Exhibit 10.48

 

LOAN AGREEMENT

 

Dated as of July 18, 2003

 

by and among

 

FIRST STATES INVESTORS DB I, LLC

as Holding Company Borrower

(and each Property-Owning Borrower that

joins the Loan Agreement from time to time)

Collectively as Borrower,

 

DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH

as Agent,

 

LASALLE BANK NATIONAL ASSOCIATION

as Collateral Agent

 

and

 

Each Lender Signatory hereto

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

TABLE OF CONTENTS

 

         Page

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

ARTICLE I. CERTAIN DEFINITIONS

   2

Section 1.1.

 

Definitions.

   2

ARTICLE II. CONDITIONS PRECEDENT

   24

Section 2.1.

 

Conditions Precedent to Closing

   24

Section 2.2.

 

Execution and Delivery of Agreement.

   25

Section 2.3.

 

Advance Procedure

   25

Section 2.4.

 

Initial and Subsequent Advances

   29

ARTICLE III. GENERAL TERMS

   31

Section 3.1.

 

The Loan.

   31

Section 3.2.

 

Use of Proceeds.

   31

Section 3.3.

 

Security for the Loan.

   31

Section 3.4.

 

Borrower’s Note

   31

Section 3.5.

 

Repayment of Advances; Interest; Exit Fee.

   32

Section 3.6.

 

Voluntary Prepayment.

   32

Section 3.7.

 

Mandatory Prepayment; Capital Events; Certain Transfers.

   33

Section 3.8.

 

Application of Payments After Event of Default.

   34

Section 3.9.

 

Method and Place of Payment From the Collection Account to Agent.

   34

Section 3.10.

 

Taxes.

   34

Section 3.11.

 

Release of Collateral.

   34

Section 3.12.

 

Central Cash Management.

   35

Section 3.13.

 

Reserve Account.

   39

Section 3.14.

 

Additional Provisions Relating to the Collection Account and the Reserve
Account.

   42

Section 3.15.

 

Security Agreement.

   43

Section 3.16.

 

Real Estate Security Documents; Mortgage Recording Taxes.

   44

Section 3.17.

 

Taxes.

   45

Section 3.18.

 

General Collateral Agent Provisions.

   46

Section 3.19.

 

Indemnity

   48

Section 3.20.

 

Inability to Determine Interest Rate; Illegality.

   49

Section 3.21.

 

Requirements of Law.

   49

ARTICLE IV. REPRESENTATIONS AND WARRANTIES

   50

Section 4.1.

 

Representations and Warranties as to Borrower

   50

Section 4.2.

 

Representations and Warranties as to Each Property.

   54

Section 4.3.

 

Survival of Representations.

   60

ARTICLE V. AFFIRMATIVE COVENANTS

   60

Section 5.1.

 

Affirmative Covenants

   60

ARTICLE VI. NEGATIVE COVENANTS

   82

Section 6.1.

 

Negative Covenants.

   82

ARTICLE VII. EVENT OF DEFAULT

   84

Section 7.1.

 

Event of Default.

   84

Section 7.2.

 

Remedies.

   85

Section 7.3.

 

Remedies Cumulative.

   86

Section 7.4.

 

Curative Advances.

   86

 

i

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

          Page

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

ARTICLE VIII. MISCELLANEOUS

   87

Section 8.1.

  

Survival.

   87

Section 8.2.

  

Agent’s Discretion.

   87

Section 8.3.

  

Governing Law.

   87

Section 8.4.

  

Modification, Waiver in Writing.

   88

Section 8.5.

  

Delay Not a Waiver.

   88

Section 8.6.

  

Notices.

   88

Section 8.7.

  

TRIAL BY JURY.

   88

Section 8.8.

  

Headings.

   88

Section 8.9.

  

Assignment.

   89

Section 8.10.

  

Severability.

   89

Section 8.11.

  

Preferences.

   89

Section 8.12.

  

Waiver of Notice.

   90

Section 8.13.

  

Failure to Consent.

   90

Section 8.14.

  

Schedules Incorporated.

   90

Section 8.15.

  

Offsets, Counterclaims and Defenses.

   90

Section 8.16.

  

No Joint Venture or Partnership.

   90

Section 8.17.

  

Waiver of Marshalling of Assets Defense.

   90

Section 8.18.

  

Waiver of Counterclaim.

   91

Section 8.19.

  

Conflict; Construction of Documents.

   91

Section 8.20.

  

Brokers and Financial Advisors.

   91

Section 8.21.

  

Counterparts.

   91

Section 8.22.

  

Estoppel Certificates.

   91

Section 8.23.

  

Payment of Expenses.

   91

Section 8.24.

  

Non-Recourse.

   92

ARTICLE IX. THE AGENT

   94

Section 9.1.

  

Appointment, Powers and Immunities.

   94

Section 9.2.

  

Reliance by Agent.

   94

Section 9.3.

  

Defaults.

   94

Section 9.4.

  

Rights as a Lender.

   94

Section 9.5.

  

Indemnification.

   95

Section 9.6.

  

Non-Reliance on Agent and Other Lenders.

   95

Section 9.7.

  

Failure to Act.

   95

Section 9.8.

  

Resignation of Agent.

   95

Section 9.9.

  

Agency Fee.

   96

Section 9.10.

  

Consents under Loan Documents.

   96

Section 9.11.

  

Notices, Reports and Other Communications.

   96

Schedule 1 – Collateral Information

    

 

ii

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

LOAN AGREEMENT

 

THIS LOAN AGREEMENT, made as of July 18, 2003, is by and among FIRST STATES
INVESTORS DB I, LLC, a Delaware limited liability company, as the parent entity
of each Property-Owning Borrower (as hereinafter defined) (“Holding Company
Borrower”), and each wholly-owned subsidiary entity that owns the Property and
from time to time joins this Agreement as an additional Borrower (individually
or collectively, as applicable, a “Property-Owning Borrower”), each having an
address at c/o First States Group, L.P., 1725 The Fairway, Jenkintown,
Pennsylvania 19046 (the Holding Company Borrower and the Property-Owning
Borrower collectively, the “Borrower”); each of the financial institutions
signatory hereto that is identified as a “Lender” on the signature pages hereto
or that, pursuant to Section 8.9 hereof, shall become a “Lender” hereunder
(individually, a “Lender”, and collectively, the “Lenders”); DEUTSCHE BANK AG,
CAYMAN ISLANDS BRANCH, a branch of a foreign banking institution, having an
address at 60 Wall Street, 10th Floor, New York, New York as agent for the
Lenders (in such capacity together with its successors in such capacity, the
“Agent”); and LASALLE BANK NATIONAL ASSOCIATION, a national banking association,
having an address at 135 South LaSalle Street, Suite 1625, Chicago, Illinois
60603, as a “bank” (as defined in Section 9-102(a)(8) of the UCC), as a
“securities intermediary” (as defined in Section 8-102(a)(14) of the UCC) and as
collateral agent for the Lenders (as used herein, “Collateral Agent” shall refer
to LaSalle Bank National Association in each such capacity as the context
requires together with any successor thereto).

 

RECITALS

 

WHEREAS, Borrower desires to obtain a series of loan advances (each, an
“Advance” and collectively, the “Loan”) in an aggregate amount at any time
outstanding of up to $300,000,000 (the “Loan Amount”) to provide to Borrower
financing for a portion of the acquisition cost of the CTL Property and the
Conduit CMBS Property that the Property-Owning Borrower acquires and to pay
certain other fees and expenses;

 

WHEREAS, the initial Lender is unwilling to make the Loan unless Borrower joins
in the execution and delivery of this Agreement, the Note and the Loan Documents
(each as hereinafter defined) to which it is a party which shall establish the
terms and conditions of, and provide security for, the Loan;

 

WHEREAS, Borrower has agreed to establish certain accounts and to grant to the
Agent on behalf of, and for the benefit of, the Lenders, a security interest
therein upon the terms and conditions of the security agreement set forth in
Section 3.15; and

 

WHEREAS, LaSalle Bank National Association, in its capacity as collateral agent,
bank and securities intermediary is willing to join in this Agreement in such
capacities.

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

NOW, THEREFORE, in consideration of the making of the Loan by the Lenders and
for other good and valuable consideration, the mutual receipt and legal
sufficiency of which are hereby acknowledged, the parties hereby covenant,
agree, represent and warrant as follows:

 

ARTICLE I.

CERTAIN DEFINITIONS

 

Section 1.1. Definitions. For all purposes of this Agreement: (1) the
capitalized terms defined in this Article 1 have the meanings assigned to them
in this Article 1 and include the plural as well as the singular; (2) all
accounting terms have the meanings assigned to them in accordance with GAAP (as
hereinafter defined); (3) the words “herein”, “hereof”, and “hereunder” and
other words of similar import refer to this Agreement as a whole and not to any
particular Article, Section, or other subdivision; and (4) the following terms
have the following meanings:

 

“Accepted Practices” means such customary practices as commercial mortgage
collateral agents or banks would follow in the normal course of their business
in performing administrative and custodial duties with respect to collateral
which is generally similar to the Account Collateral; provided, however, that
“Accepted Practices” shall not be deemed to include any custodial practices now
followed by Collateral Agent for any such collateral held for its own account to
the extent that such practices are more stringent than the practices followed by
commercial mortgage collateral agents or banks generally.

 

“Account Collateral” has the meaning set forth in Section 3.15(a) hereof.

 

“Accounts” means all of Property-Owning Borrower’s right, title and interest,
whether now owned or hereafter acquired, in, to and under all “accounts” as
defined in the UCC.

 

“Acquisition Cost” means, with respect to each acquisition of Property, the
related purchase price plus related reasonable out-of-pocket costs and expenses
approved by the Agent.

 

“Advance” has the meaning set forth in the Recitals hereto.

 

“Advance Closing Date” means each date on which an Advance is made hereunder to
provide Property-Owning Borrower with funds to acquire Property pursuant to
Sections 2.3 and 2.4.

 

“Advance Percentage” means 80%.

 

“Advance Rate” means, with respect to each Advance for Property, the product of
the Advance Percentage and the lesser of (x) the related Capital Markets
Execution and (y) the related Acquisition Cost.

 

“Advisory Fee” has the meaning ascribed to such term in the Commitment.

 

“Affiliate” of any specified Person means any other Person controlling or
controlled by or under common control with such specified Person. For the
purposes of this definition, “control” when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities or
other beneficial interests, by contract or otherwise; and the terms
“controlling” and “controlled” have the meanings correlative to the foregoing.

 

“Agent” has the meaning provided in the first paragraph of this Agreement.

 

“Agreement” means this Loan Agreement, together with the Schedules and Exhibits
hereto, as the same may from time to time hereafter be modified, supplemented or
amended.

 

“Alternative Rate” shall have the meaning assigned to such term in Section
3.20(a).

 

“Alternative Rate Transaction” shall mean, with respect to any Interest Accrual
Period, any Advance with respect to which the interest rate for such Interest
Period is determined with reference to the Alternative Rate.

 

2

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

“Applicable Margin” means either

 

(x) with respect to each Advance for the acquisition of a CTL Property, the
spread in basis points set forth in the right hand column below determined based
upon the credit rating of the related tenant set forth in the left hand column
below:

 

Credit Rating

(or the equivalent)

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

  

Spread in

Basis Points

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

AAA

   125

AA

   150

A

   175

BBB

   250

 

(y) with respect to each Advance for the acquisition of a Conduit CMBS Property,
175 basis points (1.75%);

 

provided, that notwithstanding the foregoing, in the event any Advance shall not
have been repaid in full as of the date fifteen (15) months following the date
on which such Advance was made, then commencing on and after such date fifteen
(15) months following the date on which such Advance was made, each spread in
basis points set forth above shall automatically and without the requirement of
any action being taken by the Agent or the Lenders be increased by twenty-five
basis points (0.25%) (i.e. from 125 to 150, 150 to 175, 175 to 200 and 250 to
275, as applicable).

 

“Appraisal” means an appraisal with respect to the Property prepared by an
Appraiser in accordance with the Uniform Standards of Professional Appraisal
Practice of the Appraisal Foundation, in compliance with the requirements of
Title 11 of the Financial Institution Reform, Recovery and Enforcement Act and
utilizing customary valuation methods such as the income, sales/market or cost
approaches.

 

“Appraiser” means a nationally recognized MAI appraiser selected by Borrower and
reasonably approved by the Agent.

 

“Assignment of Leases and Rents” means, with respect to each Property, an
Assignment of Rents and Leases, dated as of the applicable Advance Closing Date,
granted by the applicable Property-Owning Borrower to Agent for the benefit of
the Lenders with respect to the related Leases, as same may thereafter from time
to time be supplemented, amended, modified or extended by one or more agreements
supplemental thereto.

 

“Basic Carrying Costs” means the following costs with respect to the Property:
(i) Impositions and (ii) insurance premiums for policies of insurance required
to be maintained by Property-Owning Borrower pursuant to this Agreement or the
other Loan Documents.

 

“Borrower” has the meaning provided in the first paragraph of this Agreement.
All references in this Agreement to Borrower shall be deemed to include and be
equally applicable to the Holding Company Borrower and any Property-Owning
Borrower.

 

3

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

“Business Day” means any day other than a Saturday, a Sunday or a day on which
commercial banks in the State of New York or Illinois are authorized or
obligated by law, governmental decree or executive order to be closed. When used
with respect to an Interest Determination Date, “Business Day” shall mean any
day other than a Saturday, a Sunday or a day on which banks in London, England
are closed for interbank or foreign exchange transactions.

 

“Capital Event” means any transfer, sale, assignment, conveyance, liquidation,
or disposition (other than a Taking) of a Property and “Capital Events” shall
have a meaning correlative to the foregoing.

 

“Capital Event Proceeds” means any cash proceeds of a Capital Event received by
the Borrower net of any cash prorations, adjustments and credits with respect to
such Capital Event and net of reasonable third-party expenses paid in connection
with such Capital Event.

 

“Capital Improvement Costs” means costs incurred or to be incurred in connection
with replacements and capital repairs made to the Property (including without
limitation, TI Costs and Leasing Commissions).

 

“Capital Markets Execution” means, with respect to each Property and the related
Advance, the maximum amount of debt financing that can be issued with respect to
such Property as determined by the Agent in its good faith business judgment.

 

“Chattel Paper” means all of Property-Owning Borrower’s right, title and
interest, whether now owned or hereafter acquired, in, to and under all “chattel
paper” as defined in the UCC (whether tangible chattel paper or electronic
chattel paper).

 

“Closing Date” means the date of the execution of this Agreement.

 

“Code” means 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.

 

“Collateral” means, (x) so long as an Event of Default under the Loan has not
occurred and is not continuing, the entire legal and beneficial ownership
interests in the Holding Company Borrower pledged pursuant to the Pledge
Agreement (Holding Company Borrower) and the entire legal and beneficial
ownership interests in each Property-Owning Borrower pledged pursuant to the
Pledge Agreement (Property-Owning Borrower) and (y) after the occurrence and
during the continuance of an Event of Default, collectively, the Land,
Improvements, Leases, Rents, Personalty, and all Proceeds, and (to the full
extent assignable) Permits, which is or hereafter may become subject to a Lien
in favor of the Agent on behalf of the Lenders as security for the Loan (whether
pursuant to the Mortgages, any other Loan Document or otherwise), all whether
now owned or hereafter acquired and all other property which is or hereafter may
become subject to a Lien in favor of the Agent on behalf of the Lenders as
security for the Loan and including all property of any kind described as part
of the Property under the Mortgages.

 

“Collateral Agent” has the meaning specified in the introductory paragraph of
this Agreement.

 

“Collateral Information” means the information with respect to each Property set
forth on Schedule 1 attached hereto.

 

4

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

“Collateral Security Instrument” means any right, document or instrument, other
than the Mortgages, given as security for the Loan, including, without
limitation, the Pledge Agreements.

 

“Collection Account” has the meaning set forth in Section 3.12(a) hereof.

 

“Collection Period” means, with respect to any Payment Date, the period
commencing on and including the [eleventh (11th)] day in the month preceding the
month in which such Payment Date occurs through and including the [tenth (10th)]
day in the immediately succeeding month in which such Payment Date occurs;
provided, however, that in the case of the first Payment Date, the “Collection
Period” shall commence on the initial Advance Closing Date.

 

“Commitment” means the Conditional Commitment dated May 9, 2003, entered into by
First States Group, L.P. and the Agent with respect to the Loan.

 

“Condemnation Proceeds” means, in the event of a Taking with respect to the
Property, the proceeds in respect of such Taking less any reasonable third party
out-of-pocket expenses incurred in collecting such proceeds.

 

“Conduit CMBS Property” means a multi-tenant property or a commercial property
(including a retail, office, warehouse property, but excluding raw land)
suitable for inclusion in a conduit commercial mortgage-backed securities
offering.

 

“Consumer Price Index” means the Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics of the United States Department of
Labor, in the area where the Property is located; All Items (1982-84 = 100), or
any successor index thereto, appropriately adjusted and if the Consumer Price
Index ceases to be published and there is no successor thereto, such other index
as Agent and Borrower shall mutually agree upon.

 

“Contingent Obligation” means, as used in the definition of Other Borrowings,
without duplication, any obligation of Borrower guaranteeing any indebtedness,
leases, dividends or other obligations (“primary obligations”) of any other
Person (the “primary obligor”) in any manner, whether directly or indirectly.
Without limiting the generality of the foregoing, the term “Contingent
Obligation” shall include any obligation of Borrower:

 

(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor;

 

(ii) to advance or supply funds (x) for the purchase or payment of any such
primary obligation or (y) to maintain working capital or equity capital of the
primary obligor;

 

(iii) to purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation; or

 

(iv) otherwise to assure or hold harmless the holder of such primary obligation
against loss in respect thereof.

 

The amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming Borrower
is required to perform thereunder) as determined by Agent in good faith.

 

5

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

“Contract Assignment” means, with respect to each Property, the Assignment of
Contracts, Licenses, Permits, Agreements, Warranties and Approvals, dated as of
the applicable Advance Closing Date and granted by the applicable
Property-Owning Borrower to Agent for the benefit of the Lenders with respect to
the related Contracts, as same may thereafter from time to time be supplemented,
amended, modified or extended by one or more agreements supplemental thereto.

 

“Contracts” means the Management Agreement and all other agreements to which the
applicable Property-Owning Borrower is a party or which are assigned to the
applicable Property-Owning Borrower by the applicable Manager in the applicable
Management Agreement and which are executed in connection with the construction,
operation and management of the Property (including, without limitation,
agreements for the sale, lease or exchange of goods or other property and/or the
performance of services by it, in each case whether now in existence or
hereafter arising or acquired) as any such agreements have been or may be from
time to time amended, supplemented or otherwise modified.

 

“Credit Lease” means a Triple Net Lease, a Double Net Lease or a bond-type lease
to a tenant acceptable to the Agent that occupies and/or is master lessor to
subtenants that occupy the related Property.

 

“CTL Property” means a commercial property that is subject to a Credit Lease.

 

“Deed of Trust Trustee” means the trustee under the Mortgage that constitutes a
“deed of trust” under applicable law.

 

“Default” means the occurrence of any event which, but for the giving of notice
or the passage of time, or both, would be an Event of Default.

 

“Default Rate” means the per annum interest rate equal to the lesser of (a) 4.0%
per annum in excess of the rate otherwise applicable hereunder and (b) the
maximum rate allowable by applicable law.

 

“Deferred Maintenance Escrow Account” has the meaning set forth in Section
3.13(a).

 

“Deficient Amount” has the meaning set forth in Section 5.1(x)(iv)(B).

 

“Deposit Account” means all of Property-Owning Borrower’s right, title and
interest, whether now owned or hereafter acquired, in, to and under all “deposit
accounts” as defined in the UCC.

 

“Diligence Materials” means, collectively, the Preliminary Due Diligence Package
and the Supplemental Due Diligence List.

 

“Documents” means all of Property-Owning Borrower’s right, title and interest,
whether now owned or hereafter acquired, in, to and under all “documents” as
defined in the UCC (whether negotiable or non-negotiable) or other receipts
covering, evidencing or representing goods.

 

“Double Net Lease” shall mean a lease under which the tenant pays for all or
substantially all of any two of the following for the Property: (i) real estate
property taxes; (ii) property insurance; and (iii) operating expenses.

 

“Eligible Account” means a separate and identifiable account from all other
funds held by the holding institution that is: (i) an account maintained with a
federal or state chartered depository institution or trust company whose (1)
commercial paper, short-term debt obligations or other short-term

 

6

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

deposits are rated by the Rating Agencies not less than “A-1”(or the
equivalent), if the deposits are to be held in the account for thirty (30) days
or less or (2) long-term unsecured debt obligations are rated at least “AA-” (or
the equivalent), if the deposits are to be held in the account more than thirty
(30) days or (ii) a segregated trust account maintained with the corporate trust
department of a federal or state chartered depository institution or trust
company subject to regulations regarding fiduciary funds on deposit similar to
Title 12 of the Code of Federal Regulations Section 9.10(b) which, in either
case, has corporate trust powers, acting in its fiduciary capacity. An Eligible
Account shall not be evidenced by a certificate of deposit, passbook, other
instrument or any other physical indicia of ownership. Following a downgrade,
withdrawal, qualification or suspension of such institution’s rating, each
account must promptly (and in any case within not more than thirty (30) calendar
days) be moved to a qualifying institution or to one or more segregated trust
accounts in the trust department of such institution, if permitted.

 

“Engineer” means an Independent Engineer selected by Borrower and reasonably
approved by Agent.

 

“Engineering Report” means the structural engineering reports with respect to
the Property prepared by an Engineer and delivered to Agent in connection with
each Advance and any amendments or supplements thereto delivered to Agent.

 

“Environmental Auditor” means an Independent environmental auditor selected by
Borrower and reasonably approved by Agent.

 

“Environmental Claim” means any notice, notification, request for information,
claim, administrative, regulatory or judicial action, suit, judgment, demand or
other written communication (whether written or oral) by any Person or
Governmental Authority alleging or asserting liability with respect to Borrower
or the Property (whether for damages, contribution, indemnification, cost
recovery, compensation, injunctive relief, investigatory, response, remedial or
cleanup costs, damages to natural resources, personal injuries, fines or
penalties) arising out of, based on or resulting from (i) the presence, Use or
Release into the environment of any Hazardous Substance at any location (whether
or not owned, managed or operated by Borrower) that affects the Property, (ii)
any fact, circumstance, condition or occurrence forming the basis of any
violation, or alleged violation, of any Environmental Law with respect to the
Property or (iii) any alleged injury or threat of injury to human health, safety
or the environment with respect to the Property.

 

“Environmental Indemnity Agreement” means the Environmental Indemnity Agreement
dated as of the Closing Date, from the Holding Company Borrower and First States
Group, L.P., as indemnitor, to the Lenders, Agent and Collateral Agent, as
indemnitees.

 

“Environmental Laws” means any and all present and future federal, state or
local laws, statutes, ordinances, rules or regulations, or any judicial
interpretation thereof, any judicial or administrative orders, decrees or
judgments thereunder issued by a Governmental Authority, and any permits,
approvals, licenses, registrations, filings and authorizations, in each case as
now or hereafter in effect, relating to the environment, human health or safety,
or the Release or threatened Release of Hazardous Substances or otherwise
relating to the Use of Hazardous Substances.

 

“Environmental Reports” means a “Phase I Environmental Site Assessment” (and, if
such Phase I Environmental Site Assessment identifies any recognized
environmental conditions requiring further investigation, a “Phase II
Environment Site Assessment” with respect to such recognized environmental
conditions) as referred to in the ASTM Standards on Environmental Site
Assessments for Commercial Real Estate, E 1527-00 and an asbestos survey (if
available), with respect to the Property, prepared by an Environmental Auditor
and delivered to Agent in connection with each Advance and any amendments or
supplements thereto delivered to Agent.

 

7

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

“Equipment” means all of Property-Owning Borrower’s right, title and interest,
whether now owned or hereafter acquired, in, to and under (i) all “equipment” as
defined in the UCC, and (ii) all of the following (regardless of how classified
under the UCC): all building materials, construction materials, personal
property constituting furniture, fittings, appliances, apparatus, leasehold
improvements, machinery, devices, interior improvements, appurtenances,
equipment, plant, furnishings, fixtures, computers, electronic data processing
equipment, telecommunications equipment and other fixed assets now owned or
hereafter acquired by Property-Owning Borrower, and all Proceeds of (i) and (ii)
and as well as all additions to, substitutions for, replacements of or
accessions to any of the items recited as aforesaid and all attachments,
components, parts (including spare parts) and accessories, whether installed
thereon or affixed thereto, all regardless of whether the same are located on
such Property or are located elsewhere (including, without limitation, in
warehouses or other storage facilities or in the possession of or on the
premises of a bailee, vendor or manufacturer) for purposes of manufacture,
storage, fabrication or transportation and all extensions and replacements to,
and proceeds of, any of the foregoing.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated thereunder. Section
references to ERISA are to ERISA, as in effect at the date of this Agreement
and, as of the relevant date, any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.

 

“ERISA Affiliate” means any corporation or trade or business that is a member of
any group of organizations (i) described in Section 414(b) or (c) of the Code of
which Borrower is a member and (ii) solely for purposes of potential liability
under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code and the
lien created under Section 302(f) of ERISA and Section 412(n) of the Code,
described in Section 414(m) or (o) of the Code of which Borrower is a member.

 

“Escrow Agreement” means, with respect to the Real Estate Security Documents,
the Escrow Agreement, to be entered into by and among the Holding Company
Borrower on behalf of itself and each Property-Owning Borrower, the Agent, the
Collateral Agent, and the Title Agent, as same may thereafter from time to time
be supplemented, amended, modified or extended by one or more agreements
supplemental thereto.

 

“Event of Default” has the meaning set forth in Section 7.1 hereof.

 

“Exit Fee” means 0.25% of the principal amount of each Advance made pursuant to
this Agreement, which shall be due and payable at the time such Advance is
repaid (whether on the Maturity Date, by acceleration or otherwise); provided,
that the Exit Fee shall be waived if the Property acquired with the proceeds of
the Advance is immediately upon repayment of such Advance being including in a
securitization in which Deutsche Bank Securities Inc. acts as lead manager and
sole book runner or if the Advance is refinanced with permanent financing
provided by Deutsche Bank Securities Inc. or its Affiliates.

 

“Fee Letter” means the letter dated the date hereof entered into between
Borrower and the Collateral Agent, with respect to the fees of the Collateral
Agent under this Agreement.

 

“Fiscal Year” means the 12-month period ending on December 31st of each year
(or, in the case of the first fiscal year, such shorter period from the Closing
Date through such date) or such other fiscal year of Borrower as Borrower may
select from time to time with the prior consent of Agent.

 

8

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

“Fund” has the meaning set forth in the definition of “Permitted Investments”.

 

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

 

“General Intangibles” means all of Property-Owning Borrower’s right, title and
interest, whether now owned or hereafter acquired, in, to and under (i) all
“general intangibles” as defined in the relevant UCC, now owned or hereafter
acquired by Property-Owning Borrower and (ii) all of the following (regardless
of how characterized): all agreements, covenants, restrictions or encumbrances
affecting the Property or any part thereof.

 

“Governmental Authority” means any national or federal government, any state,
regional, local or other political subdivision thereof with jurisdiction and any
Person with jurisdiction exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government.

 

“Gross Revenue” means, for any period, the total dollar amount of all income and
receipts received by, or for the account of, Property-Owning Borrower in the
ordinary course of business with respect to the Property, but excluding Loss
Proceeds (other than the proceeds of business interruption insurance or the
proceeds of a temporary Taking in lieu of Rents).

 

“Ground Lease” means any Property owned by a Property-Owning Borrower which is a
leasehold estate.

 

“Ground Lease Impairment” means with respect to the Ground Lease: (i) any
termination, cancellation or surrender (in each case in whole or in part and
whether or not pursuant to an express right contained in the Ground Lease); (ii)
any modification, amendment, supplementation, or other change affecting the
Ground Lease; (iii) any subordination, or consent to the subordination of the
Ground Lease to any mortgage or other Lien encumbering (or that may in the
future encumber) the estate of the lessor under the Ground Lease in any
premise(s) demised to Borrower under the Ground Lease; or (iv) Borrower’s
delivery of any notice to the lessor under the Ground Lease that impairs or may
impair, or purports to limit the exercise of Agent’s rights and remedies under
the Mortgage or the Ground Lease, whether caused by Borrower or suffered or
permitted to occur by Borrower.

 

“Ground Rent” means any and all payments required of Borrower under the Ground
Lease, including base rent, fixed rent, additional rent, and any other payments,
sums or charges payable or required to be paid, whether to the ground lessor or
to a third party, under the Ground Lease.

 

“Guarantor” means American Financial Realty Trust, a Maryland real estate
investment trust, and First States Group, L.P., a Delaware limited partnership,
on a joint and several basis.

 

“Guaranty of Nonrecourse Obligations” means, with respect to the Loan, the
Guaranty of Nonrecourse Obligations guaranteeing the exceptions to the
nonrecourse provisions of the Loan Documents for which liability is retained as
described in Section 8.24 hereof from the Guarantor to the Agent for the benefit
of the Lenders.

 

“Hazardous Substance” means, collectively, (i) any petroleum or petroleum
products or waste oils, explosives, radioactive materials, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls (“PCBs”), lead-based
paint and radon, (ii) any chemicals or other materials or substances which are
now or hereafter become defined as or included in the definitions of “hazardous
substances”, “hazardous wastes”, “hazardous materials”, “extremely hazardous
wastes”, “restricted hazardous wastes”, “toxic substances”, “toxic pollutants”,
“contaminants”, “pollutants” or words of

 

9

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

similar import under any Environmental Law and (iii) any other chemical or any
other hazardous material or substance, exposure to which is now or hereafter
prohibited, limited or regulated under any Environmental Law.

 

“Holding Company Borrower” has the meaning provided in the first paragraph of
this Agreement.

 

“Impositions” means all taxes (including, without limitation, all real estate,
ad valorem, sales (including those imposed on lease rentals), use, single
business, gross receipts, value added, intangible transaction privilege,
privilege or license or similar taxes), assessments (including, without
limitation, all assessments for public improvements or benefits, whether or not
commenced or completed within the term of the Loan), ground rents, water, sewer
or other rents and charges, excises, levies, governmental fees (including,
without limitation, license, permit, inspection, authorization and similar
fees), and all other governmental charges, in each case whether general or
special, ordinary or extraordinary, foreseen or unforeseen, in respect of the
Property (including all interest and penalties thereon), accruing during or in
respect of the term hereof and which may be assessed against or imposed on or in
respect of or be a Lien upon (1) Borrower (including, without limitation, all
income, franchise, single business or other taxes imposed on Borrower for the
privilege of doing business in the jurisdiction in which the Property, or any
other collateral delivered or pledged to Agent in connection with the Loan, is
located), or (2) the Property, or any other collateral delivered or pledged to
Lenders in connection with the Loan, or any part thereof or any Rents therefrom
or any estate, right, title or interest therein, or (3) any occupancy,
operation, use or possession of, or sales from, or activity conducted on, or in
connection with the Property or the leasing or use of the Property or any part
thereof, or the acquisition or financing of the acquisition of the Property by
Borrower.

 

“Improvements” means all buildings, structures, fixtures and improvements now or
hereafter owned by Property-Owning Borrower of every nature whatsoever situated
on any Land constituting part of the Property (including, without limitation,
all gas and electric fixtures, radiators, heaters, engines and machinery,
boilers, ranges, elevators and motors, plumbing and heating fixtures, carpeting
and other floor coverings, water heaters, awnings and storm sashes, and cleaning
apparatus which are or shall be affixed to the Land or said buildings,
structures or improvements and including any additions, enlargements,
extensions, modifications, repairs or replacements thereto).

 

“Indebtedness” means the Principal Indebtedness, together with all other
obligations and liabilities due or to become due to the Lenders pursuant hereto,
under the Note or in accordance with any of the other Loan Documents, and all
other amounts, sums and expenses paid by or payable to the Lenders hereunder or
pursuant to the Note or any of the other Loan Documents.

 

“Indemnification Agreement” means with respect to any Property, the related
indemnification agreement, if any, delivered by First States Group, L.P., a
Delaware limited partnership, to the Agent for the benefit of the Lenders
pursuant to which First States Group, L.P., agrees to indemnify the Agent and
Lenders for any losses incurred on the related Advance due to or as a result of
conditions existing at (or circumstances surrounding) such Property relating to
matters that would be reasonably expected to be revealed by due diligence
deliveries referenced in Article II of this Agreement that were not made in
connection with such Advance.

 

“Indemnified Parties” has the meaning set forth in Section 5.1(i).

 

“Independent” means, when used with respect to any Person, a Person that (i)
does not have any direct financial interest or any material indirect financial
interest in Borrower or in any Affiliate of Borrower, and (ii) is not connected
with Borrower or any Affiliate of Borrower as an officer, employee, trustee,
partner, director or person performing similar functions.

 

10

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

“Index Maturity” has the meaning set forth in the definition of LIBOR.

 

“Instruments” means all of Property-Owning Borrower’s right, title and interest,
whether now owned or hereafter acquired, in, to and under all “instruments” as
defined in the UCC.

 

“Insurance Escrow Account” has the meaning set forth in Section 3.13(b).

 

“Insurance Premiums” has the meaning set forth in Section 5.1(x)(iii).

 

“Insurance Proceeds” means, in the event of a casualty with respect to the
Property, the proceeds received under any insurance policy applicable thereto.

 

“Insurance Requirements” means all material terms of any insurance policy
required pursuant to this Agreement and all material regulations, rules and
other requirements of the National Board of Fire Underwriters or such other body
exercising similar functions applicable to or affecting the Property or any part
thereof or any use or condition thereof.

 

“Insured Casualty” has the meaning set forth in Section 5.1(x)(iv)(B).

 

“Intellectual Property” means all of Property-Owning Borrower’s right, title and
interest, whether now owned or hereafter acquired, in, to and under the
trademark licenses, trademarks, rights in intellectual property, trade names,
service marks and copyrights, copyright licenses, patents, patent licenses or
the license to use intellectual property such as computer software owned or
licensed by Property-Owning Borrower or other proprietary business information
relating to Property-Owning Borrower’s policies, procedures, manuals and trade
secrets.

 

“Interest Accrual Period” means, in connection with the calculation of interest
accrued with respect to any Payment Date, the period commencing on and including
the [eleventh (11th)] day in the month preceding the month in which such Payment
Date occurs through and including the [tenth (10th)] day in the month in which
such Payment Date occurs; provided, however, that the first Interest Accrual
Period for the Loan shall commence on the initial Advance Closing Date.

 

“Interest Determination Date” means, in connection with the calculation of
interest to accrue for any Interest Accrual Period, the second Business Day
preceding the [eleventh (11th)] day of the month in which such Interest Accrual
Period commences; provided, however, that the first Interest Determination Date
for the Loan shall be the second Business Day preceding the Closing Date.

