Lender’s election in its sole
discretion, from any amounts in the Deposit Account.
 
(b)           Borrower shall indemnify, defend and hold harmless Lender for,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including the reasonable fees and
disbursements of counsel for 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 arising out of or relating to (i) any breach
by Borrower of the Loan Documents, (ii) the use or intended use of the proceeds
of the Loan, (iii) any information provided by Borrower or its Affiliates, or
contained in any documentation approved in writing by Borrower or its
Affiliates; (iv) ownership of the Security Instrument, the Property or any
interest therein, or receipt of any Rents; (v) any accident, injury to or death
of persons or loss of or damage to property occurring in, on or about the
Property or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (vi) any use, nonuse or condition in, on or
about the Property or on adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (vii) performance of any labor or
services or the furnishing of any materials or other property in respect of the
Property; (viii) any failure of the Property to comply with any Legal
Requirements; (ix) any claim by brokers, finders or similar persons claiming to
be entitled to a commission in connection with any Lease (including the Ground
Lease) or other transaction involving the Property or any part thereof, or any
liability asserted against Lender with respect thereto; and (x) the claims of
any lessee of any portion of the Property or any Person acting through or under
any lessee or otherwise arising under or as a consequence of any Lease
(including the Ground Lease) (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.
 
 
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(c)           The provisions contained in this Section 11.13 are subject to the
exculpation provisions contained in Section 11.22 of this Agreement.
 
Section 11.14                                Schedules Incorporated.
 
The Schedules annexed hereto are hereby incorporated herein as a part of this
Agreement with the same effect as if set forth in the body hereof.
 
Section 11.15                                Offsets, Counterclaims and
Defenses.
 
Any assignee of Lender’s interest in and to this Agreement and the other Loan
Documents shall take the same free and clear of all offsets, counterclaims or
defenses which are unrelated to such documents which Borrower may otherwise have
against any assignor of such documents, and no such unrelated counterclaim or
defense shall be interposed or asserted by Borrower in any action or proceeding
brought by any such assignee upon such documents and any such right to interpose
or assert any such unrelated offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by Borrower.
 
Section 11.16                                No Joint Venture or Partnership; No
Third Party Beneficiaries.
 
(a)           Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender.  Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common or joint tenancy relationship between Borrower
and Lender nor to grant Lender any interest in the Property other than that of
mortgagee, beneficiary or lender.
 
(b)           This Agreement and the other Loan Documents are solely for the
benefit of Lender and nothing contained in this Agreement or the other Loan
Documents shall be deemed to confer upon anyone other than Lender any right to
insist upon or to enforce the performance or observance of any of the
Obligations contained herein or therein.  All conditions to the obligations of
Lender to make the Loan (and disburse Reserve Funds) 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 (or make
any disbursement of Reserve Funds) 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.
 
 
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Section 11.17                                Publicity.
 
All news releases, publicity or advertising by Borrower or its Affiliates
through any media intended to reach the general public which refers to the Loan
Documents or the financing evidenced by the Loan Documents, to Lender, DB or any
of their affiliates shall be subject to the prior written approval of Lender, to
be granted or withheld in Lender’s sole but good faith discretion.
 
Section 11.18                                Waiver of Marshalling of Assets.
 
To the fullest extent permitted by law, Borrower, for itself and its successors
and assigns, waives all rights to a marshalling of the assets of Borrower,
Borrower’s members or partners, as applicable, and others with interests in
Borrower, and of the Property, and shall not assert any right under any laws
pertaining to the marshalling of assets, the 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
Obligations without any prior or different resort for collection, or of the
right of Lender to the payment of the Obligations out of the net proceeds of the
Property in preference to every other claimant whatsoever.
 
Section 11.19                                Waiver of
Offsets/Defenses/Counterclaims.
 
Borrower hereby waives the right to assert a counterclaim, other than a
compulsory counterclaim, in any action or proceeding brought against it by
Lender or its agents or otherwise to offset any obligations to make the payments
required by the Loan Documents.  No failure by Lender to perform any of its
obligations hereunder shall be a valid defense to, or result in any offset
against, any payments which Borrower is obligated to make under any of the Loan
Documents.
 
Section 11.20                                Conflict; Construction of
Documents; Reliance.
 
