Exhibit 10.2
6400 Shafer Court
Rosemont, Illinois
Tax Parcel Number: 12-03-100-015-0000
GAV Pool — Illinois
 
GERA 6400 SHAFER LLC,
as Borrower
to
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Lender
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND FIXTURE FILING
 
Dated: June 15, 2007
PREPARED BY AND UPON RECORDATION RETURN TO:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attention: David J. Weinberger, Esq.
 

 

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     THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND FIXTURE FILING
(the “Security Instrument”) is made as of the 15th day of June, 2007, by GERA
6400 SHAFER LLC, a Delaware limited liability company, having its chief
executive office at c/o Grubb & Ellis Realty Advisors, 500 West Monroe,
Suite 2800, Chicago, Illinois 60661 (hereinafter referred to as “Borrower”), to
WACHOVIA BANK, NATIONAL ASSOCIATION, having an address at Wachovia Bank,
National Association, Commercial Real Estate Services, 8739 Research Drive URP
4, NC 1075, Charlotte, North Carolina 28262 (hereinafter referred to as
“Lender”).
WITNESSETH:
     WHEREAS, Lender has authorized a loan (hereinafter referred to as the
“Loan”) to the Cross-collateralized Borrowers in the maximum principal sum of
FORTY TWO MILLION FIVE HUNDRED THOUSAND and NO/100 DOLLARS ($42,500,000.00)
(hereinafter referred to as the “Loan Amount”), which Loan is evidenced by that
certain promissory note, dated the date hereof (together with any supplements,
amendments, modifications or extensions thereof, hereinafter referred to as the
“Note”) given by the Cross-collateralized Borrowers, as maker, to Lender, as
payee;
     WHEREAS, in consideration of the Loan, the Cross-collateralized Borrowers
have agreed to make payments in amounts sufficient to pay and redeem, and
provide for the payment and redemption of the principal of, premium, if any, and
interest on the Note when due;
     WHEREAS, Borrower desires by this Security Instrument to provide for, among
other things, the issuance of the Note and for the deposit, deed and pledge by
Borrower with, and the creation of a security interest in favor of, Lender, as
security for the Cross-collateralized Borrowers’ obligations to Lender from time
to time pursuant to the Note and the other Loan Documents;
     WHEREAS, Borrower and Lender intend these recitals to be a material part of
this Security Instrument; and
     WHEREAS, all things necessary to make this Security Instrument the valid
and legally binding obligation of Borrower in accordance with its terms, for the
uses and purposes herein set forth, have been done and performed.
     NOW THEREFORE, to secure the payment of the principal of, prepayment
premium (if any) and interest on the Note and all other obligations, liabilities
or sums due or to become due under this Security Instrument, the Note or any
other Loan Documents, including, without limitation, interest on said
obligations, liabilities or sums (said principal, premium, interest and other
sums being hereinafter referred to as the “Debt”), and the performance of all
other covenants, obligations and liabilities of the Cross-collateralized
Borrowers pursuant to the Loan Documents, Borrower has executed and delivered
this Security Instrument; and Borrower has irrevocably granted, and by these
presents and by the execution and delivery hereof does hereby irrevocably grant,
bargain, sell, alien, demise, release, convey, assign, transfer, deed,
hypothecate, pledge, set over, warrant, mortgage and confirm to Lender, forever
with power of sale, all right, title and interest of Borrower in and to all of
the following property, rights, interests and estates:
     (a) the plot(s), piece(s) or parcel(s) of real property described in
Exhibit A attached hereto and made a part hereof (individually and collectively,
hereinafter referred to as the “Premises”);
     (b) (i) all buildings, foundations, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and improvements
of every kind or nature now or hereafter located on the Premises (hereinafter
collectively referred to as the “Improvements”); and (ii) to the extent
permitted by law, the name or names, if any, as may now or hereafter be used for
any of the Improvements, and the goodwill associated therewith;
     (c) all easements, servitudes, rights-of-way, strips and gores of land,
streets, ways, alleys, passages, sewer rights, water, water courses, water
rights and powers, ditches, ditch rights, reservoirs and reservoir rights, air

 

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rights and development rights, lateral support, drainage, gas, oil and mineral
rights, tenements, hereditaments and appurtenances of any nature whatsoever, in
any way belonging, relating or pertaining to the Premises or the Improvements
and the reversion and reversions, remainder and remainders, whether existing or
hereafter acquired, and all land lying in the bed of any street, road or avenue,
opened or proposed, in front of or adjoining the Premises to the center line
thereof and any and all sidewalks, drives, curbs, passageways, streets, spaces
and alleys adjacent to or used in connection with the Premises and/or
Improvements and all the estates, rights, titles, interests, property,
possession, claim and demand whatsoever, both in law and in equity, of Borrower
of, in and to the Premises and Improvements and every part and parcel thereof,
with the appurtenances thereto;
     (d) all machinery, equipment, fittings, apparatus, appliances, furniture,
furnishings, tools, fixtures (including, but not limited to, all heating, air
conditioning, ventilating, waste disposal, sprinkler and fire and theft
protection equipment, plumbing, lighting, communications and elevator fixtures)
and other property of every kind and nature whatsoever, now or hereafter located
upon, or in, and used in connection with the Premises or the Improvements, or
appurtenant thereto, and all building equipment, materials and supplies of any
nature whatsoever owned by Borrower, or in which Borrower has or shall have an
interest, now or hereafter located upon, or in, and used in connection with the
Premises or the Improvements or appurtenant thereto (hereinafter, all of the
foregoing items described in this paragraph (d) are collectively called the
“Equipment”), all of which, and any replacements, modifications, alterations and
additions thereto, to the extent permitted by applicable law, shall be deemed to
constitute fixtures (the “Fixtures”), and are part of the real estate and
security for the payment of the Debt and the performance of Borrower’s
obligations. To the extent any portion of the Equipment is not real property or
fixtures under applicable law, it shall be deemed to be personal property, and
this Security Instrument shall constitute a security agreement creating a
security interest therein in favor of Lender under the UCC;
     (e) all awards or payments, including interest thereon, which may hereafter
be made with respect to the Premises, the Improvements, the Fixtures, or the
Equipment, whether from the exercise of the right of eminent domain (including
but not limited to any transfer made in lieu of or in anticipation of the
exercise of said right), or for a change of grade, or for any other injury to or
decrease in the value of the Premises, the Improvements or the Equipment or
refunds with respect to the payment of property taxes and assessments, and all
other proceeds of the conversion, voluntary or involuntary, of the Premises,
Improvements, Equipment, Fixtures or any other Property or part thereof into
cash or liquidated claims;
     (f) all leases, tenancies, licenses and other agreements affecting the use,
enjoyment or occupancy of the Premises, the Improvements, the Fixtures, or the
Equipment or any portion thereof now or hereafter entered into, whether before
or after the filing by or against Borrower of any petition for relief under the
Bankruptcy Code and all reciprocal easement agreements, license agreements and
other agreements with Pad Owners (hereinafter collectively referred to as the
“Leases”), together with all cash or security deposits, lease termination
payments, advance rentals and payments of similar nature and guarantees or other
security held by, or issued in favor of, Borrower in connection therewith to the
extent of Borrower’s right or interest therein and all remainders, reversions
and other rights and estates appurtenant thereto, and all base, fixed,
percentage or additional rents, and other rents, oil and gas or other mineral
royalties, and bonuses, issues, profits and rebates and refunds or other
payments made by any Governmental Authority from or relating to the Premises,
the Improvements, the Fixtures or the Equipment plus all rents, common area
charges and other payments now existing or hereafter arising, whether paid or
accruing before or after the filing by or against Borrower of any petition for
relief under the Bankruptcy Code (the “Rents”) and all proceeds from the sale or
other disposition of the Leases and the right to receive and apply the Rents to
the payment of the Debt;
     (g) all proceeds of and any unearned premiums on any insurance policies
covering the Premises, the Improvements, the Fixtures, the Rents or the
Equipment, including, without limitation, the right to receive and apply the
proceeds of any insurance, judgments, or settlements made in lieu thereof, for
damage to the Premises, the Improvements, the Fixtures or the Equipment and all
refunds or rebates of Impositions, and interest paid or payable with respect
thereto;
     (h) all deposit accounts, securities accounts, funds or other accounts
maintained or deposited with Lender, or its assigns, in connection herewith,
including, without limitation, the Security Deposit Account (to the