 

“Inventory” means all of Property-Owning Borrower’s right, title and interest,
whether now owned or hereafter acquired, in, to and under all “inventory” as
defined in the UCC and shall include all Documents representing the same.

 

“Investment Property” means all of Property-Owning Borrower’s right, title and
interest, whether now owned or hereafter acquired, in, to and under all
“investment property” as defined in the UCC.

 

“Joinder” means, with respect to each Advance, the Joinder, dated as of the
applicable Advance Closing Date, executed by the related Property-Owning
Borrower pursuant to which such Property-Owning Borrower joins in and assumes
the obligations of the Borrower under the Loan on a joint and several basis, to
the Agent for the benefit of the Lenders, as same may thereafter from time to
time be supplemented, amended, modified or extended by one or more agreements
supplemental thereto.

 

11

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

“Land” has the meaning provided in the Mortgage.

 

“Leases” means all leases, subleases, lettings, occupancy agreements, tenancies
and licenses by Property-Owning Borrower as landlord of the Property or any part
thereof now or hereafter entered into, and all amendments, extensions, renewals
and guarantees thereof, and all security therefor.

 

“Lease Guarantor”, “Lease Guaranty” and “Lease Insurance Policy” have the
meanings set forth in Section 2.3(b)(x)(7).

 

“Leasing Commissions” means leasing commissions incurred by Property-Owning
Borrower in connection with leasing the Property or any portion thereof
(including renewals of existing Leases).

 

“Leasing Costs/TI Costs Account” has the meaning set forth in Section 3.13(a).

 

“Leasing Costs/TI Costs Amount” means one-twelfth (1/12th) of the annual per
square foot or per unit amount which, in connection with an Advance applied to
acquire Property, the Agent may require be deposited on subsequent Payment Dates
into the Leasing Costs/TI Costs Account on a monthly basis to be applied to
Leasing Commissions and TI Costs (taking into account, in connection with CTL
Properties only, any deposits to reserves or payments expressly required to be
made by tenants under Credit Leases).

 

“Legal Requirements” means all governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of Governmental
Authorities (including, without limitation, Environmental Laws) affecting
Borrower or the Property or any part thereof or the construction, use,
alteration or operation thereof, or any part thereof (whether now or hereafter
enacted and in force), and all permits, licenses and authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments, at any time in force affecting the
Property or any part thereof (including, without limitation, any which may (i)
require repairs, modifications or alterations in or to the Property or any part
thereof, or (ii) in any way limit the use and enjoyment thereof).

 

“Lender” has the meaning provided in the first paragraph of this Agreement.

 

“Letter of Credit Rights” means all of Property-Owning Borrower’s right, title
and interest, whether now owned or hereafter acquired, in, to and under all
“letter of credit rights” as defined in the UCC.

 

“LIBOR” means the rate per annum calculated as set forth below:

 

(i) On each Interest Determination Date, LIBOR will be determined on the basis
of the offered rate for deposits of not less than U.S. $1,000,000 for a period
of one month (the “Index Maturity”), commencing on such Interest Determination
Date, which appears on Dow Jones Market Service (formerly Telerate) Page 3750 as
of 11:00 a.m., London time (or such other page as may replace the Dow Jones
Market Service (formerly Telerate) Page on that service for the purposes of
displaying London interbank offered rates of major banks). If no such offered
rate appears, LIBOR with respect to the relevant Interest Accrual Period will be
determined as described in (ii) below.

 

12

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

(ii) With respect to an Interest Determination Date on which no such offered
rate appears on Dow Jones Market Service (formerly Telerate) Page 3750 as
described in (i) above, LIBOR shall be the arithmetic mean, expressed as a
percentage, of the offered rates for deposits in U.S. dollars for the Index
Maturity which appears on the Reuters Screen LIBO Page as of 11:00 a.m., London
time, on such date. If, in turn, such rate is not displayed on the Reuters
Screen LIBO Page at such time, then LIBOR for such date will be obtained from
the preceding Business Day for which the Reuters Screen LIBO Page displayed a
rate for the Index Maturity.

 

(iii) If on any Interest Determination Date, Agent is required but unable to
determine LIBOR in the manner provided in paragraphs (i) and (ii) above, LIBOR
for the next Interest Accrual Period shall be determined from such financial
reporting service as Agent shall reasonably determine and use with respect to
its other loan facilities on which interest is determined based on LIBOR.

 

All percentages resulting from any calculations of LIBOR referred to in this
Agreement will be carried out to five decimal places and all U.S. dollar amounts
used in or resulting from such calculations will be rounded upwards to the
nearest cent.

 

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

 

“Loan” and “Loan Amount” have the meanings set forth in the Recitals hereto.

 

“Loan Documents” means this Agreement, the Note, the Pledge Agreements, the
Environmental Indemnity Agreement, the Guaranty of Non-Recourse Obligations, the
Memoranda of Negative Pledge, the Real Estate Security Documents, the Contract
Assignments, the Manager’s Subordinations, the Joinders, any Indemnification
Agreement and all other agreements, instruments, certificates and documents
delivered by or on behalf of Borrower or an Affiliate of Borrower to evidence or
secure the Loan as same may be amended or modified from time to time.

 

“Loss Proceeds” means Condemnation Proceeds and/or Insurance Proceeds.

 

“Losses” has the meaning set forth in Section 5.1(j).

 

“Management Agreement” means with respect to each Property, the related property
management agreement entered into between the related Property-Owning Borrower
and the related property Manager, or in such other form as may be reasonably
approved by the Agent, as such agreement may be amended, modified or
supplemented and in effect from time to time.

 

“Manager” means with respect to each Property, the property manager for such
Property pursuant to a property management agreement.

 

“Manager’s Subordination” means, with respect to each Property, the related
Manager’s Consent and Subordination of Management Agreement, executed by the
related property Manager, the related Property-Owning Borrower and the Agent,
dated as of the applicable Advance Closing Date.

 

13

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

“Material Adverse Effect” means a material adverse effect upon (i) the business
operations, properties, assets or condition (financial or otherwise) of
Borrower, (ii) the ability of Borrower to perform, or of Agent to enforce, any
of the Loan Documents or (iii) the aggregate value of the Property.

 

“Maturity Date” means the earlier of (a) the Payment Date in August, 2006 or (b)
such earlier date on which the entire Loan is required to be paid in full, by
acceleration or otherwise under this Agreement or any of the other Loan
Documents.

 

“Memoranda of Negative Pledge” means each such Memorandum of Negative Pledge,
collectively.

 

“Memorandum of Negative Pledge” means, with respect to each Property located in
any state that does not impose mortgage recording taxes, the related Memorandum
of Negative Pledge, dated as of the applicable Advance Closing Date, granted by
the applicable Property-Owning Borrower to the Agent for the benefit of the
Lenders with respect to such Property, as same may thereafter from time to time
be supplemented, amended, modified or extended by one or more agreements
supplemental thereto.

 

“Money” means all of Borrower’s right, title and interest, whether now owned or
hereafter acquired, in, to and under (i) all “money” as defined in the UCC and
(ii) all moneys, cash, or other items of legal tender generated from the use or
operation of the Property.

 

“Monthly Statement” has the meaning set forth in Section 3.12(d).

 

“Mortgage” means, with respect to each Property, the related first priority
Mortgage or Deed of Trust, Assignment of Leases and Rents, Security Agreement
and Fixture Filing, dated as of the applicable Advance Closing Date, granted by
the applicable Property-Owning Borrower to or for the benefit of either Agent or
Deed of Trust Trustee for the benefit of Agent with respect to the such Property
as security for the Loan, as same may thereafter from time to time be
supplemented, amended, modified or extended by one or more agreements
supplemental thereto.

 

“Mortgage Recording Tax Escrow Account” has the meaning set forth in Section
3.13(c).

 

“Multiemployer Plan” means a multiemployer plan defined as such in Section 3(37)
of ERISA and which is covered by Title IV of ERISA (i) to which contributions
have been, or were required to have been made by Borrower or any ERISA Affiliate
or (ii) with respect to which Borrower could reasonably be expected to incur
liability.

 

“Net Proceeds” means either (x) the purchase price (at foreclosure or otherwise)
actually received by Agent from a third party purchaser with respect to the
Collateral, as a result of the exercise by Agent of its rights, powers,
privileges and other remedies after the occurrence of an Event of Default or (y)
in the event that Agent (or its nominee) or a Lender is the purchaser at
foreclosure of the Collateral, the higher of (i) the amount of Agent’s or such
Lender’s credit bid or (ii) such amount as shall be determined in accordance
with applicable law, and in either case minus all reasonable third party, out of
pocket costs and expenses (including, without limitation, all attorneys’ fees
and disbursements and any brokerage fees, if applicable) incurred by Agent (and
its nominee, if applicable) or such Lender in connection with the exercise of
such remedies; provided, however, that such costs and expenses shall not be
deducted to the extent such amounts previously have been added to the
Indebtedness in accordance with the terms of the Loan Documents or applicable
law.

 

14

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

“New Ground Lease” means, after the termination or expiration of the Ground
Lease, any new, replacement or substitute Ground Lease issued to or obtained by
Agent or its designee with respect to or in place of the terminated Ground
Lease, whether pursuant to any provision of the terminated Ground Lease or
otherwise.

 

“Note” means the promissory note made by Borrower to initial Lender pursuant to
this Agreement, as such note may be modified, amended, supplemented or extended.

 

“Officer’s Certificate” means a certificate delivered to Agent by Borrower which
is signed by an authorized officer of Borrower.

 

“Operating Budget” means, with respect to any Fiscal Year, the operating budget
for the Property reflecting Borrower’s projections of Gross Revenues and
Property Expenses for the Property for such Fiscal Year and on an annual and
monthly basis and submitted by Borrower to Agent in accordance with the
provisions of Section 5.1(r)(vi).

 

“Organizational Agreements” means, individually or collectively, as applicable
(i) the Limited Liability Company Agreement of Holding Company Borrower, dated
as of July 16, 2003, and (ii) the comparable organizational or constituent
documentation for each Property-Owning Borrower, each as amended or restated
from time to time.

 

“Other Borrowings” means, with respect to Borrower, without duplication (but not
including the Indebtedness) (i) all indebtedness of Borrower for borrowed money
or for the deferred purchase price of property or services, (ii) all
indebtedness of Borrower evidenced by a note, bond, debenture or similar
instrument, (iii) the face amount of all letters of credit issued for the
account of Borrower and, without duplication, all unreimbursed amounts drawn
thereunder, and obligations evidenced by bankers’ acceptances, (iv) all
indebtedness of Borrower secured by a Lien on any property owned by Borrower
(whether or not such indebtedness has been assumed), (v) all Contingent
Obligations of Borrower, (vi) liabilities and obligations for the payment of
money relating to a capitalized lease obligation or sale/leaseback obligation,
(vii) liabilities and obligations representing the balance deferred and unpaid
of the purchase price of any property or services, except those incurred in the
ordinary course of Borrower’s business that would constitute ordinarily a trade
payable to trade creditors, and (viii) all payment obligations of Borrower under
any interest rate protection agreement (including, without limitation, any
interest rate swaps, caps, floors, collars or similar agreements) and similar
agreements.

 

“Payment Date” has the meaning provided in Section 3.5(a).

 

“Payment Date Statement” has the meaning provided in Section 3.12(d).

 

“Payment Intangibles” means all of Property-Owning Borrower’s right, title and
interest, whether now owned or hereafter acquired, in, to and under all “payment
intangibles” as defined in the UCC.

 

“PBGC” means the Pension Benefit Guaranty Corporation established under ERISA,
or any successor thereto.

 

“Permits” means all licenses, permits, variances and certificates required by
Legal Requirements to be obtained by Property-Owning Borrower and used in
connection with the ownership, operation, use or occupancy of the Property
(including, without limitation, business licenses, state health department
licenses, licenses to conduct business and all such other permits, licenses and
rights, obtained from any Governmental Authority or private Person concerning
ownership, operation, use or occupancy of the Property).

 

15

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

“Permitted Encumbrances” means, with respect to the Property, collectively,

 

(i) the Lien created by the Mortgages, or any other Loan Documents of record,

 

(ii) all Liens, easements, restrictions, covenants and other matters disclosed
on the Title Insurance Policy concerning the Property,

 

(iii) Liens, if any, for Impositions imposed by any Governmental Authority not
yet delinquent or being contested in good faith and by appropriate proceedings
in accordance with the Mortgages,

 

(iv) mechanic’s or materialmen’s Liens, if any, being contested in good faith
and by appropriate proceedings in accordance with the Mortgages, provided that
no foreclosure has been commenced by the lien claimant,

 

(v) rights of existing and future tenants and residents as tenants only pursuant
to Leases, and

 

(vi) Liens for public utilities,

 

which Liens and encumbrances referred to in clauses (i)-(vi) above do not
materially and adversely affect (1) the ability of Borrower to pay in full the
Principal Indebtedness and interest thereon in a timely manner or (2) the use of
the Property for the use currently being made thereof, the operation of the
Property as currently being operated or the value of the Property.

 

“Permitted Investments” means any one or more of the following obligations or
securities acquired at a purchase price of not greater than par:

 

(i) obligations of, or obligations fully guaranteed as to payment of principal
and interest by, the United States or any agency or instrumentality thereof
provided such obligations are backed by the full faith and credit of the United
States of America;

 

(ii) obligations of the following United States of America government sponsored
agencies: Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit
System (consolidated systemwide bonds and notes), the Federal Home Loan Banks
(consolidated debt obligations), the Federal National Mortgage Association (debt
obligations), the Financing Corp. (debt obligations), and the Resolution Funding
Corp. (debt obligations);

 

(iii) federal funds, unsecured certificates of deposit, time deposits, bankers’
acceptances and repurchase agreements with maturities of not more than 365 days
of any bank, the short-term obligations of which are rated in the highest
short-term rating category by the Rating Agencies;

 

(iv) unsecured certificates of deposit, time deposits, federal funds or banker’s
acceptances issued by any depository institution or trust company incorporated
under the laws of the United States or of any state thereof and subject to
supervision and examination by federal and/or state banking authorities, which
investments are fully insured by the Federal Deposit Insurance Corp.;

 

16

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

(v) debt obligations with maturities of not more than 365 days and rated by the
Rating Agencies in its highest long-term unsecured rating category;

 

(vi) commercial paper (including both non-interest-bearing discount obligations
and interest-bearing obligations payable on demand or on a specified date not
more than one year after the date of issuance thereof) with maturities of not
more than 270 days and that is rated by the Rating Agencies in their highest
short-term unsecured debt rating;

 

(vii) the Federated Prime Obligation Money Market Fund (the “Fund”) so long as
the Fund is rated “AAAm” or “AAAm-G” (or the equivalent) by the Rating Agencies;

 

(viii) any other demand, money market or time deposit, demand obligation or any
other obligation, security or investment, which the Agent shall have approved in
writing;

 

provided, however, that (A) the investments described in clauses (i) through
(viii) above must have a predetermined fixed dollar of principal due at maturity
that cannot vary or change, (B) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that index, and (C)
such investments must not be subject to liquidation prior to their maturity or
have an “r” highlighter affixed to its rating; and provided, further, that, in
the judgment of Agent, such instrument continues to qualify as a “cash flow
investment” pursuant to Code Section 860G(a)(6) earning a passive return in the
nature of interest and that no instrument or security shall be a Permitted
Investment if such instrument or security evidences (x) a right to receive only
interest payments or (y) the right to receive principal and interest payments
derived from an underlying investment at a yield to maturity in excess of 120%
of the yield to maturity at par of such underlying investment.

 

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

 

“Personalty” means all right, title and interest of Property-Owning Borrower in
and to all Equipment, Inventory, Accounts, General Intangibles, Instruments,
Investment Property, Receivables, Pledged Accounts, Deposit Accounts, Contracts
and Intellectual Property and all other personal property as defined in the
relevant UCC, now owned or hereafter acquired by Property-Owning Borrower and
now or hereafter affixed to, placed upon, used in connection with, arising from
or otherwise related to the Property or which may be used in or relating to the
planning, development, financing or operation of such Property, including,
without limitation, furniture, furnishings, equipment, machinery, money,
insurance proceeds, accounts, contract rights, trademarks, goodwill, chattel
paper, documents, trade names, licenses and/or franchise agreements, rights of
Property-Owning Borrower under leases of fixtures or other personal property or
equipment, inventory, all refundable, returnable or reimbursable fees, deposits
or other funds or evidences of credit or indebtedness deposited by or on behalf
of Property-Owning Borrower with any governmental authorities, boards,
corporations, providers of utility services, public or private, including
specifically, but without limitation, all refundable, returnable or reimbursable
tap fees, utility deposits, commitment fees and development costs.

 

“Plan” means an employee benefit or other plan, other than a Multiemployer Plan,
that is covered by Title IV of ERISA or Section 302 of ERISA or Section 412 of
the Code, and (i) was established or maintained by Borrower or any ERISA
Affiliate during the five year period ended prior to the date of this Agreement
or to which Borrower or any ERISA Affiliate makes, is obligated to make or has,
within the five year period ended prior to the date of this Agreement, been
required to make contributions or (ii) with respect to which Borrower could
reasonably be expected to incur liability.

 

17

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

“Pledge Agreement (Holding Company Borrower)” means, with respect to Holding
Company Borrower, the Pledge Agreement from each of the members of Holding
Company Borrower to Agent for the benefit of the Lenders, dated as of the
Closing Date, as same may thereafter from time to time be supplemented, amended,
modified or extended by one or more agreements supplemental thereto.

 

“Pledge Agreement (Property-Owning Borrower)” means with respect to each
Property-Owning Borrower, the Pledge Agreement from the Holding Company Borrower
to Agent for the benefit of the Lenders, dated as of the Closing Date, as same
may thereafter from time to time be supplemented, amended, modified or extended
by one or more agreements supplemental thereto.

 

“Pledge Agreements” means the Pledge Agreement (Holding Company Borrower) and
the Pledge Agreement (Property-Owning Borrower), collectively.

 

“Pledged Accounts” means the Collection Account and the Reserve Account and any
successor accounts thereto.

 

“Policies” has the meaning provided in Section 5.1(x)(iii).

 

“Preliminary Due Diligence Package” means, with respect to any asset acquisition
proposed to be financed with the proceeds of an Advance, a summary memorandum
outlining the proposed transaction, including potential transaction benefits and
all material underwriting risks, all Underwriting Issues and all other
characteristics of the proposed transaction that a reasonable lender would
consider material, together with the following due diligence information
relating to such assets to be provided by Holding Company Borrower to Agent
pursuant to this Agreement:

 

(i) the Collateral Information;

 

(ii) current rent roll, if applicable;

 

(iii) cash flow pro-forma, plus historical information, if available;

 

(iv) description of the Property;

 

(v) indicative debt service coverage ratios;

 

(vi) indicative loan-to-value ratio;

 

(vii) term sheet outlining the transaction generally;

 

(viii) the submission to the Borrower’s and the Guarantor’s credit committee;
and

 

(ix) any exceptions to the representations and warranties set forth in Article
IV to this Agreement.

 

“Principal Indebtedness” means the aggregate principal amount of the Advances
outstanding as adjusted by each increase (including for advances made by Lenders
to protect the Collateral), or decrease in such principal amount of the Loan
outstanding, whether as a result of prepayment or otherwise, from time to time.

 

18

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

“Proceeds” shall have the meaning given in the UCC and, in any event, shall
include, without limitation, all of Property-Owning Borrower’s right, title and
interest in and to proceeds, product, offspring, rents, profits or receipts, in
whatever form, arising from the Collateral.

 

“Property” means the CTL Property or the Conduit CMBS Property acquired with the
proceeds of each Advance.

 

“Property Expenses” means, with respect to the Property, the following costs and
expenses but only, in the case of costs and expenses in respect of goods and
services, to the extent that they (x) are paid to Persons who are generally in
the business of providing such goods and services, (y) are customary for the
types of goods or services provided in the geographical area in which such goods
or services are provided and (z) do not constitute Capital Improvement Costs:

 

(i) Impositions;

 

(ii) insurance premiums for policies of insurance required to be maintained by
Borrower with respect to the Property pursuant to this Agreement or the other
Loan Documents;

 

(iii) the cost of all electricity, oil, gas, water, steam, heat, ventilation,
air conditioning and any other energy, utility or similar item and overtime
services with respect to the Property;

 

(iv) payments required under service contracts (including, without limitation,
service contracts for heating, ventilation and air conditioning systems,
elevators, landscape maintenance, pest extermination, security, furniture, trash
removal, answering service and credit checks);

 

(v) wages, benefits, payroll taxes, uniforms, the cost of cleaning supplies,
insurance costs and all related expenses for maintenance personnel for the
Property (including, without limitation, housekeeping employees, porters and
general repair, maintenance and security employees), whether hired by Borrower,
Manager, Collateral Agent or any other Person;

 

(vi) costs required in connection with the enforcement of any Lease (including,
without limitation, reasonable attorneys’ fees, charges for lock changes and
storage and moving expenses for furniture, fixtures and equipment and expenses
to relet the premises);

 

(vii) advertising and rent-up expenses (including, without limitation, leasing
services, tenant rent concessions, promotions for existing and prospective
tenants, banners, signs and brokerage commissions);

 

(viii) out-of-pocket cleaning, maintenance and repair expenses;

 

(ix) any expense the total cost of which is passed through to tenants pursuant
to executed Leases;

 

(x) legal, accounting, auditing and other professional fees and expenses
incurred in connection with the ownership, leasing and operation of the Property
(including, without limitation, collection costs and expenses);

 

(xi) permits, licenses and registration fees and costs;

 

(xii) any expense necessary in order to prevent a breach under a Lease;

 

19

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

(xiii) any expense necessary in order to prevent or cure a violation of any
Legal Requirement (including Environmental Law), regulation, code or ordinance;

 

(xiv) costs and expenses of any appraisals, valuations, surveys, inspections,
environmental assessments or market studies;

 

(xv) costs and expenses of security and security systems provided to and/or
installed and maintained with respect to the Property;

 

(xvi) costs of title, UCC, litigation and other searches and costs of
maintaining the Lien of the Mortgage thereon and the security interest in any
related Collateral;

 

(xvii) fees and expenses of property managers contracted with by Borrower to
perform management, administrative, payroll or other services in connection with
the operation of the Property (including, without limitation, the fees and
expenses owed to Manager under the Management Agreement);

 

(xviii) any other costs and expenses contemplated by the Operating Budget and
customarily incurred in connection with operating properties similar in type and
character to the Property (including rent for any management office);

 

(xix) any cost or expense to comply with the requirements of any Leases, whether
expended by the Borrower, the Manager, the Collateral Agent or any other Person.

 

(xx) any other category of property expense that is customary for a property of
the type and size as the Property and is reasonably approved by Agent on behalf
of the Lenders.

 

“Property-Owning Borrower” has the meaning provided in the first paragraph of
this Agreement.

 

“Quarterly Statement” has the meaning provided in Section 5.1(r)(vii).

 

“Real Estate Closing” means, with respect to any Property, the closing that
shall be deemed to have occurred when (1) the Real Estate Security Documents
applicable to such Property shall have been filed of record in the appropriate
filing office in the jurisdiction in which such Property is located or
irrevocably delivered to the Title Agent for such recordation and all mortgage
recording taxes incurred or to be incurred in connection therewith shall have
been paid by the Borrower and (2) the Title Insurance Policy shall have been
purchased by the Lender and paid for by the Borrower, as evidenced by the
delivery of a marked-up Title Insurance Policy.

 

“Real Estate Security Documents” means, with respect to each Advance for the
acquisition of Property, the related Mortgage(s) and the related Assignment(s)
of Rents and Leases.

 

“Real Estate Taxes Escrow Account” has the meaning provided in Section 3.13(b).

 

“Receivables” means all of Property-Owning Borrower’s right, title and interest,
whether now owned or hereafter acquired, in, to and under (i) any Accounts,
Chattel Paper, Instruments, Payment Intangibles, Letter of Credit Rights,
Documents, insurance policies, drafts, bills of exchange, trade acceptances,
notes or other indebtedness owing to Property-Owning Borrower from whatever
source arising, (ii) to the extent not otherwise included above, (a) all income,
Rents, issues, profits, revenues, deposits and other benefits from the Property
and (b) all receivables and other obligations now existing or

 

20

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

hereafter arising, or created out of the sale, lease, sublease, license,
concession or other grant of the right of the use and occupancy of property or
rendering of services by Property-Owning Borrower or any operator or manager of
the Property or other commercial space located at the Property or acquired from
others (including, without limiting the generality of the foregoing, from rental
of space, halls, stores, and offices, and deposits securing reservations of such
space, exhibit or sales space of every kind, license, lease, sublease and
concession fees and rentals, health club membership fees, food and beverage
wholesale and retail sales of merchandise, service charges, vending machine
sales and proceeds, if any, from business interruption or other loss of income
insurance, (iii) all of the books and records (whether in tangible, electronic
or other form) now or hereafter maintained by or on behalf of Mortgagor in
connection with the operation of the Property or in connection with any of the
foregoing and (iv) all Supporting Obligations and all liens and security
interests securing any of the foregoing and all other rights, privileges and
remedies relating to any of the foregoing.

 

“Release” means any active or passive release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment (including, without limitation,
the movement of Hazardous Substances through ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata).

 

“Release Condition” means, with respect to any proposed Capital Event of a
Property, the condition that shall be satisfied if the Agent determines in its
sole discretion that such proposed Capital Event shall not have a Material
Adverse Effect and that following such Capital Event no mandatory principal
payments are due and payable pursuant to Section 3.7(c)(i).

 

“Remedial Work” has the meaning set forth in Section 5.1(d)(i).

 

“Rents” means all income, rents, issues, profits, revenues (including all oil
and gas or other mineral royalties and bonuses), deposits (other than utility
and security deposits) and other benefits from the Property.

 

“Replacement Reserve Account” has the meaning set forth in Section 3.13(a).

 

“Replacement Reserve Amount” means one-twelfth (1/12th) of the annual per square
foot or per unit amount which, in connection with an Advance applied to acquire
Property, the Agent, may require be deposited on subsequent Payment Dates into
the Replacement Reserve Account on a monthly basis to be applied to replacement
reserve items (taking into account, in connection with CTL Properties only, any
deposits to reserves or payments expressly required to be made by tenants under
Credit Leases).

 

“Reserve Account” means the Deferred Maintenance Escrow Account, the Replacement
Reserve Account, the Leasing Costs/TI Costs Account, the Real Estate Taxes
Escrow Account, the Insurance Escrow Account, and the Mortgage Recording Tax
Escrow Account, collectively, and any successor accounts to any of the
foregoing.

 

“Single-Purpose Entity” means a Person, other than an individual, which (i) is
formed or organized under the laws of a state of the United States or the
District of Columbia solely for the purpose of acquiring and directly (or in the
case of the Holding Company Borrower, indirectly) holding an ownership interest
in the Property, (ii) does not engage in any business unrelated to the Property,
(iii) does not have any assets other than those related to its interest in the
Property (or in the case of the Holding Company Borrower, its interest in the
Property Owing Borrowers) or any indebtedness other than as permitted by this
Agreement, the Mortgages or the other Loan Documents, (iv) has its own separate
books and records and has its own accounts, in each case which are separate and
apart from the books and records and accounts of any other Person, (v) is
subject to all of the limitations on powers set

 

21

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

forth in the Organizational Agreement of Holding Company Borrower and the
Managing Member as of the Closing Date, (vi) holds itself out as being a Person
separate and apart from any other Person and (vii) has, or is controlled,
directly or indirectly, by a Person that has, at least one independent director
that is not an employee, officer, director, or paid consultant of any Affiliate
of such Person or of any principal or officer of such Person.

 

“SNDA” has the meaning set forth in Section 2.3(b)(x)(7).

 

“Supplemental Due Diligence List” shall mean, with respect to any assets
proposed to be acquired with the proceeds of an Advance, information or
deliveries concerning the assets that Agent shall reasonably request in addition
to the Preliminary Due Diligence Package.

 

“Supporting Obligations” means all of Property-Owning Borrower’s right, title
and interest, whether now owned or hereafter acquired, in, to and under (i) all
“supporting obligations” as defined in the UCC and (ii) any other guarantee,
letter of credit, secondary obligation, right or privilege that supports or
pertains to any of the Property.

 

“Survey” means an ALTA/ACSM survey of the Property prepared by a registered
Independent surveyor, in form and content satisfactory to the Agent and the
Borrower.

 

“Taking” means a taking or voluntary conveyance during the term hereof of all or
part of the Property, or any interest therein or right accruing thereto or use
thereof, as the result of, or in settlement of, any condemnation or other
eminent domain proceeding by any Governmental Authority affecting the Property
or any portion thereof whether or not the same shall have actually been
commenced.

 

“TI Costs” means tenant improvement costs and allowances incurred by Borrower in
connection with renewing existing Leases or executing new Leases for space
located in the Property.

 

“Title Agent” means a title company proposed by Borrower and reasonably
acceptable to the Agent.

 

“Title Insurance Policy” means a mortgagee’s title insurance policy or policies
(i) issued by Chicago Title Insurance Company or one or more title companies
reasonably satisfactory to Agent which policy or policies shall be in form ALTA
1992 (with waiver of arbitration provisions as provided for by the applicable
and respective state’s title policy endorsement) (with reinsurance as Agent may
require reasonably satisfactory to Agent and at amounts reasonably acceptable to
the primary insurer), naming Agent as the insured party for benefit of the
Lenders, (ii) insuring the Mortgage as being a first and prior lien upon the
Property, (iii) showing no encumbrances against the Property (whether junior or
superior to the Mortgage) which are not acceptable to Agent other than Permitted
Encumbrances, (iv) in an amount acceptable to Agent (but not more than the Loan
Amount), and (v) otherwise in form and content reasonably acceptable to Agent.
Such Title Insurance Policy shall include the following endorsements or
affirmative coverages in form and substance reasonably acceptable to Agent, to
the extent legally permitted and available in the jurisdiction in which the Land
is located: variable rate endorsement; survey endorsement; comprehensive
endorsement; first loss, last dollar and tie-in endorsement; access coverage;
separate tax parcel coverage; contiguity (if applicable) coverage; and such
other endorsements as Agent shall reasonably require in order to provide
insurance against specific risks identified by Agent in connection with the
Property.

 

“Transaction” means the transactions contemplated by the Loan Documents.

 

22

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

“Transaction Costs” means all costs and expenses paid or payable by Borrower
relating to the Transaction (including, without limitation, reasonable transfer,
mortgage and recording fees and costs, appraisal fees, legal fees and accounting
fees and the costs and expenses described in Section 8.23).

 

“Transfer” means the conveyance, assignment, sale, mortgaging, encumbrance
(other than a Permitted Encumbrance), pledging, hypothecation, granting of a
security interest in, granting of options with respect to, or other disposition
of (directly or indirectly, voluntarily or involuntarily, by operation of law or
otherwise, and whether or not for consideration or of record) all or any portion
of any legal or beneficial interest (a) in all or any portion of the Property;
or (b) in the stock, partnership interests, membership interests or other
ownership interests in Borrower and shall also include, without limitation to
the foregoing, the following: an installment sales agreement wherein Borrower
agrees to sell the Property or any part thereof or any interest therein for a
price to be paid in installments; 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 Rent; and any instrument subjecting the Property to a
condominium regime or transferring ownership to a cooperative corporation.

 

“Triple Net Lease” shall mean a lease under which the tenant pays for all or
substantially all real estate property taxes, property insurance, and operating
expenses of the Property.

 

“UCC” means with respect to any Collateral, the Uniform Commercial Code as in
effect from time to time in the State of New York; provided, that if by reason
of mandatory provisions of law, the perfection or the effect of perfection or
non-perfection or priority of the security interest in any item or portion of
the Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, “UCC” shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection or
non-perfection or priority. Wherever this agreement refers to terms as defined
in the UCC, if such term is defined in more than one Article of the UCC, the
definition in Article 9 of the UCC shall control.

 

“Underwriting Issues” shall mean, with respect to any assets as to which Holding
Company Borrower intends to request an Advance, all material information that
has come to Holding Company Borrower’s attention that, based on the making of
reasonable inquiries and the exercise of reasonable care and diligence under the
circumstances, would be considered a materially “negative” factor (either
separately or in the aggregate with other information), or a material defect in
documentation or closing deliveries, to a reasonable institutional mortgage
lender in determining whether to finance the assets in question.

 

“Use” means, with respect to any Hazardous Substance, the generation,
manufacture, processing, distribution, handling, use, treatment, recycling or
storage of such Hazardous Substance or transportation of such Hazardous
Substance in connection with or affecting Borrower or the Property.

 

“Welfare Plan” means an employee welfare benefit plan as defined in Section 3(1)
of ERISA established or maintained by Borrower or any ERISA Affiliate or with
respect to which Borrower or any ERISA Affiliate has an obligation to make
contributions and covers any current or former employee of Borrower or any ERISA
Affiliate.

 

23

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

ARTICLE II.

CONDITIONS PRECEDENT

 

Section 2.1. Conditions Precedent to Closing. The obligation of the Agent to
make the Loan is subject to the satisfaction by Borrower (and Guarantor, where
applicable) of the following conditions no later than the Closing Date:

 

(a) Loan Agreement. Holding Company Borrower, Collateral Agent, and Agent shall
have executed and delivered this Agreement.

 

(b) Note. Holding Company Borrower shall have executed and delivered to Agent
the Note.

 

(c) Environmental Indemnity Agreement; Pledge Agreements; Guaranty of
Non-Recourse Obligations; Financing Statements; Escrow Agreement. Holding
Company Borrower and First States Group, L.P. shall have executed and delivered
the Environmental Indemnity Agreement to the Agent for benefit of the Lenders.
Each of the members of Holding Company Borrower shall have executed and
delivered the Pledge Agreement (Holding Company Borrower) to the Agent for
benefit of the Lenders. Guarantor shall have executed and delivered the Guaranty
of Non-Recourse Obligations. Borrower shall have cooperated with the Agent with
respect to all financing statements required to be filed in order to perfect
Agent’s security interest in the Collateral. Title Agent, Holding Company
Borrower and the Agent shall have executed and delivered the Escrow Agreement.

 

(d) Opinions of Counsel. The initial Lender and Collateral Agent shall have
received from counsel to Borrower, the Managing Member and the Guarantor, legal
opinions in form and substance acceptable to Agent, with respect to corporate
matters and with respect to substantive non-consolidation of the Guarantor and
Holding Company Borrower in the event of the bankruptcy of the Guarantor. Such
legal opinions shall be addressed to Agent and its successors and assigns, dated
the Closing Date, and in form and substance reasonably satisfactory to Agent and
its counsel.

 

(e) Organizational Documents. The initial Lender shall have received with
respect to each of Holding Company Borrower and the Guarantor its certificate of
formation or certificate of incorporation, as applicable, as amended, modified
or supplemented to the Closing Date, as filed with the Secretary of State in the
jurisdiction of organization and in effect on the Closing Date and certified to
be true, correct and complete by the appropriate Secretary of State as of a date
not more than twenty (20) days prior to the Closing Date, together with, if
available, a good standing certificate from such Secretary of State and, for
Holding Company Borrower only, a good standing certificate from the Secretaries
of State (or the equivalent thereof) of each other State in which Holding
Company Borrower is required to be qualified to transact business.