In the event of any conflict between the provisions of this Agreement and any of
the other Loan Documents, the provisions of this Agreement shall control.  The
parties hereto acknowledge that they were represented by competent counsel in
connection with the negotiation, drafting and execution of the Loan Documents
and that such Loan Documents shall not be subject to the principle of construing
their meaning against the party which drafted same.  Borrower acknowledges that,
with respect to the Loan, Borrower shall rely solely on its own judgment and
advisors in entering into the Loan, without relying in any manner on any
statements, representations or recommendations of Lender or any parent,
subsidiary or affiliate of Lender.  Lender shall not be subject to any
limitation whatsoever in the exercise of any rights or remedies available to it
under any of the Loan Documents or any other agreements or instruments which
govern the Loan by virtue of the ownership by it or any parent, subsidiary or
affiliate of Lender of any equity interest any of them may acquire in Borrower,
and Borrower hereby irrevocably waives the right to raise any defense or take
any action on the basis of the foregoing with respect to Lender’s exercise of
any such rights or remedies.  Borrower acknowledges that Lender engages in the
business of real estate financings and other real estate transactions and
investments which may be viewed as adverse to or competitive with the business
of Borrower or its Affiliates.
 
 
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Section 11.21                                Brokers and Financial Advisors.
 
Borrower hereby represents that, except for George Smith Partners (“Broker”),
neither it nor any of its Affiliates has dealt with any financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with
the transactions contemplated by this Agreement.  Borrower will pay Broker a
commission pursuant to a separate agreement.  Borrower shall indemnify, defend
and hold Lender harmless for, from and against any and all claims, liabilities,
costs and expenses of any kind (including Lender’s attorneys’ fees and expenses)
in any way relating to or arising from a claim by any Person (including Broker)
that such Person acted on behalf of Borrower or Lender in connection with the
transactions contemplated herein.  The provisions of this Section 11.21 shall
survive the expiration and termination of this Agreement and the payment of the
Obligations.
 
Section 11.22                                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 in the Property 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 and in any other collateral given to Lender, and Lender, by
accepting the Note, this Agreement, the Security Instrument and the other Loan
Documents, shall not sue for, seek or demand any deficiency judgment against
Borrower in any such action or proceeding under or by reason of or under or in
connection with the Note, this Agreement, the Security Instrument or the other
Loan Documents.  Except for the limitation on Lender’s remedies as provided
herein, the provisions of this Section 11.22 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 any of the Loan
Documents or any guaranty made in connection with the Loan; (d) impair the right
of Lender to obtain the appointment of a receiver; (e) impair the enforcement of
the Assignment of Leases; (f) constitute a prohibition against Lender to seek a
deficiency judgment against Borrower in order to fully realize the security
granted by the Mortgage or to commence any other appropriate action or
proceeding in order for Lender to exercise its remedies against the Property; or
(g) constitute a waiver of the right of Lender to enforce the liability and
obligation of Borrower, by money judgment or otherwise, to the extent of any
loss, damage, cost, expense, liability, claim or other obligation incurred by
Lender (including attorneys’ fees and costs reasonably incurred) arising out of
or in connection with the following (all such liability and obligation of
Borrower for any or all of the following being referred to herein as “Borrower’s
Recourse Liabilities”):
 
 
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(i)                 fraud, willful misconduct or material misrepresentation by
Borrower, Guarantor or any Affiliate of Borrower or Guarantor in connection with
the Loan, including by reason of any claim under the Racketeer Influenced and
Corrupt Organizations Act (“RICO”);
 
(ii)                 the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity or in any other Loan
Document concerning environmental laws, hazardous substances and/or asbestos and
any indemnification of Lender with respect thereto in either document;
 
(iii)                 wrongful removal or destruction of any portion of the
Property or damage to the Property caused by willful misconduct or gross
negligence of Borrower, Guarantor or an Affiliate of Borrower or Guarantor;
 
(iv)                 any physical waste of the Property caused by Borrower,
Guarantor or any Affiliate of Borrower or Guarantor;
 
(v)                 the forfeiture by Borrower of the Property, or any portion
thereof, because of the conduct or purported conduct of criminal activity by
Borrower, Guarantor or any Affiliate of Borrower or Guarantor or Guarantor;
 
(vi)                 the misapplication or conversion by Borrower, Guarantor or
any Affiliate of Borrower or Guarantor of (A) any Insurance Proceeds paid by
reason of any loss, damage or destruction to the Property, (B) any Awards or
other amounts received in connection with the Condemnation of all or a portion
of the Property, or (C) any Gross Revenues (including Rents, security deposits,
advance deposits or any other deposits and Lease Termination Payments);
 
(vii)                 failure of Borrower to pay charges for labor or materials
or other charges contracted for by Borrower that creates Liens (other than the
Permitted Encumbrances) on any portion of the Property;
 