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extent permitted by law), the Escrow Accounts, the Central Account, the Rent
Account, and the Sub-Accounts and all monies and investments deposited or to be
deposited in such accounts;
     (i) all accounts receivable, contract rights, franchises, interests, estate
or other claims, both at law and in equity, now existing or hereafter arising,
and relating to the Premises, the Improvements, the Fixtures or the Equipment,
not included in Rents;
     (j) all now existing or hereafter arising claims against any Person with
respect to any damage to the Premises, the Improvements, the Fixtures or the
Equipment, including, without limitation, damage arising from any defect in or
with respect to the design or construction of the Improvements, the Fixtures or
the Equipment and any damage resulting therefrom;
     (k) all deposits or other security or advance payments, including rental
payments now or hereafter made by or on behalf of Borrower to others, with
respect to (i) insurance policies, (ii) utility services, (iii) cleaning,
maintenance, repair or similar services, (iv) refuse removal or sewer service,
(v) parking or similar services or rights and (vi) rental of Equipment, if any,
relating to or otherwise used in the operation of the Premises, the
Improvements, the Fixtures or the Equipment;
     (l) all intangible property now or hereafter relating to the Premises, the
Improvements, the Fixtures or the Equipment or its operation, including, without
limitation, software, letter of credit rights, trade names, trademarks
(including, without limitation, any licenses of or agreements to license trade
names or trademarks now or hereafter entered into by Borrower), logos, building
names and goodwill (excluding any right, title or interest in and to the names
“Grubb”, “Grubb & Ellis”, “Grubb & Ellis Company”, “Grubb & Ellis Realty
Advisers, Inc.” and variants thereof, the Grubb & Ellis logo or the goodwill
associated with such names and/or logo);
     (m) all now existing or hereafter arising advertising material, guaranties,
warranties, building permits, other permits, licenses, plans and specifications,
shop and working drawings, soil tests, appraisals and other documents, materials
and/or personal property of any kind now or hereafter existing in or relating to
the Premises, the Improvements, the Fixtures, and the Equipment;
     (n) all now existing or hereafter arising drawings, designs, plans and
specifications prepared by architects, engineers, interior designers, landscape
designers and any other consultants or professionals for the design,
development, construction, repair and/or improvement of the Property, as amended
from time to time;
     (o) the right, in the name of and on behalf of Borrower, to appear in and
defend any now existing or hereafter arising action or proceeding brought with
respect to the Premises, the Improvements, the Fixtures or the Equipment and to
commence any action or proceeding to protect the interest of Lender in the
Premises, the Improvements, the Fixtures or the Equipment; and
     (p) all proceeds, products, substitutions and accessions (including claims
and demands therefor) of each of the foregoing.
     All of the foregoing items (a) through (p), together with all of the right,
title and interest of Borrower therein, are collectively referred to as the
“Property”.
     TO HAVE AND TO HOLD the above granted and described Property unto Lender,
and the successors and assigns of Lender in fee simple, forever.
     PROVIDED, ALWAYS, and these presents are upon this express condition, if
Borrower shall well and truly pay and discharge the Debt and perform and observe
the terms, covenants and conditions set forth in the Loan Documents, then these
presents and the estate hereby granted shall cease and be void.
     AND Borrower covenants with and warrants to Lender that:

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ARTICLE I: DEFINITIONS
     Section 1.01. Certain Definitions.
     For all purposes of this Security Instrument, except as otherwise expressly
provided or unless the context clearly indicates a contrary intent:
     (i) the capitalized terms defined in this Section have the meanings
assigned to them in this Section, and include the plural as well as the
singular;
     (ii) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP; and
     (iii) the words “herein”, “hereof”, and “hereunder” and other words of
similar import refer to this Security Instrument as a whole and not to any
particular Section or other subdivision.
     “Adjusted Net Cash Flow” shall mean Pro-Forma Net Operating Income
projected over the twelve (12)-month period subsequent to the date of
calculation less (a) the Recurring Replacement Reserve Monthly Installment
multiplied by twelve (12), (b) Reletting Expenses, and (c) extraordinary capital
improvements projected by Lender, in its reasonable discretion, for the
subsequent twelve (12) month period for which sums were not deposited into the
Recurring Replacement Reserve Escrow Account. The Adjusted Net Cash Flow shall
be calculated by Borrower and shall be subject to the reasonable review and
approval of Lender.
     “Affiliate” of any specified Person shall mean any other Person directly or
indirectly Controlling or Controlled by or under direct or indirect common
Control with such specified Person.
     “Allocated Loan Amount” shall mean the Initial Allocated Loan Amount of
each Cross-collateralized Property as such amount may be adjusted from time to
time as hereinafter set forth. Upon each adjustment of the Principal Amount
(each a “Total Adjustment”), whether as a result of amortization or prepayment
or as otherwise expressly provided herein or in any other Loan Document, each
Allocated Loan Amount shall be increased or decreased, as the case may be, by an
amount equal to the product of (a) the Total Adjustment, and (b) a fraction, the
numerator of which is the applicable Allocated Loan Amount (prior to the
adjustment in question) and the denominator of which is the Principal Amount
prior to the adjustment to the Principal Amount which results in the
recalculation of the Allocated Loan Amount. However, when the Principal Amount
is reduced as a result of Lender’s receipt of (a) Net Proceeds, the Allocated
Loan Amount for the Cross-collateralized Property with respect to which the Net
Proceeds were received shall be reduced to zero (the amount by which such
Allocated Loan Amount is reduced being referred to as the “Foreclosed Allocated
Amount”) and each other Allocated Loan Amount shall (A) if the Net Proceeds
exceed the Foreclosed Allocated Amount (such excess being referred to as the
“Surplus Net Proceeds”), be decreased by an amount equal to the product of
(i) the Surplus Net Proceeds and (ii) a fraction, the numerator of which is the
applicable Allocated Loan Amount (prior to the adjustment in question) and the
denominator of which is the aggregate of all of the Allocated Loan Amounts
(prior to the adjustment in question) other than the Allocated Loan Amount
applicable to the Cross-collateralized Property with respect to which the Net
Proceeds were received (such fraction being referred to as the “Net Proceeds
Adjustment Fraction”), (B) if the Foreclosed Allocated Amount exceeds the Net
Proceeds (such excess being referred to as the “Net Proceeds Deficiency”), be
increased by an amount equal to the product of (i) the Net Proceeds Deficiency
and (ii) the Net Proceeds Adjustment Fraction, or (C) if the Net Proceeds equal
the Foreclosed Allocated Amount, remain unadjusted, or (c) Loss Proceeds or
partial prepayments made in accordance with Section 15.01 hereof, the Allocated
Loan Amount for the Cross-collateralized Property with respect to which the Loss
Proceeds or partial prepayments were received shall be decreased by an amount
equal to the sum of (i) with respect to Loss Proceeds, Loss Proceeds which are
applied towards the reduction of the Principal Amount as set forth in
Article III hereof, if any, and (ii) with respect to partial prepayments, the
amount of any such partial prepayment which is applied towards the reduction of
the Principal Amount in accordance with the provisions of the Note, if any, but
in no event shall the Allocated Loan Amount for the Cross-collateralized
Property with respect to which the Loss Proceeds or partial prepayments were
received be reduced to an amount less than zero (the amount by which such
Allocated

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Loan Amount is reduced being referred to as the “Loss Proceeds or Prepayment
Allocated Amount”) and each other Allocated Loan Amount shall be decreased by an
amount equal to the product of (i) the excess of (A) the Loss Proceeds or such
partial prepayments over (B) the Loss Proceeds or Prepayment Allocated Amount,
and (ii) a fraction, the numerator of which is the applicable Allocated Loan
Amount (prior to the adjustment in question) and the denominator of which is the
aggregate of all of the Allocated Loan Amounts (prior to the adjustment in
question) other than the Allocated Loan Amount applicable to the
Cross-collateralized Property to which such Loss Proceeds or partial prepayments
were applied.
     “Annual Budget” shall mean an annual budget submitted by Borrower to Lender
in accordance with the terms of Section 2.09 hereof.
     “Appraisal” shall mean the appraisal of the Property and all supplemental
reports or updates thereto previously delivered to Lender in connection with the
Loan.
     “Appraiser” shall mean the Person who prepared the Appraisal.
     “Approved Annual Budget” shall mean each Annual Budget approved by Lender
in accordance with the terms hereof.
     “Approved Manager Standard” shall mean the standard of business operations,
practices and procedures customarily employed by entities having a senior
executive with at least seven (7) years’ experience in the management of first
class office buildings which manage not less than five (5) first class office
buildings having an aggregate leasable square footage of not less than the
lesser of (a) one million leasable square feet and (b) five (5) times the
leasable square feet of the Property.
     “Architect” shall have the meaning set forth in Section 3.04(b)(i) hereof.
     “Assignment” shall mean the Assignment of Leases and Rents and Security
Deposits of even date herewith relating to the Property given by Borrower to
Lender, as the same may be modified, amended or supplemented from time to time.
     “Bank” shall mean the bank, trust company, savings and loan association or
savings bank designated by Lender, in its sole and absolute discretion, in which
the Central Account shall be located.
     “Bankruptcy Code” shall mean 11 U.S.C. §101 et seq., as amended from time
to time.
     “Basic Carrying Costs” shall mean the sum of the following costs associated
with the Property: (a) Impositions and (b) insurance premiums.
     “Basic Carrying Costs Escrow Account” shall mean the Escrow Account
maintained pursuant to Section 5.06 hereof.
     “Basic Carrying Costs Monthly Installment” shall mean Lender’s estimate of
one-twelfth (1/12th) of the annual amount for Basic Carrying Costs. “Basic
Carrying Costs Monthly Installment” shall also include, if required by Lender, a
sum of money which, together with such monthly installments, will be sufficient
to make the payment of each such Basic Carrying Cost at least thirty (30) days
prior to the date initially due. Should such Basic Carrying Costs not be
ascertainable at the time any monthly deposit is required to be made, the Basic
Carrying Costs Monthly Installment shall be determined by Lender in its
reasonable discretion on the basis of the aggregate Basic Carrying Costs for the
prior Fiscal Year or month or the prior payment period for such cost. As soon as
the Basic Carrying Costs are fixed for the then current Fiscal Year, month or
period, the next ensuing Basic Carrying Costs Monthly Installment shall be
adjusted to reflect any deficiency or surplus in prior monthly payments. If at
any time during the term of the Loan Lender reasonably determines that there
will be insufficient funds in the Basic Carrying Costs Escrow Account to make
payments when they become due and payable, Lender shall have the right to adjust
the Basic Carrying Costs Monthly Installment such that there will be sufficient
funds to make such payments.