 

(f) Certified Resolutions, etc. The initial Lender shall have received a
certificate of each of Holding Company Borrower and the Guarantor dated the
Closing Date, certifying (i) the names and true signatures of its incumbent
officers authorized to sign the Loan Documents to which Holding Company
Borrower, the Managing Member or the Guarantor is a party, (ii) the
Organizational Agreement of the Holding Company Borrower as in effect on the
Closing Date, (iii) the resolutions of each of the Holding Company Borrower, the
Managing Member and the Guarantor, approving and authorizing the execution,
delivery and performance of the Loan Documents to which it is a party, and (iv)
that there have been no changes in any Organizational Agreement since the date
of execution or preparation thereof.

 

(g) Additional Matters. The Agent shall have received such other certificates,
opinions, documents and instruments relating to the Loan as may have been
reasonably requested by Agent. All corporate and other organizational
proceedings, all other documents (including, without limitation, all documents
referred to herein and not appearing as exhibits hereto) and all legal matters
in connection with the Loan shall be reasonably satisfactory in form and
substance to Agent.

 

(h) Advisory Fee; Transaction Costs. Borrower shall have paid the Advisory Fee
and all Transaction Costs for which bills have been submitted in accordance with
the provisions of Section 8.23.

 

24

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

(i) No Default or Event of Default. No Default or Event of Default shall have
occurred and be continuing on the Closing Date.

 

(j) No Injunction. No law or regulation shall have been adopted, no order,
judgment or decree of any Governmental Authority shall have been issued, and no
litigation shall be pending or threatened, which in the good faith judgment of
the initial Lender would enjoin, prohibit or restrain, or impose or result in
the imposition of any material adverse condition upon, the making or repayment
of the Loan or the consummation of the Transaction.

 

(k) Representations and Warranties. The representations and warranties herein
and in the other Loan Documents shall be true and correct in all material
respects on the Closing Date.

 

(l) Filings, Registrations, Recording. Any documents (including, without
limitation, financing statements) required to be filed, registered or recorded
in order to create, in favor of the Agent, a perfected, first-priority security
interest in the Collateral, subject to no Liens other than Permitted
Encumbrances, shall have been properly prepared and executed for filing,
registration or recording in each office in each jurisdiction in which such
filings, registrations and recordations are required to perfect such
first-priority security interest.

 

(m) Consents, Licenses, Approvals, etc. The Agent shall have received copies
certified by the Borrower of all consents, licenses and approvals, if any,
required in connection with the execution, delivery and performance by the
Borrower of, and the validity and enforceability of, the Loan Documents, which
consents, licenses and approvals shall be in full force and effect.

 

(n) Collection Account and Reserve Account. The Collection Account and Reserve
Account shall have been established with the Collateral Agent, and the terms of
all documentation relating to such accounts shall be in accordance with the
requirements of the Loan Documents and shall be satisfactory to the Agent in
form and substance and the Holding Company Borrower shall provide evidence of
same, including any agreements with respect thereto.

 

(o) Other Documents. The Agent shall have received such other documents as the
Agent or its counsel may reasonably request.

 

Section 2.2. Execution and Delivery of Agreement. The execution and delivery of
this Agreement by each party to this Agreement shall be deemed to constitute the
satisfaction or waiver of the conditions set forth in Section 2.1.

 

Section 2.3. Advance Procedure

 

(a) Preliminary Approval. Holding Company Borrower shall give Agent written
notice of each proposed Advance and Agent shall inform Holding Company Borrower
of its determination with respect to any assets proposed to be acquired by
Borrower solely in accordance with the procedure set forth below. Agent shall
have the right to review all assets proposed to be financed by Agent with the
proceeds of an Advance and to conduct its own due diligence investigation of
such assets as Agent reasonably determines. Agent shall be entitled to make a
determination, in the exercise of its good faith business judgment, that it
shall or shall not finance any or all of the assets proposed to be financed by
Agent with the proceeds of an Advance.

 

(i) Holding Company Borrower may, from time to time, submit to Agent a
Preliminary Due Diligence Package for Agent’s review and approval in order to
make an Advance with respect to any Property that Holding Company Borrower
proposes to cause a Property-Owning Borrower to acquire and finance under this
Agreement.

 

25

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

(ii) Upon Agent’s receipt of a complete Preliminary Due Diligence Package,
Agent, within five (5) Business Days, shall have the right to request, in
Agent’s good faith business judgment, additional diligence materials and
deliveries that Agent shall specify on a Supplemental Due Diligence List. Upon
Agent’s receipt of all of the Diligence Materials or Agent’s waiver thereof,
Agent, within seven (7) Business Days shall either (i) notify Holding Company
Borrower (x) that it has obtained internal credit approval; (y) of the Advance
Rate, and (z) of the Capital Markets Execution for the assets or (ii) deny, in
Agent’s sole and absolute discretion, the request for an Advance. Agent’s
failure to respond to Holding Company Borrower within seven (7) Business Days
shall be deemed to be a denial of Holding Company Borrower’s request for an
Advance, unless Agent and Holding Company Borrower have agreed otherwise in
writing.

 

(b) Final Approval. Upon Agent’s notification to Holding Company Borrower of the
Advance Rate and the Capital Markets Execution for any assets, Holding Company
Borrower shall, if Holding Company Borrower desires to obtain an Advance with
respect to such assets, satisfy the conditions set forth below (in addition to
satisfying the conditions precedent to obtaining each Advance, as set forth in
Section 2.4 of this Agreement) as a condition precedent to Agent’s approval of
such assets as Property, all in a manner reasonably satisfactory to Agent and
pursuant to documentation reasonably satisfactory to Agent:

 

(i) Survey; Appraisal. Agent shall have received the Survey and the Appraisal
with respect to the Property, which shall be in form and substance reasonably
satisfactory to Agent.

 

(ii) Engineering Report. Agent shall have received the Engineering Report with
respect to the Property prepared by the Engineer, which Engineering Report shall
be reasonably acceptable to Agent.

 

(iii) Environmental Matters. An Environmental Report prepared by an
Environmental Auditor with respect to the Property shall have been made
available to the Agent, which Environmental Report shall be reasonably
acceptable to Agent.

 

(iv) Property Information. Agent shall have received reasonably acceptable
information relating to the Property, which shall include the following, to the
extent reasonably available:

 

(1) operating statements for the current year (including actual to date
information, an annual budget and trailing twelve month data in hard copy and on
diskette) and for the immediately preceding year (including tenant improvements
costs, leasing commissions, capital reserves, major repairs, replacement items
and occupancy rates in hard copy and on diskette);

 

(2) copies of Leases with respect to the tenants of the Property, a copy of the
standard lease form, if any, and tenant lease abstracts;

 

(3) current property rent roll data on a tenant by tenant basis in hard copy;
and

 

26

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

(4) current real estate tax bills (or a certification of current tax amounts
evidenced in the owner’s title insurance policy).

 

(v) Pro-Forma Financial Statement; Operating Budget. Agent shall have received
(i) the initial pro forma financial statement and Operating Budget for the
Property for the following twelve months (including on an annual and monthly
basis a break-down of projected Gross Revenues, Property Expenses, Capital
Improvement Costs (including Leasing Commissions and TI Costs), replacement
reserve costs and average occupancy level (expressed as a percentage)), (ii) a
financial statement that forecasts projected revenues and operating expenses for
not less than three years (including the assumptions used in such forecast), and
(iii) any local market study and/or research and demographics report prepared
for Borrower.

 

(vi) Site Inspection. Borrower shall have provided to Agent the opportunity to
perform, or cause to be performed on its behalf, an on-site due diligence review
of the Property which inspection is satisfactory to Agent in its sole
discretion.

 

(vii) Insurance. Agent shall have received certificates of insurance
demonstrating insurance coverage in respect of the Property of types, in
amounts, with insurers and otherwise in compliance with the terms, provisions
and conditions set forth in this Agreement. Such certificates shall indicate
that Agent is a named additional insured and shall contain a loss payee
endorsement in favor of Agent with respect to the property policies required to
be maintained under this Agreement.

 

(viii) Lien Search Reports. To the extent not covered by the materials delivered
by the title insurance company in connection with the title commitment, Agent
shall have received satisfactory reports of tax lien and judgment searches and
title updates conducted by the title companies or search firms acceptable to the
Agent with respect to the Property, such searches to be conducted in each of the
locations required by Agent.

 

(ix) Consents, Licenses, Approvals, etc. Agent shall have received copies of all
consents, licenses and approvals, if any, required in connection with the
execution, delivery and performance by Borrower and Collateral Agent, and the
validity and enforceability, of the Loan Documents, and such consents, licenses
and approvals shall be in full force and effect.

 

(x) Certificates of Occupancy, Zoning Reports. Agent shall have received copies
of certificates of occupancy issued by the appropriate Governmental Authority of
the jurisdiction in which the Property is located reflecting, and consistent
with, the use of the Property as of the Advance Closing Date and evidence that
the Property is in compliance with all applicable zoning laws, rules and
regulations (which items may be satisfied through the delivery of a report from
The Planning and Zoning Resource Corporation with respect to the Property).

 

(xi) Additional Real Estate Matters. Agent shall have received such other real
estate related certificates and documentation relating to the Property as Agent
may have reasonably requested. Such documentation shall include the following as
requested by Agent and to the extent reasonably available:

 

(1) a certified copy of the purchase and sale agreement (with exhibits) for the
Property;

 

27

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

(2) estoppel certificates in form and substance reasonably acceptable to Agent
in respect of such percentage of the rentable square footage rented to
commercial tenants as shall be reasonably acceptable to Agent;

 

(3) graphics (including interior and exterior photographs, rental brochures and
a competitive properties map) as required by Agent;

 

(4) with respect to each CTL Property:

 

(A) at least one signed copy of the Credit Lease,

 

(B) at least one signed copy of each amendment, modification, assignment, and
assumption of the Credit Lease,

 

(C) at least one signed copy of the guaranty of a Credit Lease (a “Lease
Guaranty”), if any,

 

(D) a copy of the opinion of counsel for the Credit Lease and the Lease
Guaranty, if any,

 

(E) a copy of evidence of formation and authority for the tenant and any Lease
Guarantor, if any,

 

(F) a copy of the “Lease Enhancement Policy” or “Extended Amortization Policy”
or “residual value insurance policy” (the “Lease Insurance Policy”), if any,

 

(G) an estoppel certificate dated no earlier than 90 days before the date of
delivery, addressed to Holding Company Borrower and Holding Company Borrower’s
successors and assigns, executed by the tenant and the guarantor under any Lease
Guaranty (the “Lease Guarantor”),

 

(H) a subordination, nondisturbance, and attornment agreement between the tenant
and Property-Owning Borrower confirming the continuation of the Credit Lease
after any foreclosure under the Loan (the “SNDA”),

 

(I) an original assignment of the SNDA from Property-Owning Borrower in blank,
in recordable form if the SNDA was in recordable form, and

 

(J) a UCC-1 financing statement relating to the assignment to Agent of the Lease
Guaranty, the SNDA, and any claims under the Lease Insurance Policy; and

 

(5) with respect to each Ground Lease:

 

(A) (a) original ground lessor’s estoppel certificate; (b) original fully
executed counterpart or a certified copy of the Ground Lease and all amendments
referred to in “a”; (c) copy of memorandum of lease, with recording information;
(d) original of any separate agreement, if any, between the

 

28

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

ground lessor and Property-Owning Borrower; (e) copy of an opinion of counsel
for ground lessor, if any such opinion was obtained; and (f) copy of recorded
subordination agreement from any fee mortgagee of record at the time item “c”
was recorded.

 

(xii) Title Commitment. Agent shall have received the title commitment for the
Property, which shall be reasonably acceptable to the Agent.

 

Within five (5) Business Days of Holding Company Borrower’s satisfaction of all
of the conditions enumerated in clauses (i) through (xii) above, Agent shall
either (i) if the asset proposed to be acquired with the proceeds of the Advance
are not reasonably satisfactory in form and substance to Agent, notify Holding
Company Borrower that Agent has not approved the asset as Property or (ii)
notify Holding Company Borrower in writing that Agent has approved the asset as
Property (including in such notification (x) the related deposit required to be
made to the Deferred Maintenance Escrow Account and the Mortgage Recording Tax
Escrow Account out of the proceeds of the Advance, if any, (y) the Replacement
Reserve Amount, if any, and (z) the Leasing Costs/TI Costs Amount, if any).
Agent’s failure to respond to Holding Company Borrower within five (5) Business
Days shall be deemed to be a denial of Holding Company Borrower’s request that
Agent approve the asset, unless Agent and Holding Company Borrower have agreed
otherwise in writing.

 

Section 2.4. Initial and Subsequent Advances. The making of each Advance to
Borrower on any Business Day is subject to the following further conditions
precedent, both immediately prior to the making of such Advance and also after
giving effect thereto and to the intended use thereof:

 

(a) the Escrow Agreement, together with any amendments or modifications thereto
reasonably required in Agent’s discretion, shall be in full force and effect;

 

(b) no Default or Event of Default shall have occurred and be continuing;

 

(c) the representations and warranties made by Borrower in Article IV hereof,
and in each of the other Loan Documents, shall be true and correct on and as of
the date of the making of such Advance with the same force and effect as if made
on and as of such date (or, if any such representation or warranty is expressly
stated to have been made as of a specific date, as of such specific date);

 

(d) the aggregate outstanding principal amount of the Advances shall not exceed
the maximum amount permitted at such time under Section 3.7 hereof;

 

(e) the Agent shall have completed its due diligence review of the Property
being acquired with the proceeds of such Advance and such other documents,
records, agreements, instruments or information relating to the Property as the
Lender in its reasonable discretion deems appropriate to review and such review
shall be satisfactory to the Lender in its reasonable discretion;

 

(f) the Lender shall have received the following Property-related Loan
documents:

 

(i) Real Estate Security Documents; Memorandum of Negative Pledge.
Property-Owning Borrower shall have executed and delivered to Title Agent the
Real Estate Security Documents and the Memorandum of Negative Pledge with
respect to the Property with a direction letter to record the Memorandum of
Negative Pledge;

 

29

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

(ii) Financing Statements. Borrower shall have cooperated with Agent in the
preparation of all financing statements required by Agent pursuant hereto and
such financing statements shall have been irrevocably delivered to the Title
Agent;

 

(iii) Management Agreement and Manager’s Subordination. With respect to the
Property, Agent shall have received the executed Management Agreement and the
Manager and Property-Owning Borrower shall have executed and delivered the
Manager’s Subordination to Agent;

 

(iv) Contract Assignment. With respect to the Property, Property-Owning Borrower
shall have executed and delivered to Agent a Contract Assignment;

 

(v) Organizational Agreement; Joinder. The Holding Company Borrower shall have
delivered to the Agent the Organizational Agreement for the Property-Owning
Borrower that will own such Property, which shall be in form and substance
acceptable to the Agent and such Property-Owning Borrower shall have executed
and delivered to Agent a Joinder;

 

(vi) Pledge Agreement. The Holding Company Borrower shall have executed and
delivered to the Agent a supplement to each of the Pledge Agreement
(Property-Owning Borrower) and the UCC insurance policy confirming that the
Agent has a perfected first priority security interest in the related ownership
interests pledged as part of the Collateral;

 

(vii) UCC Insurance Policy. As to any Advance (or series of Advances being made
on any single Advance Closing Date) in an aggregate amount of not less than
$25,000,000, the Borrower shall have cooperated with the Agent to cause the
issuance by a title company acceptable to the Agent of a UCC insurance policy
with respect to the ownership interests pledged to the Agent under and pursuant
to the Pledge Agreements in an amount not less than the aggregate amount of such
Advance or Advances and the Borrower shall have paid all costs and expenses
incurred in connection therewith.

 

(viii) Opinions of Counsel. Agent shall have received from counsel to any new
Property-Owning Borrower joining this Agreement on such Advance Closing Date its
legal opinion in form and substance satisfactory to Agent, as to corporate
matters. The legal opinions will be addressed to Agent and Lenders and their
successors and assigns, dated the Advance Closing Date, and in form and
substance reasonably satisfactory to Agent and its counsel; and

 

(ix) Closing Statement. The Agent and Borrower shall have agreed upon a detailed
closing statement from Borrower in a form reasonably acceptable to the Agent,
which includes a complete description of Borrower’s sources and uses of funds on
the Closing Date; and

 

(x) Indemnification Agreement. To the extent the Borrower has not delivered any
of the third party due diligence items set forth in Section 2.3(b)(i)–(iii),
(v)-(x), and (xii) above with respect to a proposed asset and the Agent has
nonetheless approved the asset as a Property on the condition that First States
Group, L.P. delivers an Indemnification Agreement, the Agent shall have received
from First States Group, L.P. an Indemnification Agreement, in a form reasonably
acceptable to the Agent.

 

30

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

(g) Borrower shall have paid all Transaction Costs for which bills have been
submitted and have not been previously paid.

 

ARTICLE III.

GENERAL TERMS

 

Section 3.1. The Loan.

 

(a) Subject to the terms and conditions of this Agreement, the Lenders shall
make Advances to Borrower from the initial Advance Closing Date to but excluding
the Maturity Date in an aggregate principal amount at any one time outstanding
up to the Loan Amount. The proceeds of the Loan shall be used solely for the
purposes identified in Section 3.2 hereof. On each Advance Closing Date, upon
the satisfaction of the conditions set forth in Section 3.3 and 3.4, the Lenders
shall initiate a wire or other transfer of immediately available funds to an
account designated by Borrower in an amount equal to (x) the related Advance
Rate, less (y) the sum of (i) the reasonable out-of-pocket expenses incurred by
Agent in connection with the origination and funding of the Advance, (ii) the
reasonable fees and expenses of Agent’s counsel and (iii) the amount, if any,
reasonably required by the Agent in writing to be deposited in the Deferred
Maintenance Escrow Account, the Real Estate Taxes Escrow Account or the
Insurance Escrow Account pursuant to Section 3.13. Subject to the terms and
conditions of this Agreement, during such period, the Borrower may borrow, repay
and reborrow hereunder. In no event shall an Advance be made when any Default
has occurred and is continuing. Borrower may not receive, without Agent’s
written consent (i) more than two Advances during any calendar month, or (ii) an
Advance in an amount less than $3,000,000.

 

(b) The Loan shall constitute one general obligation of Borrower to Lenders and
shall be secured by the security interest in and Liens granted upon all of the
Collateral, and by all other security interests and Liens at any time or times
hereafter granted by Borrower to Agent or to Collateral Agent on behalf of
Lenders as security for the Loan.

 

Section 3.2. Use of Proceeds. Proceeds of the Loan shall be used only for the
following purposes: (a) to finance a portion of the acquisition cost of or
refinance the Property, (b) to make the required deposits to the Deferred
Maintenance Escrow Account, the Real Estate Taxes Escrow Account, and the
Insurance Escrow Account, (c) to pay Transaction Costs (including the reasonable
out of pocket expenses incurred by Lenders in connection with the origination
and funding of the Loan) and (d) to pay to counsel to each of Collateral Agent,
the Agent and Borrower its respective reasonable fees, expenses and
disbursements.

 

Section 3.3. Security for the Loan. The Note and Borrower’s obligations
hereunder and under all other Loan Documents shall be secured by (a) so long as
an Event of Default has not occurred and is not continuing, the Pledge
Agreements and (b) if an Event of Default has occurred and is continuing, Liens
upon the Property pursuant to the Mortgages, the Contract Assignments, the
Manager’s Subordinations, the Assignments of Leases and Rents.

 

Section 3.4. Borrower’s Note . Borrower’s obligation to pay the principal of and
interest on the Loan and all other amounts due under the Loan Documents shall be
evidenced initially by the Note, duly executed and delivered by Borrower on the
Closing Date. The Note shall be payable as to principal, interest and all other
amounts due under the Loan Documents, as specified in this Agreement, with a
final maturity on the Maturity Date. The initial Lender shall have the right to
have the Note subdivided, by exchange for promissory notes of lesser
denominations in the form of the initial Note, upon written request to Borrower
and, in such event, Borrower shall promptly execute additional or replacement
Notes. At no time shall the aggregate principal amount of the Note (or of such
replacement Notes) exceed the Loan Amount.

 

31

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

Section 3.5. Repayment of Advances; Interest; Exit Fee.

 

(a) Borrower shall pay to Agent interest on the Principal Indebtedness of the
Loan from the initial Advance Closing Date to but excluding the date the Loan
shall be paid in full at the interest rate provided in Section 3.5(b) below.
Interest on the Loan shall accrue on the Principal Indebtedness commencing on
the Closing Date and shall be payable in arrears on the eleventh (11th) day of
the month following the month in which the initial Advance Closing Date occurs
and on the eleventh (11th) day of each and every month thereafter through the
month in which the Maturity Date occurs, unless, in any such case, such day is
not a Business Day, in which event such interest shall be payable on the first
Business Day following such date (such date for any particular month, the
“Payment Date”). The Agent and the Collateral Agent shall calculate LIBOR on
each Interest Determination Date for the related Interest Accrual Period and
promptly communicate to Borrower such rate for such period. The entire
outstanding Principal Indebtedness of the Loan and the Note, together with all
accrued but unpaid interest thereon and all other amounts due under the Loan
Documents (including, without limitation, the Exit Fee), shall be due and
payable by Borrower to the Lenders on the Maturity Date. Interest shall be
computed on the basis of a 360 day year and the actual number of days elapsed.

 

(b) Each Advance shall bear interest during each Interest Accrual Period from
and including its respective Advance Closing Date at a rate per annum equal to
the sum of LIBOR determined as of the Interest Determination Date immediately
preceding such Interest Accrual Period plus the related Applicable Margin.

 

(c) Simultaneous with the repayment of any Advance hereunder, in whole or in
part, whether voluntary or involuntary, the Borrower shall pay to the Agent the
Exit Fee, if any, due and payable in connection therewith.

 

(d) While an Event of Default has occurred and is continuing, Borrower shall pay
to Agent interest at the Default Rate on any amount owing to the Lenders not
paid when due until such amount is paid in full.

 

Section 3.6. Voluntary Prepayment.

 

(a) Borrower may voluntarily prepay the Loan in whole or in part on any Payment
Date; provided, however, that, any such prepayment shall be accompanied by an
amount representing all accrued interest on the portion of the Loan being
prepaid and other amounts then due under the Loan Documents (including, without
limitation, the Exit Fee).

 

(b) In the event of any such voluntary prepayment, Borrower shall give Agent
written notice (or telephonic notice promptly confirmed in writing) of its
intent to prepay, which notice shall be given at least ten (10) days’ prior to
the date upon which prepayment is to be made and shall specify the Payment Date
on which such prepayment is to be made and the amount of such prepayment (which
shall not be less than $1,000,000). If any such notice is given, the amount
specified in such notice shall be due and payable on the Payment Date specified
therein (unless such notice is revoked by Borrower prior to the date specified
therein in which event Borrower shall immediately reimburse Agent for any
out-of-pocket costs incurred in connection with the giving of such notice and
its revocation).

 

32

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

Section 3.7. Mandatory Prepayment; Capital Events; Certain Transfers.

 

(a) So long as no Event of Default has occurred and is continuing, Borrower may
enter into a Capital Event with respect to one or more Properties, which were
acquired with the proceeds of an Advance; provided, however, that (i) Borrower
shall have given Agent at least fifteen (15) Business Days’ prior written notice
of the Capital Event and (ii) by not later than ten (10) Business Days following
the receipt of such notice, the Agent shall have notified the Borrower that the
Release Condition has been satisfied.

 

(b) Except as otherwise provided in Section 3.12(e) in the event Loss Proceeds
are required to be made available for restoration pursuant to Section 5.1(x) of
this Agreement and excluding Loss Proceeds which Borrower is obligated to turn
over to tenants or other third persons pursuant to applicable law, in the event
of a casualty or a Taking of the Property, in whole or in part, Borrower shall
cause all such Loss Proceeds otherwise payable with respect to the Property to
be deposited directly into the Collection Account in accordance with Section
3.12(a)(iii) and shall on the Payment Date occurring immediately following the
receipt of such Loss Proceeds, apply such portion of Loss Proceeds solely to
make the payments required pursuant to item (iii) of clause first of Section
3.12(b) of this Agreement.

 

(c) The Borrower shall make mandatory prepayments of the Advances as follows:

 

(i) if the Lender determines with respect to any Advance that the outstanding
principal amount of such Advance is equal to or greater than 90% of the then
current related Capital Markets Execution and so notifies Borrower on any
Business Day, then the Borrower shall by no later than forty-eight (48) hours
after receipt of such notice prepay the related Advance in part (or if requested
by the Borrower and acceptable to the Agent in its sole discretion, pledge
additional collateral to the Agent for the benefit of the Lenders) such that
after giving effect to such prepayment or pledge (or both), the outstanding
principal amount of such Advance does not exceed 80% of the then current related
Capital Markets Execution;

 

(ii) if any Advance shall not have been repaid in full as of the date one (1)
year following the date on which such Advance was made, then on such date one
(1) year following the date on which such Advance was made the Borrower shall
prepay the related Advance in part such that after giving effect to such
prepayment, the outstanding principal amount of such Advance does not exceed 70%
of the then current related Capital Markets Execution;

 

(iii) if any Advance shall not have been repaid in full as of the date fifteen
(15) months following the date on which such Advance was made, then on such date
fifteen (15) months following the date on which such Advance was made the
Borrower shall prepay the related Advance in part such that after giving effect
to such prepayment, the outstanding principal amount of such Advance does not
exceed 60% of the then current related Capital Markets Execution; and

 

(iv) if any Advance shall not have been repaid in full as of the date eighteen
(18) months following the date on which such Advance was made, then on such date
eighteen (18) months following the date on which such Advance was made the
Borrower shall prepay the related Advance in whole such that the balance of such
Advance has been reduced to zero.

 

The Agent may determine the Capital Markets Execution each Business Day during
the term of the Loan and shall provide to the Borrower written notice of any
such Capital Markets Execution which gives rise to the Borrower’s obligation to
make a mandatory prepayment pursuant to this Section 3.7(c).

 

33

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

(d) Upon payment or prepayment of the Loan in full, Borrower shall pay to the
Lenders, in addition to the amounts specified in Section 3.6, Section 3.7 and
Section 3.12, as applicable, all other amounts then due and payable to the
Lenders pursuant to the Loan Documents.

 

Section 3.8. Application of Payments After Event of Default. All proceeds
relating to any repayments of the Loan after the Collateral Agent shall have
received written notice of the occurrence of an Event of Default shall be
applied by Agent, in Agent’s sole discretion, to amounts then outstanding under
this Agreement (including, without limitation, any unpaid fees of the Collateral
Agent payable pursuant to the Fee Letter and any reasonable out-of-pocket costs
and expenses of Collateral Agent and the Lenders, in that order, reimbursable
pursuant to the terms of this Agreement arising as a result of such repayment;
any accrued and unpaid interest then payable with respect to the Loan or the
portion thereof being repaid; any accrued and unpaid Exit Fee in respect of any
such Principal Indebtedness being repaid; the Principal Indebtedness or the
portion thereof being repaid; and any other sums then due and payable to or for
the benefit of Agent pursuant to this Agreement or any other Loan Document(s)).

 

Section 3.9. Method and Place of Payment From the Collection Account to Agent.

 

(a) Except as otherwise specifically provided herein, all payments and
prepayments under this Agreement and the Note shall be made to Agent not later
than 2:00 p.m., New York City time, on the date when due and shall be made in
lawful money of the United States of America by wire transfer in federal or
other immediately available funds to its account at ABA No. [                ],
Account No. [                ], Reference: [                ] and Agent shall
disburse such payments to the Person entitled thereto on the Business Day of
receipt of such payments (or the next Business Day if the payments are received
after 2:00 p.m., New York City time on such Business Day) to the account
designated by such Person in writing to Agent from time to time. Any funds
received by Agent after such time shall, for all purposes hereof, be deemed to
have been paid on the next succeeding Business Day. Agent shall notify Borrower
in writing of any changes in the account to which payments are to be made. All
payments made by Borrower hereunder, or by Borrower under the other Loan
Documents, shall be made irrespective of, and without any deduction for, any
set-offs or counterclaims.

 

(b) Except to the extent otherwise provided herein, (i) each payment or
prepayment of principal of the Loan by Borrower shall be made to Agent for the
account of the Lenders pro rata in accordance with the respective unpaid portion
of the Loan held by such Lenders and (ii) each payment of interest on the Loan
by Borrower shall be made to Agent for the account of the Lenders pro rata in
accordance with the amounts of interest on the portion of the Loan held by such
Lenders then due and payable to the respective Lenders.

 

Section 3.10. Taxes. All payments made by Borrower under the Note and this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority (other than taxes imposed on the income of the Lenders).

 

Section 3.11. Release of Collateral.

 

(a) Notwithstanding any other provision of this Agreement or any other Loan
Document, upon the occurrence of a Capital Event with respect to any Property as
described in Section 3.7(a) hereof or a mandatory prepayment of an Advance with
respect to any Property required under Section 3.7(c) hereof, Agent, on behalf
of the Lenders, shall, simultaneously with such Capital Event, release of record
either (x) the related Memorandum of Negative Pledge, if the related Mortgage
and Assignment of Rents and Leases have not been previously recorded or (y) the
Lien of the related

 

34

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

Mortgage and UCC-1 financing statements and any other Liens in favor of the
Lenders relating to the Property or the portion thereof affected by such Capital
Event, and in either such event, if the Property-Owning Borrower shall thereupon
have no further Property included in the Collateral, shall release the
Property-Owning Borrower from all obligations hereunder and release the
interests in such Property-Owning Borrower from the Pledge Agreement
(Property-Owning Borrower); provided, however, that the Agent shall not be
required to release its Lien unless any Proceeds of such Capital Event are paid
to Agent in full or partial satisfaction of the Indebtedness as and to the
extent required by Section 3.7(c)(i).

 

(b) In the event Borrower satisfies the outstanding Indebtedness in full, Agent
and, at the written direction of Agent, Collateral Agent shall withdraw and hold
uninvested for Borrower in an Eligible Account at LaSalle Bank National
Association from the Business Day immediately preceding the date upon which the
release of funds is to be made to Borrower and release on the date on which the
outstanding Indebtedness is repaid in full any and all amounts then on deposit
in the Reserve Account and/or the Collection Account to Borrower. Upon repayment
of the Loan and all other amounts due hereunder and under the Loan Documents in
full in accordance with the terms hereof and thereof, the Lenders shall,
promptly after such payment, release or cause to be released all Liens with
respect to all Collateral or, to the extent necessary to facilitate future
savings of mortgage tax in states that impose mortgage taxes, assign such Liens
to Borrower’s new lender(s), provided that any such assignments shall be without
recourse, representation, or warranty of any kind, except that Agent and each
Lender shall represent and warrant (1) the then outstanding amount of the
Principal Indebtedness and (2) that such Liens have not been previously assigned
by Agent or any Lender.

 

Section 3.12. Central Cash Management.

 

(a) Collection Account; Deposits to and Withdrawals from the Collection Account.

 

(i) On or before the Closing Date, Borrower shall establish and maintain with
the Collateral Agent a collection account (the “Collection Account”), which
shall be an Eligible Account with a separate and unique identification number
and entitled “Deutsche Bank AG, Cayman Islands Branch as Agent, as secured party
from First States Investors DB I, LLC pursuant to a Loan Agreement dated as of
July 18, 2003 among First States Investors DB I, LLC, Deutsche Bank AG, Cayman
Islands Branch as Agent and LaSalle Bank National Association as Collateral
Agent.” With respect to each Advance and the related Property, not later than
the related Advance Closing Date, Borrower shall deliver to each tenant under a
Lease an irrevocable direction letter in a form approved by Agent requiring the
tenant to pay all Rents and Money received from Accounts or under Leases and
derived from the Property and Proceeds thereof owed to Borrower directly to the
Collection Account. Borrower shall provide to Agent proof of such delivery. In
addition, Borrower shall deliver an irrevocable direction letter in such form to
each tenant under a new Lease entered into after the date thereof prior to the
commencement of such Lease. If a tenant under a Lease forwards such Rents, Money
or Proceeds to Borrower rather than directly to the Collection Account, Borrower
shall (i) deliver an additional irrevocable direction letter to the tenant and
make other commercially reasonable efforts to cause the tenant to forward such
Rents, Money or Proceeds directly to the Collateral Account and (ii) immediately
deposit or cause the Manager to deposit in the Collection Account such Rents,
Money or Proceeds. Borrower shall not have any right to withdraw Money from the
Collection Account, which shall be under the sole dominion and control, and the
“control” within the meaning of Sections 9-104 and 9-106 of the UCC, of the
Agent. Any such Rents, Money or Proceeds held by Borrower or the Manager prior
to deposit into the Collection Account shall be held in trust for the benefit of
the Agent and the Lenders.

 

35

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

(ii) In the event that Agent has notified the Collateral Agent and Borrower that
an Event of Default has occurred and is continuing,

 

(A) all Rents and Money received from Accounts or under Leases and derived from
the Property and all Proceeds thereof shall be payable to Agent for the account
of Lenders or as otherwise directed by Agent on behalf of Lenders (provided that
such direction shall not result in the nonpayment of any outstanding fees
payable to the Collateral Agent pursuant to the Fee Letter),

 

(B) Agent on behalf of the Lenders shall make deposits, or cause deposits to be
made, of such Rents, Money and Proceeds directly to the Collection Account, and
Borrower shall cooperate (and shall cause the Manager to cooperate) with Agent
on behalf of the Lenders in the making of such deposits or causing such deposits
to be made,

 

(C) Borrower shall not have any right to make or direct any withdrawals from the
Collection Account or the Reserve Account without the prior written consent of
Agent on behalf of the Lenders, and

 

(D) proceeds on deposit in the Collection Account and the Reserve Account may be
applied by Collateral Agent on behalf of the Lenders for the payment of the
Indebtedness pursuant to Section 3.8 of this Agreement.

 

(iii) So long as no Event of Default shall have occurred and be continuing,
Borrower shall deposit in the Collection Account: (a) as and when required by
Section 3.7(b), Loss Proceeds received by Borrower and (b) simultaneously with
the consummation of any Capital Event and if required by the Agent, the Capital
Event Proceeds resulting from such Capital Event (and any contributions from
Borrower’s principals) required in connection with such Capital Event in order
to comply with the Release Condition.