(viii)                any security deposits, advance deposits or any other
deposits collected with respect to the Property which are not delivered to
Lender in accordance with the provisions of the Loan Documents;
 
(ix)                   the failure to pay Taxes for which Borrower is
responsible under this Agreement, the Ground Lease and/or any other Loan
Document;
 
(x)                    failure to comply with the requirements of Borrower
regarding the Policies in accordance with Section 5.1.1 hereof;
 
(xi)                   Borrower’s indemnification of Lender set forth in
Section 9.2 hereof;
 
 
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(xii)                  if Borrower breaches its representations, warranties
and/or covenants contained in Section 3.1.41 or Section 4.1.16 hereof with
respect to the Ground Lease; and/or
 
(xiii)                 the existence and/or enforcement of the “Indemnified
Title Items” referenced in the Disclosure Schedule (notwithstanding the fact
that the Title Insurance Policy affirmatively insures over such Indemnified
Title Items).
 
(xiv)                 failure of Borrower to cause the demolition and/or removal
of all or any portion of the Improvements, Personal Property and/or the Ground
Tenant Improvements designated by Lender if, following a Casualty or
Condemnation at the Property, the Improvements and/or the Ground Tenant
Improvements are not restored in accordance with the terms and conditions of
Sections 5.2, 5.3 and/or 5.4 and the Ground Lease as a result of the failure of
Ground Tenant’s mortgage lender to make proceeds/awards available to Ground
Tenant for such purpose.
 
Notwithstanding anything to the contrary in this Agreement or any of the other
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 Obligations or to
require that all collateral shall continue to secure all of the Obligations
owing to Lender in accordance with the Loan Documents, and (B) the Obligations
shall be fully recourse to Borrower in the event that any of the following occur
(each, a “Springing Recourse Event”): (i) Borrower fails to comply with the
provisions of Section 3.1.24 hereof if such failure actually results in the
substantive consolidation of Borrower’s assets into the bankruptcy estate of
another Person (provided that Borrower shall have no liability under this clause
(i) if and to the extent that Lender takes affirmative, legal action in any
legal proceedings involving Borrower or the bankruptcy estate of another Person,
the purpose of which is to cause the substantive consolidation of Borrower’s
assets and such affirmative, legal action by Lender causes the substantive
consolidation of Borrower’s assets); (ii) except as otherwise expressly
permitted in this Agreement and/or any other Loan Document, Borrower fails to
obtain Lender’s prior consent in accordance with the terms of this Agreement to
any subordinate financing secured by the Property or other voluntary Lien
encumbering the Property (other than the Permitted Encumbrances); (iii) Borrower
fails to obtain Lender’s prior consent in accordance with the terms of this
Agreement to any Transfer of the Property or any interest therein or any
Transfer of any direct or indirect interest in Borrower, in either case as
required by the Security Instrument or this Agreement other than a Permitted
Transfer or as otherwise expressly permitted under any Loan Document (it being
further understood and agreed that none of the following shall constitute a
violation of any restrictions on Transfer under this Agreement or any Loan
Document giving rise to liability under this clause (iii):  (A) a Defeasance or
compliance by Borrower with any of the provisions contained in Section 2.5 of
this Agreement, (B) an involuntary Condemnation of the Property or any part
thereof, or (C) a foreclosure or deed in lieu of foreclosure of the Property or
any portion thereof, as applicable); (iv) Borrower or Sole Member files a
voluntary petition under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law; (v) the filing of an involuntary petition against
Borrower and/or Sole Member under the Bankruptcy Code or any other Federal or
state bankruptcy or insolvency law by any other Person in which Borrower, Sole
Member or Guarantor or any Affiliate of Borrower, Sole Member and/or Guarantor
colludes with or otherwise assists such Person, and/or Borrower, Sole Member or
Guarantor or any Affiliate of Borrower, Sole Member or Guarantor  solicits or
causes to be solicited petitioning creditors for any involuntary petition
against Borrower and/or Sole Member by any Person; (vi) Borrower and/or Sole
Member files an answer consenting to, or otherwise acquiescing in, or joining
in, any involuntary petition filed against it by any other Person under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;
(vii) Borrower, Sole Member, Guarantor or any Affiliate of Borrower, Sole Member
or Guarantor consents to, or acquiesces in, or joins in, an application for the
appointment of a custodian, receiver, trustee or examiner for Borrower or any
portion of the Property; or (viii) Borrower or Sole Member makes an assignment
for the benefit of creditors or admits, in writing or in any legal proceeding,
its insolvency or inability to pay its debts as they become due; or (ix) if
Guarantor, Borrower, Sole Member or any Affiliate of any of the foregoing, in
connection with any enforcement action or exercise or assertion of any right or
remedy by or on behalf of Lender under or in connection with the Guaranty, the
Note, the Mortgage or any other Loan Document, seeks a defense, judicial
intervention or injunctive or other equitable relief of any kind, or asserts in
a pleading filed in connection with a judicial proceeding any defense against
Lender or any right in connection with any security for the
Loan; provided thatthere shall be no liability pursuant to this clause (ix)in
the event that (A) with respect to a monetary obligation/liability, Borrower
asserts, in good faith, a defense of actual payment or contests, in good faith,
the calculation of amounts owed, and (B) with respect to a non-monetary
obligation/liability, such defense, judicial intervention or injunctive or other
equitable relief is raised or asserted by Guarantor in good faith.
 