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Notwithstanding anything to the contrary contained herein, provided that (a) no
Event of Default has occurred and is continuing and (b) Borrower delivers proof
reasonably satisfactory to Lender that all insurance premiums have been paid on
or prior to the date which is five (5) Business Days prior to the date upon
which such insurance premiums are due and payable and that the Property is
insured pursuant to blanket insurance policies in accordance with Section
3.02(d) hereof, the “Basic Carrying Costs Monthly Installment” allocable to
insurance premiums shall be $0.
     “Basic Carrying Costs Sub-Account” shall mean the Sub-Account of the
Central Account established pursuant to Section 5.02 into which the Basic
Carrying Costs Monthly Installments shall be deposited.
     “Borrower” shall mean Borrower named herein and any successor to the
obligations of Borrower.
     “Business Day” shall mean any day other than (a) a Saturday or Sunday, or
(b) a day on which banking and savings and loan institutions in the State of New
York or the State of North Carolina are authorized or obligated by law or
executive order to be closed, or at any time during which the Loan is an asset
of a Securitization, the cities, states and/or commonwealths used in the
comparable definition of “Business Day” in the Securitization documents.
     “Capital Expenditures” shall mean for any period, the amount expended for
items capitalized under GAAP including expenditures for building improvements or
major repairs, leasing commissions and tenant improvements.
     “Cash Expenses” shall mean for any period, the operating expenses
(excluding Capital Expenditures) for the Property as set forth in an Approved
Annual Budget to the extent that such expenses are actually incurred by Borrower
minus payments into the Basic Carrying Costs Sub-Account, the Debt Service
Payment Sub-Account and the Recurring Replacement Reserve Sub-Account (to the
extent such sums are for the payment of sums set forth as operating expenses in
the Approved Annual Budget).
     “Central Account” shall mean an Eligible Account, maintained at the Bank,
in the name of Borrower for the benefit of Lender or its successors or assigns
(as secured party) as may be designated by Lender.
     “Closing Date” shall mean the date of the Note.
     “Code” shall mean the Internal Revenue Code of 1986, as amended and as it
may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto.
     “Condemnation Proceeds” shall mean all of the proceeds in respect of any
Taking or purchase in lieu thereof.
     “Contractual Obligation” shall mean, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of the property owned by it
is bound.
     “Control” means, when used with respect to any specific Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person whether through
ownership of voting securities, beneficial interests, by contract or otherwise.
The definition is to be construed to apply equally to variations of the word
“Control” including “Controlled,” “Controlling” or “Controlled by.”
     “CPI” shall mean “The Consumer Price Index (New Series) (Base Period
1982-84=100) (all items for all urban consumers)” issued by the Bureau of Labor
Statistics of the United States Department of Labor (the “Bureau”). If the CPI
ceases to use the 1982-84 average equaling 100 as the basis of calculation, or
if a change is made in the term, components or number of items contained in said
index, or if the index is altered, modified, converted or revised in any other
way, then the index shall be adjusted to the figure that would have been arrived
at had the change in the manner of computing the index in effect at the date of
this Security Instrument not been made. If at any time during the term of this
Security Instrument the CPI shall no longer be published by the Bureau, then

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any comparable index issued by the Bureau or similar agency of the United States
issuing similar indices shall be used in lieu of the CPI.
     “Cross-collateralized Borrowers” shall mean each Person which has executed
the Note.
     “Cross-collateralized Mortgage” shall mean each mortgage, deed of trust,
deed to secure debt, security agreement, assignment of rents and fixture filing
as originally executed or as same may hereafter from time to time be
supplemented, amended, modified or extended by one or more indentures
supplemental thereto granted by a Cross-collateralized Borrower to Lender as
security for the Note.
     “Cross-collateralized Property” shall mean each parcel or parcels of real
property encumbered by a Cross-collateralized Mortgage as identified on
Exhibit F attached hereto and made a part hereof.
     “Curtailment Reserve Escrow Account” shall mean the Escrow Account
maintained pursuant to Section 5.11 hereof.
     “Curtailment Reserve Sub-Account” shall mean the Sub-Account of the Central
Account established pursuant to Section 5.02 hereof into which excess cash flow
shall be deposited pursuant to Section 5.05.
     “Debt” shall have the meaning set forth in the Recitals hereto.
     “Debt Service” shall mean the amount of interest and principal payments due
and payable in accordance with the Note during an applicable period.
     “Debt Service Coverage” shall mean the quotient obtained by dividing
Adjusted Net Cash Flow by the sum of the (a) aggregate payments of interest,
principal and all other sums due for such specified period under the Note
(determined as of the date the calculation of Debt Service Coverage is required
or requested hereunder) and (b) aggregate payments of interest, principal and
all other sums due for such specified period pursuant to the terms of
subordinate or mezzanine financing, if any, then affecting or related to the
Property or, if Debt Service Coverage is being calculated in connection with a
request for consent to any subordinate or mezzanine financing, then proposed. In
determining Debt Service Coverage, the applicable interest rate for the Loan and
for any floating rate loan referred to in clause (b) above, if any, shall be the
greater of (1) the LIBOR Margin, with respect to the Loan, and the applicable
margin over the applicable index, with respect to any other loan referred to in
clause (b) above, plus the then current LIBOR Rate, with respect to the Loan, or
the then current applicable index rate, with respect to any other loan described
in clause (b) above (but in no event more than the strike price set forth in the
Rate Cap Agreement or any similar agreement applicable to any loan referred to
in clause (b) above) and (2) 8.50%.
     “Debt Service Payment Sub-Account” shall mean the Sub-Account of the
Central Account established pursuant to Section 5.02 hereof into which the
Required Debt Service Payment shall be deposited.
     “Debt Service Reserve Escrow Account” shall mean an Escrow Account
established and maintained pursuant to Section 5.15 hereof.
     “Default” shall mean any Event of Default or event which would constitute
an Event of Default if all requirements in connection therewith for the giving
of notice, the lapse of time, and the happening of any further condition, event
or act, had been satisfied.
     “Default Rate” shall mean the lesser of (a) the highest rate allowable at
law and (b) five percent (5%) above the interest rate set forth in the Note.
     “Default Rate Interest” shall mean, to the extent the Default Rate becomes
applicable, interest in excess of the interest which would have accrued on
(a) the Principal Amount and (b) any accrued but unpaid interest, if the Default
Rate was not applicable.

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     “Development Laws” shall mean all applicable subdivision, zoning,
environmental protection, wetlands protection, or land use laws or ordinances,
and any and all applicable rules and regulations of any Governmental Authority
promulgated thereunder or related thereto.
     “Disclosure Document” shall mean a prospectus, prospectus supplement,
private placement memorandum, or similar offering memorandum or offering
circular, in each case in preliminary or final form, used to offer securities in
connection with a Securitization.
     “Dollar” and the sign “$” shall mean lawful money of the United States of
America.
     “Eligible Account” shall mean a segregated account which is either (a) an
account or accounts maintained with a federal or state chartered depository
institution or trust company the long term unsecured debt obligations of which
are rated by each of the Rating Agencies (or, if not rated by Fitch, Inc.
(“Fitch”), otherwise acceptable to Fitch, as confirmed in writing that such
account would not, in and of itself, result in a downgrade, qualification or
withdrawal of the then current ratings assigned to any certificates issued in
connection with a Securitization) in its second highest rating category at all
times or, if the funds in such account are to be held in such account for less
than thirty (30) days, the short term obligations of which are rated by each of
the Rating Agencies (or, if not rated by Fitch, otherwise acceptable to Fitch,
as confirmed in writing that such account would not, in and of itself, result in
a downgrade, qualification or withdrawal of the then current ratings assigned to
any certificates issued in connection with a Securitization) in its second
highest rating category at all times or (b) a segregated trust account or
accounts maintained with a federal or state chartered depository institution or
trust company acting in its fiduciary capacity which, in the case of a state
chartered depository institution is subject to regulations substantially similar
to 12 C.F.R. § 9.10(b), having in either case a combined capital and surplus of
at least $100,000,000 and subject to supervision or examination by federal and
state authority, or otherwise acceptable (as evidenced by a written confirmation
from each Rating Agency that such account would not, in and of itself, cause a
downgrade, qualification or withdrawal of the then current ratings assigned to
any certificates issued in connection with a Securitization) to each Rating
Agency, which may be an account maintained by Lender or its agents. Eligible
Accounts may bear interest. The title of each Eligible Account shall indicate
that the funds held therein are held in trust for the uses and purposes set
forth herein.
     “Engineer” shall have the meaning set forth in Section 3.04(b)(i) hereof.
     “Engineering Escrow Account” shall mean an Escrow Account established and
maintained pursuant to Section 5.12 hereof relating to payments for any Required
Engineering Work.
     “Environmental Problem” shall mean any of the following:
     (a) the presence of any Hazardous Material on, in, under, or above all or
any portion of the Property;
     (b) the release or threatened release of any Hazardous Material from or
onto the Property;
     (c) the violation of any Environmental Statute with respect to the
Property; or
     (d) the failure to obtain or to abide by the terms or conditions of any
permit or approval required under any Environmental Statute with respect to the
Property.
A condition described above shall be an Environmental Problem regardless of
whether or not any Governmental Authority has taken any action in connection
with the condition and regardless of whether that condition was in existence on
or before the date hereof.
     “Environmental Report” shall mean the environmental audit report for the
Property and any supplements or updates thereto, previously delivered to Lender
in connection with the Loan.