 

(b) Distribution of Cash. So long as the Collateral Agent shall not have
received written notice from Agent on behalf of the Lenders that an Event of
Default has occurred and is continuing, the Collateral Agent shall hold
uninvested for Borrower or the Lenders in an Eligible Account at LaSalle Bank
National Association, the funds on deposit in the Collection Account as of the
close of business on the Business Day immediately preceding each Payment Date to
such Payment Date and shall apply such funds on such Payment Date, in each case
to the extent of the amounts set forth in the related Payment Date Statement
delivered by the Collateral Agent, as follows:

 

first, to the payment to the Agent of (i) the interest then due and payable on
the Note with respect to the related Interest Accrual Period, (ii) the Exit Fee,
if any, then due and payable and (iii) the Principal Indebtedness in an amount
equal to any additional amount to which the Agent is then entitled pursuant to
Section 3.7 of this Agreement;

 

second, to the payment to the Collateral Agent of its fees then due and payable
pursuant to the Fee Letter;

 

third, to the Real Estate Taxes Escrow Account and the Insurance Escrow Account,
in that order, in the respective amounts required to be deposited therein as
described in Section 3.13(b);

 

fourth, to the Replacement Reserve Account in the amount required to be
deposited therein as described in Section 3.13(a);

 

36

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

fifth, to the Leasing Costs/TI Costs Account in the amount required to be
deposited therein as described in Section 3.13(a);

 

sixth, to the payment of any outstanding indemnification payment to which an
Indemnified Party is then entitled pursuant to Sections 5.1(i) and 5.1(j); and

 

seventh, to Borrower in an amount equal to remaining available funds, if any.

 

(c) Permitted Investments. Borrower shall, or shall direct Collateral Agent in
writing to, invest and reinvest any balance in the Collection Account, from time
to time in Permitted Investments; provided, however, that

 

(i) the maturity of the Permitted Investments on deposit therein shall be at the
discretion of Borrower, but in any event no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
therefrom pursuant to Section 3.12(a) or 3.12(b) of this Agreement,

 

(ii) after Collateral Agent has received written notice from Agent that an Event
of Default has occurred and is continuing Borrower shall not have any right to
direct investment of the balance in the Collection Account,

 

(iii) all such Permitted Investments shall be held in the name of Collateral
Agent and shall be credited to the Collection Account, and

 

(iv) if no written investment direction is provided to Collateral Agent by
Borrower, Collateral Agent shall invest any balance in the Collection Account in
an investment of the type described in clause (vii) of the definition of
Permitted Investments.

 

Agent, the Lenders and Collateral Agent shall have no liability for any loss in
investments of funds in the Collection Account that are invested in Permitted
Investments (unless, in the case of Collateral Agent, invested contrary to
Borrower’s or Agent’s written direction) and no such loss shall affect
Borrower’s obligation to fund, or liability for funding, the Collection Account.
All interest paid or other earnings on the Permitted Investments of funds
deposited into the Collection Account made hereunder shall be deposited into the
Collection Account. Borrower shall include all earnings on the Collection
Account as income of Borrower for federal and applicable state tax purposes.

 

(d) Monthly and Payment Date Statements. With respect to each Collection Period,
Collateral Agent shall prepare and deliver, or shall cause to be prepared and
delivered, to Agent a statement no later than ten (10) Business Days after the
end of such Collection Period setting forth the aggregate deposits to and
withdrawals from the Collection Account and each account of the Reserve Account
and the opening and closing balances in such accounts (collectively, the
“Monthly Statement”). With respect to each Payment Date and the related
Collection Period and Interest Accrual Period, Collateral Agent shall prepare
and deliver, or shall cause to be prepared and delivered to Borrower and Agent,
a statement (each, a “Payment Date Statement”) no later than the Business Day
prior to such Payment Date with respect to each of the items below, setting
forth the following:

 

(i) the aggregate deposits to the Collection Account during the related
Collection Period for each type of deposit under this Agreement and the opening
and closing balances in the Collection Account;

 

37

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

(ii) the amount of interest then due and payable on the Note with respect to the
Interest Accrual Period (including the applicable number of days and interest
rate which were applied in determining such amount);

 

(iii) the amount of the Exit Fee, if any, then due and payable;

 

(iv) the amount of the fees of the Collateral Agent and any expenses payable to
the Collateral Agent and any outstanding indemnification payment to which an
Indemnified Party is then entitled under this Agreement;

 

(v) the following information with respect to the Principal Indebtedness in a
format reasonably acceptable to Agent: (1) the Principal Indebtedness as of the
preceding Payment Date, (2) any principal payable to the Lenders pursuant to
Sections 3.6, 3.7 or 3.12 on such Payment Date, and (3) the Principal
Indebtedness on the current Payment Date (taking into account such payments);
and

 

(vi) the amount withdrawn from or remitted to each account of the Reserve
Account in accordance with Sections 3.12 and 3.13 and the amount remitted to the
Borrower.

 

(e) Loss Proceeds. In the event of a casualty or Taking with respect to the
Property, unless pursuant to Section 5.1(x) of this Agreement or applicable law,
the Loss Proceeds are to be made available to Borrower for restoration or to the
tenants, all of Borrower’s interest in Loss Proceeds shall be paid directly to
the Collection Account to satisfy the requirements of Section 3.7(b). If the
Loss Proceeds are to be made available for restoration pursuant to this
Agreement or to the tenants pursuant to applicable law, such Loss Proceeds shall
be held by the Collateral Agent in a segregated interest-bearing Eligible
Account in the name of the Collateral Agent on behalf of the Lenders to be
opened by the Collateral Agent within three (3) Business Days after the
Collateral Agent receives written notice of the necessity therefor from the
Agent, to be withdrawn by the Collateral Agent and held uninvested in a LaSalle
Bank National Association account from the Business Day immediately preceding
the date upon which payment to Borrower or to the tenants is to be made to such
payment date for delivery to Borrower or to the tenants from time to time to pay
restoration costs pursuant to a schedule reasonably acceptable to Agent and
Borrower. Funds on deposit in any such account opened by the Collateral Agent
shall be invested in Permitted Investments in the same manner and subject to the
same restrictions as set forth in Section 3.12(c) with respect to the Collection
Account (except that the maturity shall be not later than as necessary to
satisfy the schedule referred to in the preceding sentence). If any Loss
Proceeds are received by Borrower, such Loss Proceeds shall be received in trust
for the Lenders, shall be segregated from other funds of Borrower, and shall be
forthwith paid to Collateral Agent to the extent necessary to comply with this
Agreement.

 

(f) Collateral Agent’s Reliance. Collateral Agent may rely and shall be
protected in acting or refraining from acting upon any written notice,
instruction or request furnished to it hereunder and reasonably believed by it
to be genuine and to have been signed or presented by the proper party or
parties. Collateral Agent may rely on written notice from Agent as to the
occurrence and continuance of an Event of Default, without further written
notice by the Lenders to the contrary.

 

38

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

Section 3.13. Reserve Account.

 

(a) Deferred Maintenance Escrow Account, Replacement Reserve Account and Leasing
Costs/TI Costs Account.

 

(i) On or before the Closing Date, Borrower shall establish and maintain with
the Collateral Agent three separate accounts for Capital Improvement Costs,
replacement reserves, Leasing Commissions and TI Costs, each of which shall be
an Eligible Account and shall have the same title as the Collection Account, for
the benefit of the Lenders until the Loan is paid in full. The three accounts
shall be designated the Deferred Maintenance Escrow Account (the “Deferred
Maintenance Escrow Account”), the Replacement Reserve Account (the “Replacement
Reserve Account”), and the Leasing Costs/TI Costs Account (the “Leasing Costs/TI
Costs Account”). If required by Agent, on any Advance Closing Date, Agent shall
deposit out of the proceeds of an Advance in the Deferred Maintenance Escrow
Account for the Borrower an amount for required Capital Improvement Costs to be
incurred with respect to the related Property being acquired, based upon the
Engineering Reports delivered to Agent and the reasonable determination of the
Agent of any additional necessary amounts. On each Payment Date, if required in
writing by the Agent, Borrower shall instruct the Collateral Agent in the
Payment Date Statement to deposit from the Collection Account (or if the funds
for such deposit are not available pursuant to Section 3.12(b), shall make a
deposit of Borrower’s funds) in the Replacement Reserve Account, equal to the
Replacement Reserve Amount and in the Leasing Costs/TI Costs Account, equal to
the Leasing Costs/TI Costs Amount.

 

(ii) Any and all Moneys remitted to the Deferred Maintenance Escrow Account,
together with any Permitted Investments in which such Moneys are or will be
invested or reinvested during the term of this Agreement, shall be held in the
Deferred Maintenance Escrow Account (i) to be withdrawn by Collateral Agent upon
written request of Borrower made not more than once each month in an amount not
less than $5,000 and held uninvested for Borrower or the Lenders in an Eligible
Account at LaSalle Bank National Association from the close of business on the
Business Day immediately preceding the date upon which payment is to be made to
Borrower to such date, and applied to pay directly or reimburse Borrower for
immediate repairs constituting Capital Improvement Costs referenced in the
Engineering Reports for the related Property, or (ii) for purposes otherwise
requested by Borrower and reasonably approved by the Agent in writing.

 

(iii) Any and all Moneys remitted to the Replacement Reserve Account, together
with any Permitted Investments in which such Moneys are or will be invested or
reinvested during the term of this Agreement, shall be held in the Replacement
Reserve Account (i) to be withdrawn by Collateral Agent upon written request by
Borrower made not more than once each month in an amount not less than $5,000
and held uninvested for Borrower or the Lenders in an Eligible Account at
LaSalle Bank National Association from the close of business on the Business Day
immediately preceding the date upon which payment is to be made to Borrower to
such date, and applied to pay directly or reimburse Borrower for replacement
reserve costs reasonably determined by Borrower for the Property for which such
funds were so reserved or (ii) for purposes otherwise requested by Borrower and
reasonably approved by the Agent in writing.

 

(iv) Any and all Moneys remitted to the Leasing Costs/TI Costs Account, together
with any Permitted Investments in which such Moneys are or will be invested or
reinvested during the term of this Agreement, shall be held in the Leasing
Costs/TI Costs Account (i) to be withdrawn by Collateral Agent upon written
request by Borrower made not more than once each month in an amount not less
than $5,000 and held uninvested for Borrower or the Lenders in an

 

39

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

Eligible Account at LaSalle Bank National Association from the close of business
on the Business Day immediately preceding the date upon which payment is to be
made to Borrower to such date, and applied to pay directly or reimburse Borrower
for Leasing Commissions and TI Costs incurred in connection with leasing
activities for the Property for which such funds were so reserved after the
related Advance Closing Date specified by Borrower in a written request
delivered to Collateral Agent and the Agent or (ii) for purposes otherwise
requested by Borrower and reasonably approved by the Agent in writing.

 

(v) Not less than three (3) Business Days prior to Borrower’s delivery of a
request to Collateral Agent to withdraw the funds on deposit in the Deferred
Maintenance Escrow Account, Replacement Reserve Account or Leasing Costs/TI
Costs Account, in whole or in part, Borrower shall provide the Agent with
written notice (with a copy to Collateral Agent) of such request (including
therein a statement of the purpose for the withdrawal and in the case of a
reimbursement of the Borrower, evidence that the related costs have been paid).
In the event Borrower completes the repairs for which funds were reserved in the
Deferred Maintenance Escrow Account to the reasonable satisfaction of the Agent,
Agent and, at the written direction of Agent, Collateral Agent shall withdraw
and hold uninvested for Borrower in an Eligible Account at LaSalle Bank National
Association from the Business Day immediately preceding the date upon which the
release of funds is to be made to Borrower and release on the date of release
any and all amounts then on deposit in the Deferred Maintenance Escrow Account
to the Collection Account.

 

(b) Real Estate Taxes Escrow Account, Insurance Escrow Account. On or before the
Closing Date, Borrower shall establish and maintain with the Collateral Agent
two separate accounts for Basic Carrying Costs, each of which shall be an
Eligible Account and shall have the same title as the Collection Account for the
benefit of the Lenders until the Loan is paid in full. The two accounts shall be
designated the Real Estate Taxes Escrow Account (the “Real Estate Taxes Escrow
Account”) and the Insurance Escrow Account (the “Insurance Escrow Account”). On
each Advance Closing Date, the Agent may deposit out of the Loan proceeds in the
Real Estate Taxes Escrow Account and in the Insurance Escrow Account amounts
which the Agent deems necessary based upon Basic Carrying Costs which are to
become due and payable with respect to the Property being acquired with the
proceeds of the related Advance. On each Payment Date, Borrower shall instruct
the Collateral Agent in the Payment Date Statement to deposit from the
Collection Account (or, if the funds for such deposit are not available pursuant
to Section 3.12(b), shall make a deposit of Borrower’s funds),

 

(1) an amount equal to the Impositions portion of Monthly Property Expenses in
the Real Estate Taxes Escrow Account (except that such deposit shall not be
required to be made, if, in connection with CTL Properties only, the Borrower
demonstrates to the Agent’s reasonable satisfaction that a tenant under the
related Credit Lease is expressly required to make a similar deposit to a
reserve or to pay such Imposition), and

 

(2) an amount equal to the portion of Monthly Property Expenses equal to
insurance premiums for policies of insurance required to be maintained by
Borrower with respect to the Property pursuant to this Agreement or the other
Loan Documents in the Insurance Escrow Account (except that such deposit shall
not be required to be made, if, in connection with CTL Properties only, the
Borrower demonstrates to the Agent’s reasonable satisfaction that a tenant under
the related Credit Lease is expressly required to make a similar deposit to a
reserve or to pay such Imposition).

 

Any and all Moneys remitted to the Real Estate Taxes Escrow Account or Insurance
Escrow Account together with any Permitted Investments in which such Moneys are
or will be invested or reinvested

 

40

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

during the terms of this Agreement, shall be held in the Real Estate Taxes
Escrow Account or Insurance Escrow Account to be withdrawn from the Real Estate
Taxes Escrow Account or Insurance Escrow Account, as applicable, by the
Collateral Agent upon written request of Borrower delivered to Agent and
Collateral Agent together with documentation and other evidence (including
invoices and in the case of a reimbursement of the Borrower, evidence that the
related costs have been paid) with respect to the respective Basic Carrying
Costs towards which such funds are to be applied and held uninvested for
Borrower or the Lenders in an Eligible Account at LaSalle Bank National
Association from the close of business on the Business Day immediately preceding
the date upon which direct payment or reimbursement to Borrower is to be made to
such date, and applied to pay directly (or reimburse Borrower) for (i) (x) any
Impositions (in the case of the Real Estate Taxes Escrow Account) or (y) any
insurance premiums for policies of insurance required to be maintained by
Borrower with respect to the Property pursuant to this Agreement or the other
Loan Documents (in the case of the Insurance Escrow Account) shown on the
Operating Budget, in each case currently due to be paid and not previously paid
or reimbursed and (ii) any Property Expenses not shown on the Operating Budget
but reasonably approved by the Agent in writing for payment or reimbursement.
The Borrower shall deliver to the Agent tax certificates or other evidence of
tax paid promptly following payment of same in order to enable the Agent to
verify the payment of taxes.

 

(c) Mortgage Recording Tax Escrow Account. On or before the Closing Date,
Borrower shall establish and maintain with the Collateral Agent an account for
Mortgage recording taxes, if any, that would be payable in connection with a
Real Estate Closing on the Property which is acquired with the proceeds of each
Advance, which shall be an Eligible Account and shall have the same title as the
Collection Account, for the benefit of the Lenders until the Loan is paid in
full. The account shall be designated the Mortgage Recording Tax Escrow Account
(the “Mortgage Recording Tax Escrow Account”). If required by Agent, on any
Advance Closing Date, Agent shall deposit out of the proceeds of an Advance in
the Mortgage Recording Tax Escrow Account for the Borrower an amount for
required Mortgage recording taxes calculated by the Title Agent that satisfy the
requirements of Section 3.16 of this Agreement sufficient to create first Liens.

 

Any and all Moneys remitted to the Mortgage Recording Tax Escrow Account,
together with any Permitted Investments in which such Moneys are or will be
invested or reinvested during the term of this Agreement, shall be held in the
Mortgage Recording Tax Escrow Account (i) to be withdrawn by Collateral Agent
upon written request of Agent following the occurrence and during the
continuance of an Event of Default and held uninvested for Borrower or the
Lenders in an Eligible Account at LaSalle Bank National Association from the
close of business on the Business Day immediately preceding the date upon which
payment is to be made to Agent to such date, and applied to pay directly or
reimburse Agent for Mortgage recording taxes imposed upon recordation of the
Mortgages.

 

(d) Investment of Funds. All or a portion of any Moneys in the Reserve Account
shall be invested and reinvested, so long as Collateral Agent has not received
written notice from Agent that an Event of Default has occurred and is
continuing, by Collateral Agent in accordance with written instructions
delivered by Borrower, or after Collateral Agent has received written notice
from Agent that an Event of Default has occurred and is continuing, by Agent, in
one or more Permitted Investments. If no written investment direction is
provided to Collateral Agent by Borrower, Collateral Agent shall invest such
Moneys in an investment of the type described in clause (vii) of the definition
of Permitted Investments. Agent, the Lenders and Collateral Agent shall have no
liability for any loss in investments of funds in the Reserve Account that are
invested in Permitted Investments (unless, in the case of Collateral Agent,
invested contrary to Borrower’s or Agent’s written direction) and no such loss
shall affect Borrower’s obligation to fund, or liability for funding, the
Reserve Account. Unless and until title to the funds therein shall have vested
in any Person other than Borrower, Borrower shall include all such income or
gain on any account of the Reserve Account as income of Borrower for federal and
applicable state tax purposes.

 

41

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

(e) Event of Default. After Collateral Agent has received written notice from
Agent that an Event of Default has occurred and is continuing, Borrower shall
not be permitted to make any withdrawal(s) from the Reserve Account and
Collateral Agent at the written direction of Agent may liquidate any Permitted
Investments of the amount on deposit in such account, withdraw and hold the
proceeds of such liquidation uninvested for Lenders in a LaSalle Bank National
Association account from the Business Day immediately preceding the date such
funds are to be used and use such amount on deposit in the Reserve Account on
the succeeding Business Day to make payments on account of the Loan in
accordance with the priorities set forth in Section 3.8.

 

Section 3.14. Additional Provisions Relating to the Collection Account and the
Reserve Account.

 

(a) The Collateral Agent covenants and agrees that: (i) all securities or other
property underlying any financial assets credited to any Pledged Account shall
be registered in the name of the Collateral Agent, indorsed to the Collateral
Agent or indorsed in blank or credited to another securities account maintained
in the name of the Collateral Agent and in no case will any financial asset
credited to any Pledged Account be registered in the name of the Borrower,
payable to the order of the Borrower or specially indorsed to the Borrower
except to the extent the foregoing have been specially indorsed to the
Collateral Agent or in blank; and (ii) all Permitted Investments and all other
property delivered to the Collateral Agent pursuant to this Agreement will be
promptly credited to one of the Pledged Accounts.

 

(b) The Collateral Agent hereby agrees that each item of property (whether
investment property, financial asset, security, instrument, cash or otherwise)
credited to any Pledged Account shall be treated as a “financial asset” within
the meaning of Section 8-102(a)(9) of the UCC.

 

(c) If at any time the Collateral Agent shall receive from the Agent an
entitlement order (i.e. an order directing transfer or redemption of any
financial asset relating to a Pledged Account) or any instruction (within the
meaning of Section 9-104 of the UCC) originated by the Agent (i.e. an
instruction directing the disposition of funds in a Pledged Account), the
Collateral Agent shall comply with such entitlement order or instruction without
further consent by the Borrower or any other Person.

 

(d) Regardless of any provision in any other agreement, for purposes of the UCC,
with respect to each Pledged Account, New York shall be deemed to be the bank’s
jurisdiction (within the meaning of Section 9-304 of the UCC) and the securities
intermediary’s jurisdiction (within the meaning of Section 8-110 of the UCC).
The Pledged Accounts shall be governed by the laws of the State of New York.

 

(e) Except for the claims and interest of the Agent and of the Borrower in the
Pledged Accounts, the Collateral Agent represents and warrants that it does not
know of any Lien on or claim to, or interest in, any Pledged Account or in any
“financial asset” (as defined in Section 8-102(a) of the UCC) credited thereto.
If any Person asserts any Lien, encumbrance or adverse claim (including any
writ, garnishment, judgment, warrant of attachment, execution or similar
process) against the Pledged Accounts or in any financial asset carried therein,
the Collateral Agent will promptly notify the Agent and the Borrower thereof.

 

42

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

Section 3.15. Security Agreement.

 

(a) Pledge of Account. To secure the full and punctual payment and performance
of all of the Indebtedness, Borrower hereby assigns, conveys, pledges and
transfers to the Agent on behalf of the Lenders as secured party, and grants
Agent on behalf of the Lenders a first and continuing security interest in and
to, the following property, whether now owned or existing or hereafter acquired
or arising and regardless of where located (collectively, the “Account
Collateral”):

 

(i) all of Borrower’s right, title and interest in the Pledged Accounts and all
Money and Permitted Investments, if any, from time to time deposited or held in
the Pledged Accounts or purchased with funds or assets on deposit in the Pledged
Accounts;

 

(ii) all of Borrower’s right, title and interest in interest, dividends, Money,
Instruments and other property from time to time received, receivable or
otherwise payable in respect of, or in exchange for, any of the foregoing until
such time as such items are disbursed from the Pledged Accounts; and

 

(iii) to the extent not covered by clause (i) or (ii) above, all Borrower’s
right, title and interest in Proceeds of any or all of the foregoing until such
time as such items are disbursed from the Pledged Accounts.

 

(b) Covenants. So long as any portion of the Indebtedness is outstanding,
Borrower shall not open (or permit Collateral Agent to open) any account other
than the Collection Account for the deposit of Rents or Money received from
Accounts or under Leases and derived from the Property and all Proceeds to pay
amounts owing hereunder, other than any account for amounts required by law to
be segregated by Borrower. Borrower shall not have any right to withdraw Money
from the Reserve Account, which shall be under the sole dominion and control,
and the “control” within the meaning of Sections 9-104 and 9-106 of the UCC, of
the Agent. The Account Collateral shall be subject to such applicable laws, and
such applicable regulations of the Board of Governors of the Federal Reserve
System and of any other banking authority or Governmental Authority, as may now
or hereafter be in effect, and to the rules, regulations and procedures of
Collateral Agent relating to demand deposit accounts generally from time to time
in effect.

 

(c) Financing Statements; Further Assurances. The Borrower hereby authorizes the
filing of any financing statements or continuation statements, and amendments to
financing statements, in any jurisdictions and with any filing offices as the
Agent may determine, in its sole discretion, are necessary or advisable to
perfect the security interest granted to the Agent in connection herewith. Such
financing statements may describe the collateral in the same manner as described
in any security agreement or pledge agreement entered into by the parties in
connection herewith or may contain an indication or description of collateral
that describes such property in any other manner as the Agent may determine, in
its sole discretion, is necessary, advisable or prudent to ensure the perfection
of the security interest in the collateral granted to the Agent in connection
herewith, including, without limitation, describing such property as “all
assets” or “all personal property” whether now owned or hereafter acquired. From
time to time, at the expense of Borrower, Borrower shall promptly execute and
deliver all further instruments, and take all further action, that Agent may
reasonably request, in order to continue the perfection and protection of the
pledge and security interest granted or purported to be granted hereby.

 

(d) Transfers and Other Liens. Borrower shall not sell or otherwise dispose of
any of the Account Collateral other than pursuant to the terms of this Agreement
and the other Loan Documents, or create or permit to exist any Lien upon or with
respect to all or any of the Account Collateral, except for the Lien granted to
Agent, Permitted Encumbrances and the rights of the institution acting as Agent,
under or as contemplated by this Agreement.

 

43

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

(e) No Waiver. Every right and remedy granted to Agent under this Agreement or
by law may be exercised by Agent at any time and from time to time, and as often
as Agent may deem it expedient. Any and all of Agent’s rights with respect to
the pledge of and security interest in the Account Collateral granted hereunder
shall continue unimpaired, and to the extent permitted by law, Borrower shall be
and remain obligated in accordance with the terms hereof, notwithstanding (i)
any proceeding of Borrower under the United States Bankruptcy Code or any
bankruptcy, insolvency or reorganization laws or statutes of any state, (ii) the
release or substitution of Account Collateral at any time, or of any rights or
interests therein or (iii) any delay, extension of time, renewal, compromise or
other indulgence granted by Agent in the event of any Default with respect to
the Account Collateral or otherwise hereunder. No delay or extension of time by
Agent in exercising any power of sale, option or other right or remedy
hereunder, and no notice or demand which may be given to or made upon Borrower
by Agent, shall constitute a waiver thereof, or limit, impair or prejudice
Agent’s right, without notice or demand, to take any action against Borrower or
to exercise any other power of sale, option or any other right or remedy.

 

(f) Agent Appointed Attorney-In-Fact. Borrower hereby irrevocably constitutes
and appoints Agent as Borrower’s true and lawful attorney-in-fact, with full
power of substitution, at any time after the occurrence and during the
continuation of an Event of Default, to execute, acknowledge and deliver any
instruments and to exercise and enforce every right, power, remedy, option and
privilege of Borrower with respect to the Account Collateral, and do in the
name, place and stead of Borrower, all such acts, things and deeds for and on
behalf of and in the name of Borrower with respect to the Account Collateral,
which Borrower could or might do or which Agent may deem necessary or desirable
to more fully vest in Agent the rights and remedies provided for herein with
respect to the Account Collateral and to accomplish the purposes of this
Agreement. The foregoing powers of attorney are irrevocable and coupled with an
interest and shall terminate upon repayment of the Indebtedness in full.

 

(g) Continuing Security Interest; Termination. This Section 3.15 shall create a
continuing pledge of and security interest in the Account Collateral and shall
remain in full force and effect until payment in full by Borrower of the
Indebtedness. Upon payment in full by Borrower of the Indebtedness, Agent shall
return to Borrower such of the Account Collateral as shall not have been applied
pursuant to the terms hereof, and shall execute such instruments and documents
as may be reasonably requested by Borrower to evidence such termination and the
release of the pledge and lien hereof.

 

(h) Right of Set-off. Collateral Agent waives any and all rights it may have at
law or otherwise to set off or make any claim against the Account Collateral,
except, with respect to any checks returned for insufficient funds, and the
payment of Collateral Agent’s fees and expenses due under this Agreement
(including reasonable attorney fees and disbursements) for the maintenance of
the Account Collateral.

 

Section 3.16. Real Estate Security Documents; Mortgage Recording Taxes.

 

(a) If an Event of Default has occurred and is continuing, then the Agent may in
its sole and absolute discretion cause the Real Estate Closing to occur in whole
or in part. Any out-of-pocket costs and expenses incurred by the Agent in
connection therewith (including, but not limited to, the costs to purchase the
Title Insurance Policy and all state, county and municipal recording and all
other taxes imposed upon the execution and recordation of the Mortgages, if
any), to the extent not paid by the Borrower, shall be added to the Principal
Indebtedness and treated as an advance by the Agent to protect its interest in
the Collateral.

 

44

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

(b) Except as set forth in the following sentence, the Liens to be created by
the Mortgages are intended to encumber each legal parcel of the Property either
(x) with respect to each jurisdiction that does not impose mortgage recording
taxes, to the full extent of the Loan Amount or (y) with respect to
jurisdictions that impose mortgage recording taxes, 125% of the related Advance
for such Property. By not later than five (5) Business Days after the Agent
shall have notified the Borrower that an Event of Default shall have occurred,
Borrower shall have paid all state, county and municipal recording and all other
taxes imposed upon the execution and recordation of the Mortgages.

 

Section 3.17. Taxes.

 

(a) All payments made by Borrower under the Note and this Agreement shall be
made free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority (other than taxes
imposed on (or measured by) the income of any Lender as a result of a present or
former connection between Lender and the jurisdiction imposing such taxes
excluding such connection arising solely from transactions or payments
contemplated by this Agreement). If any such tax is required to be deducted or
withheld from any payment under the Note or this Agreement, Borrower shall
increase the payment to the extent necessary so as to yield the amount (after
all deductions or withholdings required) that would have been payable if there
were no such deduction or withholding. If any such tax is payable by Borrower,
then, as promptly as possible thereafter, Borrower shall send to such Lender a
copy of an original receipt received by the Borrower showing payment thereof. If
Borrower fails to pay any such tax when due or fails to remit to such Lender the
required receipt, Borrower shall indemnify such Lender for any incremental
taxes, interest or penalties that may become payable by the Lender as a result
of any such failure.

 

(b) If a Lender is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code), then such Lender shall provide, on or before
such Lender becomes a party to this Agreement and as requested by Borrower
thereafter, an IRS Form W-8ECI or W-8BEN (plus a non-bank certificate in the
case of a Lender relying on the so-called “portfolio interest” exemption)
claiming complete exemption from, or a reduced rate of, United States
withholding tax on payments under the Note or this Agreement. No Lender shall be
required to provide a form that such Lender is not legally able to deliver. In
addition, such Lender agrees that from time to time, when a lapse in time or
change in circumstances renders the previous certification invalid or inaccurate
in any material respect, it will promptly deliver to Borrower two new accurate
and complete original signed copies of Internal Revenue Service Form W-8ECI or
W-8BEN (or successor forms) and such other forms as may be required in order to
confirm or establish the entitlement of such Lender to a continued exemption
from or reduction in United States withholding tax with respect to payments
under the Note or this Agreement, or it shall immediately notify Borrower of its
inability to deliver any such form, in which case such Lender shall not be
required to deliver any such form pursuant to this Section 3.17(b).
Notwithstanding anything to the contrary contained herein, (x) Borrower shall be
entitled, to the extent required to do so by law, to deduct or withhold income
or similar taxes imposed by a Governmental Authority from interest, fees or
other amounts payable hereunder for the account of any such Lender to the extent
that such Lender has not provided to the Borrower properly completed and
executed documentation that establishes a complete exemption from such deduction
or withholding (which, with respect to the United States and political
subdivisions thereof, shall be Internal Revenue Service Forms described in this
Section 3.17(b), and, with respect to any other Governmental Authority, shall be
requested in writing by Borrower), (y) Borrower shall not be obligated to
gross-up payments to be made to such Lender in respect of taxes imposed by a
Governmental Authority if such Lender has not provided to the Borrower properly
completed and executed documentation reasonably requested by Borrower, as would
permit Borrower to make payments without withholding or at a reduced rate,
provided that the foregoing shall not apply if such Lender is not

 

45

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

legally able to or entitled to deliver such documentation, and (z) Borrower
shall not be obligated to gross-up payments under Section 3.17(a) to be made to
such Lender in respect of any tax that is in effect and would apply to amounts
payable to such Lender at the time such Lender becomes a party to this
Agreement, except to the extent the assignor with respect to such Lender would
have been entitled at the time of assignment to receive additional amounts from
Borrower with respect to any tax pursuant to this Section 3.17. Other than as
set forth in this Section 3.17(b), Borrower agrees to pay additional amounts as
provided in Section 3.17(a) and to indemnify each Lender and its assignees and
transferees in respect of any taxes deducted or withheld by it as a result of
any changes that are effective after the Closing Date in any applicable law,
treaty, governmental rule, regulation, guideline or other, or in the
interpretation thereof, relating to the deducting or withholding of such taxes.

 

(c) If the Lender receives a refund in respect of taxes paid by Borrower which
refund in the judgment of the Lender is allocable to a payment made by Borrower
pursuant to Section 3.13(a), the Lender shall promptly pay such refund, but not
out-of-pocket costs of the Lender, to Borrower if all of the payments due to the
Lender under this Section 3.13 have been paid in full.

 

Section 3.18. General Collateral Agent Provisions.

 

(a) Appointment. The Lenders hereby designate and appoint LaSalle Bank National
Association as Collateral Agent on behalf of the Lenders under this Agreement,
and authorize LaSalle Bank National Association, as Collateral Agent for the
Lenders, to take such actions on their behalf under the provisions of this
Agreement and to exercise such powers and perform such duties as are expressly
delegated to Collateral Agent by the terms of this Agreement, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in this Agreement, Collateral Agent shall not have any
duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with the Lenders, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Collateral
Agent.

 

(b) Collateral Agent’s Right to Perform. If an Event of Default shall have
occurred and be continuing, then Collateral Agent may, but shall have no
obligation to, itself perform, or cause performance of, such covenant or
obligation giving rise to such Event of Default. The reasonable fees and
expenses of Collateral Agent incurred in connection therewith shall be payable
by Borrower to Collateral Agent upon demand, which obligation shall be secured
by all Collateral.

 

(c) Standard of Care. Beyond the observance of Accepted Practices and the
exercise of reasonable care in the custody or disbursements thereof, Collateral
Agent shall not have any duty as to any Account Collateral or any income thereon
in its possession or control or in the possession or control of any agents for,
or of Collateral Agent, or the preservation of rights against any Person or
otherwise with respect thereto. Collateral Agent shall be deemed to have
exercised reasonable care in the custody of the Account Collateral in its
possession if the Account Collateral is accorded treatment in accordance with
the Accepted Practices.

 

(d) Exculpatory Provisions. Neither Collateral Agent nor any of its officers,
directors, employees, agents, attorneys, attorneys-in-fact or Affiliates shall
be responsible in any manner to the Lenders for any recitals, statements,
representations or warranties made by Borrower or any officer thereof contained
in this Agreement or any other Loan Document or in any certificate, report,
statement or other document referred to or provided for in, or received by
Collateral Agent under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement, the Note or any other Loan Document or for any
failure of Borrower to perform its obligations hereunder or thereunder.
Collateral Agent shall not be under any

 

46

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

obligation to the Lenders to ascertain or to inquire as to the agreements
contained in, or conditions of, this Loan Agreement or any other Loan Document,
or to inspect the properties, books or records of Borrower. Collateral Agent
shall not be required to take any discretionary actions hereunder except at the
written direction of Borrower or Agent, it being understood and agreed that
Collateral Agent’s duties hereunder shall be wholly ministerial in nature and
that Collateral Agent shall not be responsible for calculating any financial
ratios or generating any reports (other than the Monthly Statement) for the
Lenders or Borrower. In connection with any discretionary action which Borrower
is permitted hereunder to direct Collateral Agent to take, if Collateral Agent
shall follow Agent’s directions and not Borrower’s directions, it shall have no
liability to Borrower (or to any other Person) for following any such directions
of Agent and for not following such directions of Borrower (if expressly
permitted herein). Collateral Agent shall not be under any obligation or duty to
perform any act which, in Collateral Agent’s sole reasonable judgment, could
involve it in expense or liability or to institute or defend any suit in respect
hereof, or to advance any of its own monies, unless Agent or Borrower, as the
case may be, shall have offered to Collateral Agent reasonable security or
indemnity against such expense, liability, suit or advance.

 

(e) Indemnification. Borrower shall indemnify and hold Collateral Agent, and its
agents, attorneys, employees and officers harmless from and against any loss,
cost or damage (including, without limitation, reasonable attorneys’ fees and
disbursements) incurred by Collateral Agent in connection with the transactions
contemplated hereby, excluding any such loss, cost or damage arising as a result
of Collateral Agent’s failure to adopt and follow Accepted Practices, gross
negligence, bad faith, willful misconduct or violation of applicable law. The
indemnification set forth in this paragraph shall survive the satisfaction and
payment of the Indebtedness and the termination of this Agreement.