 
-100-

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Section 11.23                                Prior Agreements.
 
This Agreement and the other Loan Documents contain the entire agreement of the
parties hereto and thereto in respect of the transactions contemplated hereby
and thereby, and all prior agreements among or between such parties, whether
oral or written, including (y) the Summary of Terms and Conditions dated August
11, 2010 (as may be amended) between Guarantor and Lender and (z) the Commitment
Letter dated September 1, 2010 (as may be amended) between Guarantor and Lender,
are superseded by the terms of this Agreement and the other Loan Documents.  In
addition, Borrower hereby agrees that it is not relying on and has not relied on
any representations, warranties or statements, whether written or oral, of the
Lender, any Affiliate of the Lender or any other party in connection with its
decision to enter into the transaction described in this Agreement and the
related Loan Documents and that this Agreement and the related Loan Documents
set forth the entire set of representations, warranties and understandings of
the Borrower with respect to the transaction described herein and in the Loan
Documents.
 
Section 11.24                                Servicer.
 
At the option of Lender, the Loan may be serviced by a servicer (the “Servicer”)
selected by Lender and Lender may delegate all or any portion of its
responsibilities under this Agreement and the other Loan Documents to the
Servicer pursuant to a servicing agreement (the “Servicing Agreement”) between
Lender and Servicer.  Borrower shall not be responsible for any set-up fees or
any other initial costs relating to or arising under the Servicing Agreement, or
for payment of the annual servicing fee due to the Servicer under the Servicing
Agreement; provided, however, that Borrower shall be responsible for the payment
of any other fees and expenses of the Servicer and any related third-party fees
and expenses (i.e., which are not initial set-up fees or any other initial costs
relating to or arising under the Servicing Agreement, or for payment of the
annual servicing fee due to the Servicer under the Servicing Agreement),
including, without limitation, special servicing fees, work-out fees and
attorneys fees and disbursements in connection with a prepayment, release of the
Property, assumption or modification of the Loan, special servicing or work-out
of the Loan or enforcement of the Loan Documents.
 
 
-101-

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Section 11.25                                Joint and Several Liability.
 
If more than one Person has executed this Agreement as “Borrower,” the
representations, covenants, warranties and obligations of all such Persons
hereunder shall be joint and several.
 
Section 11.26                                Creation of Security Interest.
 
Notwithstanding any other provision set forth in this Agreement, the Note, the
Security Instrument or any of the other Loan Documents, Lender may at any time
create a security interest in all or any portion of its rights under this
Agreement, the Note, the Security Instrument and any other Loan Document
(including the advances owing to it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.
 
Section 11.27                                Assignments and Participations.
 
(a)           Lender may assign to one or more Persons all or a portion of its
rights and obligations under this Agreement.
 
(b)           Upon such execution and delivery, from and after the effective
date specified in the related assignment and acceptance agreement, the assignee
thereunder shall be a party hereto and shall have the rights and obligations of
Lender hereunder to the extent of its interest in the Loan.
 
(c)           Lender may sell participations to one or more Persons in or to all
or a portion of its rights and obligations under this Agreement; provided,
however, that (i) Lender’s obligations under this Agreement shall remain
unchanged, (ii) Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) Lender shall remain the
holder of any Note for all purposes of this Agreement, and (iv) Borrower shall
continue to deal solely and directly with Lender in connection with Lender’s
rights and obligations under and in respect of this Agreement and the other Loan
Documents.  Lender shall not be relieved of any obligations hereunder as the
result of the sale of any participations.
 
Lender may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 11.27, disclose to the
assignee or participant or proposed assignees or participants, as the case may
be, any information relating to Borrower or any of its Affiliates or to any
aspect of the Loan that has been furnished to Lender by or on behalf of the
Borrower or any of its Affiliates.
 