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     “Environmental Statute” shall mean any federal, state or local statute,
ordinance, rule or regulation, any judicial or administrative order (whether or
not on consent) or judgment applicable to Borrower or the Property including,
without limitation, any judgment or settlement based on common law theories, and
any provisions or conditions of any permit, license or other authorization
binding on Borrower relating to (a) the protection of the environment, the
safety and health of persons (including employees) or the public welfare from
actual or potential exposure (or effects of exposure) to any actual or potential
release, discharge, disposal or emission (whether past or present) of any
Hazardous Materials or (b) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of any Hazardous Materials,
including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (“CERCLA”), as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. §9601 et seq., the Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of
1976, as amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C.
§6901 et seq., the Federal Water Pollution Control Act, as amended by the Clean
Water Act of 1977, 33 U.S.C. §1251 et seq., the Toxic Substances Control Act of
1976, 15 U.S.C. §2601 et seq., the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. §1101 et seq., the Clean Air Act of 1966,
as amended, 42 U.S.C. §7401 et seq., the National Environmental Policy Act of
1975, 42 U.S.C. §4321, the Rivers and Harbors Act of 1899, 33 U.S.C. §401 et
seq., the Endangered Species Act of 1973, as amended, 16 U.S.C. §1531 et seq.,
the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §651 et
seq., and the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. §300(f) et
seq., and all rules, regulations and guidance documents promulgated or published
thereunder.
     “Equipment” shall have the meaning set forth in granting clause (d) of this
Security Instrument.
     “ERISA” shall mean 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 Security
Instrument and, as of the relevant date, any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
     “ERISA Affiliate” shall mean any corporation or trade or business that is a
member of any group of organizations (a) described in Section 414(b) or (c) of
the Code of which Borrower is a member and (b) 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 Account” shall mean each of the Engineering Escrow Account, the
Basic Carrying Costs Escrow Account, the Recurring Replacement Reserve Escrow
Account, the Reletting Reserve Escrow Account, the Debt Service Reserve Escrow
Account and the Underwritten Rent Escrow Account, the Operation and Maintenance
Expense Escrow Account and the Curtailment Reserve Escrow Account, each of which
shall be an Eligible Account or book entry sub-account of an Eligible Account.
     “Event of Default” shall have the meaning set forth in Section 13.01
hereof.
     “Extraordinary Expense” shall mean an extraordinary operating expense or
capital expense not set forth in the Approved Annual Budget or allotted for in
the Recurring Replacement Reserve Sub-Account.
     “First Interest Accrual Period” shall have the meaning set forth in the
Note.
     “Fiscal Year” shall mean the twelve (12) month period commencing on January
1 and ending on December 31 during each year of the term of this Security
Instrument, or such other fiscal year of Borrower as Borrower may select from
time to time with the prior written consent of Lender.
     “Fixtures” shall have the meaning set forth in granting clause (d) of this
Security Instrument.
     “GAAP” shall mean generally accepted accounting principles in the United
States of America, as of the date of the applicable financial report,
consistently applied.

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     “General Partner” shall mean, if Borrower is a partnership, each general
partner of Borrower and, if Borrower is a limited liability company, each
managing member of Borrower and in each case, if applicable, each general
partner or managing member of such general partner or managing member. In the
event that Borrower is a single member limited liability company, the term
“General Partner” shall include such single member.
     “Governmental Authority” shall mean, with respect to any Person, any
federal or State government or other political subdivision thereof and any
entity, including any regulatory or administrative authority or court,
exercising executive, legislative, judicial, regulatory or administrative or
quasi-administrative functions of or pertaining to government, and any
arbitration board or tribunal, in each case having jurisdiction over such
applicable Person or such Person’s property and any stock exchange on which
shares of capital stock of such Person are listed or admitted for trading.
     “Hazardous Material” shall mean any flammable, explosive or radioactive
materials, hazardous materials or wastes, hazardous or toxic substances,
pollutants or related materials, asbestos or any material containing asbestos,
molds, spores and fungus which may pose a risk to human health or the
environment or any other substance or material as defined in or regulated by any
Environmental Statutes.
     “Impositions” shall mean 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
or license or similar taxes), assessments (including, without limitation, all
assessments for public improvements or benefits, whether or not commenced or
completed prior to the date hereof and whether or not commenced or completed
within the term of this Security Instrument), ground rents, water, sewer or
other rents and charges, excises, levies, 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, or foreseen or unforeseen, of every character in respect of the
Property and/or any Rent (including all interest and penalties thereon), which
at any time prior to, during or in respect of the term hereof may be assessed or
imposed on or in respect of or be a lien upon (a) Borrower (including, without
limitation, all 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 Lender in connection with the Loan
is located) or Lender, (b) the Property or any part thereof or any Rents
therefrom or any estate, right, title or interest therein, or (c) any occupancy,
operation, use or possession of, or sales from, or activity conducted on, or in
connection with the Property, or any part thereof, or the leasing or use of the
Property, or any part thereof, or the acquisition or financing of the
acquisition of the Property, or any part thereof, by Borrower.
     “Improvements” shall have the meaning set forth in granting clause (b) of
this Security Instrument.
     “Indemnified Parties” shall have the meaning set forth in Section 12.01
hereof.
     “Independent” shall mean, when used with respect to any Person, a Person
who (a) is in fact independent, (b) does not have any direct financial interest
or any material indirect financial interest in Borrower, or in any Affiliate of
Borrower or any constituent partner, shareholder, member or beneficiary of
Borrower, (c) is not connected with Borrower or any Affiliate of Borrower or any
constituent partner, shareholder, member or beneficiary of Borrower as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions and (d) is not a member of the immediate family of
a Person defined in (b) or (c) above. Whenever it is herein provided that any
Independent Person’s opinion or certificate shall be provided, such opinion or
certificate shall state that the Person executing the same has read this
definition and is Independent within the meaning hereof.
     “Independent Director” shall have the meaning set forth in
Section 2.02(g)(xvi) hereof.
     “Initial Allocated Loan Amount” shall mean the portion of the Loan Amount
allocated to each Cross-collateralized Property as set forth on Exhibit F
annexed hereto and made a part hereof.

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     “Initial Debt Service Reserve Deposit” shall equal the amount set forth on
Exhibit B attached hereto and made a part hereof.
     “Initial Engineering Deposit” shall equal the amount set forth on Exhibit B
attached hereto and made a part hereof.
     “Initial Reletting Reserve Deposit” shall equal the amount set forth on
Exhibit B attached hereto and made a part hereof.
     “Initial Underwritten Rent Deposit” shall equal the amount set forth on
Exhibit B attached hereto and made a part hereof.
     “Institutional Lender” shall mean any of the following Persons: (a) any
bank, savings and loan association, savings institution, trust company or
national banking association, acting for its own account or in a fiduciary
capacity, (b) any charitable foundation, (c) any insurance company or pension
and/or annuity company, (d) any fraternal benefit society, (e) any pension,
retirement or profit sharing trust or fund within the meaning of Title I of
ERISA or for which any bank, trust company, national banking association or
investment adviser registered under the Investment Advisers Act of 1940, as
amended, is acting as trustee or agent, (f) any investment company or business
development company, as defined in the Investment Company Act of 1940, as
amended, (g) any small business investment company licensed under the Small
Business Investment Act of 1958, as amended, (h) any broker or dealer registered
under the Securities Exchange Act of 1934, as amended, or any investment adviser
registered under the Investment Adviser Act of 1940, as amended, (i) any
government, any public employees’ pension or retirement system, or any other
government agency supervising the investment of public funds, or (j) any other
entity all of the equity owners of which are Institutional Lenders; provided
that each of said Persons shall have net assets in excess of $1,000,000,000 and
a net worth in excess of $500,000,000, be in the business of making commercial
mortgage loans, secured by properties of like type, size and value as the
Property and have a long term credit rating which is not less than “BBB-” (or
its equivalent) from each Rating Agency.
     “Insurance Proceeds” shall mean all of the proceeds received under the
insurance policies required to be maintained by Borrower pursuant to Article III
hereof.
     “Insurance Requirements” shall mean all terms of any insurance policy
required by this Security Instrument, all requirements of the issuer of any such
policy, and all regulations and then current standards applicable to or
affecting the Property or any use or condition thereof, which may, at any time,
be recommended by the Board of Fire Underwriters, if any, having jurisdiction
over the Property, or such other Person exercising similar functions.
     “Interest Accrual Period” shall have the meaning set forth in the Note.
     “Interest Rate” shall have the meaning set forth in the Note.
     “Interest Shortfall” shall mean any shortfall in the amount of interest
required to be paid with respect to the Loan Amount on any Payment Date.
     “Late Charge” shall have the meaning set forth in Section 13.09 hereof.
     “Leases” shall have the meaning set forth in granting clause (f) of this
Security Instrument.
     “Legal Requirement” shall mean as to any Person, the certificate of
incorporation, by-laws, certificate of limited partnership, agreement of limited
partnership or other organization or governing documents of such Person, and any
law, statute, order, ordinance, judgment, decree, injunction, treaty, rule or
regulation (including, without limitation, Environmental Statutes, Development
Laws and Use Requirements) or determination of an arbitrator or a court or other
Governmental Authority and all covenants, agreements, restrictions and
encumbrances contained in

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any instruments, in each case applicable to or binding upon such Person or any
of its property or to which such Person or any of its property is subject.
     “Lender” shall mean the Lender named herein and its successors or assigns.
     “LIBOR Margin” shall have the meaning set forth in the Note.
     “LIBOR Rate” shall have the meaning set forth in the Note.
     “Loan” shall have the meaning set forth in the Recitals hereto.
     “Loan Amount” shall have the meaning set forth in the Recitals hereto.
     “Loan Documents” shall mean this Security Instrument, the Note, the
Assignment, and any and all other agreements, instruments, certificates or
documents executed and delivered by Borrower, any of the Cross-collateralized
Borrowers or any Affiliate of Borrower in connection with the Loan, together
with any supplements, amendments, modifications or extensions thereof.
     “Loan Year” shall mean each 365 day period (or 366 day period if the month
of February in a leap year is included) commencing on the first day of the month
following the Closing Date (provided, however, that the first Loan Year shall
also include the period from the Closing Date to the end of the month in which
the Closing Date occurs).
     “Loss Proceeds” shall mean, collectively, all Insurance Proceeds and all
Condemnation Proceeds.
     “Major Space Lease” shall mean any Space Lease of a tenant or Affiliate of
such tenant where such tenant, together with such Affiliate, leases, in the
aggregate, 15,000 or more square feet.
     “Management Agreement” shall have the meaning set forth in Section 7.02
hereof.
     “Manager” shall mean the Person, other than Borrower, which manages the
Property on behalf of Borrower.
     “Manager Certification” shall have the meaning set forth in Section 2.09
hereof.
     “Material Adverse Effect” shall mean any event or condition that has a
material adverse effect on (a) the Property, (b) the business, prospects,
profits, management, operations or condition (financial or otherwise) of
Borrower, (c) the enforceability, validity, perfection or priority of the lien
of any Loan Document or (d) the ability of Borrower to perform any obligations
under any Loan Document.
     “Maturity”, when used with respect to the Note, shall mean the Maturity
Date set forth in the Note or such other date pursuant to the Note on which the
final payment of principal, and premium, if any, on the Note becomes due and
payable as therein or herein provided, whether at Stated Maturity or by
declaration of acceleration, or otherwise.
     “Maturity Date” shall mean the Maturity Date set forth in the Note, as the
same may be extended from time to time pursuant to the terms of the Note].
     “Multiemployer Plan” shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been, or were required to
have been, made by Borrower or any ERISA Affiliate and which is covered by Title
IV of ERISA.