 

(f) Collateral Agent’s Reliance. Collateral Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, fax, electronic mail
message, telex or teletype message, statement, order or other document
reasonably believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel and other experts selected in good faith by Collateral Agent.
Collateral Agent may deem and treat the payee of the Note as the owner thereof
for all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with Collateral Agent. Collateral Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such advice or
concurrence of Agent as it deems appropriate or it shall first be indemnified to
its satisfaction by Agent against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action.
Provided that Collateral Agent acts in accordance with Accepted Practices,
Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of
Agent, and such request and any action taken or failure to act pursuant thereto
shall be binding upon Agent and all future holders of the Note. All requests to
Collateral Agent for wire transfers of funds, for transfers between accounts
established pursuant to this Agreement or any other transfer not specifically
described in this Agreement shall be in writing.

 

(g) Notice of Default. Collateral Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
Collateral Agent has received written notice from Agent referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a “notice of default”. Collateral Agent shall take such action with
respect to such Default or Event of Default as shall be directed by Agent,
including any action under this Agreement.

 

(h) Non-Reliance on Collateral Agent. Neither Collateral Agent nor any of its
officers, directors, employees, agents, attorneys, attorneys-in-fact or
Affiliates has made any representations or warranties to the Lenders and no act
by Collateral Agent hereinafter taken (including

 

47

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

any review of the affairs of Borrower) shall be deemed to constitute any
representation or warranty by Collateral Agent to the Lenders. Except for
notices, reports and other documents expressly required to be furnished to Agent
by Collateral Agent hereunder, Collateral Agent shall not have any duty or
responsibility to provide the Lenders with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of Borrower which may come into the
possession of Collateral Agent or any of its officers, directors, employees,
agents, attorneys, attorneys-in-fact or Affiliates.

 

(i) Removal and Resignation. Collateral Agent shall have the right to resign as
collateral agent hereunder and Agent shall have the right to remove Collateral
Agent as collateral agent hereunder, in each case upon thirty (30) days’ written
notice to the other parties to this Agreement. In the event of such resignation
or removal, Agent shall appoint a successor Collateral Agent, or at Agent’s
option in Agent’s sole and absolute discretion Agent may assume and perform the
rights and obligations of Collateral Agent. No such removal of or resignation by
Collateral Agent shall become effective until a successor Collateral Agent shall
have accepted such appointment (or Agent shall have determined to designate
itself as Collateral Agent) and executed an instrument by which it shall have
assumed all of the rights and obligations of Collateral Agent hereunder. If no
such successor Collateral Agent is appointed within sixty (60) days (or, if fees
payable under the Fee Letter have not been paid, thirty (30) days) after receipt
of the resigning Collateral Agent’s notice of resignation or removal, the
resigning Collateral Agent may petition a court for the appointment of a
successor Collateral Agent unless Agent elects, in its sole and absolute
discretion, to assume the rights and obligations of Collateral Agent itself. In
connection with any removal of or resignation by Collateral Agent, (A) the
removed or resigning Collateral Agent shall (1) duly assign, transfer and
deliver to the successor Collateral Agent this Agreement and all Money and
Permitted Investments held by it hereunder, (2) execute such financing
statements and other instruments as may be necessary to assign to the successor
Collateral Agent the security interest existing in favor of the retiring
Collateral Agent hereunder, and to otherwise give effect to such succession and
(3) take such other actions as may be reasonably required by Borrower, Agent or
the successor Collateral Agent in connection with the foregoing and (B) the
successor Collateral Agent shall establish in its name, as agent for the
Lenders, as secured party, the Collection Account and Reserve Account as
Borrower is required to maintain pursuant to the terms of this Agreement.

 

(j) Individual Capacity. Collateral Agent and its Affiliates may make loans to,
accept deposits from and generally engage in any kind of business with Borrower
or any Affiliate, as though Collateral Agent were not Collateral Agent
hereunder, or under the other Loan Documents.

 

Section 3.19. Indemnity. If Borrower makes a prepayment of the Advances on any
day which is not a Payment Date or defaults in making a prepayment after having
given a notice in accordance with Section 2.6 of prepayment of Advances, the
Borrower shall indemnify the Lenders and hold the Lenders harmless from any
actual loss or expense (excluding any lost profit or opportunity cost) which the
Lenders may sustain or incur arising from (a) the re-employment of funds
obtained by the Lenders to maintain the Advances hereunder or (b) fees payable
to terminate the deposits from which such funds were obtained, in either case,
which actual loss or expense shall be equal to an amount equal to the excess, as
reasonably determined by the Lender, of (i) its cost of obtaining funds for such
Advances for the period from the date of such payment through the following
Payment Date over (ii) the amount of interest likely to be realized by such
Lender in redeploying the funds not utilized by reason of such payment for such
period. This Section 3.19 shall survive termination of this Loan Agreement and
payment of the Note.

 

48

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

Section 3.20. Inability to Determine Interest Rate; Illegality.

 

(a) If prior to the first day of any Interest Accrual Period, (i) Lender shall
have determined (which determination shall be conclusive and binding upon
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining LIBOR for such
Interest Accrual Period, or (ii) LIBOR determined or to be determined for such
Interest Accrual Period will not adequately and fairly reflect the cost to such
Lender (as determined and certified by such Lender) of making or maintaining
Advances during such Interest Accrual Period, such Lender shall give telecopy or
telephonic notice thereof to Borrower as soon as practicable thereafter. If such
notice is given, the interest rate with respect to such Advances for such
Interest Accrual Period, and for any subsequent Interest Accrual Periods until
such notice has been withdrawn by such Lender, shall be a per annum rate (the
“Alternative Rate”) equal to a rate determined based on an index approximating
the behavior of LIBOR as reasonably determined by such Lender.

 

(b) Notwithstanding any other provision herein, if the adoption of or any change
in any Legal Requirement or in the interpretation or application thereof shall
make it unlawful for a Lender to effect Advances as contemplated by the Loan
Documents, (a) the commitment of such Lender hereunder to make new Advances and
to continue Advances as such shall forthwith be canceled, and (b) the Advances
then outstanding shall be converted automatically to Alternative Rate Advances
on the last day of the then current Interest Accrual Period or within such
earlier period as may be required by law. If any such conversion of an Advance
occurs on a day which is not the last day of the then current Interest Accrual
Period with respect to such Advance, Borrower shall pay to such Lender such
amounts, if any, as may be required pursuant to Section 3.19.

 

Section 3.21. Requirements of Law.

 

(a) If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof by any Governmental Authority or
compliance by a Lender with any directive from any central bank or other
Governmental Authority having jurisdiction over such Lender made subsequent to
the date hereof:

 

(i) shall subject such Lender to any tax of any kind whatsoever with respect to
the Loan Documents or any Transaction, or change the basis of taxation of
payments to such Lender in respect thereof (except for changes in the rate of
tax on such Lender’s overall net income);

 

(ii) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such Lender which
is not otherwise included in the determination of LIBOR hereunder; or

 

(iii) shall impose on such Lender any other condition;

 

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, continuing or
maintaining Advances or to reduce any amount receivable under the Loan Documents
in respect thereof; then, in any such case, Borrower shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for such increased cost or reduced amount receivable. If such Lender
becomes entitled to claim any additional amounts pursuant to this Section
3.21(a), it shall promptly notify Borrower of the event by reason of which it
has become so entitled. As a condition to Borrower’s liability under this
paragraph, such Lender

 

49

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

shall promptly deliver to Borrower a certificate as to the calculation of any
additional amounts payable pursuant to this subsection and including any
available supporting documentation, which certificate shall be conclusive and
binding upon Borrower in the absence of manifest error. This covenant shall
survive the termination of the Agreement and payment of the Note.

 

(b) If a Lender shall have determined that the adoption of or any change in any
Legal Requirement regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any directive regarding capital adequacy from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Lender’s or such corporation’s capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance by an amount which is deemed by such Lender to be material, then from
time to time, after submission by such Lender to Borrower of a written request
therefore, Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender for such reduction. As a condition to Borrower’s
liability under this paragraph, such Lender shall promptly deliver to Borrower a
certificate as to the calculation of any additional amounts payable pursuant to
this subsection and including any available supporting documentation, which
certificate shall be conclusive and binding upon Borrower in the absence of
manifest error. This covenant shall survive the termination of the Agreement and
payment of the Note.

 

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

 

Section 4.1. Representations and Warranties as to Borrower. Borrower represents
and warrants that, as of the Closing Date and as of each Advance Closing Date:

 

(a) Organization. Borrower (i) is a duly and solely organized and validly
existing limited liability company in good standing under the laws of the State
of Delaware, (ii) has the requisite power and authority to own its properties
(including, without limitation, the Property) and to carry on its business as
now being conducted and is qualified to do business in the jurisdiction in which
the Property is located, and (iii) has the requisite power to execute and
deliver, and perform its obligations under, this Agreement, the Note and all of
the other Loan Documents to which it is a party.

 

(b) Authorization; No Conflict; Consents and Approvals. The execution and
delivery by Borrower of this Agreement, the Note and each of the other Loan
Documents, Borrower’s performance of its obligations hereunder and thereunder
and the creation of the security interests and liens provided for in this
Agreement and the other Loan Documents to which it is a party (i) have been duly
authorized by all requisite action on the part of Borrower, (ii) will not
violate any provision of any Legal Requirements, any order of any court or other
Governmental Authority, the Organizational Agreement or any indenture or
agreement or other instrument to which Borrower is a party or by which Borrower
is bound, and (iii) will not be in conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under, or result
in the creation or imposition of any Lien of any nature whatsoever upon the
Property pursuant to, any such indenture or agreement or material instrument
other than the Loan Documents. Other than those obtained or filed on or prior to
the Closing Date, Borrower is not required to obtain any consent, approval or
authorization from, or to file declaration or statement with, any Governmental
Authority or other agency in connection with or as a condition to the execution,
delivery or performance of this Agreement, the Note or the other Loan Documents
executed and delivered by Borrower.

 

(c) Enforceability. This Agreement, the Note and each other Loan Document
executed by Borrower in connection with the Loan (including, without limitation,
any Collateral Security

 

50

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

Instrument), is the legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, subject to bankruptcy,
insolvency, and other limitations on creditors’ rights generally and to
equitable principles. This Agreement, the Note and such other Loan Documents are
not subject to any right of rescission, set-off, counterclaim or defense by
Borrower (including the defense of usury), and Borrower has not asserted any
right of rescission, set-off, counterclaim or defense with respect thereto.

 

(d) Litigation. There are no actions, suits or proceedings at law or in equity
by or before any Governmental Authority or other agency now pending and served
or, to the best knowledge of Borrower, threatened in writing against Borrower or
any Collateral, which actions, suits or proceedings, if determined against
Borrower or such Collateral, are reasonably likely to result in a Material
Adverse Effect.

 

(e) Agreements. Borrower is not in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument to which it is a party or by which Borrower or any
Collateral is bound which is reasonably likely to have a Material Adverse
Effect. Borrower is not a party to any agreement or instrument or subject to any
restriction that is reasonably likely to have a Material Adverse Effect.

 

(f) No Bankruptcy Filing. Borrower is not contemplating either the filing of a
petition by it under any state or federal bankruptcy or insolvency laws or the
liquidation of all or a major portion of its assets or property. Borrower has
not received written notice that any Person is contemplating the filing of any
such petition against it.

 

(g) Solvency. Giving effect to the transactions contemplated hereby, the fair
saleable value of Borrower’s assets exceeds and will, immediately following the
making of the Loan, exceed Borrower’s total liabilities (including, without
limitation, subordinated, unliquidated, disputed and contingent liabilities).
The fair saleable value of Borrower’s assets is and will, immediately following
the making of the Loan, be greater than Borrower’s probable liabilities
(including the maximum amount of its contingent liabilities on its debts as such
debts become absolute and matured). Borrower’s assets do not and, immediately
following the making of the Loan will not, constitute unreasonably small capital
to carry out its business as conducted or as proposed to be conducted. Borrower
does not intend to, and does not believe that it will, incur debts and
liabilities (including, without limitation, contingent liabilities and other
commitments) beyond its ability to pay such debts as they mature (taking into
account the timing and amounts to be payable on or in respect of obligations of
Borrower).

 

(h) Other Debt. Borrower has not borrowed or received other debt financing
whether unsecured or secured by the Property or any part thereof.

 

(i) Full and Accurate Disclosure. No statement of fact made by or on behalf of
Borrower in this Agreement or in any of the other Loan Documents contains any
untrue statement of material fact or omits to state any material fact necessary
to make statements contained herein or therein not misleading. To the best
knowledge of Borrower, there is no fact that has not been disclosed to Agent
that is likely to result in a Material Adverse Effect.

 

(j) Financial Information. All financial statements and other data concerning
Borrower and the Property that has been delivered by or on behalf of Borrower to
Agent is true, complete and correct in all material respects and has been
prepared in accordance with GAAP. Since the delivery of such data, except as
otherwise disclosed in writing to Agent, there has been no change in the
financial position of Borrower or the Property, or in the results of operations
of Borrower, which change results or is reasonably likely to result in a
Material Adverse Effect. Borrower has not incurred any obligation or liability,
contingent or otherwise, not reflected in such financial data, which is likely
to have a Material Adverse Effect upon its business operations or the Property.

 

51

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

(k) Investment Company Act; Public Utility Holding 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,
(ii) a “holding company” or a “subsidiary company” of a “holding company” or an
“affiliate” of either a “holding company” or a “subsidiary company” within the
meaning of the Public Utility Holding Company Act of 1935, as amended, or (iii)
subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money in accordance with this
Agreement.

 

(l) Compliance. Borrower is in compliance with all applicable Legal
Requirements, except for noncompliance that is not reasonably likely to have a
Material Adverse Effect. Borrower is not in default or violation of any order,
writ, injunction, decree or demand of any Governmental Authority except for
defaults or violations which are not reasonably likely to have a Material
Adverse Effect.

 

(m) Use of Proceeds; Margin Regulations. Borrower will use the proceeds of the
Loan for the purposes described in Section 2.2. 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.

 

(n) Single-Purpose Entity.

 

(i) Borrower at all times since its formation has been a duly formed and
existing limited liability company under the laws of the State of its formation
and a Single-Purpose Entity.

 

(ii) Borrower at all times since its formation has complied with the provisions
of its Organizational Agreement since such agreement was executed and delivered
and the laws of the State of Delaware relating to limited liability companies.

 

(iii) All customary formalities regarding the limited liability company
existence of Borrower have been observed at all times since the Organizational
Agreement was executed and delivered.

 

(iv) Borrower has at all times since it began maintaining such items accurately
maintained its financial statements, accounting records and other limited
liability company documents separate from those of its members, Affiliates of
its members and any other Person. Borrower has not at any time since its
formation commingled its assets with those of its members, any Affiliates of its
members, or any other Person. Borrower has at all times since establishing its
own bank accounts accurately maintained its own bank accounts and separate books
of account.

 

(v) Borrower has at all times since receiving funds paid its own liabilities
from its own separate assets.

 

(vi) Borrower has at all times since its formation identified itself in all
dealings with the public, under its own name and as a separate and distinct
entity. Borrower has not at any time since its formation identified itself as
being a division or a part of any other entity. Borrower has not at any time
since its formation identified its members or any Affiliates of its members as
being a division or part of Borrower.

 

52

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

(vii) Borrower is as of the date hereof adequately capitalized in light of the
nature of its business.

 

(viii) Borrower has not at any time since its formation assumed or guaranteed
the liabilities of its members (or any predecessor corporation, partnership or
limited liability company), any Affiliates of its members, or any other Persons,
except for liabilities relating to the Collateral. Borrower has not at any time
since its formation acquired obligations or securities of its members (or any
predecessor corporation, partnership or limited liability company), or any
Affiliates of its members or any other Person. Borrower has not at any time
since its formation pledged its assets for the benefit of any other entity
(other than the Agent) or made loans or advances to its members (or any
predecessor corporation, partnership or limited liability company), or any
Affiliates of its members or any other Person.

 

(ix) Borrower has not at any time since its formation entered into and was not a
party to any transaction with its members (or any predecessor corporation,
partnership or limited liability company) or any Affiliates of its members,
except for in the ordinary course of business of Borrower on terms which are no
less favorable to Borrower than would be obtained in a comparable arm’s length
transaction with an unrelated third party (other than in connection with the
execution by Borrower and Manager of the Management Agreement).

 

(o) No Defaults. No Default or Event of Default exists under or with respect to
any Loan Document.

 

(p) Plans and Welfare Plans. The assets of Borrower are not treated as “plan
assets” under regulations currently promulgated under ERISA. Each Plan, and, to
the best knowledge of Borrower, each Multiemployer Plan, is in compliance in all
material respects with, and has been administered in all material respects in
compliance with, its terms and the applicable provisions of ERISA, the Code and
any other federal or state law, and no event or condition has occurred and is
continuing as to which Borrower would be under an obligation to furnish a report
to Lender under Section 5.1(v)(i). Other than an application for a favorable
determination letter with respect to a Plan, there are no pending issues or
claims before the Internal Revenue Service, the United States Department of
Labor or any court of competent jurisdiction related to any Plan or Welfare
Plan. No event has occurred, and there exists no condition or set of
circumstances, in connection with any Plan or Welfare Plan under which Borrower
or, to the best knowledge of Borrower, any ERISA Affiliate, directly or
indirectly (through an indemnification agreement or otherwise), is reasonably
likely to be subject to any material risk of liability under Section 409 or
502(i) of ERISA or Section 4975 of the Code. No Welfare Plan provides or will
provide benefits, including, without limitation, death or medical benefits
(whether or not insured) with respect to any current or former employee of
Borrower, or, to the best knowledge of Borrower, any ERISA Affiliate beyond his
or her retirement or other termination of service other than (i) coverage
mandated by applicable law, (ii) death or disability benefits that have been
fully provided for by fully paid up insurance or (iii) severance benefits.

 

(q) Additional Borrower UCC Information. Borrower’s organizational
identification number is 02-0698897 and the full legal name of Borrower is as
set forth on the signature pages hereof and Borrower has not done in the last
five (5) years, and does not do, business under any other name (including any
trade-name or fictitious business name).

 

53

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

(r) Not Foreign Person. Borrower is not a “foreign person” within the meaning of
§ 1445(f)(3) of the Code.

 

(s) Labor Matters. Borrower is not a party to any collective bargaining
agreements.

 

(t) Pre-Closing Date Activities. Borrower has not conducted any business or
other activity on or prior to the Closing Date, other than in connection with
the acquisition, management and ownership of the Property.

 

(u) No Bankruptcies or Criminal Proceedings Involving Borrower or Related
Parties. No bankruptcy, insolvency, reorganization or comparable proceedings
have ever been instituted by or against Borrower, any Affiliate of Borrower, any
Guarantor or any individual or entity owning, with his, her or its family
members, 20% or more of the direct, or indirect beneficial ownership interests
in Borrower (each such Guarantor, individual, or entity being herein referred to
as a “Principal”), and no such proceeding is now pending or contemplated. None
of Borrower, any Principal, or to Borrower’s knowledge, any other individual or
entity directly or indirectly owning or controlling, or the family members of
which own or control, any direct or indirect beneficial ownership interest in
Borrower or in the Manager or asset manager for the Property, have been charged,
indicted or convicted, or are currently under the threat of charge, indictment
or conviction, for any felony or crime punishable by imprisonment.

 

Section 4.2. Representations and Warranties as to Each Property. Borrower hereby
represents and warrants to the Agent that, as to all Property, as of each
Advance Closing Date:

 

(a) Title to the Property. Borrower owns good, marketable and insurable fee
simple title to the applicable Land, free and clear of all Liens, other than the
Permitted Encumbrances applicable to the Land. Borrower owns the other Property
free and clear of any and all Liens, other than Permitted Encumbrances. There
are no outstanding options to purchase or rights of first refusal or
restrictions on transferability affecting such Property.

 

(b) Utilities and Public Access. To the best of Borrower’s knowledge, the
Property has adequate rights of access to public ways and is served by water,
electric, sewer, sanitary sewer and storm drain facilities. All public utilities
necessary to the continued use and enjoyment of the Property as presently used
and enjoyed are located in the public right-of-way abutting the premises, and
all such utilities are connected so as to serve the Property without passing
over other property except for land or easement areas of or available to the
utility company providing such utility service. All roads necessary for the full
utilization of the Property for its current purpose have been completed and
dedicated to public use and accepted by all Governmental Authorities or are the
subject of access easements for the benefit of the Property.

 

(c) Condemnation. No Taking has been commenced nor has Borrower received written
notice of a Taking, with respect to all or any portion of the Property or for
the relocation of roadways providing access to the Property.

 

(d) Compliance. The Property is in compliance with all applicable Legal
Requirements (including, without limitation, building and zoning ordinances and
codes) and all applicable Insurance Requirements, except for noncompliance which
is not reasonably likely to have a Material Adverse Effect.

 

54

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

(e) Environmental Compliance. Except for matters set forth in the Environmental
Reports delivered to Agent in connection with the Loan (true, correct and
complete copies of which have been provided to Agent by Borrower):

 

(i) Borrower is in full compliance with all applicable Environmental Laws with
respect to the Property (which compliance includes, but is not limited to, the
possession by Borrower or the Manager of all environmental, health and safety
permits, licenses and other governmental authorizations required in connection
with the ownership and operation of the Property under all Environmental Laws),
except for noncompliance which is not reasonably likely to have a Material
Adverse Effect.

 

(ii) There is no Environmental Claim pending or, to the actual knowledge of
Borrower, threatened, and no penalties arising under Environmental Laws have
been assessed, against Borrower or the Manager with respect to the Property or,
to the actual knowledge of Borrower, against any Person with respect to the
Property whose liability for any Environmental Claim Borrower or the Manager has
or may have retained or assumed either contractually or by operation of law, and
no investigation or review is pending or, to the actual knowledge of Borrower,
threatened by any Governmental Authority, citizens group, employee or other
Person with respect to any alleged failure by Borrower or the Manager or the
Property to have any environmental, health or safety permit, license or other
authorization required under, or to otherwise comply with, any Environmental Law
or with respect to any alleged liability of Borrower or the Manager for any Use
or Release of any Hazardous Substances.

 

(iii) There are no present and, to the actual knowledge of the Borrower, there
have been no past Releases of any Hazardous Substance at, on, in, under or from
the Property that are reasonably likely to form the basis of any Environmental
Claim against Borrower, the Manager or against any Person whose liability for
any Environmental Claim Borrower or the Manager has or may have retained or
assumed either contractually or by operation of law.

 

(iv) Without limiting the generality of the foregoing, there is not present at,
on, in or under the Property, PCB-containing equipment, asbestos or asbestos
containing materials, underground storage tanks or surface impoundments for
Hazardous Substances, lead in drinking water (except in concentrations that
comply with all Environmental Laws), or lead based paint, the presence of which
is reasonably likely to result in a Material Adverse Effect.

 

(v) No liens are presently recorded with the appropriate land records under or
pursuant to any Environmental Law with respect to the Property and no
Governmental Authority has been taking or, to the actual knowledge of Borrower,
is in the process of taking any action that could subject the Property to Liens
under any Environmental Law.

 

(vi) There have been no environmental investigations, studies, audits, reviews
or other analyses conducted by or that are in the possession of Borrower in
relation to the Property which have not been made available to the Agent.

 

(f) Mortgage and Other Liens. Upon filing, each Mortgage creates a valid and
enforceable first priority Lien on the Property described therein, as security
for the repayment of the Indebtedness, subject only to the Permitted
Encumbrances applicable to the Property. This Agreement creates a valid and
enforceable first priority Lien on all Account Collateral. Each Collateral
Security Instrument establishes and creates a valid, subsisting and enforceable
Lien on and a security interest in, or claim to, the rights and property
described therein. All property covered by any Collateral Security Instrument in
which a security interest can be perfected by the filing of a financing
statement is subject to a UCC financing statement filed and/or recorded, as
appropriate (or irrevocably delivered to an agent for such recordation or
filing) in all places necessary to perfect a valid first priority Lien with
respect to the rights and property that are the subject of such Collateral
Security Instrument to the extent governed by the UCC.

 

55

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

(g) Assessments. There are no pending or, to the actual knowledge of Borrower,
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.

 

(h) No Joint Assessment; Separate Lots. Borrower has not suffered, permitted or
initiated the joint assessment of the Property (i) with any other real property
constituting a separate tax lot, 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 as a single lien. The Property
is comprised of one or more parcels, each of which constitutes a separate tax
lot and none of which constitutes a portion of any other tax lot.

 

(i) No Prior Assignment. The Agent is the collateral assignee of Borrower’s
interest under the Leases. There are no prior assignments of the Leases or any
portion of the Rent due and payable or to become due and payable which are
presently outstanding.

 

(j) Permits; Certificate of Occupancy. Borrower has obtained all Permits
necessary to the use and operation of the Property except where the failure to
obtain such Permits is not reasonably likely to have a Material Adverse Effect.
The use being made of the Property is in conformity with the certificate of
occupancy and/or such Permits for the Property and any other restrictions,
covenants or conditions affecting the Property, except for non-conformity which
is not reasonably likely to result in a Material Adverse Effect.

 

(k) Flood Zone. Except as shown on the Survey, the Property described therein is
not located in a flood hazard area as defined by the Federal Insurance
Administration.

 

(l) Physical Condition. Except as set forth in the Engineering Report, to the
best knowledge of Borrower, the Property is free of structural defects and all
building systems contained therein are in good working order subject to ordinary
wear and tear.

 

(m) Security Deposits. Borrower and the Manager are in compliance with all Legal
Requirements relating to all security deposits with respect to the Property,
except where the failure to comply is not reasonably likely to result in a
Material Adverse Effect.

 

(n) Intellectual Property. All material Intellectual Property that Borrower owns
or has pending, or under which it is licensed, are in good standing and
uncontested. There is no right under any Intellectual Property necessary to the
business of Borrower as presently conducted or as Borrower contemplates
conducting its business. Borrower has not infringed, is not infringing, and has
not received notice of infringement with respect to asserted Trademarks of
others. There is no infringement by others of material Intellectual Property of
Borrower.

 

(o) No Encroachments. Except as shown on the Survey, to the best knowledge of
Borrower, (i) 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, (ii) no improvements on adjoining properties
encroach upon the Property, (iii) no easements or other encumbrances upon the
Property encroach upon any of the Improvements, so as to materially and
adversely affect the value or marketability of the Property and (iv) all of the
Improvements comply with all material requirements of any applicable zoning and
subdivision laws and ordinances.

 

56

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

(p) Management Agreement. The Management Agreement is in full force and effect.
There is no default, breach or violation existing thereunder by Borrower or, to
the best knowledge of Borrower, any other party thereto and no event (other than
payments due but not yet delinquent) which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach or violation by Borrower or, to the best knowledge of Borrower,
any other party thereunder or entitle Borrower or, to the best knowledge of
Borrower, any other party thereto to terminate any such agreement.

 

(q) Leases. The Property is not subject to any Leases other than the Leases
described in the rent roll or the Engineering Report delivered to Agent in
connection with the making of the Loan. No person has any possessory interest in
the Property or right to occupy the same except under and pursuant to the
provisions of the Leases. The current Leases are in full force and effect and
there are no defaults thereunder by either party and no conditions which with
the passage of time and/or notice would constitute defaults thereunder, except
for such defaults as are not reasonably likely to result in a Material Adverse
Effect.

 

(r) Credit Lease. With respect to each CTL Property only:

 

(1) Such CTL Property is subject to a Credit Lease; such Credit Lease is in full
force and effect, and is a legal, valid, binding and enforceable agreement of
the related tenant, except as such enforcement may be limited by bankruptcy,
insolvency or other laws affecting the rights of creditors generally, and
general principles of equity; no uncured default by the Property-Owning Borrower
or the tenant has occurred under such Credit Lease and there is no existing
condition which, but for the passage of time or the giving of notice, or both,
would result in a default under the terms of such Credit Lease.

 

(2) Each Credit Lease is subordinate to the related Mortgage, either pursuant to
the terms and conditions of such Credit Lease or pursuant to the terms and
conditions of a subordination, non-disturbance and attornment agreement between
the Agent and the applicable tenant; any subleases entered into by such tenant
will be subject and subordinate to the Credit Lease and will not relieve the
tenant of its obligations under the Credit Lease; in the event that the Agent
acquires title to a CTL Property by foreclosure or otherwise, the lessor’s
interest under the related Credit Lease is freely assignable by the Agent and
its successors and assigns to any person without the consent of the tenant, and,
in the event the lessor’s interest is so assigned, the tenant will be obligated
to recognize the assignee as lessor under such Credit Lease.

 

(3) Each Credit Lease has an original term ending on or after the date the
Property-Owning Borrower is required to deposit its final payment on the related
Advance with the Lenders unless covered by extended amortization or residual
value insurance.

 

(4) The monthly payment for the related Advance is less than or equal to the
basic rent due under the related Credit Lease (unless an “Extended Amortization
Policy” or a residual value insurance policy or cash reserves or other form of
credit enhancement has been obtained which has been in each case disclosed to
Agent).

 

(5) There is no assignment of any Credit Lease by any tenant pending.

 

(6) Each tenant has agreed to notify the related mortgagee of any default under
the related Credit Lease and to provide such mortgagee with additional time and
opportunity to cure.

 

57

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

(7) Except as otherwise disclosed to Agent with respect to tenants which are
master lessor to subtenants, each CTL Property is not subject to any lease other
than the related Credit Lease, no person has any possessory interest in, or
right to occupy, the related CTL Property except under and pursuant to such
Credit Lease and the tenant under the related Credit Lease is in occupancy of
the entire Property.

 

(8) No tenant under a Credit Lease (nor Lease Guarantor, if applicable) has been
released, in whole or in part, from its obligations under the Credit Lease (or
Lease Guaranty, as applicable).

 

(9) Under the terms of the Credit Lease, the tenant is not permitted to assign
or sublet its interest or obligations under the Credit Lease unless such tenant
remains fully liable thereunder.

 

(10) Each tenant under a Credit Lease is required (or has been irrevocably
directed) to make all rental payments directly to the Collection Account or a
lockbox established by the Property-Owning Borrower which provides for automatic
sweep of deposits to the Collection Account.

 

(11) With respect to any Credit Lease guaranteed by the parent or affiliate of a
tenant, each existing Lease Guaranty is in full force and effect, and no default
exists thereunder.

 

(12) With respect to any Credit Lease that is not a Triple Net Lease or Double
Net Lease, such Credit Lease is a bondable lease with no termination or rent
abatement rights by the tenant, except in connection with the exercise of a
purchase option; the obligations of any tenant under such lease (including, but
not limited to, the obligation of the tenant to pay fixed and additional rent),
are not affected by reason of any damage to or destruction of any portion of the
CTL Property, any taking of the CTL Property or any part thereof by condemnation
or otherwise, or any prohibition, limitation, interruption, restriction, or
interference of the tenant’s use, occupancy or enjoyment of the CTL Property.

 

(13) Each Credit Lease contains no monetary obligations or obligations
associated with managing, owning, developing and operating the CTL Property
(including, but not limited to, the costs associated with utilities, taxes,
insurance, capital and structural improvements and maintenance and repairs), on
the part of the Property-Owning Borrower unless such obligations are fully
reimbursable or have been paid by the tenant.

 

(14) Each Credit Lease contains customary and enforceable provisions which
render the rights and remedies of the lessor thereunder adequate for the
enforcement and satisfaction of the lessor’s rights thereunder.

 

(15) Any anticipated maintenance, repair, or replacement obligations imposed by
any easement or reciprocal easement agreement either is a direct obligation of
the tenant or an adjacent property owner or is an obligation or liability of the
Property-Owning Borrower, reimbursable by the tenant, or has been reserved for
under the Loan Documents.

 

(16) The Credit Lease cannot be modified without the consent of the mortgagee
thereunder.

 

(17) Except for (a) a termination due to a default by the Property-Owning
Borrower under the Credit Lease or (b) a termination due to casualty or
condemnation, no tenant

 

58

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

can terminate a Credit Lease for any reason prior to the payment in full of or
the payment of funds sufficient to pay in full (1) the principal balance of the
related Advance, (2) all accrued and unpaid interest on the related Advance and
(3) any other sums due and payable under the related Advance, as of the
termination date.

 

(18) No right or claim of rescission, offset, abatement, diminution, defense or
counterclaim to a Credit Lease has been asserted with respect thereto, nor is
there any existing condition which, but for the passage of time or giving of
notice, would result in a right or claim of rescission, offset, abatement,
diminution, defense or counterclaim under the terms of any Credit Lease (other
than for nonmaterial punch list items).

 

(19) The obligations of the tenant under any Credit Lease (including, but not
limited to, the obligations of the tenant to pay fixed and additional rent), are
not affected by reason of any damage to or destruction of any portion of the
leased property or any taking of the leased property or any part thereof by
condemnation or otherwise, except for CTL Properties subject to casualty and
condemnation lease enhancement policies or which permit termination of rent only
pursuant to exercise of a funding option sufficient to pay the Advance in full.

 

(20) In the case of a Credit Lease with a “lease enhancement policy” and/or an
“extended amortization policy” and/or residual value insurance policy, the
entire premium has been paid in full for each such policy (or is required to be
paid within thirty days after the related closing date), such policies are each
in full force and effect, and the legal, valid and binding obligation of the
insurer thereunder, enforceable in accordance with their respective terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to or affecting
the rights of creditors generally and by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).

 

(s) Ground Lease. Other than the Ground Lease, the Property does not consist of
a leasehold estate in whole or in part. With respect to the Ground Lease:

 

(i) The Ground Lease or a memorandum thereof, including all amendments and
modifications thereto, or a separate agreement signed by the applicable lessor
has been duly recorded and by its terms permits the interest of the Borrower
thereunder to be encumbered by the applicable Mortgage and there has been no
change in the terms of the Ground Lease since its recordation.

 

(ii) The Ground Lease is not subject to any Liens or encumbrances other than the
Mortgage, subject to the Permitted Encumbrances, and the Ground Lease is prior
to all Liens, charges and encumbrances on the fee interest of the lessor
thereunder.

 

(iii) The Ground Lease is valid and subsisting and is in full force and effect
in accordance with its terms and no uncured default has occurred under the
Ground Lease.

 

(iv) The Mortgage encumbering the Ground Lease conforms and complies with the
Ground Lease, does not constitute a violation or default under the Ground Lease,
and is and shall at all times constitute a valid Lien (subject only to Permitted
Encumbrances) on the Borrower’s entire estate under the Ground Lease.

 

(v) All Ground Rent due and payable through and including the Advance Closing
Date therefor has been paid.

 

59

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

(vi) All terms, conditions, and agreements contained in the Ground Lease have
been performed to the extent they apply to periods through and including the
Advance Closing Date therefor.

 

(viii) The Ground Lease grants any leasehold mortgagee standard protections
necessary to protect the security of a leasehold mortgagee (including the right
of the leasehold mortgagee to receive notice of lessee’s default under the
Ground Lease, the right of the leasehold mortgagee, with adequate time, to cure
such default and, in the case of incurable defaults of lessee, the right of the
leasehold mortgagee to enter into a new Ground Lease with lessor on the same
terms as the existing Ground Lease).