 
-102-

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Section 11.28                                Counterparts.
 
This Agreement may be executed in any number of counterparts, each of which when
so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
 
Section 11.29                                Set-Off.
 
In addition to any rights and remedies of Lender provided by this Agreement and
by law, Lender shall have the right in its sole discretion, without prior notice
to Borrower, any such notice being expressly waived by Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by Lender or any Affiliate thereof to or
for the credit or the account of Borrower.  Lender agrees promptly to notify
Borrower after any such set-off and application made by Lender; provided that
the failure to give such notice shall not affect the validity of such set-off
and application.
 
[NO FURTHER TEXT ON THIS PAGE]
 
 
-103-

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized representatives, all as of the day and year
first above written.
 
LENDER:
 
GERMAN AMERICAN CAPITAL CORPORATION,
 a Maryland corporation
 
By:           _____________________________________
Name:
Title:
 
By:           _____________________________________
Name:
Title:
 
BORROWER:
 
SDQ FEE, LLC,
a Delaware limited liability company

By:           SDQ Fee Holdings, LLC,
 a Delaware limited liability company,
 its sole equity member

By:           Glimcher Properties Limited Partnership,
  a Delaware limited partnership,
  its sole member

By:           Glimcher Properties Corporation,
  a Delaware corporation,
  its sole general partner
 
By: ________________________________
Name: Mark E. Yale
Title:Executive Vice President, Chief
Financial Officer and Treasurer

 
 

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

 

SCHEDULE I
 
DISCLOSURE SCHEDULE
 
1.
Oakville Grocery Lienholder Suit: Fairbanks Contracting and Development, LLC
(“Fairbanks”) filed a breach of contract action, unjust enrichment, and lien
foreclosure suit against Kierland Crossing, LLC and several other parties on
August 12, 2010. Fairbanks was a contractor of Oakville Grocery (“Oakville”), a
current Scottsdale Quarter subtenant.  Fairbanks holds a mechanic lien for
services provided to Oakville.  Borrower has not been named as a party, although
its predecessor-in-interest has been named and served.

2.
Industrial Refrigeration and Boiler Company Suit: Industrial Refrigeration and
Boiler Company (“Industrial”), a subcontractor to Fairbanks, filed a breach of
contract action, unjust enrichment, and lien foreclosure suit against Kierland
Crossing, LLC and several other parties on August 27, 2010.  Industrial holds a
mechanic lien for services provided to Fairbanks in connection with the Oakville
construction.  Borrower has not been named as a party, although its
predecessor-in-interest has been named and served.

3.
The Items Disclosed on Schedule B – Part II of the Title Insurance Policy, a
copy of which follows on the succeeding pages of this Schedule.  For the
purposes of clause (xiii) of “Borrower’s Recourse Liability” in Section 11.22 of
the Loan Agreement, the items listed in Items 5 through 16 of Schedule B – Part
II of the Title Insurance Policy are the “Indemnified Title Items”).

 
 
Sch. I-1

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

 
 
SCHEDULE “B” - PART II
Subordinate Matters

In addition to the matters set fort in Schedule "B", Part I of this Policy, the
title to the estate or interest in the land described or referred to in Schedule
"A", is subject to the following matters, if any be shown, but the Company
insures that such matters are subordinate to the lien or charge of the insured
mortgage upon said estate or interest.

1.
Assignment of Leases and Rents from SDQ Fee, LLC, a Delaware limited liability
company, in favor of German American Capital Corporation, a Maryland
corporation, dated ________, 2010 and recorded _______, 2010, in the records of
Maricopa County, Arizona..

2.
UCC-1 Financing Statement from SDQ Fee, LLC, a Delaware limited liability
company, in favor of German American Capital Corporation, a Maryland
corporation, recorded _______, 2010, in the records of Maricopa County, Arizona.

3.
Reciprocal Easement and Operating Agreement by and between Kierland Crossing
Residential, LLC, an Arizona limited liability company, Kierland Crossing
Residential II, LLC, an Arizona limited liability company, Kierland Crossing
Residential III, LLC, an Arizona limited liability company and Kierland
Crossing, LLC, a Delaware limited liability company, dated November 26, 2007 and
recorded February 5, 2008, as Document No. 20080099586 {See Tab 40}, as amended
by Amendment No. 1 to Reciprocal Easement and Operating Agreement by and between
Kierland Crossing Residential, LLC, an Arizona limited liability company,
Kierland Crossing Residential II, LLC, an Arizona limited liability company,
Kierland Crossing Residential III, LLC, an Arizona limited liability company and
Kierland Crossing, LLC, a Delaware limited liability company, dated March 27,
2008 and recorded April 16, 2008 as Document 20080334982 {See Tab 41}, both in
the records of Maricopa County, Arizona. (FNT Ex. 23)

Continued...
 