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     “Net Capital Expenditures” shall mean for any period the amount by which
Capital Expenditures during such period exceed reimbursements for such items
during such period from any fund established pursuant to the Loan Documents.
     “Net Operating Income” shall mean in each Fiscal Year or portion thereof
during the term hereof, Operating Income less Operating Expenses.
     “Net Proceeds” shall mean the excess of (a)(i) the purchase price (at
foreclosure or otherwise) actually received by Lender with respect to the
Property as a result of the exercise by Lender of its rights, powers, privileges
and other remedies after the occurrence of an Event of Default, or (ii) in the
event that Lender (or Lender’s nominee) is the purchaser at foreclosure by
credit bid, then the amount of such credit bid, in either case, over (b) all
costs and expenses, including, without limitation, all attorneys’ fees and
disbursements and any brokerage fees, if applicable, incurred by Lender in
connection with the exercise of such remedies, including the sale of such
Property after a foreclosure against the Property.
     “Note” shall have the meaning set forth in the Recitals hereto.
     “O&M Operative Period” shall commence upon such time as Lender determines
that there are not adequate sums in the Debt Service Reserve Escrow Account to
make the required Debt Service payment due on the next Payment Date.
     “OFAC List” shall mean the list of specially designated nationals and
blocked persons subject to financial sanctions that is maintained by the U.S.
Treasury Department, Office of Foreign Assets Control and accessible through the
internet website www.treas.gov/ofac/t11sdn.pdf.
     “Officer’s Certificate” shall mean a certificate delivered to Lender by
Borrower which is signed on behalf of Borrower by an authorized representative
of Borrower which states that the items set forth in such certificate are true,
accurate and complete in all material respects.
     “Operating Expenses” shall mean, in each Fiscal Year or portion thereof
during the term hereof, all expenses directly attributable to the operation,
repair and/or maintenance of the Property including, without limitation,
(a) Impositions, (b) insurance premiums, (c) management fees, whether or not
actually paid, equal to the greater of the actual management fees and four
percent (4%) of annual “base” or “fixed” Rent due under the Leases and (d) costs
attributable to the operation, repair and maintenance of the systems for
heating, ventilating and air conditioning the Improvements and actually paid for
by Borrower. Operating Expenses shall not include interest, principal and
premium, if any, due under the Note or otherwise in connection with the Debt,
income taxes, extraordinary capital improvement costs, any non-cash charge or
expense such as depreciation or amortization or any item of expense otherwise
includable in Operating Expenses which is paid directly by any tenant except
real estate taxes paid directly to any taxing authority by any tenant.
     “Operating Income” shall mean, in each Fiscal Year or portion thereof
during the term hereof, all revenue derived by Borrower arising from the
Property including, without limitation, rental revenues (whether denominated as
basic rent, additional rent, escalation payments, electrical payments or
otherwise) and other fees and charges payable pursuant to Leases or otherwise in
connection with the Property, and business interruption, rent or other similar
insurance proceeds. Operating Income shall not include (a) Insurance Proceeds
(other than proceeds of rent, business interruption or other similar insurance
allocable to the applicable period) and Condemnation Proceeds (other than
Condemnation Proceeds arising from a temporary taking or the use and occupancy
of all or part of the applicable Property allocable to the applicable period),
or interest accrued on such Condemnation Proceeds, (b) proceeds of any
financing, (c) proceeds of any sale, exchange or transfer of the Property or any
part thereof or interest therein, (d) capital contributions or loans to Borrower
or an Affiliate of Borrower, (e) any item of income otherwise includable in
Operating Income but paid directly by any tenant to a Person other than Borrower
except for real estate taxes paid directly to any taxing authority by any
tenant, (f) any other extraordinary, non-recurring revenues, (g) Rent paid by or
on behalf of any lessee under a Space Lease which is the subject of any
proceeding or action relating to its bankruptcy, reorganization or other
arrangement pursuant to the Bankruptcy Code or any

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similar federal or state law or which has been adjudicated a bankrupt or
insolvent unless such Space Lease has been affirmed by the trustee in such
proceeding or action, (h) Rent paid by or on behalf of any lessee under a Space
Lease the demised premises of which are not occupied either by such lessee or by
a sublessee thereof, (i) Rent paid by or on behalf of any lessee under a Space
Lease in whole or partial consideration for the termination of any Space Lease,
or (j) sales tax rebates from any Governmental Authority.
     “Operation and Maintenance Expense Escrow Account” shall mean the Escrow
Account maintained pursuant to Section 5.09 hereof relating to the payment of
Operating Expenses (exclusive of Basic Carrying Costs).
     “Operation and Maintenance Expense Sub-Account” shall mean the Sub-Account
of the Central Account established pursuant to Section 5.02 hereof into which
sums allocated for the payment of Cash Expenses, Net Capital Expenditures and
approved Extraordinary Expenses shall be deposited.
     “Pad Owners” shall mean any owner of any fee interest in property
contiguous to or surrounded by the Property who has entered into or is subject
to a reciprocal easement agreement or other agreement or agreements with
Borrower either (a) in connection with an existing or potential improvement on
such property or (b) relating to or affecting the Property.
     “Payment Date” shall have the meaning set forth in the Note.
     “PBGC” shall mean the Pension Benefit Guaranty Corporation established
under ERISA, or any successor thereto.
     “Permitted Encumbrances” shall have the meaning set forth in
Section 2.05(a) hereof.
     “Person” shall mean 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.
     “Plan” shall mean an employee benefit or other plan established or
maintained by Borrower or any ERISA Affiliate during the five-year period ended
prior to the date of this Security Instrument 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 Security Instrument, been required to make
contributions (whether or not covered by Title IV of ERISA or Section 302 of
ERISA or Section 401(a) or 412 of the Code), other than a Multiemployer Plan.
     “Premises” shall have the meaning set forth in granting clause (a) of this
Security Instrument.
     “Principal Amount” shall mean the Loan Amount as such amount may be reduced
from time to time pursuant to the terms of this Security Instrument, the Note or
the other Loan Documents.
     “Principal Payments” shall mean all payments of principal made pursuant to
the terms of the Note.
     “Pro-Forma Net Operating Income” shall mean Pro-Forma Operating Income less
Pro-Forma Operating Expenses.
     “Pro-Forma Operating Expenses” shall mean projected aggregate annualized
Operating Expenses for all of the Cross-collateralized Properties based on a
trailing twelve (12)-month period as reasonably adjusted by Lender to take into
account, among other things, anticipated increases in Operating Expenses.
     “Pro-Forma Operating Income” shall mean projected aggregate annualized
Operating Income for all of the Cross-collateralized Properties based on the
most recent rent rolls and such other information as is required to be delivered
by Borrower pursuant to Section 2.09 hereof excluding rent relating to tenants
under Space Leases (pursuant to the most recent rent roll) that are more than
thirty (30) days old as reasonably adjusted by Lender to

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take into account, among other things, a vacancy factor equal to the greater of
(a) anticipated vacancies and (b) market vacancies for the market in which the
Cross-collateralized Properties are located.
     “Prohibited Person” shall mean any Person and/or any Affiliate thereof
identified on the OFAC List or any other Person or foreign country or agency
thereof with whom a U.S. Person may not conduct business or transactions by
prohibition of Federal law or Executive Order of the President of the United
States of America.
     “Property” shall have the meaning set forth in the granting clauses of this
Security Instrument.
     “Property Agreements” shall mean all agreements, grants of easements and/or
rights-of-way, reciprocal easement agreements, permits, declarations of
covenants, conditions and restrictions, disposition and development agreements,
planned unit development agreements, parking agreements, party wall agreements
or other instruments affecting the Property, including, without limitation any
agreements with Pad Owners, but not including any brokerage agreements,
management agreements, service contracts, Space Leases or the Loan Documents.
     “Rate Cap Agreement” shall mean that certain interest rate protection
agreement (together with the confirmation and schedules relating thereto) with a
notional amount which shall not at any time be less than the Principal Amount
and a LIBOR Rate strike price equal to six percent 6%) entered into by Borrower
in accordance with the terms hereof or of the other Loan Documents and any
similar interest rate cap or collar agreements subsequently entered into in
replacement or substitution therefor by Borrower with respect to the Loan.
     “Rating Agency” shall mean each of Standard & Poor’s Ratings Services, a
division of The McGraw-Hill Company, Inc. (“Standard & Poor’s”), Fitch, Inc.,
and Moody’s Investors Service, Inc. (“Moody’s”) and any successor to any of
them; provided, however, that at any time after a Securitization, “Rating
Agency” shall mean those of the foregoing rating agencies that from time to time
rate the securities issued in connection with such Securitization.
     “Realty” shall have the meaning set forth in Section 2.05(b) hereof.
     “Recurring Replacement Expenditures” shall mean expenditures related to
capital repairs, replacements and improvements performed at the Property from
time to time.
     “Recurring Replacement Reserve Escrow Account” shall mean the Escrow
Account maintained pursuant to Section 5.08 hereof relating to the payment of
Recurring Replacement Expenditures.
     “Recurring Replacement Reserve Monthly Installment” shall mean the amount
per month set forth on Exhibit B attached hereto and made a part hereof (the
“Initial Recurring Installments”).
     “Recurring Replacement Reserve Sub-Account” shall mean the Sub-Account of
the Central Account established pursuant to Section 5.02 hereof into which the
Recurring Replacement Reserve Monthly Installment shall be deposited.
     “Regulation AB” shall mean Regulation AB under the Securities Act and the
Securities Exchange Act of 1934 (as amended).
     “Reletting Expenditures” shall mean reasonable and actual out-of-pocket
expenditures payable to bona-fide third parties and the Manager or its
Affiliates incurred by Borrower relating to reletting of space at the Property
and in connection with any brokerage commissions due and payable, or any
improvements and replacements required to be made by Borrower (or reasonable and
actual out-of-pocket expenditures paid to tenants in connection with any
improvements and replacements made by tenants at the Property) under the terms
of any Lease to prepare the relevant space for occupancy by the tenant
thereunder.