 

(ix) The Ground Lease has a term (inclusive of any exercised renewal or
extension periods) which extends not less than twenty (20) years beyond the
Maturity Date.

 

(x) The Ground Lease requires the lessor to enter into a New Ground Lease upon
the termination of the Ground Lease for any reason, including the rejection of a
Ground Lease in bankruptcy.

 

Section 4.3. Survival of Representations. Borrower agrees that (i) all of the
representations and warranties of Borrower set forth in Section 4.1 and 4.2 and
in the other Loan Documents delivered on the Closing Date are made as of the
Closing Date, and (ii) all representations and warranties made by Borrower shall
survive the delivery of the Note and making of the Loan and continue for so long
as any amount remains owing to the Lenders under this Agreement, the Note or any
of the other Loan Documents; provided, however, that the representations set
forth in Section 4.2(e) shall survive in perpetuity. All representations,
warranties, covenants and agreements made in this Agreement or in the other Loan
Documents shall be deemed to have been relied upon by the Lenders and Collateral
Agent notwithstanding any investigation heretofore or hereafter made by the
Lenders and Collateral Agent or on their behalf.

 

ARTICLE V.

AFFIRMATIVE COVENANTS

 

Section 5.1. Affirmative Covenants. Borrower covenants and agrees that, from the
date hereof and until payment in full of the Indebtedness:

 

(a) Existence; Compliance with Legal Requirements: Insurance. Borrower shall do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect its existence as a limited liability company, rights, licenses,
Permits and franchises necessary for the conduct of its business and comply with
all Legal Requirements and Insurance Requirements applicable to it and the
Property, except for such non-compliance which is not reasonably likely to
result in a Material Adverse Effect. Borrower shall at all times maintain,
preserve and protect all franchises and trade names and preserve all the
remainder of its property necessary for the continued conduct of its business
and keep the Property in good repair, working order and condition, except for
reasonable wear and use (and except for casualty losses as to which other
provisions hereof shall govern), and from time to time make, or cause to be
made, all reasonably necessary repairs, renewals, replacements, betterments and
improvements thereto. Borrower shall or shall cause its tenants 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 more fully provided in this Agreement, and otherwise perform and
comply with all obligations of Borrower under the Mortgages.

 

60

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

(b) Basic Carrying Costs and Other Claims. Borrower shall pay and discharge all
Impositions, as well as all lawful claims for labor, materials and supplies or
otherwise when due and payable all as more fully provided in, and subject to any
rights to contest contained in, the Mortgage. Borrower shall pay all Basic
Carrying Costs with respect to Borrower and the Property in accordance with the
provisions of the Mortgage and this Agreement, subject, however, to Borrower’s
rights to contest payment of Impositions in accordance with the Mortgage.
Borrower’s obligation to pay Basic Carrying Costs pursuant to this Agreement
shall include, to the extent permitted by applicable law, Impositions resulting
from future changes in law which impose upon a Lender an obligation to pay any
property taxes on the Property or other Impositions. Borrower shall (x) pay its
trade payables within forty-five (45) days from the date such trade payables are
incurred and (y) not permit its trade payables to exceed 2% of the Principal
Indebtedness.

 

(c) Litigation. Borrower shall give prompt written notice to Agent of any
litigation or governmental proceedings pending or threatened (in writing)
against Borrower, or the Property which is reasonably likely to have a Material
Adverse Effect.

 

(d) Environmental Remediation.

 

(i) If any investigation, site monitoring, cleanup, removal, restoration or
other remedial work of any kind or nature is required pursuant to an order or
directive of any Governmental Authority or under any applicable Environmental
Law, because of or in connection with the current or future presence, suspected
presence, Release or suspected Release of a Hazardous Substance on, under or
from the Property or any portion thereof (collectively, the “Remedial Work”),
Borrower shall promptly commence and diligently prosecute to completion all such
Remedial Work, and shall conduct such Remedial Work in accordance with
applicable Environmental Laws. In all events, such Remedial Work shall be
commenced within such period of time as required under any applicable
Environmental Law; provided, however, that Borrower shall not be required to
commence such Remedial Work within the above specified time periods: (x) if
prevented from doing so by any Governmental Authority, (y) if commencing such
Remedial Work within such time periods would result in Borrower or such Remedial
Work violating any Environmental Law or (z) if Borrower, at its expense and
after prior notice to Agent, is contesting by appropriate legal, administrative
or other proceedings conducted in good faith and with due diligence the need to
perform Remedial Work, as long as (1) Borrower is permitted by the applicable
Environmental Laws to delay performance of the Remedial Work pending such
proceedings, (2) neither the Property nor any part thereof or interest therein
shall be sold, forfeited or lost if Borrower does not perform the Remedial Work
being contested, and Borrower would have the opportunity to do so, in the event
of Borrower’s failure to prevail in the contest, (3) the Lenders would not, by
virtue of such permitted contest, be exposed to any risk of any civil liability
for which Borrower has not furnished additional security as provided in clause
(4) below, or to any risk of criminal liability, and neither the Property nor
any interest therein would be subject to the imposition of any lien for which
Borrower has not furnished additional security as provided in clause (4) below,
as a result of the failure to perform such Remedial Work and (4) Borrower shall
have furnished to the Agent additional security in respect of the Remedial Work
being contested and the loss or damage that may result from Borrower’s failure
to prevail in such contest in such amount as may be reasonably requested by the
Agent.

 

(ii) If requested by the Agent, all Remedial Work under clause (A) above shall
be performed by contractors, and under the supervision of a consulting Engineer,
each approved in advance by the Agent which approval shall not be unreasonably
withheld or delayed. Borrower shall pay all costs and expenses reasonably
incurred in connection with such Remedial Work. If Borrower does not timely
commence and diligently prosecute to completion the Remedial Work,

 

61

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

the Agent may (but shall not be obligated to), upon 30 days prior written notice
to Borrower of its intention to do so, cause such Remedial Work to be performed.
Borrower shall pay or reimburse the Agent on demand for all expenses (including
reasonable attorneys’ fees and disbursements, but excluding internal overhead,
administrative and similar costs of the Lenders) reasonably relating to or
incurred by the Agent in connection with monitoring, reviewing or performing any
Remedial Work in accordance herewith.

 

(iii) Borrower shall not commence any Remedial Work under clause (A) above, nor
enter into any settlement agreement, consent decree or other compromise relating
to any Hazardous Substances or Environmental Laws without providing notice to
the Agent as provided in Section 5.1(f). Notwithstanding the foregoing, if the
presence or threatened presence of Hazardous Substances on, under, about or
emanating from the Property poses an immediate threat to the health, safety or
welfare of any Person or the environment, or is of such a nature that an
immediate response is necessary or required under applicable Environmental Law,
Borrower may complete all necessary Remedial Work. In such events, Borrower
shall notify Agent as soon as practicable and, in any event, within three
Business Days, of any action taken.

 

(e) Environmental Matters: Inspection.

 

(i) Borrower shall not permit a Hazardous Substance to be present on, under or
to emanate from the Property, or migrate from adjoining property controlled by
Borrower onto or into the Property, except under conditions permitted by
applicable Environmental Laws and, in the event that such Hazardous Substances
are present on, under or emanate from the Property, or migrate onto or into the
Property, Borrower shall cause the removal or remediation of such Hazardous
Substances, in accordance with this Agreement and Environmental Laws, either on
its own behalf or by causing a tenant or other party primarily at fault to
perform such removal and remediation. Borrower shall use commercially reasonable
efforts to prevent, and to seek the remediation of, any migration of Hazardous
Substances onto or into the Property from any adjoining property.

 

(ii) Upon reasonable prior written notice, the Agent shall have the right,
except as otherwise provided under Leases, at all reasonable times during normal
business hours to enter upon and inspect all or any portion of the Property,
provided that such inspections shall not unreasonably interfere with the
operation or the tenants, residents or occupants of the Property. If the Agent
has reasonable grounds to suspect that Remedial Work may be required, the Agent
shall notify Borrower and, thereafter, may select a consulting Engineer to
conduct and prepare reports of such inspections (with notice to Borrower prior
to the commencement of such inspection). Borrower shall be given a reasonable
opportunity to review any reports, data and other documents or materials
reviewed or prepared by the Engineer, and to submit comments and suggested
revisions or rebuttals to same. The inspection rights granted to the Agent in
this Section 5.1(e) shall be in addition to, and not in limitation of, any other
inspection rights granted to the Agent in this Agreement, and shall expressly
include the right (if the Agent reasonably suspects that Remedial Work may be
required) to conduct soil borings, establish ground water monitoring wells and
conduct other customary environmental tests, assessments and audits.

 

62

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

(iii) Borrower agrees to bear and shall pay or reimburse the Lenders on demand
for all sums advanced and reasonable expenses incurred (including reasonable
attorneys’ fees and disbursements, but excluding internal overhead,
administrative and similar costs of the Lenders) reasonably relating to, or
incurred by Lenders in connection with, the inspections and reports described in
this Section 5.1(e)(to the extent such inspections and reports relate to the
Property) in the following situations:

 

(x) If the Agent has reasonable grounds to believe, at the time any such
inspection is ordered, that there exists an occurrence or condition that could
lead to an Environmental Claim;

 

(y) If any such inspection reveals an occurrence or condition that is reasonably
likely to lead to an Environmental Claim; or

 

(z) If an Event of Default with respect to the Property exists at the time any
such inspection is ordered, and such Event of Default relates to any
representation, covenant or other obligation pertaining to Hazardous Substances,
Environmental Laws or any other environmental matter.

 

(f) Environmental Notices. Borrower shall promptly provide notice to Agent of:

 

(i) any Environmental Claim asserted by any Governmental Authority with respect
to any Hazardous Substance on, in, under or emanating from the Property, which
might involve remediation cost or liability greater than $25,000;

 

(ii) any proceeding, investigation or inquiry commenced or threatened in writing
by any Governmental Authority, against Borrower, with respect to the presence,
suspected presence, Release or threatened Release of Hazardous Substances from
or onto, in or under any property not owned by Borrower (including, without
limitation, proceedings under the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended, 42 U.S.C. §9601, et seq.), which
might involve remediation cost or liability greater than $25,000;

 

(iii) all Environmental Claims asserted or threatened against Borrower with
respect to the Property, against any other party occupying the Property or any
portion thereof which become known to Borrower or against the Property, which
might involve remediation cost or liability greater than $25,000;

 

(iv) the discovery by Borrower of any occurrence or condition on the Property
which could involve remediation cost or liability greater than $25,000;

 

(v) the commencement or completion of any Remedial Work, which might involve
remediation cost or liability greater than $25,000; and

 

(vi) any of the foregoing clauses (i) – (v) that a tenant notifies to Borrower
under a Lease with respect to such tenant.

 

(g) Copies of Notices. Borrower shall transmit to the Agent copies of any
citations, orders, notices or other written communications received from any
Person and any notices, reports or other written communications submitted to any
Governmental Authority with respect to the matters described in Section 5.1(f).

 

(h) Environmental Claims. The Agent may join and participate in, as a party if
the Agent so determines, any legal or administrative proceeding or action
concerning the Property or any portion thereof under any Environmental Law, if,
in the Agent’s reasonable judgment, the interests of the Lenders shall not be
adequately protected by Borrower; provided, however, that the Lenders shall not
participate in day-to-day decision making with respect to environmental
compliance. Borrower shall pay or reimburse the Lenders on demand for all
reasonable sums advanced and reasonable expenses incurred (including reasonable
attorneys’ fees and disbursements, but excluding internal overhead,
administrative and similar costs of the Lenders) by the Lenders in connection
with any such action or proceeding.

 

63

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

(i) Environmental Indemnification. Borrower shall indemnify, reimburse, defend,
and hold harmless the Agent, each Lender, the Collateral Agent and each of its
respective parents, subsidiaries, Affiliates, shareholders, directors, officers,
employees, representatives, agents, successors, assigns and attorneys
(collectively, the “Indemnified Parties”) for, from, and against all demands,
claims, actions or causes of action, assessments, losses, damages, liabilities,
costs and expenses (including, without limitation, interest, penalties,
reasonable attorneys’ fees, disbursements and expenses, and reasonable
consultants’ fees, disbursements and expenses (but excluding internal overhead,
administrative, lost opportunity and similar costs of the Lenders and the
Collateral Agent)), asserted against, resulting to, imposed on, or incurred by
any Indemnified Party, directly or indirectly, in connection with any of the
following (except to the extent same are directly and solely caused by the gross
negligence or willful misconduct of any Indemnified Party and except that any
Indemnified Party shall not be indemnified against claims resulting from actions
taken or events occurring with respect to the Property after the Agent
forecloses its Lien or security interest upon the Property or accepts a deed in
lieu of foreclosure or is a so-called “mortgagee-in-possession” unless and to
the extent such indemnification relates to any of the following which occurred
while Borrower owned the Property):

 

(a) events, circumstances, or conditions which form the reasonable basis for an
Environmental Claim;

 

(b) any pollution or threat to human health or the environment that is related
in any way to Borrower’s or any previous owner’s or operator’s management, use,
control, ownership or operation of the Property (including, without limitation,
all on-site and off-site activities involving Hazardous Substances), and whether
occurring, existing or arising prior to or from and after the date hereof, and
whether or not the pollution or threat to human health or the environment is
described in the Environmental Reports;

 

(c) any Environmental Claim against any Person whose liability for such
Environmental Claim Borrower has or may have assumed or retained either
contractually or by operation of law; or

 

(d) the breach of any representation, warranty or covenant set forth in Section
4.2(e) and Sections 5.1(d) through 5.1(i), inclusive.

 

The provisions of and undertakings and indemnification set forth in this Section
5.1(i) shall survive the satisfaction and payment of the Indebtedness and
termination of this Agreement.

 

(j) General Indemnity.

 

(i) Borrower shall, at its sole cost and expense, protect, defend, indemnify,
release and hold harmless the Indemnified Parties for, from and against any and
all claims, suits, liabilities (including, without limitation, strict
liabilities), administrative and judicial actions and proceedings, obligations,
debts, damages, losses, costs, expenses, fines, penalties, charges, fees,
expenses, judgments, awards, amounts paid in settlement, and litigation costs,
of whatever kind or nature and whether or not incurred in connection with any
judicial or administrative proceedings (including, but not limited to,
reasonable attorneys’ fees and other reasonable costs of defense) (the “Losses”)
imposed upon or incurred by or asserted against any Indemnified Parties (except
to the extent same are directly and solely caused by the gross negligence or
willful misconduct of any Indemnified Party) and directly or indirectly arising
out of or in any way relating to any one or more of the following:

 

(A) ownership of the Note, any of the other Loan Documents or the Property or
any interest therein or receipt of any Rents or Accounts;

 

64

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

(B) any untrue statement of any material fact contained in any information
provided by Borrower, the Property or the Loan or the omission to state therein
a material fact required to be stated in such information or necessary in order
to make the statements in such information or in light of the circumstances
under which they were made not misleading;

 

(C) any and all lawful action that may be taken and is taken by the Lender in
connection with the enforcement of the provisions of this Agreement, the Note or
any of the other Loan Documents, whether or not suit is filed in connection with
same, or in connection with Borrower or any Affiliate of Borrower becoming a
party to a voluntary or involuntary federal or state bankruptcy, insolvency or
similar proceeding;

 

(D) any accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;

 

(E) any use, nonuse or condition in, on or about the Property or any part
thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways;

 

(F) any failure on the part of Borrower to perform or be in compliance with any
of the terms of this Agreement or any of the other Loan Documents;

 

(G) performance of any labor or services or the furnishing of any materials or
other property in respect of the Property or any part thereof pursuant to
provisions of this Agreement;

 

(H) the failure of Borrower to file timely with the Internal Revenue Service an
accurate Form 1099-B, Statement for Recipients of Proceeds from Real Estate,
Broker and Barter Exchange Transactions, which may be required in connection
with this Agreement;

 

(I) any failure of the Property to be in compliance with any Legal Requirement;

 

(J) the enforcement by any Indemnified Party of the provisions of this Section
5.1(j); and

 

(K) any and all claims and demands whatsoever which may be asserted against the
Lenders by reason of any alleged obligations or undertakings on its part to
perform or discharge any of the terms, covenants, or agreements contained in any
Lease.

 

Any amounts payable to an Indemnified Party by reason of the application of this
Section 5.1(j)(i) shall become due and payable ten (10) days after written
demand and shall bear interest at the Default Rate from the tenth (10th) day
after demand until paid.

 

65

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

(ii) Borrower shall, at its sole cost and expense, protect, defend, indemnify,
release and hold harmless the Indemnified Parties from and against any and all
Losses imposed upon or incurred by or asserted against any of the Indemnified
Parties and directly or indirectly arising out of or in any way relating to any
tax on the making and/or recording of this Agreement, the Note or any of the
other Loan Documents.

 

(iii) Borrower shall, at its sole cost and expense, protect, defend, indemnify,
release and hold harmless the Indemnified Parties from and against any and all
Losses (including, without limitation, reasonable attorneys’ fees and costs
incurred in the investigation, defense, and settlement of Losses incurred in
correcting any prohibited transaction or in the sale of a prohibited loan, and
in obtaining any individual prohibited transaction exemption under ERISA that
may be required, in the Lender’s reasonable discretion) that the Indemnified
Parties may incur, directly or indirectly, as a result of a default under
Borrower’s covenants with respect to ERISA and employee benefits plans contained
herein.

 

(iv) Promptly after receipt by an Indemnified Party under this Section 5.1(j) of
notice of the making of any claim or the commencement of any action, such
Indemnified Party shall, if a claim in respect thereof is to be made by such
Indemnified Party against Borrower under this Section 5.1(j), notify Borrower in
writing, but the omission so to notify Borrower will not relieve Borrower from
any liability which it may have to any Indemnified Party under this Section
5.1(j) or otherwise unless and to the extent that Borrower did not otherwise
possess knowledge of such claim or action and such failure resulted in the
forfeiture by Borrower of substantial rights and defenses. In case any such
claim is made or action is brought against any Indemnified Party and such
Indemnified Party seeks or intends to seek indemnity from Borrower, Borrower
will be entitled to participate in, and, to the extent that it may wish, to
assume the defense thereof with counsel reasonably satisfactory to the
Indemnified Party; and, upon receipt of notice from Borrower to such Indemnified
Party of its election so to assume the defense of such claim or action and only
upon approval by the Indemnified Party of such counsel (such approval not to be
unreasonably withheld or delayed), Borrower will not be liable to such
Indemnified Party under this Section 5.1(j) for any legal or other expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof. Notwithstanding the preceding sentence, each Indemnified Party will be
entitled to employ counsel separate from such counsel for Borrower and from any
other party in such action if such Indemnified Party reasonably determines that
a conflict of interest exists which makes representation by counsel chosen by
Borrower not advisable. In such event, Borrower shall pay the reasonable fees
and disbursements of such separate counsel, subject to reimbursement of such
costs if the Indemnified Party requiring such separate counsel is found not to
be entitled to the indemnity protection of this Section 5.1(j). Borrower shall
not, without the prior written consent of an Indemnified Party, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not such Indemnified Party
is an actual or potential party to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each Indemnified
Party from all liability arising out of such claim, action, suit or proceeding.
Each Indemnified Party shall not enter into a settlement of or consent to the
entry of any judgment with respect to any action, claim, suit or proceeding as
to which an Indemnified Party would be entitled to indemnification hereunder
without the prior written consent of Borrower.

 

The provisions of and undertakings and indemnification set forth in this Section
5.1(j) shall survive the satisfaction and payment of the Indebtedness and
termination of this Agreement.

 

66

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

(k) Access to Property. Borrower shall permit agents, representatives and
employees of the Agent to inspect the Property or any part thereof at such
reasonable times as may be requested by Agent upon reasonable advance written
notice, subject, however, to the rights of Borrower and of the tenants of the
Property.

 

(l) Notice of Default. Borrower shall promptly advise Agent in writing of any
change in Borrower’s condition, financial or otherwise, that is reasonably
likely to have a Material Adverse Effect, or of the occurrence of any Default or
Event of Default.

 

(m) Cooperate in Legal Proceedings. Except with respect to any claim by
Borrower, the Managing Member or the Guarantor against the Agent or any Lender,
Borrower shall reasonably cooperate with Agent with respect to any proceedings
before any Governmental Authority that are reasonably likely to in any way
materially affect the rights of the Lenders hereunder or any rights obtained by
the Lenders under any of the Loan Documents and, in connection therewith, shall
not prohibit Agent, at its election, from participating in any such proceedings.

 

(n) Perform Loan Documents. Borrower shall observe, perform and satisfy all the
terms, provisions, covenants and conditions required to be observed, performed
or satisfied by it, and shall pay when due all costs, fees and expenses required
to be paid by it, under the Loan Documents.

 

(o) Insurance Benefits. Borrower shall reasonably cooperate with Agent in
obtaining for the Lenders the benefits of any Insurance Proceeds lawfully or
equitably payable to Borrower or Lenders in connection with the Property. Agent
shall be reimbursed for any expenses reasonably incurred in connection therewith
(including reasonable attorneys’ fees and disbursements, but excluding internal
overhead, administrative and similar costs of Agent) out of such Insurance
Proceeds, all as more specifically provided in this Agreement.

 

(p) Further Assurances. Borrower shall, at Borrower’s sole cost and expense:

 

(i) upon Agent’s reasonable request therefor given from time to time, pay for
(a) reports of UCC, tax lien, judgment and litigation searches with respect to
Borrower, and (b) searches of title to the Property, each such search to be
conducted by search firms designated by Agent in each of the locations
designated by Agent;

 

(ii) furnish to Agent all instruments, documents, certificates, title and other
insurance reports and agreements, and each and every other document,
certificate, agreement and instrument required to be furnished pursuant to the
terms of the Loan Documents;

 

(iii) execute and deliver to Agent such documents, instruments, certificates,
assignments and other writings, and do such other acts necessary, to evidence,
preserve and/or protect the Collateral at any time securing or intended to
secure the Note, as Agent may reasonably require (including, without limitation,
tenant estoppel certificates, an amended or replacement Mortgage, UCC financing
statements or Collateral Security Instruments); and

 

(iv) 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 Agent shall
reasonably require from time to time.

 

67

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

(q) Management of Property.

 

(i) The Property shall be managed at all times by the Manager or another manager
reasonably satisfactory to Agent, pursuant to a Management Agreement. Any such
manager may be an Affiliate of Borrower, provided that: (a) the terms and
conditions of such manager’s engagement are at arm’s length, reasonable,
competitive and customary in the applicable marketplace; and (b) Agent has
approved such manager and such terms, which approval shall not be unreasonably
withheld or delayed. Borrower shall cause the manager of the Property to agree
that such manager’s management agreement is subject and subordinate in all
respects to the Lien of the Mortgage. A Management Agreement may be terminated
(1) by Borrower at any time in accordance with the provisions of such Management
Agreement so long as a successor manager as specified below shall have been
appointed and such successor manager has (i) entered into a Management
Agreement, subject to any modifications approved by Agent, which approval shall
not be unreasonably denied, conditioned or delayed, and (ii) has executed and
delivered the Manager’s Subordination to Agent, and (2) by Agent upon thirty
(30) days’ prior written notice to Borrower and the Manager (a) upon the
occurrence and continuation of an Event of Default or (b) if the Manager commits
any act which would permit termination under the Management Agreement (subject
to any applicable notice, grace and cure periods provided in the Management
Agreement). Borrower may from time to time appoint a successor manager to manage
the Property with Agent’s prior written consent, such consent not to be
unreasonably withheld. Notwithstanding the foregoing, any successor manager
selected hereunder by Agent or Borrower to manage the Property shall be a
reputable management company having substantial experience in the management of
real property of a similar type, size and quality in the state in which the
Property is located. Borrower further covenants and agrees that any manager of
Property shall at all times while any Indebtedness is outstanding maintain
worker’s compensation insurance as required by Governmental Authorities.

 

(ii) Borrower further covenants and agrees that the Property shall be operated
pursuant to the Management Agreement and that Borrower shall: (w) promptly
perform and/or observe all of the material covenants and agreements required to
be performed and observed by it under the Management Agreement and do all things
reasonably necessary to preserve and to keep unimpaired its material rights
thereunder; (x) promptly notify the Agent of any material default under the
Management Agreement of which it is aware; (y) promptly deliver to the Agent a
copy of each financial statement, business plan, capital expenditures plan,
notice and report received by it under the Management Agreement, including, but
not limited to, financial statements; and (z) promptly enforce the performance
and observance of the covenants and agreements required to be performed and/or
observed by the Manager under the Management Agreement.

 

(r) Financial Reporting.

 

(i) Borrower shall keep and maintain or shall cause to be kept and maintained on
a Fiscal Year basis in accordance with GAAP consistently applied, books, records
and accounts reflecting in reasonable detail all of the financial affairs of
Borrower and all items of income and expense in connection with the operation of
the Property and ownership of the Property and in connection with any services,
equipment or furnishings provided in connection with the operation of the
Property, whether such income or expense may be realized by Borrower or by any
other Person whatsoever. Agent shall have the right from time to time at all
times during normal business hours upon reasonable prior written notice to
Borrower to examine such books, records and accounts at the office of Borrower
or other Person maintaining such books, records and accounts and to make such
copies or extracts thereof as Agent shall desire. During the continuation of an
Event of Default (including, without limitation, an Event of Default resulting

 

68

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

from the failure of the Borrower to deliver any of the financial information
required to be delivered pursuant to this Section 5.1(r)), Borrower shall pay
any reasonable costs and expenses incurred by Agent to examine Borrower’s
accounting records, as Agent shall reasonably determine to be necessary or
appropriate in the protection of the Lenders’ interest.

 

(ii) Borrower shall furnish to Agent annually, within one hundred twenty (120)
days following the end of each Fiscal Year, a complete copy of Borrower’s
unaudited financial statement in accordance with GAAP consistently applied
(which may be prepared internally) covering Borrower’s financial position and
results of operations, for such Fiscal Year and containing a statement of
revenues and expenses, a statement of assets and liabilities and a statement of
Borrower’s equity, all of which shall be in form and substance reasonably
acceptable to Agent. Agent shall have the right from time to time to review and
consult with respect to the accounting procedures used in the preparation of
such annual financial statements. Together with Borrower’s annual financial
statements, Borrower shall furnish to Agent an Officer’s Certificate certifying
as of the date thereof (x) that the annual financial statements present fairly
in all material respects the results of operations and financial condition of
Borrower all in accordance with GAAP consistently applied, and (y) whether there
exists an Event of Default or Default, and if such Event of Default or Default
exists, the nature thereof, the period of time it has existed and the action
then being taken to remedy same.

 

(iii) Borrower shall furnish to Agent, within sixty (60) days following the end
of each Fiscal Year quarter a true, complete and correct quarterly unaudited
financial statement prepared in accordance with GAAP with respect to Borrower
for the portion of the Fiscal Year then ended.

 

(iv) Borrower shall furnish to Agent, within thirty (30) Business Days after
request, such further information with respect to the operation of the Property
and the financial affairs of Borrower as may be reasonably requested by Agent,
including all business plans prepared for Borrower.

 

(v) Borrower shall furnish to Agent, within thirty (30) Business Days after
request, such further information regarding any Plan or Multiemployer Plan and
any reports or other information required to be filed under ERISA as may be
reasonably requested by Agent in writing.

 

(vi) At least thirty (30) days prior to the end of each of Borrower’s Fiscal
Years, Borrower shall submit or cause to be submitted to Agent for its approval,
such approval not to be unreasonably withheld or delayed, an Operating Budget
for Property Expenses, Capital Improvement Costs, Leasing Commissions, TI Costs
and replacement reserve costs for the next Fiscal Year for the Property. Until
so approved by Agent for the subsequent Fiscal Year, the Operating Budget
approved by Agent for the preceding Fiscal Year shall remain in effect for
purposes of Section 3.12; provided, that for so long as such prior Operating
Budget remains in effect, amounts set forth in the prior Operating Budget with
respect to Property Expenses, TI Costs and Leasing Commissions shall be deemed
increased on a percentage basis by an amount equal to the greater of (x) actual
increases then known to Borrower and (y) the increase in the Consumer Price
Index (expressed as a percentage) as measured over the calendar year that the
prior Operating Budget was in effect.

 

(vii) No later than thirty (30) days following the end of each calendar quarter,
beginning with the first calendar quarter end after the related Advance Closing
Date, Borrower shall prepare and deliver to the Agent and the Collateral Agent a
statement (each a “Quarterly Statement”) in hard copy and on diskette and/or a
copy through electronic mail, in form and substance reasonably satisfactory to
Agent, setting forth with respect to the related Property,

 

69

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

(A) a rent roll dated as of the last day of such quarter in a form acceptable to
the Agent, identifying each of the Leases and containing any information
reasonably required by Agent; and

 

(B) monthly and year-to-date operating statements prepared for each calendar
month during each such quarter, each of which shall include an itemization of
actual (not pro forma) capital expenditures during the applicable period.

 

(s) Operation of Property. Borrower shall cause the operation of the Property to
be conducted at all times in a manner consistent with at least the level of
operation of the Property as of the Closing Date, including, without limitation,
the following:

 

(i) to maintain or cause to be maintained the standard of the Property at all
times at a level not lower than that maintained by prudent managers of similar
facilities or land in the region where the Property is located; and

 

(ii) to operate or cause to be operated the Property in a prudent manner in
compliance in all material respects with applicable Legal Requirements and
Insurance Requirements relating thereto and maintain or cause to be maintained
all licenses, Permits and any other agreements necessary for the continued use
and operation of the Property.

 

(t) Single-Purpose Entity.

 

(i) Borrower at all times will continue to be a duly formed and validly existing
limited liability company under the laws of the State of its formation and a
Single-Purpose Entity.

 

(ii) Borrower shall at all times comply with the provisions of its
Organizational Agreement and the laws of the State of its formation relating to
limited liability companies.

 

(iii) Borrower shall observe all customary formalities regarding its existence.

 

(iv) Borrower shall accurately maintain its financial statements, accounting
records and other corporate documents separate from those of its members,
Affiliates of its members and any other Person. Borrower shall not commingle its
assets with those of its members, any Affiliates of its members, or any other
Person. Borrower shall continue to accurately maintain its own bank accounts and
separate books of account.

 

(v) Borrower shall continue to pay its own liabilities from its own separate
assets.

 

(vi) Borrower shall continue to identify itself in all dealings with the public,
under its own name or trade names and as a separate and distinct entity.
Borrower will not identify itself as being a division or a part of any other
entity. Borrower will not identify its members or any Affiliates of its members
as being a division or part of Borrower.

 

(vii) Borrower shall continue to be adequately capitalized in light of the
nature of its business.

 

70

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

(viii) Borrower shall not assume or guarantee the liabilities of its members,
any Affiliates of its members or any other Persons, except for liabilities
relating to the Property. Borrower shall not acquire obligations or securities
of its members, or any Affiliates of its members or any other Persons. Except
for the Liens granted pursuant to the Loan Documents, Borrower shall not pledge
its assets for the benefit of any other Person (other than the Agent) or make
loans or advances to its members (or any predecessor corporation), or any
Affiliates of its members or any other Persons.

 

(ix) Borrower shall not enter into or be a party to any transaction with its
members or any Affiliates of its members, except for in the ordinary course of
business on terms which are no less favorable to Borrower than would be obtained
in a comparable arm’s length transaction with an unrelated third party (other
than in connection with the execution by Borrower and the Manager of the
Management Agreement).

 

(u) ERISA. Borrower shall deliver to Agent as soon as possible, and in any event
within ten days after Borrower knows or has reason to believe that any of the
events or conditions specified below with respect to any Plan or Multiemployer
Plan has occurred or exists, an Officer’s Certificate setting forth details
respecting such event or condition and the action, if any, that Borrower or its
ERISA Affiliate proposes to take with respect thereto (and a copy of any report
or notice required to be filed with or given to PBGC by Borrower or an ERISA
Affiliate with respect to such event or condition):

 

(i) any reportable event, as defined in Section 4043(b) of ERISA and the
regulations issued thereunder, with respect to a Plan, as to which PBGC has not
by regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within thirty (30) days of the occurrence of such event (provided that
a failure to meet the minimum funding standard of Section 412 of the Code or
Section 302 of ERISA, including, without limitation, the failure to make on or
before its due date a required installment under Section 412(m) of the Code or
Section 302(e) of ERISA, shall be a reportable event regardless of the issuance
of any waivers in accordance with Section 412(d) of the Code); and any request
for a waiver under Section 412(d) of the Code for any Plan;

 

(ii) the distribution under Section 4041(c) of ERISA of a notice of intent to
terminate any Plan or any action taken by Borrower or an ERISA Affiliate to
terminate any Plan;

 

(iii) the institution by PBGC of proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by Borrower or any ERISA Affiliate of Borrower of a notice from a
Multiemployer Plan that such action has been taken by PBGC with respect to such
Multiemployer Plan;

 

(iv) the complete or partial withdrawal from a Multiemployer Plan by Borrower or
any ERISA Affiliate of Borrower that results in material liability under Section
4201 or 4204 of ERISA (including the obligation to satisfy secondary liability
as a result of a purchaser default) or the receipt by Borrower or any ERISA
Affiliate of Borrower of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that
it intends to terminate or has terminated under Section 4041A of ERISA;

 

(v) the institution of a proceeding by a fiduciary of any Multiemployer Plan
against Borrower or any ERISA Affiliate of Borrower to enforce Section 515 of
ERISA, which proceeding is not dismissed within thirty (30) days;

 

71

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

(vi) the adoption of an amendment to any Plan that, pursuant to Section
401(a)(29) of the Code or Section 307 of ERISA, would result in the loss of
tax-exempt status of the trust of which such Plan is a part if Borrower or an
ERISA Affiliate of Borrower fails to timely provide security to the Plan in
accordance with the provisions of said Sections; and

 

(vii) the imposition of a lien or a security interest in connection with a Plan.

 

(v) Reserved.

 

(w) Reserved.

 

(x) Insurance.

 

(i) Borrower, at its sole cost and expense, shall keep the Improvements and
Equipment insured (including, but not limited to, any period of renovation,
alteration and/or construction) during the term of the Loan with the coverage
and in the amounts required under this Agreement for the mutual benefit of
Borrower and Agent against loss or damage by fire, lightning, wind and such
other perils as are customarily included in a standard “all-risk” or “special
cause of loss” form and against loss or damage by other risks and hazards
covered by a standard extended coverage insurance policy (including, without
limitation, riot and civil commotion, vandalism, malicious mischief, burglary,
collapse, theft and such other coverages as may be reasonably required by Agent
on the special form (formerly known as an all risk form)). Such insurance shall
be in an amount (i) equal to at least the greater of then full replacement cost
of the Improvements and Equipment (exclusive of the cost of foundations and
footings), without deduction for physical depreciation and the outstanding
Principal Indebtedness, and (ii) such that the insurer would not deem Borrower a
co-insurer under said policies. The policies of insurance carried in accordance
with this Section 5.1(x) shall be paid not less than ten (10) days in advance of
the due date thereof and shall contain the “Replacement Cost Endorsement” with a
waiver of depreciation. If terrorism coverage is excluded on an “all-risk”
basis, then the Borrower shall obtain coverage for terrorism and similar acts in
the standalone terrorism market. Notwithstanding the foregoing, Agent shall not
unreasonably withhold its consent to reductions in the stated amounts and types
of coverage required to be maintained by Borrower hereunder if such levels of
coverage or types of insurance, as determined by Agent in its sole reasonable
discretion, (A) are not available at commercially reasonable rates and (B) are
not at the time commonly maintained for properties similar to the Property and
located in or around the region in which the Property is located.