 
Sch. I-2

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

 
 
SCHEDULE “B” - PART II, Subordinate Matters, Continued...

4.
Subject to the terms and conditions of that certain Subordination
Non-Disturbance and Attornment Agreement, by and among German American Capital
Corporation, a Maryland corporation, KeyBank National Association, as
Administrative Agent, and Kierland Crossing, LLC, a Delaware limited liability
company, hereinafter the “SNDA”, dated ___, 2010 and recorded _____, 2010, in
the records of Maricopa County, Arizona, and to the extent of the subordination
provided for in the SNDA, the following matters affecting title are shown here
in Schedule B, Part II:

 
(1)
First Amended and Restated Ground Lease, as disclosed by that certain Memorandum
of Lease by and between Sucia Scottsdale, LLC, a Delaware limited liability
company, and Kierland Crossing, LLC, a Delaware limited liability company, dated
December 6, 2006 and recorded December 11, 2006 as Document No. 20061613859, in
the records of Maricopa County, Arizona.

 
(2)
Unrecorded Second Amendment to First Amended and Restated Ground Lease, by and
between SDQ Fee, LLC, a Delaware limited liability company, and Kierland
Crossing, LLC, a Delaware limited liability company, dated ___, 2010.

 
(3)
Subordination Non-Disturbance and Attornment Agreement, by and among German
American Capital Corporation, a Maryland corporation, KeyBank National
Association, as Administrative Agent, and Kierland Crossing, LLC, a Delaware
limited liability company, dated ___, 2010 and recorded _____, 2010, in the
records of Maricopa County, Arizona.

 
Continued...
 
 
Sch. I-3

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

 
 
SCHEDULE “B” - PART II, Subordinate Matters, Continued...

4. Continued...

The aforementioned First Amended and Restated Ground Lease ground lessee’s
interest is encumbered by the following:

 
(4)
Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture
Filing, by Kierland Crossing, LLC, a Delaware limited liability company, in
favor of KeyBank National Association, as Administrative Agent, dated November
30, 2007 and recorded February 11, 2008 as Document No.20080115325, in the
records of Maricopa County, Arizona, in the original principal amount of
$220,000,000.00. (Affects Leasehold Interest)

 
(5)
Assignment of Leases and Rents by Kierland Crossing, LLC, a Delaware limited
liability company, in favor of KeyBank National Association, as Administrative
Agent, dated November 30, 2007 and recorded February 11, 2008 as Document
No.20080115326, in the records of Maricopa County, Arizona.  (Affects Leasehold
Interest)

5.
Notice and Claim of Lien for Labor, Services, Material, Machinery Fixtures
and/or Tools by Fairbanks Contracting & Development, LLC, against Sucia
Scottsdale, LLC, and Scottsdale OG, Inc., dated February 18, 2010 and recorded
February 19, 2010 as  Document No. 20100138493 {See Tab 42}, for the amount
$348,944.93, plus costs and interest, and as affected by that certain Notice of
Lis Pendens Case No. CV2010-095491 by Fairbank’s Contracting & Development, LLC,
an Arizona limited liability company, vs. Sucia Scottsdale, LLC, a Delaware
limited liability company, recorded August 12, 2010 as Document No.
2010-0690345, both in the records of Maricopa County, Arizona. (Oakville
Grocery)

Continued...
 
 
Sch. I-4

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

 
 
SCHEDULE “B” - PART II, Subordinate Matters, Continued...

6.
Notice and Claim of Mechanic's and Materialman's Lien by Farnsworth Wholes
Scottsdale LLC, against Sucia Scottsdale, LLC, a Delaware limited liability
company, dated February 10, 2010 and recorded February 23, 2010 as Document No.
20100149796, in the records of Maricopa County, Arizona, in the amount of
$24,49084, plus costs and interest.  (FNT Ex. 14)

7.
Notice and Claim of Mechanic’s and Materialman's Lien by Rick the Plumber Inc.,
against Sucia Scottsdale, LLC, a Delaware limited liability company, dated
February 22, 2010 and recorded February 23, 2010 as  Document No. 20100149797,
in the records of Maricopa County, Arizona, in the amount of $44,600.00, plus
costs and interest.  (FNT Ex. 15)