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     “Reletting Expenses” shall mean Lender’s estimate of expenditures to be
incurred by Borrower on an annual basis during the term of the Loan relating to
reletting of space at the Property and in connection with any brokerage
commissions due and payable in connection therewith, or any improvements and
replacements required to be made by Borrower (or expenditures to be paid to
tenants in connection with any improvements and replacements to be made by
tenants at the Property) to prepare the relevant space for occupancy.
     “Reletting Reserve Escrow Account” shall mean the Escrow Account maintained
pursuant to Section 5.07 hereof relating to the payment of Reletting
Expenditures.
     “Rent Account” shall mean an Eligible Account maintained in a bank
acceptable to Lender in the joint names of Borrower and Lender or such other
name as Lender may designate in writing.
     “Rents” shall have the meaning set forth in granting clause (f) of this
Security Instrument.
     “Rent Roll” shall have the meaning set forth in Section 2.05 (o) hereof.
     “Required Debt Service Coverage” shall mean a Debt Service Coverage of not
less than 1.2:1.
     “Required Debt Service Payment” shall mean, as of any Payment Date, the
amount of interest and principal then due and payable pursuant to the Note,
together with any other sums due thereunder, including, without limitation, any
prepayments required to be made or for which notice has been given under this
Security Instrument, Default Rate Interest and premium, if any, paid in
accordance therewith.
     “Required Engineering Work” shall mean the immediate engineering and/or
environmental remediation work set forth on Exhibit D attached hereto and made a
part hereof.
     “Retention Amount” shall have the meaning set forth in Section 3.04(b)(vii)
hereof.
     “Securities Act” shall mean the Securities Act of 1933, as the same shall
be amended from time to time.
     “Securitization” shall mean a public or private offering of securities by
Lender or any of its Affiliates or their respective successors and assigns which
are collateralized, in whole or in part, by this Security Instrument.
     “Security Deposit Account” shall have the meaning set forth in Section 5.01
hereof.
     “Security Instrument” shall mean this Security Instrument as originally
executed or as it may hereafter from time to time be supplemented, amended,
modified or extended by one or more indentures supplemental hereto.
     “Significant Obligor” shall have the meaning set forth in Item 1101(k) of
Regulation AB.
     “Single Purpose Entity” shall mean a corporation, partnership, joint
venture, limited liability company, trust or unincorporated association, which
is formed or organized solely for the purpose of holding, directly, an ownership
interest in the Property and has complied, does comply and shall comply with the
representations and covenants set forth in Section 2.02(g) hereof.
     “Solvent” shall mean, as to any Person, that (a) the sum of the assets of
such Person, at a fair valuation, exceeds its liabilities, including contingent
liabilities, (b) such Person has sufficient capital with which to conduct its
business as presently conducted and as proposed to be conducted and (c) such
Person has not incurred debts, and does not intend to incur debts, beyond its
ability to pay such debts as they mature. For purposes of this definition,
“debt” means any liability on a claim, and “claim” means (a) a right to payment,
whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured, or (b) a right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,

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unmatured, disputed, undisputed, secured, or unsecured. With respect to any such
contingent liabilities, such liabilities shall be computed in accordance with
GAAP at the amount which, in light of all the facts and circumstances existing
at the time, represents the amount which can reasonably be expected to become an
actual or matured liability.
     “Space Leases” shall mean any Lease or sublease thereunder (including,
without limitation, any Major Space Lease) or any other agreement providing for
the use and occupancy of a portion of the Property together with any
supplements, renewals, amendments, modifications or extensions thereof.
     “State” shall mean any of the states which are members of the United States
of America.
     “Stated Maturity” when used with respect to the Note or any installment of
interest and/or principal payment thereunder, shall mean the date specified in
the Note as the fixed date on which a payment of all or any portion of principal
and/or interest is due and payable , as such date may be extended from time to
time pursuant to the terms of the Note.
     “Sub-Accounts” shall have the meaning set forth in Section 5.02 hereof.
     “Substantial Casualty” shall have the meaning set forth in Section 3.04
hereof.
     “Taking” shall mean a condemnation or taking pursuant to the lawful
exercise of the power of eminent domain.
     “Total GLA” shall mean the total gross leasable area of the Property,
including all Space Leases.
     “Transfer” shall mean the conveyance, assignment, sale, mortgaging,
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; (b) if
Borrower is a corporation or, if Borrower is a partnership and any General
Partner is a corporation, in the stock of Borrower or any General Partner;
(c) in Borrower (or any trust of which Borrower is a trustee); or (d) if
Borrower is a limited or general partnership, joint venture, limited liability
company, trust, nominee trust, tenancy in common or other unincorporated form of
business association or form of ownership interest, in any Person having a legal
or beneficial ownership in Borrower, excluding any legal or beneficial interest
in any constituent limited partner, if Borrower is a limited partnership, or in
any non-managing member, if Borrower is a limited liability company, unless such
interest would, or together with all other direct or indirect interests in
Borrower which were previously transferred, aggregate 49% or more of the
partnership or membership, as applicable, interest in Borrower or would result
in any Person who, as of the Closing Date, did not own, directly or indirectly,
49% or more of the partnership or membership, as applicable, interest in
Borrower, owning, directly or indirectly, 49% or more of the partnership or
membership, as applicable, interest in Borrower and excluding any legal or
beneficial interest in any General Partner unless such interest would, or
together with all other direct or indirect interest in the General Partner which
were previously transferred, aggregate 49% or more of the partnership or
membership, as applicable, interest in the General Partner (or result in a
change in control of the management of the General Partner from the individuals
exercising such control immediately prior to the conveyance or other disposition
of such legal or beneficial interest) 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; an agreement by Borrower leasing all or
substantially all of the Property to one or more Persons pursuant to a single or
related transactions, or a sale, assignment or other transfer of, or the grant
of a security interest in, Borrower’s right, title and interest in and to any
Leases or any Rent; any instrument subjecting the Property to a condominium
regime or transferring ownership to a cooperative corporation; and the
dissolution or termination of Borrower or the merger or consolidation of
Borrower with any other Person.
     “UCC” shall mean the Uniform Commercial Code as in effect on the date
hereof in the State in which the Realty is located; provided, however, that if
by reason of mandatory provisions of law, the perfection or the effect of

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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 in which the Realty is located
(“Other UCC State”), “UCC” means the Uniform Commercial Code as in effect in
such Other UCC State for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection or priority.
     “Underwritten Rent Escrow Account” shall mean an Escrow Account maintained
pursuant to Section 5.14 hereof.
     “Unscheduled Payments” shall mean (a) all Loss Proceeds that Borrower has
elected or is required to apply to the repayment of the Debt pursuant to this
Security Instrument, the Note or any other Loan Documents, (b) any funds
representing a voluntary or involuntary principal prepayment and (c) any Net
Proceeds.
     “Use Requirements” shall mean any and all building codes, permits,
certificates of occupancy or compliance, laws, regulations, or ordinances
(including, without limitation, health, pollution, fire protection, medical and
day-care facilities, waste product and sewage disposal regulations),
restrictions of record, easements, reciprocal easements, declarations or other
agreements affecting the use of the Property or any part thereof.
     “Welfare Plan” shall mean an employee welfare benefit plan as defined in
Section 3(1) of ERISA established or maintained by Borrower or any ERISA
Affiliate or that covers any current or former employee of Borrower or any ERISA
Affiliate.
     “Work” shall have the meaning set forth in Section 3.04(a)(i) hereof.
ARTICLE II: REPRESENTATIONS, WARRANTIES
AND COVENANTS OF BORROWER
     Section 2.01. Payment of Debt. Borrower will pay the Debt at the time and
in the manner provided in the Note and the other Loan Documents, all in lawful
money of the United States of America in immediately available funds.
     Section 2.02. Representations, Warranties and Covenants of Borrower.
Borrower represents and warrants to and covenants with Lender:
          (a) Organization and Authority. Borrower (i) is a limited liability
company, general partnership, limited partnership or corporation, as the case
may be, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation, (ii) has all requisite power and authority
and all necessary licenses and permits to own and operate the Property and to
carry on its business as now conducted and as presently proposed to be conducted
and (iii) is duly qualified, authorized to do business and in good standing in
the jurisdiction where the Property is located and in each other jurisdiction
where the conduct of its business or the nature of its activities makes such
qualification necessary. If Borrower is a limited liability company, limited
partnership or general partnership, each general partner or managing member, as
applicable, of Borrower which is a corporation is duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
formation.
          (b) Power. Borrower and, if applicable, each General Partner has full
power and authority to execute, deliver and perform, as applicable, the Loan
Documents to which it is a party, to make the borrowings thereunder, to execute
and deliver the Note and to grant to Lender a first, prior, perfected and
continuing lien on and security interest in the Property, subject only to the
Permitted Encumbrances.
          (c) Authorization of Borrowing. The execution, delivery and
performance of the Loan Documents to which Borrower is a party, the making of
the borrowings thereunder, the execution and delivery of the Note, the grant of
the liens on the Property pursuant to the Loan Documents to which Borrower is a
party and the consummation of the Loan are within the powers of Borrower and
have been duly authorized by Borrower and, if