 

(ii) Borrower, at its sole cost and expense, for the mutual benefit of Borrower
and Agent, shall also (or shall cause the tenant under the terms of an
applicable Lease to) obtain and maintain or cause to be obtained and maintained
during the entire term of the Loan the following policies of insurance:

 

(A) flood insurance, if any part of the Property is located in an area
identified by the Federal Emergency Management Agency as an area having special
flood hazards and in which flood insurance has been made 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 (and any amendment or
successor act thereto) in an amount at least equal to the maximum limit of
coverage available with respect to the Improvements and Equipment under said Act
and with deductibles not to exceed the maximum deductibles available under said
Act;

 

72

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

(B) Comprehensive General Liability or Commercial General Liability insurance,
including a broad form comprehensive general liability endorsement and coverage
for broad form property damage, contractual damages, personal injuries
(including death resulting therefrom) and a liquor liability endorsement if
liquor is sold on the Property, containing minimum limits of liability of $1
million for both injury to or death of a person and for property damage per
occurrence and $3 million in the aggregate for the Property, and such other
liability insurance reasonably requested by Agent; in addition, at least $10
million excess and/or umbrella liability insurance shall be obtained and
maintained for any and all claims, including all legal liability imposed upon
Borrower and all court costs and attorneys’ fees incurred in connection with the
ownership, operation and maintenance of the Property;

 

(C) business interruption insurance (including rental value) in an annual
aggregate amount equal to the estimated gross revenues from the Leases of the
Property (including, without limitation, the loss of all Rents and additional
Rents payable by all of the lessees under the Leases (whether or not such Leases
are terminable in the event of a fire or casualty)), such insurance to cover
losses for a period of the longer of (x) one year after the date of the fire or
casualty in question or (y) the period from the time of loss until all repairs
are fully completed with reasonable diligence and dispatch, plus an extended
period of indemnity commencing at the time repairs are completed for a period of
not less than 90 days and to be increased or decreased, as applicable, from time
to time during the term of the Loan if, and when, the gross revenues from the
Leases of the Property materially increase or decrease, as applicable
(including, without limitation, increases from new Leases and renewal Leases
entered into in accordance with the terms of this Agreement), to reflect all
increased Rent and increased additional Rent payable by all of the lessees under
such renewal Leases and all Rent and additional Rent payable by all of the
lessees under such new Leases;

 

(D) insurance against loss or damage from (x) leakage of sprinkler systems and
(y) explosion of steam boilers, air conditioning equipment, high pressure
piping, machinery and equipment, pressure vessels or similar apparatus now or
hereafter installed in the Improvements (without exclusion for explosions),
covering all boilers or other pressure vessels, machinery and equipment located
in, on, or about the Improvements; coverage is required in an amount at least
equal to the full replacement cost of such equipment and the building or
buildings housing same and shall extend to electrical equipment, sprinkler
systems, heating and air conditioning equipment, refrigeration equipment and
piping;

 

(E) worker’s compensation insurance coverage (in amounts not less than the
statutory minimums for all persons employed by Borrower or its tenants at the
Property and in compliance with all other requirements of applicable local,
state and federal law) and “Employers Liability” insurance in amounts not less
than required by statute;

 

(F) during any period of repair or restoration, builder’s “all risk” insurance
in an amount equal to not less than the full insurable value of the Property
against such risks (including, without limitation, fire and extended coverage
and collapse of the Improvements to agreed limits) as Agent may request, in form
and substance acceptable to Agent;

 

(G) ordinance or law coverage to compensate for the cost of demolition,
increased cost of construction, and loss to any undamaged portions of the
Improvements,

 

73

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

if the current use of the Property or the Improvements themselves are or become
“nonconforming” pursuant to the applicable zoning regulations, or full
rebuildability following casualty is otherwise not permitted under such zoning
regulations;

 

(H) if required by Agent as a result of the Property being located in an area
with a high degree of seismic activity, earthquake damage insurance in an amount
and form acceptable to Agent; and

 

(I) such other insurance as may from time to time be reasonably required by
Agent in order to protect its interests with respect to the Loan and the
Property.

 

(iii) All policies of insurance (the “Policies”) required pursuant to this
Section 5.1(x):

 

(J) shall be issued by an insurer approved by Agent which has a claims paying
ability rating of not less than “A” (or the equivalent) by Rating Agencies
satisfactory to Agent (one of which shall be Standard & Poor’s Ratings Group)
and A:VIII or better as to claims paying ability by AM Best; provided, however,
if the insurance provided hereunder is procured by a syndication of more than
five insurers then the foregoing requirements shall not be violated if at least
sixty percent of the coverage is with carriers having a claims paying ability
rating of “A-” or better by Standard & Poor’s,

 

(K) shall name Agent as an additional insured and contain a standard
noncontributory mortgagee clause and a Agent’s Loss Payable Endorsement, or
their equivalents, naming Agent (and/or such other party as may be designated by
Agent) as the party to which all payments made by such insurance company shall
be paid; provided, with respect to CTL Properties only, Borrower shall be deemed
to comply with this paragraph if the insurance obtained by the tenant (and not
the Borrower) satisfies the requirement,

 

(L) shall be maintained throughout the term of the Loan without cost to Agent,

 

(M) shall contain such provisions as Agent deems reasonably necessary or
desirable to protect its interest (including, without limitation, endorsements
providing that neither Borrower, Agent nor any other party shall be a co-insurer
under said Policies and that Agent shall receive at least thirty (30) days prior
written notice of any modification, reduction or cancellation),

 

(N) shall contain a waiver of subrogation against Agent,

 

(O) shall be for a term of not less than one year,

 

(P) shall be issued by an insurer licensed in the state in which the Property is
located,

 

(Q) shall provide that Agent may, but shall not be obligated to, make premium
payments to prevent any cancellation, endorsement, alteration or reissuance, and
such payments shall be accepted by the insurer to prevent same; provided, with
respect to CTL Properties only, Borrower shall be deemed to comply with this
paragraph if the insurance obtained by the tenant (and not the Borrower)
satisfies the requirement, and

 

74

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

(R) shall be reasonably satisfactory in form and substance to Agent and
reasonably approved by Agent as to amounts, form, risk coverage, deductibles,
loss payees and insureds to the extent not otherwise specified in this Section
5.1(x).

 

Insurance certificates evidencing such coverages shall be delivered to Agent;
provided, however, upon demand by a Rating Agency, copies of said Policies,
certified as true and correct by Borrower, shall be delivered to Agent. Prior to
the expiration date of each of the Policies, Borrower shall deliver to Agent
satisfactory evidence of the renewal of each Policy. The insurance coverage
required under this Section 5.1(x) may be effected under a blanket policy or
policies covering the Property and other property and assets not constituting a
part of the Collateral; provided that any such blanket policy shall provide at
least the same amount and form of protection as would a separate policy insuring
the Property individually, which amount shall not be less than the amount
required pursuant to this Section 5.1(x) and which shall in any case comply in
all other respects with the requirements of this Section 5.1(x). Upon demand
therefor, Borrower shall reimburse Agent for all of Agent’s or its designee’s
reasonable costs and expenses incurred in obtaining any or all of the Policies
or otherwise causing the compliance with the terms and provisions of this
Section 5.1(x), including (without limitation) obtaining updated flood hazard
certificates and replacement of any so-called “forced placed” insurance
coverages to the extent Borrower was required to obtain and maintain any such
Policy or Policies hereunder and failed to do so. Borrower shall pay the
premiums for such Policies (the “Insurance Premiums”) as the same become due and
payable and shall furnish to Agent 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 Agent (provided, however,
that Borrower is not required to furnish such evidence of payment to Agent in
the event that such Insurance Premiums have been paid by Agent or the Collateral
Agent). If Borrower does not furnish such evidence and receipts at least five
(5) days prior to the expiration of any expiring Policy, then Agent may procure,
but shall not be obligated to procure, such insurance and pay the Insurance
Premiums therefor, and Borrower agrees to reimburse Agent for the cost of such
Insurance Premiums promptly on demand. Within thirty (30) days after request by
Agent, Borrower shall obtain such increases in the amounts of coverage required
hereunder as may be reasonably requested by Agent, based on then
industry-standard amounts of coverage then being obtained by prudent owners of
properties similar to the Property in the same applicable market region as the
Property. Borrower shall give Agent prompt written notice if Borrower receives
from any insurer any written notification or threat of any actions or
proceedings regarding the non-compliance or non-conformity of the Property with
any insurance requirements.

 

(iv) If the Property shall be damaged or destroyed, in whole or in part, by fire
or other casualty, Borrower shall give prompt notice thereof to Agent.

 

(A) In case of loss covered by Policies, Agent may either (a) jointly with a
Borrower settle and adjust any claim and agree with the insurance company or
companies on the amount to be paid on the loss or (b) allow Borrower to agree
with the insurance company or companies on the amount to be paid upon the loss;
provided, that Borrower may settle and adjust losses per occurrence level not in
excess of $50,000, agree with the insurance company or companies on the amount
to be paid upon the loss and collect and receipt for any such Insurance
Proceeds; provided, further, that if (x) at the time of the settlement of such
claim an Event of Default has occurred and is continuing or (y) the Agent and
the Borrower are unable to agree upon a joint settlement or (z) the Agent
disapproves of the Borrower’s proposed settlement with the insurance company,
then Agent shall settle and adjust such claim without the consent of Borrower.
In any such case Agent shall and is hereby authorized to collect and receipt for
any such Insurance

 

75

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

Proceeds subject to and to the extent provided for in this Agreement. The
reasonable out-of-pocket expenses incurred by Agent in the adjustment and
collection of Insurance Proceeds shall become part of the Indebtedness and be
secured by the Mortgage and shall be reimbursed by Borrower to Agent upon demand
therefor.

 

(B) In the event of any insured damage to or destruction of the Property or any
part thereof (herein called an “Insured Casualty”) where the aggregate amount of
the loss, as reasonably determined by an Independent insurance adjuster, is less
than ten percent (10%) of the related Advance, and if, in the reasonable
judgment of Agent, the Property can be restored by not later than the first to
occur of (a) twelve (12) months of settlement of the claim and (b) the
expiration of the business interruption insurance and, in any case, not later
than six (6)months prior to the Maturity Date to an economic unit not less
materially valuable (including an assessment of the impact of the termination of
any Leases due to such Insured Casualty) and not less useful than the same was
prior to the Insured Casualty, or if Agent otherwise elects to allow a Borrower
to restore the Property, then, if no Event of Default shall have occurred and be
continuing, the Insurance Proceeds (after reimbursement of any reasonable
out-of-pocket expenses incurred by Agent in connection with the collection of
any applicable Insurance Proceeds) shall be made available to reimburse Borrower
for the cost of restoring, repairing, replacing or rebuilding the Property or
part thereof subject to the Insured Casualty, as provided for below. Borrower
hereby covenants and agrees to commence and diligently to prosecute such
restoring, repairing, replacing or rebuilding. Borrower shall pay all
out-of-pocket costs (and if required by Agent, Borrower shall deposit the total
thereof with Agent in advance) of such restoring, repairing, replacing or
rebuilding in excess of the Insurance Proceeds made available pursuant to the
terms hereof (the “Deficient Amount”).

 

(C) Except as provided above, the Insurance Proceeds collected upon any Insured
Casualty shall, at the option of Agent in its sole discretion, be applied to the
payment of the Indebtedness as provided in Section 2.7(b) of this Agreement or
applied to the cost of restoring, repairing, replacing or rebuilding the
affected Property or part thereof subject to the Insured Casualty, in the manner
set forth below.

 

(D) In the event that Insurance Proceeds (after reimbursement of any reasonable
expenses incurred by Agent in connection with the collection of any applicable
Insurance Proceeds), if any, shall be made available to Borrower for the
restoring, repairing, replacing or rebuilding of any portion of the affected
Property, Borrower covenants to restore, repair, replace or rebuild the same to
be of at least comparable value as prior to such damage or destruction, all to
be effected in accordance with Legal Requirements and plans and specifications
approved in advance by Agent, such approval not to be unreasonably withheld or
delayed.

 

(E) In the event Borrower is entitled to reimbursement out of Insurance
Proceeds, such proceeds shall be held in an Eligible Account as provided in
Section 2.12(f) and disbursed from time to time as the restoration progresses
upon Agent being furnished with (1) evidence reasonably satisfactory to it
(which evidence may include inspection(s) of the work performed) that the
restoration, repair, replacement and rebuilding covered by the disbursement has
been completed in accordance with plans and specifications approved by Agent,
(2) evidence reasonably satisfactory to it of the estimated cost of completion
of the restoration, repair, replacement and rebuilding, (3) funds, or, at
Agent’s option, assurances reasonably satisfactory to Agent that such

 

76

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

funds are available and sufficient in addition to the Insurance Proceeds to
complete the proposed restoration, repair, replacement and rebuilding, and (4)
such architect’s certificates, waivers of lien, contractor’s sworn statements,
title insurance endorsements, bonds and other evidences of cost, payment and
performance of the foregoing repair, restoration, replacement or rebuilding as
Agent may reasonably require and approve. Agent may, in any event, require that
all plans and specifications for such restoration, repair, replacement and
rebuilding be submitted to and reasonably approved by Agent prior to
commencement of work. Agent may retain a construction consultant to inspect such
work and review Borrower’s request for payments and Borrower shall, on demand by
Agent, reimburse Agent for the reasonable fees and disbursements of such
consultant. No payment made prior to the final completion of the restoration,
repair, replacement and rebuilding shall exceed ninety percent (90%) of the hard
construction costs value of the work performed from time to time (except for
restoration work on a trade by trade basis or on an hourly basis for
professional services in which event, payment may be made in full upon the
completion of such work); funds other than Insurance Proceeds shall be disbursed
prior to disbursement of such proceeds; and, at all times, the undisbursed
balance of such proceeds remaining in the accounts of Agent, together with funds
deposited for that purpose or irrevocably committed to the repayment of Agent by
or on behalf of Borrower for that purpose, shall be at least sufficient in the
reasonable judgment of Agent to pay for the cost of completion of the
restoration, repair, replacement or rebuilding, free and clear of all liens or
claims for lien, except for Permitted Encumbrances. Any surplus which may remain
out of Insurance Proceeds held by Agent after payment of such costs of
restoration, repair, replacement or rebuilding shall be paid to Borrower so long
as no Event of Default has occurred and is continuing.

 

(v) Borrower shall not carry separate insurance, concurrent in kind or form or
contributing in the event of loss, with any insurance required under this
Agreement that would be considered “co-insurance” or adversely affect the
ability to collect under a policy of insurance required hereunder.

 

(y) Condemnation.

 

(i) Borrower shall promptly give Agent written notice of the actual or
threatened commencement of any proceeding for a Taking and shall deliver to
Agent copies of any and all papers served in connection with such proceedings.
Agent is hereby irrevocably appointed as Borrower’s attorney-in-fact, coupled
with an interest, with exclusive power to collect, receive and retain any
Condemnation Proceeds for said Taking. With respect to any compromise or
settlement in connection with such proceeding, Agent shall jointly with Borrower
compromise and reach settlement unless at the time of such Taking an Event of
Default has occurred and is continuing and the Indebtedness has been
accelerated, in which event Agent shall compromise and reach settlement without
the consent of Borrower. Notwithstanding the foregoing provisions of this
Section 5.1(y), Borrower is authorized to negotiate, compromise and settle,
without participation by Agent, Condemnation Proceeds of up to $50,000 in
connection with any Taking. Notwithstanding any Taking, Borrower shall continue
to pay the Indebtedness at the time and in the manner provided for in this
Agreement and the other Loan Documents and the Indebtedness shall not be reduced
except in accordance therewith.

 

(ii) Borrower shall cause the Condemnation Proceeds to be paid directly to the
Collection Account as provided in Section 3.7(b) of this Agreement. Agent may,
in its sole discretion, apply any such Condemnation Proceeds to the reduction or
discharge of the Indebtedness (whether or not then due and payable).

 

77

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

(iii) With respect to a Taking in part, which shall mean any Taking which does
not render the affected Property physically or economically unsuitable in the
reasonable judgment of Agent for the use to which it was devoted prior to the
Taking, Borrower shall cause the Condemnation Proceeds to be paid to Agent as
described above or deposited into the applicable account pursuant to the
provisions of this Agreement, to be applied to the cost of repairing, replacing,
restoring or rebuilding the affected Property as follows:

 

(A) Provided that Condemnation Proceeds shall be made available to Borrower for
the restoring, repairing, replacing or rebuilding of the affected Property,
Borrower hereby covenants to restore, repair, replace or rebuild the same to be
of at least comparable value and, to the extent commercially practicable, of
substantially the same character as prior to the Taking, all to be effected in
accordance with applicable law and plans and specifications reasonably approved
in advance by Agent. Borrower shall pay all costs (and if required by Agent,
Borrower shall deposit the total thereof with Agent in advance) of such
restoring, repairing, replacing or rebuilding in excess of the Condemnation
Proceeds made available pursuant to the terms hereof.

 

(B) The Condemnation Proceeds held by Agent shall be held in an Eligible Account
as provided in Section 3.12(f) and disbursed from time to time as the
restoration progresses upon Agent being furnished with (1) evidence reasonably
satisfactory to it (which evidence may include inspection(s) of the work
performed) that the restoration, repair, replacement and rebuilding covered by
the disbursement has been completed in accordance with plans and specifications
approved by Agent, (2) evidence reasonably satisfactory to it of the estimated
cost of completion of the restoration, repair, replacement and rebuilding, (3)
funds, or, at Agent’s option, assurances satisfactory to Agent that such funds
are available and sufficient in addition to the Condemnation Proceeds to
complete the proposed restoration, repair, replacement and rebuilding, and (4)
such architect’s certificates, waivers of lien, contractor’s sworn statements,
title insurance endorsements, bonds and other evidences of cost, payment and
performance of the foregoing repair, restoration, replacement or rebuilding as
Agent may reasonably require and approve. Agent may, in any event, require that
all plans and specifications for such restoration, repair, replacement and
rebuilding be submitted to and reasonably approved by Agent prior to
commencement of work. Agent may retain a construction consultant to inspect such
work and review any request by Borrower for payments and Borrower shall, on
demand by Agent, reimburse Agent for the reasonable fees and disbursements of
such consultant. No payment made prior to the final completion of the
restoration, repair, replacement and rebuilding shall exceed ninety percent
(90%) of the hard construction costs value of the construction work performed
from time to time (except for restoration work on a trade by trade basis or on
an hourly basis for professional services in which event, payment may be made in
full upon the completion of such work); funds other than Condemnation Proceeds
shall be disbursed prior to disbursement of such proceeds; and at all times, the
undisbursed balance of such proceeds remaining in the hands of Agent, together
with funds deposited for that purpose or irrevocably committed to the repayment
of Agent by or on behalf of Borrower for that purpose, shall be at least
sufficient in the reasonable judgment of Agent to pay for the cost of completion
of the restoration, repair, replacement or rebuilding, free and clear of all
liens or claims for lien. Any surplus which may remain out of Condemnation
Proceeds held by Agent after payment of such costs of restoration, repair,
replacement or rebuilding shall be paid to Borrower so long as no Event of
Default has occurred and is continuing.

 

78

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

(C) If the affected Property is sold, through foreclosure or otherwise, prior to
the receipt by Agent of any such Condemnation Proceeds to which it is entitled
hereunder, Agent shall have the right, whether or not a deficiency judgment on
the Note shall have been sought, recovered or denied, to have reserved in any
foreclosure decree a right to receive said award or payment, or a portion
thereof sufficient to pay the Indebtedness. In no case shall any such
application reduce or postpone any payments otherwise required pursuant to this
Agreement, other than the final payment on the Note.

 

(z) Leases and Rents.

 

 

(i) Borrower absolutely and unconditionally assigns to Agent, Borrower’s right,
title and interest in all current and future Leases and Rents as collateral for
the Loan, it being intended by Borrower that this assignment constitutes a
present, absolute assignment and not an assignment for additional security only.
Such assignment to Agent shall not be construed to bind Agent to the performance
of any of the covenants, conditions or provisions contained in any such Lease or
otherwise impose any obligation upon Agent. Borrower shall execute and deliver
to Agent such additional instruments, in form and substance reasonably
satisfactory to Agent, as may hereafter be reasonably requested in writing by
Agent to further evidence and confirm such assignment. Nevertheless, subject to
the terms of this Section 5.1(z), Agent grants to Borrower a license to lease,
own, maintain, operate and manage the Property and to collect, use and apply the
Rent, which license is revocable only upon the occurrence and during the
continuance of an Event of Default under this Agreement. Any portion of the
Rents held by Borrower shall be held in trust for the benefit of Agent for use
in the payment of the Indebtedness. Upon the occurrence of an Event of Default
and during the continuance thereof, the license granted to Borrower herein shall
automatically be revoked, and Agent shall immediately be entitled to possession
of all Rents, whether or not Agent enters upon or takes control of the Property.
Agent is hereby granted and assigned by Borrower the right, at its option, upon
revocation of the license granted herein, to enter upon the Property in person,
by agent or by court-appointed receiver to collect the Rents. Any Rents
collected after the revocation of the license shall be applied toward payment of
the Indebtedness as set forth in Section 3.8 hereof.

 

(ii) All Leases entered into by Borrower shall provide for rental rates
comparable to then-existing local market rates and terms and conditions
commercially reasonable and consistent with then-prevailing local market terms
and conditions and otherwise in form and substance as is customary for similar
type properties. With respect to any Lease for more than the greater of (x) 10%
of the rentable square footage of the Property or (y) 10,000 square feet,
Borrower shall not enter into such Lease, without the prior written consent of
Agent, such consent not to be unreasonably withheld or delayed. Borrower shall
furnish Agent with (1) detailed term sheets in advance in the case of any
Leases, modifications, amendments or renewals for which Agent’s consent is
required and (2) in the case of any other Leases, executed copies of such Leases
upon written request. All renewals or amendments or modifications of Leases that
do not satisfy the requirements of the first sentence of this Section 5.1(z)(ii)
shall be subject to the prior approval of Agent. All Leases executed after the
date hereof shall provide that they are subordinate to the Mortgage, and that
the lessee agrees to attorn to Agent. Borrower,

 

(A) shall observe and perform all of the material obligations imposed upon the
lessor under the Leases and shall not do or permit to be done anything to
materially impair the value of the Leases as security for the Indebtedness;

 

(B) shall promptly send copies to Agent of all written notices of default which
Borrower shall send or receive thereunder;

 

79

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

(C) shall enforce all of the material terms, covenants and conditions contained
in the Leases upon the part of the lessee thereunder to be observed or performed
and shall effect a termination or diminution of the obligations of tenants under
leases, only in a manner that a prudent owner of a similar property to the
Property would enforce such terms covenants and conditions or effect such
termination or diminution in the ordinary course of business;

 

(D) shall not collect any of the Rents more than one (1) month in advance;

 

(E) shall not execute any other assignment of lessor’s interest in the Leases or
Rents; and

 

(F) shall not convey or transfer or suffer or permit a conveyance or transfer of
the Property or of any interest therein so as to effect a merger of the estates
and rights of, or a termination or diminution of the obligations of, lessees
thereunder.

 

(iii) Borrower shall deposit security deposits of lessees which are turned over
to or for the benefit of Borrower or otherwise collected by or on behalf of
Borrower, into an Eligible Account with the same name as the Collection Account
and shall not commingle such funds with any other funds of Borrower. Any bond or
other instrument which Borrower is permitted to hold in lieu of cash security
deposits under any applicable Legal Requirements shall be maintained in full
force and effect unless replaced by cash deposits as hereinabove described,
shall, if permitted pursuant to Legal Requirements, name Agent as payee or
mortgagee thereunder (or at Agent’s option, be fully assignable to Agent) and
shall, in all respects, comply with any applicable Legal Requirements and
otherwise be reasonably satisfactory to Agent. Borrower shall, upon request,
provide Agent with evidence reasonably satisfactory to Agent of Borrower’s
compliance with the foregoing. Upon the occurrence and during the continuance of
any Event of Default, Borrower shall, upon Agent’s request, if permitted by any
applicable Legal Requirements, turn over to Agent the security deposits (and any
interest theretofore earned thereon) with respect to all or any portion of the
Property, to be held by Agent subject to the terms of the Leases.

 

(aa) Maintenance of Property. Borrower shall cause the Property to be maintained
in a good and safe condition and repair, subject to wear and tear and damage
caused by casualty or condemnation. The Improvements and the Equipment shall not
be removed, demolished or altered (except for normal replacement of the
Equipment, Improvements contemplated in an approved Operating Budget or pursuant
to Leases in effect from time to time or for removals, demolition or alterations
that cost up to $50,000) without the consent of the Agent which consent shall
not be unreasonably withheld. Except with respect to an Insured Casualty which
shall be governed by the terms and conditions provided herein, Borrower shall,
or shall cause any tenants obligated under their respective Leases to, promptly
repair, replace or rebuild any part of the Property that becomes damaged, worn
or dilapidated except where the failure to do so is not reasonably likely to
have a Material Adverse Effect. Borrower shall complete and pay for any
structure at any time in the process of construction or repair on the Land.
Borrower shall not initiate, join in, or consent to any change in any private
restrictive covenant, zoning law or other public or private restriction,
limiting or defining the uses which may be made of the Property or any part
thereof which can be reasonably likely to result in a Material Adverse Effect
without consent of the Agent. If under applicable zoning provisions the use of
all or any portion of the Property is or shall become a nonconforming use,
Borrower will not cause or permit such nonconforming use to be discontinued or
abandoned if such discontinuance of abandonment would cause such nonconforming
use to no longer be permitted without the express written consent of the Agent.
Borrower shall not (i) change the use of the Land in any material respect, (ii)
permit or suffer to occur any waste on or to the Property or to any portion
thereof or (iii) take any steps whatsoever to convert the Property, or any
portion thereof, to a condominium or cooperative form of management.

 

80

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

(bb) Taxes on Security. Borrower shall pay all taxes, charges, filing,
registration and recording fees, excises and levies payable with respect to the
Note or the Lien created or secured by the Loan Documents, other than income,
franchise and doing business taxes imposed on Agent, any Lender or Collateral
Agent. If there shall be enacted any law (1) deducting the Loan from the value
of the Collateral for the purpose of taxation, (2) affecting Agent’s Lien on the
Collateral or (3) changing existing laws of taxation of mortgages, deeds of
trust, security deeds, or debts secured by realty, or changing the manner of
collecting any such taxes, Borrower shall promptly pay to Agent, on demand, all
taxes, costs and charges for which Agent is or may be liable as a result
thereof; provided, however, if such payment would be prohibited by law or would
render the Loan usurious, then instead of collecting such payment, Agent may
declare all amounts owing under the Loan Documents to be immediately due and
payable.

 

(cc) Ground Lease.

 

(i) The Borrower shall pay, promptly when due and payable, all Ground Rent. Upon
notice from Agent, simultaneously with the making of each and every payment of
Ground Rent payable after the delivery of such notice, the Borrower shall
simultaneously deliver to Agent a copy of the check in the amount of such
payment delivered to the payee.

 

(ii) The Borrower shall perform and observe all terms, covenants, and conditions
that Borrower is required to perform and observe under the Ground Lease and do
everything necessary to preserve and to keep unimpaired and in full force and
effect the Ground Lease. The Borrower shall not permit the Ground Lease to go
into default (whether or not any cure period in the Ground Lease has expired).

 

(iii) The Borrower shall enforce the obligations of the applicable lessor under
the Ground Lease so that the Borrower may at all times enjoy all its rights,
benefits and privileges under the applicable Ground Lease.

 

(iv) The Borrower shall not, without Agent’s consent, cause, agree to, permit,
or suffer to occur any Ground Lease Impairment. Any Ground Lease Impairment made
without Agent’s consent shall be null, void, and of no force of effect. Any
party entering into or purportedly obtaining the benefit of such a purported
Ground Lease Impairment is hereby placed on notice that Borrower has no power or
authority to cause, consent, or agree to such Ground Lease Impairment without
Agent’s consent.

 

(v) The Borrower shall not, without Agent’s consent, refuse to consent or
consent to any action that any lessor under a Ground Lease or any third party
takes or desires to take under or with respect to the Ground Lease.

 

(vi) The Borrower shall promptly deliver to Agent a copy of any notice of
default or termination, or demands for performance (other than routine bills for
current Ground Rent) that it receives from the lessor under the Ground Lease.
The Borrower shall furnish to Agent all information that Agent may request from
time to time concerning the Ground Lease and Borrower’s compliance with the
Ground Lease. Borrower, immediately upon learning that the lessor under the
Ground Lease has failed to perform the terms and provisions under the Ground
Lease (including by reason of a rejection or disaffirmance or purported
rejection or disaffirmance of the Ground Lease pursuant to any state or federal
bankruptcy law), shall notify Agent thereof. Promptly after the Advance Closing
Date therefor, and again promptly after execution of any

 

81

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

amendment to the related Mortgage, Borrower shall notify the applicable ground
lessor of the execution and delivery of the related leasehold Mortgage or such
amendment. Such notice shall set forth, verbatim, in a form satisfactory to
Agent, all provisions of the related leasehold Mortgage relating to Ground Lease
Impairments. Agent shall have the right, but not the obligation, to give any
lessor under a Ground Lease at any time any notice described in this paragraph
or otherwise relating to the related leasehold Mortgage or the Loan.

 

(vii) The Borrower shall promptly notify Agent of any request that any party to
the Ground Lease makes for arbitration or other dispute resolution procedure
pursuant to the Ground Lease and of the institution of any such arbitration or
dispute resolution. The Borrower hereby authorizes Agent to participate in any
such arbitration or dispute resolution. Such participation may, at Agent’s
option, be to the exclusion of, and in place of, the Borrower. The Borrower
shall promptly deliver to Agent a copy of the determination of each such
arbitration or dispute resolution mechanism.

 

(viii) If Agent or its designee shall acquire or obtain a New Ground Lease, then
Borrower shall have no right, title or interest whatsoever in or to such New
Ground Lease, or any proceeds or income arising from the estate arising under
any such New Ground Lease, including from any sale or other disposition thereof.
Agent or its designee shall hold such New Ground Lease free and clear of any
right or claim of Borrower.

 

(ix) Borrower shall not amend, modify or cancel the Ground Lease.

 

ARTICLE VI.

NEGATIVE COVENANTS

 

Section 6.1. Negative Covenants. Borrower covenants and agrees that, until
payment in full of the Indebtedness, it will not do, directly or indirectly, any
of the following unless Agent consents thereto in writing:

 

(a) Liens on the Property. Incur, create, assume, become or be liable in any
manner with respect to, or permit to exist, except as permitted by the Mortgage,
any Lien with respect to the Property, except: (i) Liens in favor of the Lenders
and (ii) the Permitted Encumbrances.

 

(b) Ownership and Transfer. Except as expressly permitted by or pursuant to this
Agreement or the other Loan Documents, own any property of any kind other than
the Property, or Transfer the Property or any portion thereof.

 

(c) Other Borrowings. Incur, create, assume, become or be liable in any manner
with respect to Other Borrowings.

 

(d) Dissolution; Merger or Consolidation. Dissolve, terminate, liquidate, merge
with or consolidate into another Person.

 

(e) Change In Business. Cease to be a Single-Purpose Entity, or make any
material change in the scope or nature of its business objectives, purposes or
operations, or undertake or participate in activities other than the continuance
of its present business.

 

(f) Debt Cancellation. Cancel or otherwise forgive or release any material claim
or debt owed to Borrower by any Person, except for adequate consideration or in
the ordinary course of Borrower’s business.

 

82

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

(g) Affiliate Transactions. Enter into, or be a party to, any transaction with
an Affiliate of Borrower, except in the ordinary course of business and on terms
which are fully disclosed to Agent in advance and on terms which 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 (other than the
Management Agreement).

 

(h) Creation of Easements. Except as expressly permitted by or pursuant to the
Mortgage or this Agreement, create, or permit the Property or any part thereof
to become subject to, any easement, license or restrictive covenant, other than
a Permitted Encumbrance, provided, that the consent of Agent shall not be
unreasonably withheld or delayed to the extent that any such easement, license
or restrictive covenant is reasonably necessary for the continued use,
enjoyment, access to or operation of the applicable Property.

 

(i) Misapplication of Funds. Distribute any Rents or Moneys received from
Accounts in violation of the provisions of Section 3.12, or fail to pledge any
security deposit to Agent, or misappropriate any security deposit or portion
thereof.

 

(j) Certain Restrictions. Enter into any agreement that expressly restricts the
ability of Borrower to enter into amendments, modifications or waivers of any of
the Loan Documents.

 

(k) Assignment of Licenses and Permits. Assign or transfer any of its interest
in any Permits pertaining to the Property, or assign, transfer or remove or
permit any other Person to assign, transfer or remove any records pertaining to
the Property.

 

(l) Place of Organization. Change its jurisdiction of organization, creation or
formation, as applicable, without giving Agent at least fifteen (15) days’ prior
written notice thereof and promptly providing Agent such information as Agent
may reasonably request in connection therewith.

 

(m) Leases. Enter into, amend or cancel Leases, except as permitted by or
pursuant to or would not result in a violation of this Agreement.

 

(n) Management Agreement. Except in accordance with this Agreement, (i)
terminate or cancel the Management Agreement, (ii) consent to either the
reduction of the term of or the assignment of the Management Agreement, (iii)
increase or consent to the increase of the amount of any charges under the
Management Agreement, or (iv) otherwise modify, change, supplement, alter or
amend, or waive or release any of its rights and remedies under, the Management
Agreement in any material respect.

 

(o) Plans and Welfare Plans. Knowingly engage in or permit any transaction in
connection with which Borrower or any ERISA Affiliate could be subject to either
a material civil penalty or tax assessed pursuant to Section 502(i) or 502(1) of
ERISA or Section 4975 of the Code, permit any Welfare Plan to provide benefits,
including without limitation, medical benefits (whether or not insured), with
respect to any current or former employee of Borrower beyond his or her
retirement or other termination of service other than (i) coverage mandated by
applicable law, (ii) death or disability benefits that have been fully provided
for by paid up insurance or otherwise or (iii) severance benefits (unless such
coverage is provided after notification of and with the reasonable approval of
Agent), permit the assets of Borrower to become “plan assets”, whether by
operation of law or under regulations promulgated under ERISA or adopt, amend
(except as may be required by applicable law) or increase the amount of any
benefit or amount payable under, or permit any ERISA Affiliate to adopt, amend
(except as may be required by applicable law) or increase the amount of any
benefit or amount payable under, any Plan or Welfare Plan, except for normal
increases in the ordinary course of business consistent with past practice that,
in the aggregate, do not result in a material increase in benefits expense to
Borrower or any ERISA Affiliate.