8.
Notice and Claim of Mechanic's, Professional Services, Materialman's Lien by
Industrial Refrigeration & Boiler Co, against Oakville Grocery, Kierland
Crossing, LLC, a Delaware limited liability company, Scottsdale OG Inc., and
Sucia Scottsdale, LLC, a Delaware limited liability company; dated March 3, 2010
and recorded March 4, 2010 as  Document No. 20100184279 {See Tab 46}, in the
records of Maricopa County, Arizona, for the amount $56,924.44, plus costs and
interest. (Oakville Grocery)  (FNT Ex. 16)

9.
Notice and Claim of Lien for Labor, Services, Material, Machinery Fixtures
and/or Tools by Statewide Electric, against Sucia Scottsdale, LLC, a Delaware
limited liability company, and Oakville Grocery, dated March 10, 2010 and
recorded March 12, 2010 as  Document No. 20100209015 {See Tab 47}, in the
records of Maricopa County, Arizona, for the amount $87,503.52, plus costs and
interest. (Oakville Grocery)  (FNT Ex. 17)

10.
Notice & Claim of Mechanic's and Materialman's Lien by Partitions and
Accessories Company vs. Fairbanks Contracting & Development (original
contractor) and Sucia Scottsdale, LLC, a Delaware limited liability company,
dated March 25, 2010, and recorded April 2, 2010 as  Document No. 20100278937,
in the records of Maricopa County, Arizona, for the amount $4,143.00, plus costs
and interest.  (FNT Ex. 18)

 
Continued...
 
 
Sch. I-5

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

 

SCHEDULE “B” - PART II, Subordinate Matters, Continued...

11.
Notice and Claim of Lien for Labor, Services, Material, Machinery Fixtures
and/or Tools by To The Max Airmax Cooling & Heating,  against Sucia Scottsdale,
LLC, a Delaware limited liability company, dated April 1, 2010 and recorded
April 8, 2010 as  Document No. 20100294239, in the records of Maricopa County,
Arizona, for the amount $87,503.52, plus costs and interest.  (FNT Ex. 19)

12.
Notice and Claim of Mechanic’s and Materialman’s Lien by W.D. Drywall, against
Sucia Scottsdale, LLC, a Delaware limited liability company, dated June 8, 2010
and recorded June 22, 2010 as  Document No. 2010-0501637, in the records of
Maricopa County, Arizona, for the amount $31,561.65, plus costs and interest.

13.
Arizona - Notice and Claim of Mechanic's, Materialmen’s, or Professional
Services Lien - A.R.S. 33-993 by Steeler, Inc., against Sucia Scottsdale, LLC, a
Delaware limited liability company, dated June 21, 2010 and recorded June 22,
2010 as  Document No. 20100525839, in the records of Maricopa County, Arizona,
for the amount $5,596.50, plus costs and interest.  (FNT Ex. 20)

14.
Notice and Claim of Lien for Labor, Services, Material, Machinery Fixtures
and/or Tools by Hajoca Corp. against Sucia Scottsdale, LLC, a Delaware limited
liability company, dated July 27, 2010 and recorded July 29, 2010 as Document
No. 20100645865, in the records of Maricopa County, Arizona, for the amount
$12,785.54, plus costs and interest.  (FNT Ex. 21)

15.
Mechanic's and Materialmen’s Lien by Brown Wholesale Electric, a division of
Wesco Distribution, Inc., a Delaware corporation,  against Sucia Scottsdale,
LLC, a Delaware limited liability company, dated July 26, 2010 and recorded July
29, 2010 as  Document No. 20100646016, in the records of Maricopa County,
Arizona, for the amount $18,636.30, plus costs and interest.  (FNT Ex. 22)

Continued...
 
 
Sch. I-6

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

 
 
SCHEDULE “B” - PART II, Subordinate Matters, Continued...

16.
Notice and Claim of Mechanic's and Materialmen’s Lien by Mechanical Products
Southwest Inc. against Sucia Scottsdale, LLC, a Delaware limited liability
company, dated July 28, 2010 and recorded August 2, 2010 as Document No.
20100657840, in the records of Maricopa County, Arizona, for the amount
$7,589.00, plus costs and interest.  (FNT Ex. 23)

This policy affirmatively insures the insured against loss or damage which the
Insured shall sustain resulting from the existence and/or enforcement of items 5
through 16 above.