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applicable, the General Partners, by all requisite action (and Borrower hereby
represents that no approval or action of any member, limited partner or
shareholder, as applicable, of Borrower is required to authorize any of the Loan
Documents to which Borrower is a party) and will constitute the legal, valid and
binding obligation of Borrower, enforceable against Borrower in accordance with
their terms, except as enforcement may be stayed or limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights
generally and by general principles of equity (whether considered in proceedings
at law or in equity) and will not (i) violate any provision of its partnership
agreement or partnership certificate or certificate of incorporation or by-laws,
or operating agreement, limited liability company agreement, certificate of
formation or articles of organization, as applicable, or, to its knowledge, any
law, judgment, order, rule or regulation of any court, arbitration panel or
other Governmental Authority, domestic or foreign, or other Person affecting or
binding upon Borrower or the Property, or (ii) violate any provision of any
indenture, agreement, mortgage, deed of trust, contract or other instrument to
which Borrower or, if applicable, any General Partner is a party or by which any
of their respective property, assets or revenues are bound, or be in conflict
with, result in an acceleration of any obligation or a breach of or constitute
(with notice or lapse of time or both) a default or require any payment or
prepayment under, any such indenture, agreement, mortgage, deed of trust,
contract or other instrument, or (iii) result in the creation or imposition of
any lien, except those in favor of Lender as provided in the Loan Documents to
which it is a party.
          (d) Consent. Neither Borrower nor, if applicable, any General Partner,
is required to obtain any consent, approval or authorization from, or to file
any 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 Security Instrument, the Note or the other Loan Documents which has not
been so obtained or filed.
          (e) Interest Rate. The rate of interest paid under the Note and the
method and manner of the calculation thereof do not violate any usury or other
law or applicable Legal Requirement.
          (f) Other Agreements. Borrower is not a party to nor is otherwise
bound by any agreements or instruments which, individually or in the aggregate,
are reasonably likely to have a Material Adverse Effect. Neither Borrower nor,
if applicable, any General Partner, is in violation of its organizational
documents or other restriction or any agreement or instrument by which it is
bound, or any judgment, decree, writ, injunction, order or award of any
arbitrator, court or Governmental Authority, or any Legal Requirement, in each
case, applicable to Borrower or the Property, except for such violations that
would not, individually or in the aggregate, have a Material Adverse Effect.
          (g) Maintenance of Existence. (i) Borrower is familiar with the
criteria of the Rating Agency required to qualify as a special-purpose
bankruptcy-remote entity and Borrower and, if applicable, each General Partner
at all times since their formation have been duly formed and existing at all
times and at all times have preserved and shall preserve and has kept and shall
keep in full force and effect their existence as a Single Purpose Entity.
     (ii) Borrower and, if applicable, each General Partner, at all times since
their organization have complied, and will continue to comply, with the
provisions of its certificate of limited partnership and agreement of limited
partnership or certificate of incorporation and by-laws or articles of
organization, certificate of formation, limited liability company agreement and
operating agreement, as applicable, and the laws of its jurisdiction of
organization relating to partnerships, corporations or limited liability
companies, as applicable.
     (iii) Borrower and, if applicable, each General Partner have done or caused
to be done and will do all things necessary to observe organizational
formalities and preserve their existence and Borrower and, if applicable, each
General Partner will not amend, modify or otherwise change any of the single
purpose entity provisions in the certificate of limited partnership and
agreement of limited partnership or certificate of incorporation and by-laws or
articles of organization, certificate of formation, limited liability company
agreement and operating agreement, as applicable, or other organizational
documents of Borrower and, if applicable, each General Partner.

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     (iv) Borrower and, if applicable, each General Partner, have at all times
accurately maintained, and will continue to accurately maintain, their
respective financial statements, accounting records and other partnership,
company or corporate documents separate from those of any other Person and
Borrower and/or, if applicable, General Partner, have filed and will file its
own tax returns or, if Borrower and/or, if applicable, General Partner is part
of a consolidated group for purposes of filing tax returns or if Borrower, and
General Partner, if applicable, are disregarded entities for federal tax
purposes, Borrower and, General Partner, as applicable, may be included in a
consolidated tax return provided that Borrower and, General Partner, if
applicable, have been shown and will be shown as separate members of such group.
Borrower and, if applicable, each General Partner have not at any time since
their formation commingled, and will not commingle, their respective assets with
those of any other Person and each has maintained and will maintain their assets
in such a manner such that it will not be costly or difficult to segregate,
ascertain or identify their individual assets from those of any other Person.
Borrower and, if applicable, each General Partner has not permitted and will not
permit any Affiliate independent access to their bank accounts. Borrower and, if
applicable, each General Partner have at all times since their formation
accurately maintained and utilized, and will continue to accurately maintain and
utilize, their own separate bank accounts, payroll and separate books of
account, stationery, invoices and checks.
     (v) Borrower and, if applicable, each General Partner, have at all times
paid, and will continue to pay, their own liabilities from their own separate
assets and each has allocated and charged and shall each allocate and charge
fairly and reasonably any overhead which Borrower and, if applicable, any
General Partner, shares with any other Person, including, without limitation,
for office space and services performed by any employee of another Person.
     (vi) Borrower and, if applicable, each General Partner, have at all times
identified themselves, and will continue to identify themselves, in all dealings
with the public, under their own names and as separate and distinct entities and
have corrected and shall correct any known misunderstanding regarding their
status as separate and distinct entities. Borrower and, if applicable, each
General Partner, have not at any time identified themselves, and will not
identify themselves, as being a division of any other Person.
     (vii) Borrower and, if applicable, each General Partner, have been at all
times, and will continue to be, adequately capitalized for the normal
obligations reasonably foreseeable in light of the nature of their respective
businesses.
     (viii) Borrower and, if applicable, each General Partner, (A) have not
owned, do not own and will not own any assets or property other than, with
respect to Borrower, the Property and any incidental personal property necessary
for the ownership, management or operation of the Property and, with respect to
General Partner, if applicable, its interest in Borrower, (B) have not engaged
and will not engage in any business other than the ownership, management and
operation of the Property or, with respect to General Partner, if applicable,
its interest in Borrower, (C) have not incurred and will not incur any debt,
secured or unsecured, direct or contingent (including guaranteeing any
obligation), other than, with respect to Borrower, (X) the Loan and
(Y) unsecured trade and operational debt which (1) is not evidenced by a note,
(2) is incurred in the ordinary course of the operation of the Property,
(3) does not exceed in the aggregate four percent (4%) of the Allocated Loan
Amount for the Property and (4) is, unless being contested in accordance with
the terms of this Security Instrument, paid prior to the earlier to occur of the
sixtieth (60th) day after the date incurred and the date when due, (D) have not
pledged and will not pledge their assets for the benefit of any other Person and
(E) have not made and will not make any loans or advances to any Person
(including any Affiliate).
     (ix) Neither Borrower nor, if applicable, any General Partner will change
its name or principal place of business without giving Lender at least thirty
(30) days prior written notice.
     (x) Neither Borrower nor, if applicable, any General Partner has, and
neither of such Persons will have, any subsidiaries (other than, with respect to
General Partner, Borrower).

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     (xi) Borrower has preserved and maintained and will preserve and maintain
its existence as a Delaware limited liability company and all material rights,
privileges, tradenames and franchises.
     (xii) Neither Borrower, nor, if applicable, any General Partner, has merged
or consolidated with, and except as specifically permitted in this Security
Instrument and/or in any other Loan Documents, neither will merge or consolidate
with, and neither has sold all or substantially all of its respective assets to
any Person, and except as specifically permitted in this Security Instrument
and/or in any other Loan Documents, neither will sell all or substantially all
of its respective assets to any Person, and neither has liquidated, wound up or
dissolved itself (or suffered any liquidation, winding up or dissolution) and
neither will liquidate, wind up or dissolve itself (or suffer any liquidation,
winding up or dissolution). Neither Borrower, nor, if applicable, any General
Partner has acquired nor will acquire any business or assets from, or capital
stock or other ownership interest of, or be a party to any acquisition of, any
Person.
     (xiii) Borrower and, if applicable, each General Partner, have not at any
time since their formation assumed, guaranteed or held themselves out to be
responsible for, and will not assume, guarantee or hold themselves out to be
responsible for the liabilities or the decisions or actions respecting the daily
business affairs of their partners, shareholders or members or any predecessor
company, corporation or partnership, each as applicable, any Affiliates, or any
other Persons except as provided in the Loan Documents. Borrower and, if
applicable, each General Partner, have not at any time since their formation
acquired, and will not acquire, obligations or securities of its partners or
shareholders, members or any predecessor company, corporation or partnership,
each as applicable, or any Affiliates except as provided in the Loan Documents.
Borrower and, if applicable, each General Partner, have not at any time since
their formation made, and will not make, loans to its partners, members or
shareholders or any predecessor company, corporation or partnership, each as
applicable, or any Affiliates of any of such Persons. Borrower and, if
applicable, each General Partner, have no known contingent liabilities nor do
they have any material financial liabilities under any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which such Person
is a party or by which it is otherwise bound other than under the Loan Documents
except as provided in the Loan Documents.
     (xiv) Borrower and, if applicable, each General Partner, have not at any
time since their formation entered into and was not a party to, and, will not
enter into or be a party to, any transaction with its Affiliates, members,
partners or shareholders, as applicable, or any Affiliates thereof except in the
ordinary course of business of such Person on terms which are no less favorable
to such Person than would be obtained in a comparable arm’s length transaction
with an unrelated third party.
     (xv) If Borrower is a limited partnership or a limited liability company,
the General Partner shall be a corporation or limited liability company whose
sole asset is its interest in the Cross-collateralized Borrower and the General
Partner will at all times comply, and will cause Borrower to comply, with each
of the representations, warranties, and covenants contained in this
Section 2.02(g) as if such representation, warranty or covenant was made
directly by such General Partner.
     (xvi) Borrower shall at all times cause there to be at least two duly
appointed members of the board of directors or board of managers or other
governing board or body, as applicable (an “Independent Director”), of, if
Borrower is a corporation, Borrower, if Borrower is a limited partnership, of
the General Partner, and if Borrower is a limited liability company, of the
General Partner or of Borrower, reasonably satisfactory to Lender who shall not
have been at the time of such individual’s appointment, and may not be or have
been at any time during the preceding five (5) years (A) a shareholder, officer,
director, attorney, counsel, partner, member or employee of Borrower or any of
the foregoing Persons or Affiliates thereof, (other than its capacity as an
Independent Director) (B) a customer or creditor of, or supplier or service
provider to, Borrower or any of its shareholders, partners, members or their
Affiliates who derives more than one percent (1%) of its profits or revenues
(excluding any fee paid by any such parties for such director to serve as an
Independent Director) from its activities with Borrower or any of its
shareholders, partners, members or their Affiliates, (C) a member of the
immediate family of any Person referred to in (A) or (B) above or (D) a Person
Controlling, Controlled by or under common Control with any Person