 

83

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

(p) Transfer of Ownership Interests. Permit any Transfer of a direct or indirect
ownership interest or voting right in Borrower, other than as contemplated in
Section 3.11 above.

 

(q) Equipment and Inventory. Except pursuant to the Management Agreement, permit
any Equipment owned by Borrower to be removed at any time from the Property
unless the removed item is consumed or sold in the usual and customary course of
business, removed temporarily for maintenance and repair or, if removed
permanently, replaced by an article of equivalent suitability and not materially
less value, owned by Borrower free and clear of any Lien.

 

(r) Management Fees. Pay Borrower or any Affiliate of Borrower any management
fees with respect to the Property except as contemplated by the Management
Agreement.

 

ARTICLE VII.

EVENT OF DEFAULT

 

Section 7.1. Event of Default. The occurrence of one or more of the following
events shall be an “Event of Default” hereunder:

 

(a) if on any Payment Date Borrower fails to pay any accrued and unpaid interest
on the Loan then due and payable or any principal payment amount then due and
payable in accordance with the provisions of Section 3.7 hereof;

 

(b) if Borrower fails (a) to pay (1) the outstanding Indebtedness on the
Maturity Date or (2) the fees then due and payable to Collateral Agent pursuant
to the Fee Letter on any Payment Date; or (b) to deposit into the Collection
Account, the amount required pursuant to Section 3.7(b), respectively;

 

(c) if Borrower fails to make any required deposit to a Reserve Account or to
pay any other amount payable pursuant to this Agreement or any other Loan
Document when due and payable in accordance with the provisions hereof or
thereof, as the case may be, and such failure continues for ten (10) days after
Agent delivers written notice thereof to Borrower;

 

(d) if any representation or warranty made herein or in any other Loan Document,
or in any report, certificate, financial statement or other Instrument,
agreement or document furnished by Borrower in connection with this Agreement,
the Note or any other Loan Document executed and delivered by any Borrower shall
be false in any material respect as of the date such representation or warranty
was made (or if such representation or warranty relates to an earlier date, then
as of such earlier date);

 

(e) if Borrower or the Guarantor makes an assignment for the benefit of
creditors;

 

(f) if a receiver, liquidator or trustee shall be appointed for Borrower or the
Guarantor or if Borrower or the 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 or the
Guarantor, or if any proceeding for the dissolution or liquidation of Borrower
or the Guarantor shall be instituted; provided, however, that if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by Borrower or the Guarantor, upon the same not being discharged,
stayed or dismissed within ninety (90) days, or if Borrower or the Guarantor
shall generally not be paying its debts as they become due;

 

84

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

(g) if Borrower attempts to delegate its obligations or assign its rights under
this Agreement, any of the other Loan Documents or any interest herein or
therein, or if any Transfer occurs other than in accordance with or as permitted
under this Agreement;

 

(h) if any provision of the Organizational Agreement affecting the purpose for
which Borrower is formed is amended or modified in any material respect which is
reasonably likely to adversely affect the Lenders, Agent or Collateral Agent, or
if Borrower fails to perform or enforce the provisions of the Organizational
Agreement and such failure has a Material Adverse Effect or attempts to dissolve
Borrower without Agent’s consent;

 

(i) if an Event of Default as defined or described in the Note or any other Loan
Document occurs, whether as to Borrower or the Property or any portion thereof;

 

(j) if Borrower fails to maintain any insurance required to be maintained
pursuant to Section 5.1(x) hereof; and

 

(k) if Borrower shall fail to perform any of the terms, covenants or conditions
of this Agreement, the Note, the Mortgage or the other Loan Documents, other
than as specifically otherwise referred to above in this definition of “Event of
Default,” for ten (10) days after notice to Borrower from Agent or its
successors or assigns, in the case of any Default which can be cured by the
payment of a sum of money (other than Events of Default pursuant to Sections
7.1(a) and 7.1(b) above as to which the grace period, if any, set forth therein
is applicable), or for thirty (30) days after notice from Agent or its
successors or assigns, in the case of any other Default (unless a longer notice
period is otherwise provided herein or in such other Loan Document); provided,
however, that if such non-monetary Default is susceptible of cure but cannot
reasonably be cured within such thirty (30) day period and such Borrower shall
have commenced to cure such Default within such thirty (30) day period and
thereafter diligently and expeditiously proceeds to cure the same, such thirty
(30) day period shall be extended for an additional thirty (30) days;

 

then, upon the occurrence of any such Event of Default and at any time
thereafter, Agent or Collateral Agent or its successors or assigns, 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 further notice or demand, as Agent on behalf of the Lenders or
its successors or assigns, deems advisable to protect and enforce its rights
against Borrower and in and to all or any portion of the Collateral (including,
without limitation, declaring the entire Indebtedness to be immediately due and
payable) and may enforce or avail itself of any or all rights or remedies
provided in the Loan Documents against Borrower and/or the Collateral
(including, without limitation, all rights or remedies available at law or in
equity).

 

Section 7.2. Remedies.

 

(a) Upon the occurrence of an Event of Default, all or any one or more of the
rights, powers, other remedies available to Agent or Collateral Agent or the
Lenders against Borrower under this Agreement or any of the other Loan Documents
executed by or with respect to Borrower, or at law or in equity may be exercised
by Lenders at any time and from time to time, whether or not all or any portion
of the Indebtedness shall be declared due and payable, and whether or not Agent
shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Loan Documents with
respect to all or any portion of the Collateral. Any such actions taken by Agent
or

 

85

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

Collateral Agent shall be cumulative and concurrent and may be pursued
independently, singly, successively, together or otherwise, at such time and in
such order as Agent may determine in its sole discretion, to the fullest extent
permitted by law, without impairing or otherwise affecting the other rights and
remedies of Agent and the Lenders permitted by law, equity or contract or as set
forth herein or in the other Loan Documents.

 

(b) In the event of the foreclosure or other action by Agent or Collateral Agent
to enforce Agent’s remedies in connection with all or any portion of the
Collateral, Agent shall apply all Net Proceeds received to repay the
Indebtedness in accordance with Section 3.8, the Indebtedness shall be reduced
to the extent of such Net Proceeds and the remaining portion of the Indebtedness
shall remain outstanding and secured by the Loan Documents, it being understood
and agreed by Borrower that Borrower is liable for the repayment of all the
Indebtedness; provided, however, that the Note shall be deemed to have been
accelerated only to the extent of the Net Proceeds actually received by Agent
with respect to the Collateral and applied in reduction of the Indebtedness
evidenced by the Note in accordance with the provisions of this Agreement, after
payment by Borrower of all Transaction Costs and costs of enforcement.

 

(c) Upon and during the continuation of an Event of Default, the Agent shall
have the right, but not the obligation, with respect to any and all bankruptcy
proceedings that are now or hereafter commenced in connection with the Property,
to (i) vote to accept or reject any plans of reorganization, (ii) vote in any
election of a trustee, (iii) elect the treatment of secured claims as specified
in Section 1111(b) of the Bankruptcy Code, and (iv) make any other decisions
requested of holders of claims or interests that the Borrower would have had the
right to do in such bankruptcy proceedings in the absence of an Event of
Default.

 

Section 7.3. Remedies Cumulative. The rights, powers and remedies of Agent,
Collateral Agent, or any Lender under this Agreement shall be cumulative and not
exclusive of any other right, power or remedy which Agent, Collateral Agent or
any Lender may have against Borrower pursuant to this Agreement or the other
Loan Documents executed by or with respect to Borrower, or existing at law or in
equity or otherwise. Agent or any Lender’s rights, powers and remedies may be
pursued singly, concurrently or otherwise, at such time and in such order as
Agent may determine in Agent’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 any Default or Event of Default shall not
be construed to be a waiver of any subsequent Default or Event of Default or to
impair any remedy, right or power consequent thereon. Notwithstanding any other
provision of this Agreement, Agent for the benefit of the Lenders reserves the
right to seek a deficiency judgment or preserve a deficiency claim, in
connection with the foreclosure of the Mortgage on the Property, to the extent
necessary to foreclose on other parts of the Collateral.

 

Section 7.4. Curative Advances. If any Event of Default occurs and is not cured
by Borrower after notice from the Agent, then Agent or Collateral Agent may
expend such sums as either shall reasonably deem appropriate to cure or attempt
to cure such Event of Default. Borrower shall immediately repay all such sums so
advanced, which sums shall immediately become part of the Indebtedness, bear
interest at the Default Rate from the date advanced until the date repaid, and
be secured by all Collateral.

 

86

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

ARTICLE VIII.

MISCELLANEOUS

 

Section 8.1. Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the execution and delivery of this Agreement, the
making by the initial Lender of the Loan hereunder and the execution and
delivery by Borrower to the initial Lender of the Loan Documents, and shall
continue in full force and effect so long as any portion of the Indebtedness is
outstanding and unpaid. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party. All covenants, promises and agreements in this Agreement
contained, by or on behalf of Borrower, shall inure to the benefit of the
respective successors and assigns of Agent and each Lender. Nothing in this
Agreement or in any other Loan Document, express or implied, shall give to any
Person other than the parties and the holder of the Note and the other Loan
Documents, and their legal representatives, successors and assigns, any benefit
or any legal or equitable right, remedy or claim hereunder.

 

Section 8.2. Agent’s Discretion. Whenever pursuant to this Agreement, Agent
exercises any right given to it to approve or disapprove, or any arrangement or
term is to be satisfactory to Agent, the decision of Agent to approve or
disapprove or to decide whether arrangements or terms are satisfactory or not
satisfactory shall (except as is otherwise specifically herein provided) be in
the sole discretion of Agent and shall be final and conclusive.

 

Section 8.3. Governing Law.

 

(a) This Agreement was negotiated in New York and made by the initial Lender and
accepted by Borrower in the State of New York, and the proceeds of the Note
delivered pursuant hereto were disbursed from 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 limitation,
matters of construction, validity, performance, and maximum permissible rates of
interest), 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 and any applicable law
of the United States of America.

 

(b) Any legal suit, action or proceeding against the Lenders or Borrower arising
out of or relating to this Agreement may be instituted in any federal or state
court in New York, New York. Borrower hereby (i) irrevocably waives, to the
fullest extent permitted by applicable law, any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum, and (ii) irrevocably submits to
the jurisdiction of any such court in any such suit, action or proceeding.
Borrower does hereby designate and appoint Corporation Service Company as its
authorized agent to accept and acknowledge on its behalf service of any and all
process which may be served in any such suit, action or proceeding in any
federal or state court in New York, New York, and agrees that service of process
upon said agent at said address (or at such other office in New York, New York
as may be designated by Borrower from time to time in accordance with the terms
hereof) with a copy to Borrower at its principal executive offices, and written
notice of said service of Borrower 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 Agent of any change in 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 office
shall be designated as the 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.

 

87

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

Section 8.4. Modification, Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement
or any other Loan Document, or consent or waiver referred to in any Loan
Document or consent to any departure by Borrower therefrom, shall in any event
be effective unless the same shall be in a writing signed by the party against
whom enforcement is sought, and then such waiver or consent shall be effective
only in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to or demand on Borrower shall
entitle Borrower to any other or future notice or demand in the same, similar or
other circumstances.

 

Section 8.5. Delay Not a Waiver. Neither any failure nor any delay on the part
of Agent or any 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, or any other instrument
given as security therefor, shall operate as or constitute a waiver thereof, nor
shall a single or partial exercise thereof preclude any other future exercise,
or the exercise of any other right, power, remedy or privilege. In particular,
and not by way of limitation, by accepting payment after the due date of any
amount payable under this Agreement, the Note or any other Loan Document, Agent
and each Lender shall not be deemed to have waived any right either to require
prompt payment when due of all other amounts due under this Agreement, the Note
or the other Loan Documents, or to declare a default for failure to effect
prompt payment of any such other amount.

 

Section 8.6. Notices. All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document shall be given in writing
and shall be effective for all purposes if hand delivered or sent by (a)
certified or registered United States mail, postage prepaid, or (b) expedited
prepaid delivery service, either commercial or United States Postal Service,
with proof of attempted delivery, and by facsimile transmission, addressed if to
Lender at its address set forth on the first page hereof, Attention: Chris
Tognola/Tom Traynor, if to Collateral Agent at its address set forth on the
first page hereof, Attention: Tom Quinlan, and if to Borrower at its addresses
set forth on the first page hereof, Attention: General Counsel, or at such other
address and Person as shall be designated from time to time by any party hereto,
as the case may be, in a written notice to the other parties hereto in the
manner provided for in this Section 8.6. A notice shall be deemed to have been
given: in the case of hand delivery, at the time of delivery; in the case of
registered or certified mail, when delivered or three Business Days after
mailing; or in the case of expedited prepaid delivery and facsimile
transmission, on the Business Day after the same was sent. A party receiving a
notice which does not comply with the technical requirements for notice under
this Section 8.6 may elect to waive any deficiencies and treat the notice as
having been properly given.

 

Section 8.7. TRIAL BY JURY. BORROWER, TO THE FULLEST EXTENT THAT IT MAY LAWFULLY
DO SO, WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING, INCLUDING, WITHOUT
LIMITATION, ANY TORT ACTION, BROUGHT BY ANY PARTY HERETO WITH RESPECT TO THIS
AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS.

 

Section 8.8. Headings. The Article and Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.

 

88

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

Section 8.9. Assignment.

 

(a) Borrower may not sell, assign or transfer any interest in the Loan
Documents, or any portion of the foregoing (including, without limitation,
Borrower’s rights, title, interests, remedies, powers and duties hereunder and
thereunder) without Agent’s prior written consent. Each Lender shall have the
right to assign or participate this Agreement and/or its interest in any of the
other Loan Documents and the obligations hereunder to any Person. In the event
of an assignment by any Lender, (a) the assignee shall have, to the extent of
such assignment, the same rights, benefits and obligations as it would have if
it were an original “Lender” hereunder; (b) the assignee shall be deemed for all
purposes to be a “Lender” hereunder; and (c) upon any such substitution of
Lender, a replacement or addition “Lender signature page” shall be executed by
the new Lender and attached to this Agreement and thereupon become a part of
this Agreement. After the effectiveness of any assignment, the new Lender shall
provide notice to Borrower of the identity, address and other pertinent
information pertaining to the new Lender. Notwithstanding anything in this
Agreement to the contrary, after an assignment by any Lender, the “Lender”
(prior to such assignment) shall continue to have the benefits of any rights or
indemnifications and shall continue to have the obligations contained herein
which such Lender had during the period such party was a “Lender” hereunder.
Borrower shall not be obligated to interact directly with any participant in the
Loan or to pay or reimburse the Agent or any Lender for any Transaction Costs
that would not have been incurred by the Agent or such Lender had no such
participation in the Loan been issued.

 

(b) The Agent may from time to time elect to enter into a servicing agreement
with a servicer, pursuant to which the servicer shall be appointed to service
and administer the Loan and the Account Collateral in accordance with the terms
hereof and to exercise any and all other rights of the Lenders with respect to
the Loan as set forth in such servicing agreement. The Agent shall promptly
notify the Borrower if the Agent shall elect to appoint or change the servicer,
and all notices and other communications from the Borrower to the Agent shall be
delivered to the servicer with a copy concurrently delivered to the Agent, and
any notice, direction or other communication from the servicer to the Borrower
shall have the same force and effect as a notice, direction or communication
from the Agent. The servicer shall be entitled to be reimbursed for any cost,
expense or liability which is incurred by the servicer pursuant to such
servicing and administrative duties and which would otherwise be reimbursable to
the Lenders under this Agreement or any other Loan Document in the same manner
and to the same extent as if the Lenders incurred such cost, expense or
liability in the first place. The parties hereto acknowledge and agree that the
servicer shall be a third party beneficiary to this Agreement and the other Loan
Documents.

 

Section 8.10. 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 8.11. Preferences. Agent and the Lenders shall have no obligation to
marshal any assets in favor of Borrower or any other party or against or in
payment of any or all of the obligations of Borrower pursuant to this Agreement,
the Note or any other Loan Document. The Lenders shall have the continuing and
exclusive right to apply or reverse and reapply any and all payments by Borrower
to any portion of the obligations of Borrower hereunder, provided that such
application or reapplication is performed by the Lenders in accordance with the
terms of this Agreement or any other applicable Loan Document. To the extent
Borrower makes a payment or payments to Agent or any Lender for Borrower’s
benefit, 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

 

89

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

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 Agent
or such Lender.

 

Section 8.12. Waiver of Notice. Borrower shall not be entitled to any notices of
any nature whatsoever from Agent, any Lender or Collateral Agent except with
respect to matters for which this Agreement or another Loan Document
specifically and expressly provides for the giving of notice by Agent, such
Lender and/or Collateral Agent 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 Agent, any Lender and Collateral Agent with respect to
any matter for which this Agreement or the other Loan Documents does not
specifically and expressly provide for the giving of notice by Agent or such
Lender or Collateral Agent to Borrower.

 

Section 8.13. Failure to Consent. If Borrower shall seek the approval by or
consent of Agent or the Lenders hereunder or under the Note, or any of the other
Loan Documents, and Agent or the Lenders shall fail or refuse to give such
consent or approval, then Borrower shall not be entitled to any damages for any
withholding or delay of such approval or consent by Agent or the Lenders, it
being intended that Borrower’s sole remedy shall be to bring an action for an
injunction or specific performance.

 

Section 8.14. Schedules Incorporated. The information set forth on the cover,
heading and recitals hereof, and the Schedules attached hereto, are hereby
incorporated herein as a part of this Agreement with the same effect as if set
forth in the body hereof.

 

Section 8.15. Offsets, Counterclaims and Defenses. Any assignee of any 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 this Agreement and the other Loan Documents which Borrower may
otherwise have against any assignor or this Agreement and the other Loan
Documents. No such unrelated counterclaim or defense shall be interposed or
asserted by Borrower in any action or proceeding brought by any such assignee
upon this Agreement or upon any other Loan Document. 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 8.16. No Joint Venture or Partnership. Borrower, Agent and each Lender
intend that the relationship created hereunder be solely that of borrower and
lender. Nothing herein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between Borrower and any Lender
nor to grant any Lender any interest in the Collateral other than that of
secured party, mortgagee or lender.

 

Section 8.17. Waiver of Marshalling of Assets Defense. To the fullest extent
Borrower may legally do so, Borrower waives all rights to a marshalling of the
assets of Borrower, and others with interests in Borrower, and of the
Collateral, or to a sale in inverse order of alienation in the event of
foreclosure of the interests hereby created, and agrees not to assert any right
under any laws pertaining to the marshalling of assets, the sale in inverse
order of alienation, homestead exemption, the administration of estates of
decedents, or any other matters whatsoever to defeat, reduce or affect the right
of any Lender under the Loan Documents to a sale of any Collateral for the
collection of the Indebtedness without any prior or different resort for
collection, or the right of any Lender to the payment of the Indebtedness out of
the Net Proceeds of the Collateral in preference to every other claimant
whatsoever.

 

90

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

Section 8.18. Waiver of Counterclaim. To the extent permitted by applicable law,
Borrower hereby waives the right to assert a counterclaim, other than compulsory
counterclaim, in any action or proceeding brought against it by Agent or its
agents.

 

Section 8.19. Conflict; Construction of Documents. In the event of any conflict
between the provisions of this Agreement and the provisions of any of the other
Loan Documents, the provisions of this Agreement shall prevail. The parties
hereto acknowledge that they were represented by counsel in connection with the
negotiation and drafting of the Loan Documents and that the Loan Documents shall
not be subject to the principle of construing their meaning against the party
that drafted same.

 

Section 8.20. Brokers and Financial Advisors. Borrower and the initial Lender
hereby represent that they have dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the
transactions contemplated by this Agreement. Borrower and initial Lender hereby
agree to indemnify and hold the other and Collateral Agent harmless from and
against any and all claims, liabilities, costs and expenses of any kind in any
way relating to or arising from a claim by any Person that such Person acted on
behalf of the indemnifying party in connection with the transactions
contemplated herein. The provisions of this Section 8.20 shall survive the
expiration and termination of this Agreement and the repayment of the
Indebtedness.

 

Section 8.21. 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 8.22. Estoppel Certificates. Agent, Borrower and each Lender hereby
agree at any time and from time to time upon not less than fifteen (15) days
prior written notice by Borrower or such Lender to execute, acknowledge and
deliver to the party specified in such notice, a statement, in writing,
certifying that this Agreement is unmodified and in full force and effect (or if
there have been modifications, that the same, as modified, is in full force and
effect and stating the modifications hereto), and stating whether or not, to the
knowledge of such certifying party, any Default or Event of Default has occurred
and is then continuing, and, if so, specifying each such Default or Event of
Default; provided, however, that it shall be a condition precedent to any
Lender’s obligation to deliver the statement pursuant to this Section 8.22, that
such Lender shall have received, together with Borrower’s request for such
statement, an Officer’s Certificate stating that, to the knowledge of Borrower,
no Default or Event of Default exists as of the date of such certificate (or
specifying such Default or Event of Default).

 

Section 8.23. Payment of Expenses. Borrower shall pay all Transaction Costs,
which shall include, without limitation, (a) reasonable out-of-pocket costs and
expenses of Agent in connection with (i) the negotiation, preparation, execution
and delivery of the Loan Documents and the documents and instruments referred to
therein; (ii) the creation, perfection or protection of Lenders’ Liens in the
Collateral (including, without limitation, fees and expenses for title and lien
searches or amended or replacement Mortgages, UCC financing statements or
Collateral Security Instruments, title insurance premiums and filing and
recording fees, third party due diligence expenses for the Property plus travel
expenses, accounting firm fees, costs of the Appraisals, Environmental Reports
(and an environmental consultant), and the Engineering Reports and costs and
fees incurred in connection with arranging, setting up, servicing and
maintaining the Account Collateral); (iii) the negotiation, preparation,
execution and delivery of any amendment, waiver, restructuring or consent
relating to any of the Loan Documents, and (iv) the preservation of rights under
and enforcement of the Loan Documents and the documents and instruments referred
to therein, including any communications or discussions relating to any action
that Borrower shall from time to time request Agent to take, as well as any
restructuring or rescheduling of the Indebtedness, (b) the reasonable fees,
expenses and other charges of counsel to Agent in connection with

 

91

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

all of the foregoing, (c) all reasonable fees and expenses of each of the
servicer appointed pursuant to Section 8.9(b) and Collateral Agent and its
respective counsel and (d) Agent’s (or, where reasonably deemed necessary by
Agent, any other Lender’s) reasonable out-of-pocket travel expenses in
connection with site visits to the Property.

 

Section 8.24. Non-Recourse. Anything contained herein, in the Note or in any
other Loan Document to the contrary notwithstanding, no recourse shall be had
for the payment of the principal or interest on the Loan or for any other
Indebtedness, obligation or liability hereunder or under any other Loan Document
or for any claim based hereon or thereon or otherwise in respect hereof or
thereof against (i) any agent, contractor, director, officer, member,
consultant, manager, stockholder, subscriber to capital stock, incorporator,
beneficiary, participant, trustee or advisor of Borrower, or any partner or
member therein; (ii) any legal representative, heir, estate, successor or assign
of any thereof; (iii) any corporation (or any officer, director, employee or
shareholder thereof), limited liability company (or member thereof), partnership
(or any partner thereof), individual or entity to which any ownership interest
in Borrower shall have been directly or indirectly transferred; (iv) any
purchaser of any asset of Borrower; or (v) any other Person (except Borrower),
for any deficiency or other sum owing with respect to the Note or any other
Indebtedness, obligation or liability or arising under this Agreement or any
Loan Document. It is understood that neither the Note nor any other
Indebtedness, obligation or liability under or with respect to this Agreement
and any other Loan Document may be enforced against any Person described in
clauses (i) through (v) above; provided, however, that the foregoing provisions
of this paragraph shall not:

 

(A) prevent recourse to Borrower, the assets of Borrower, the Property or any
other instrument or document which is pledged by Borrower to the Lenders
pursuant to the Loan Documents, including all Collateral;

 

(B) have any applicability whatsoever to the collateral pledged pursuant to the
Pledge Agreement or limit the liability of the parties under the Guaranty of
Non-Recourse Obligations or the liability of the parties thereunder; or

 

(C) constitute a waiver, release or discharge of any indebtedness or obligation
evidenced by the Note or secured by the Loan Documents, and the same shall
continue until paid or discharged in full; or

 

(D) prevent recourse to Borrower and Guarantor and their respective assets for
repayment of the Indebtedness, and the Indebtedness shall be fully recourse to
the Borrower and the Guarantor, in the event that any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed (A) by Borrower or (B) against Borrower
with the consent or acquiescence of Borrower or the Guarantor or their
respective Affiliates; or

 

(E) prevent recourse to Borrower and Guarantor and their respective assets, and
Borrower and Guarantor shall be fully and personally liable, for any loss,
costs, liability, damage or expense suffered or incurred by Agent or any
Indemnified Party related to or arising from:

 

  (1) any fraud, misappropriation or misapplication of funds (including Loss
Proceeds or Rents) committed by or on behalf of Borrower in contravention of the
Loan Documents, or intentional misrepresentation contained in any Loan Documents
or report furnished pursuant to any Loan Document;

 

  (2) any Transfer in violation of the terms of the Loan Documents;

 

92

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

  (3) violation of any of the terms, covenants and conditions to maintain
Borrower as a Single-Purpose Entity;

 

  (4) additional financing obtained by Borrower (whether secured or unsecured)
in violation of the terms of the Loan Documents;

 

  (5) actual physical waste to the Property;

 

  (6) breach of any representation, warranty or covenant in this Agreement or
the Environmental Indemnity Agreement, concerning Environmental Laws and
Hazardous Substances;

 

  (7) any security deposits received by Borrower or Manager from tenants not
being properly applied, returned to tenants when due or delivered to Agent, a
receiver or a purchaser of the Property in the event of a foreclosure sale upon
such Person taking possession of the Property;

 

  (8) any Legal Requirement mandating the forfeiture by Borrower of the
Collateral or any portion thereof because of the conduct or purported conduct of
criminal activity by Borrower or any Affiliate in connection therewith;

 

  (9) if any Lien is voluntarily placed on the Collateral or any portion thereof
in contravention of the Loan Documents and such Lien is not discharged and
removed within ten (10) days after notice;

 

  (10) any and all liabilities, obligations, losses, damages, costs and expenses
(including, without limitation, reasonable attorneys’ fees, causes of action,
suits, claims, demands and adjustments of any nature or description whatsoever)
which may at any time be imposed upon, incurred by or awarded against Agent or
any Lender, in the event (and arising out of such circumstances) that Borrower
should raise any defense, counterclaim and/or allegation in any foreclosure
action by Agent relative to the Property, the Account Collateral or any part
thereof which is found by a court to have been raised by Borrower in bad faith
or to be without basis in fact or law;

 

  (11) the costs incurred in any bankruptcy or similar proceeding which may be
brought by or against Borrower, or any pledgor or Guarantor; or

 

  (12) the failure to pay Impositions assessed against the Property to the
extent there was sufficient funds available to pay the same, or the failure to
maintain insurance as required under the Loan Documents, or the failure to pay
any deductible amount in respect of any insurance maintained in respect of the
Property, or the failure to pay and discharge any mechanic’s or materialman’s
Liens against the Property to the extent there was sufficient funds available to
pay and discharge the same or the work relating to such Liens was not approved
by Agent in writing or permitted by the Loan Documents.

 

93

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

ARTICLE IX.

THE AGENT

 

Section 9.1. Appointment, Powers and Immunities. Each Lender hereby irrevocably
appoints and authorizes Agent to act as its agent hereunder and under the other
Loan Documents with such powers as are specifically delegated to Agent by the
terms of this Agreement and of the other Loan Documents, together with such
other powers as are reasonably incidental thereto. Agent (which term as used in
this sentence and in Section 9.5 and the first sentence of Section 9.6 hereof
shall include reference to its Affiliates and its own and its Affiliates’
officers, directors, employees and agents): (a) shall have no duties or
responsibilities to the Lenders except those expressly set forth in this
Agreement and in the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee for any Lender; (b) shall not
be responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or in any other Loan Document, or in any
certificate or other document referred to or provided for in, or received by any
of them under, this Agreement or any other Loan Document, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or any other document referred to or
provided for herein or therein or for any failure by Borrower, or any other
Person to perform any of their obligations hereunder or thereunder; (c) shall
not be required to initiate or conduct any litigation or collection proceedings
hereunder or under any other Loan Document; and (d) shall not be responsible to
the Lenders for any action taken or omitted to be taken by it hereunder or under
any other Loan Document or under any other document or instrument referred to or
provided for herein or therein or in connection herewith or therewith, except
for its own gross negligence or willful misconduct. Agent may employ agents and
attorneys-in-fact and shall not be responsible to the Lenders for the negligence
or misconduct of any such agents or attorneys-in-fact selected by it in good
faith.

 

Section 9.2. Reliance by Agent. Agent shall be entitled to rely upon any
certification, notice or other communication (including, without limitation, any
thereof by telephone, facsimile transmission, telex, electronic mail, or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by Agent in
good faith. As to any matters not expressly provided for by this Agreement or
any other Loan Document, Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder or thereunder in accordance with the
instructions given by all of the Lenders, and such instructions of such Lenders
and any action taken or failure to act pursuant thereto shall be binding on all
of the Lenders.

 

Section 9.3. Defaults. Agent shall not be deemed to have knowledge or notice of
the occurrence of a Default or Event of Default unless Agent has received
written notice from a Lender or Borrower specifying such Default and stating
that such notice is a “Notice of Default”. In the event that Agent receives such
a notice of the occurrence of a Default or Event of Default, Agent shall give
prompt notice thereof to the Lenders. Agent shall (subject to Section 9.7
hereof) take such action with respect to such Default or Event of Default as
shall be directed by all Lenders, provided that, unless and until Agent shall
have received such directions, Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interest of the Lenders
except to the extent that this Agreement expressly requires that such action be
taken, or not be taken, only with the consent or upon the authorization of all
of the Lenders.

 

Section 9.4. Rights as a Lender. With respect to the Loan made by it, Agent in
its capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and my exercise the same as though it were not
acting as Agent, and the term “Lender” or “Lenders” shall, unless the context
otherwise indicates, include Agent in its individual capacity. Agent and its
affiliates may (without having to account therefor to any Lender) lend money to,
make investments in and

 

94

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

generally engage in any kind of business with Borrower or any of their
Affiliates as if it were not acting as Agent, and Agent and its Affiliates may
accept fees and other consideration from Borrower or such Affiliate for services
in connection with this Agreement or otherwise without having to account for the
same to the Lenders.

 

Section 9.5. Indemnification. The Lenders agree to indemnify Agent (to the
extent not reimbursed by Borrower, but without limiting the obligations of
Borrower under the Loan Documents) ratably in accordance with their respective
interests in the Loan, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against Agent (including by any Lender) arising out of or by reason of
any investigation in or in any way relating to or arising out of this Agreement
or any other Loan Document or any other documents contemplated by or referred to
herein or therein or the Transaction (including, without limitation, the costs
and expenses that Borrower is obligated to pay under the Loan Documents, but
excluding, unless a Default or Event of Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.

 

Section 9.6. Non-Reliance on Agent and Other Lenders. Each Lender agrees and
acknowledges that it has, independently and without reliance on Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Borrower and its own decision to
enter into this Agreement and that it will, independently and without reliance
upon Agent or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or under any other
Loan Document. Agent shall not be required to keep itself informed as to the
performance or observance by Borrower of this Agreement or any of the other Loan
Documents or to inspect the properties or books of Borrower or any of their
Affiliates. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by Agent hereunder, Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the affairs, financial condition or business of
Borrower or any of their Affiliates that may come into the possession of Agent
or any of its Affiliates.

 

Section 9.7. Failure to Act. Except for action expressly required of Agent
hereunder and under the other Loan Documents, Agent shall in all cases be fully
justified in failing or refusing to act hereunder and thereunder unless it shall
receive further assurances to its satisfaction from the Lenders of their
indemnification obligations under Section 9.5 hereof against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.

 

Section 9.8. Resignation of Agent. Subject to the appointment and acceptance of
a successor Agent as provided below, Agent may resign upon giving notice thereof
to the Lenders; provided, however, that such resignation shall not be effective
until such time as the successor Agent is in place and shall deliver written
notice of such appointment to Borrower. Upon any such resignation, the Lenders
shall have the right to appoint a successor Agent, subject to, if an Event of
Default has not occurred and is not continuing, the consent of the Borrower,
such consent not to be unreasonably withheld, delayed or conditioned. If no
successor Agent shall have been so appointed by the Lenders and shall have
accepted such appointment within 30 days after the retiring Agent’s giving of
notice of resignation, then the retiring Agent may, on behalf of the Lenders
appoint a successor Agent, that shall be a sophisticated financial institution.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its

 

95

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

duties and obligations hereunder. After any retiring Agent’s resignation
hereunder as Agent, the provisions of this Article 9 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Agent.

 

Section 9.9. Agency Fee. Each Lender will pay to Agent an agency fee as may be
agreed upon between such Lender and Agent. Borrower shall not be liable for the
payment of such fee.

 

Section 9.10. Consents under Loan Documents. Agent may consent to any
modification, supplement or waiver under any of the Loan Documents, provided
that, without the prior consent of each Lender, Agent shall not release any
Collateral or otherwise terminate any Lien under any Loan Document providing for
collateral security, or agree to additional obligations being secured by such
collateral security (unless the Lien for such additional obligations shall be
junior to the Lien in favor of the Obligations), except that no such consent
shall be required, and Agent is hereby authorized, to release any Lien covering
Collateral that is the subject of a disposition permitted hereunder.

 

Section 9.11. Notices, Reports and Other Communications. Agent shall provide, at
its expense, copies of each notice, report, document, correspondence or other
written communication delivered to Agent by Borrower or any Affiliate of
Borrower pursuant to any Loan Document, to each Lender identified in such
notice, report, document, correspondence or other written communication or
reasonably determined by Agent to be entitled thereto or affected thereby, as
soon as practicable after Agent’s receipt thereof.

 

96

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

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.

 

AGENT AND INITIAL LENDER: DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH, a Cayman
Islands Branch of a Foreign Bank By:  

 

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

Name:  

 

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

Title:  

 

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

By:  

 

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

Name:  

 

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

Title:  

 

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

BORROWER: FIRST STATES INVESTORS DB I, LLC, a Delaware limited liability company
By:  

 

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

Name:   Sonya A. Huffman Title:   Vice President COLLATERAL AGENT: LASALLE BANK
NATIONAL ASSOCIATION, a national banking association (as Collateral Agent for
the Lenders only) By:  

 

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

Name:     Title:   Vice President