 
Sch. I-7

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

 
 
SCHEDULE II
 
INTENTIONALLY BLANK
 
 
Sch. II-1

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SCHEDULE III
 
ORGANIZATIONAL CHART
 
* ownership percentages are as of 6/30/10 for these entities
 
[chart1.jpg]
 
 
Sch. III-1

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SCHEDULE IV
 
BORROWER OPERATING ACCOUNT
 
The Huntington National Bank
ABA#:                   044000024
Account Name: Glimcher Properties Limited Partnership
Account#: 0189-164-3594
 
 
Sch. IV-1

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

 

SCHEDULE V
 
LIST OF REAs
 
 
1.
Joint Development Agreement disclosed by Memorandum recorded in the official
records of Maricopa County, Arizona as Document No. 2008-0099585.

 
 
2.
Reciprocal Easement and Operating Agreement recorded in the official records of
Maricopa County, Arizona as Document No. 2008-0099586, and amendment thereto
recorded in the official records of Maricopa County, Arizona as Document No.
2008-00334982.

 
 
Sch. V-1

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

 

EXHIBIT A

LEGAL DESCRIPTION
 
A portion of the Northwest quarter of Section 11 and the Southwest quarter of
Section 2, Township 3 North, Range 4 East of the Gila and Salt River Base and
Meridian, Maricopa County, Arizona, being described as follows:

COMMENCING at a City of Scottsdale brass cap found at the monumented
intersection of 73rd Street and Butherus Road, as recorded in Thunderbird
Industrial Airpark No. 3-A, in Book 160 of maps, page 8, records of Maricopa
County, Arizona, from which a City of Scottsdale brass cap in a handhole found
at the monumented intersection of Butherus Road and Scottsdale Road, as shown on
said Thunderbird Industrial Airpark No, 3-A, bears North 88 degrees 51 minutes
18 seconds West, 1,054.98 feet; Thence along the monumented centerline of
Butherus Road, North 88 degrees 51 minutes 18 seconds West, 370.07 feet; thence
North 01 degree 08 minutes 42 seconds east 50.00 feet to a point on a line 50.00
feet North of and parallel with said centerline of Butherus Road and the TRUE
POINT OF BEGINNING;

Thence along said parallel line, north 88 degrees 51 minutes 18 seconds West,
594.92 feet to a point of curvature having a radius of 25.00 feet;

Thence Northwesterly, 39.26 feet along the arc of said curve concave to the
Northeast, through a central angle of 89 degrees 59 minutes 18 seconds to a
point on a line 65.00 feet East of and parallel with the monumented centerline
of Scottsdale Road;

Thence along last said parallel line, North 01 degrees 08 minutes 00 seconds
East, 941.49 feet to a point of curvature having a radius of 20.00 feet;

Thence Northeasterly, 30.95 feet along the arc of said curve concave to the
Southeast, through a central angle of 88 degrees 40 minutes 15 seconds, to a
point of reverse curvature having a radius of 2,065.00 feet, also being 65.00
feet South of and parallel with the monumented centerline of Greenway-Hayden
Loop as shown on the Scottsdale Research park Map of Dedication, recorded as
Book 259 of Maps, page 38, and Affidavit Document No. 88-0350648, records of
Maricopa County, Arizona;

Continued...
 
 
Exhibit A-1

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

 
 
Thence along last said parallel curve, Easterly, 591.35 feet along the arc of
said curve concave to the North, through a central angle of 16 degrees 24
minutes 28 seconds;

Thence South 16 degrees 36 minutes 13 seconds east, 40.25 feet to a point of
curvature having a radius of 150.00 feet;

Thence Southerly, 46.47 feet along said curve concave to the west through a
central angle of 17 degrees 44 minutes 55 seconds;

Thence South 01 degrees 08 minutes 42 seconds West, 1000.15 feet to the TRUE
POINT OF BEGINNING.

EXCEPT that portion of land dedicated as right of way as shown on the map of
Dedication for Scottsdale Quarter, recorded February 4, 2009 in Book 1020 of
Maps, Page 26, and Certificate of Correction, recorded in Document No.
2010-0316769, in the records of Maricopa County, Arizona.

 
Exhibit A-2

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

 
 
EXHIBIT B
 
CERTAIN UPDATED INFORMATION
 
 
(A)
Any proposed program for the renovation, improvement or development of the
Property, or any part thereof, including the estimated cost thereof and the
method of financing to be used.

 
 
(B)
The general competitive conditions to which the Property is or may be subject.

 
 
(C)
Management of the Property.

 
 
(D)
Principal business, occupations and professions carried on in, or from the
Property.

 
 
(E)
Principal nature of business of Ground Tenant, and the principal provisions of
the Ground Lease including, but not limited to: rental per annum, expiration
date, and renewal options.

 
 
(F)
The effective annual rental per square foot or unit for each of the last three
years prior to the date of filing.

 
 
Exhibit B-1