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referred to in (A) through (C) above. A natural person who satisfies the
foregoing definition other than subparagraph (B) shall not be disqualified from
serving as an Independent Director of Borrower, if such individual is an
Independent Director provided by a nationally-recognized company that provides
professional independent directors and/or managers (a “Professional Independent
Director”) and other corporate services in the ordinary course of its business.
A natural person who otherwise satisfies the foregoing definition other than
subparagraph (A) by reason of being the independent director of a “special
purpose entity” affiliated with Borrower or an Affiliate thereof shall not be
disqualified from serving as an Independent Director of Borrower if such
individual is either (i) a Professional Independent Director or (ii) the fees
that such individual earns from serving as independent director of Affiliates of
Borrower in any given year constitute in the aggregate less than five percent
(5%) of such individual’s annual income for that year.
     (xvii) Borrower and, if applicable, each General Partner, shall not cause
or permit the board of directors or board of managers or other governing board
or body, as applicable, of Borrower or, if applicable, each General Partner, to
take any action which, under the terms of any certificate of incorporation,
by-laws, limited liability company agreement, operating agreement, limited
liability company agreement, certificate of formation or articles of
organization requires a vote of the board of directors or board of managers or
other governing board or body of Borrower, or, if applicable, the General
Partner, unless at the time of such action there shall be at least two members
who are Independent Directors.
     (xviii) Borrower and, if applicable, each General Partner has paid and
shall pay the salaries of their own employees and has maintained and shall
maintain a sufficient number of employees in light of their contemplated
business operations.
     (xix) Borrower shall, and shall cause its Affiliates to, and Borrower has
and has caused its Affiliates to, conduct its business so that the assumptions
made with respect to Borrower and, if applicable, each General Partner, in that
certain opinion letter relating to substantive non-consolidation dated the date
hereof (the “Insolvency Opinion”) delivered in connection with the Loan has been
and shall be true and correct in all respects.
     Notwithstanding anything to the contrary contained in this Section 2.02(g),
provided Borrower is a Delaware single member limited liability company which
satisfies the single purpose bankruptcy remote entity requirements of each
Rating Agency for a single member limited liability company as of the date of
this Security Instrument, the foregoing provisions of this Section 2.02(g) shall
not apply to the General Partner. Lender hereby acknowledges that as of the date
hereof, Section 2.02(g) is not applicable to the General Partner.
     Notwithstanding anything to the contrary contained in this Security
Instrument or in the other Loan Documents, Borrower shall have the right to
distribute the proceeds from the Loan to General Partner and General Partner
shall have the right to distribute the proceeds from the Loan to its sole
member.
     (h) No Defaults. No Default or Event of Default has occurred and is
continuing or would occur as a result of the consummation of the transactions
contemplated by the Loan Documents. Borrower is not in default in the payment or
performance of any of its Contractual Obligations in any respect.
     (i) Consents and Approvals. Borrower and, if applicable, each General
Partner, have obtained or made all necessary (i) consents, approvals and
authorizations, and registrations and filings of or with all Governmental
Authorities and (ii) consents, approvals, waivers and notifications of partners,
stockholders, members, creditors, lessors and other nongovernmental Persons, in
each case, which are required to be obtained or made by Borrower or, if
applicable, the General Partner, in connection with the execution and delivery
of, and the performance by Borrower of its obligations under, the Loan
Documents.
     (j) Investment Company Act Status, etc. Borrower is not (i) an “investment
company,” or a company “controlled” by an “investment company,” as such terms
are defined in the Investment Company Act of 1940, as

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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.
     (k) Compliance with Law. Borrower is in compliance in all material respects
with all Legal Requirements to which it or the Property is subject, including,
without limitation, all Environmental Statutes, the Occupational Safety and
Health Act of 1970, the Americans with Disabilities Act and ERISA. No portion of
the Property has been or will be purchased, improved, fixtured, equipped or
furnished with proceeds of any illegal activity and, to the best of Borrower’s
knowledge, no illegal activities are being conducted at or from the Property.
     (l) Financial Information. All financial data that has been delivered by
Borrower to Lender (i) is true, complete and correct in all material respects as
of the date of such financial data, (ii) accurately represents the financial
condition and results of operations of the Persons covered thereby as of the
date on which the same shall have been furnished, and (iii) has been prepared in
accordance with GAAP (or such other accounting basis as is reasonably acceptable
to Lender) throughout the periods covered thereby. As of the date hereof,
neither Borrower nor, if applicable, any General Partner, has any contingent
liability, liability for taxes or other unusual or forward commitment not
reflected in such financial statements delivered to Lender. Since the date of
the last financial statements delivered by Borrower to Lender except as
otherwise disclosed in such financial statements or notes thereto, there has
been no change in the assets, liabilities or financial position of Borrower nor,
if applicable, any General Partner, or in the results of operations of Borrower
which would have a Material Adverse Effect. Neither Borrower nor, if applicable,
any General Partner, has incurred any obligation or liability, contingent or
otherwise not reflected in such financial statements which would have a Material
Adverse Effect.
     (m) Transaction Brokerage Fees. Borrower has not dealt with any financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Security Instrument. All
brokerage fees, commissions and other expenses payable in connection with the
transactions contemplated by the Loan Documents have been paid in full by
Borrower contemporaneously with the execution of the Loan Documents and the
funding of the Loan. Borrower hereby agrees to indemnify and hold Lender
harmless for, from and against any and all claims, liabilities, costs and
expenses of any kind in any way relating to or arising from (i) a claim by any
Person that such Person acted on behalf of Borrower in connection with the
transactions contemplated herein or (ii) any breach of the foregoing
representation. The provisions of this subsection (m) shall survive the
repayment of the Debt.
     (n) Federal Reserve Regulations. No part of the proceeds of the Loan will
be used for the purpose of “purchasing” or “carrying” any “margin stock” within
the meaning of Regulations T, U or X of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulations T, U or X or any other Regulations of such Board of Governors, or
for any purposes prohibited by Legal Requirements or by the terms and conditions
of the Loan Documents.
     (o) Pending Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of Borrower, threatened against or affecting Borrower
or the Property in any court or before any Governmental Authority which if
adversely determined either individually or collectively has or is reasonably
likely to have a Material Adverse Effect.
     (p) Solvency; No Bankruptcy. Each of Borrower and, if applicable, the
General Partner, (i) is and has at all times been Solvent and will remain
Solvent immediately upon the consummation of the transactions contemplated by
the Loan Documents and (ii) is free from bankruptcy, reorganization or
arrangement proceedings or a general assignment for the benefit of creditors and
is not contemplating the filing of a petition under any state or federal
bankruptcy or insolvency laws or the liquidation of all or a major portion of
such Person’s assets or property and Borrower has no knowledge of any Person
contemplating the filing of any such petition against it or, if applicable, the
General Partner. None of the transactions contemplated hereby will be or have
been made with an intent to hinder, delay or defraud any present or future
creditors of Borrower and Borrower has received reasonably equivalent value in
exchange for its obligations under the Loan Documents. Borrower’s assets do not,
and

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immediately upon consummation of the transaction contemplated in the Loan
Documents will not, constitute unreasonably small capital to carry out its
business as presently conducted or as proposed to be conducted. Borrower does
not intend to, nor believes that it will, incur debts and liabilities beyond its
ability to pay such debts as they may mature.
     (q) Use of Proceeds. The proceeds of the Loan shall be used for the
business purpose of Borrower and no portion of the proceeds of the Loan will be
used for family, personal, agricultural or household use.
     (r) Tax Filings. Borrower and, if applicable, each General Partner, have
filed all federal, state and local tax returns required to be filed and have
paid or made adequate provision for the payment of all federal, state and local
taxes, charges and assessments payable by Borrower and, if applicable, the
General Partners. Borrower and, if applicable, the General Partners, believe
that their respective tax returns properly reflect the income and taxes of
Borrower and said General Partner, if any, for the periods covered thereby,
subject only to reasonable adjustments required by the Internal Revenue Service
or other applicable tax authority upon audit.
     (s) Not Foreign Person. Borrower is not a “foreign person” within the
meaning of §1445(f)(3) of the Code.
     (t) ERISA. (i) The assets of Borrower are not and will not become treated
as “plan assets”, whether by operation of law or under regulations promulgated
under ERISA. If any Person having a legal or beneficial ownership interest in
Borrower is using (or is deemed under ERISA to be using) “plan assets”, Borrower
will qualify as a “real estate operating company” within the meaning of 29
C.F.R. §2510.3-101(e) at all times that the Loan is outstanding. Each Plan and
Welfare Plan, and, to the 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 applicable Legal Requirement, 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 clause (ii)(A) of this Section.
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 under which Borrower or any ERISA Affiliate,
directly or indirectly (through an indemnification agreement or otherwise),
could 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 any
ERISA Affiliate beyond his or her retirement or other termination of service
other than (A) coverage mandated by applicable law, (B) death or disability
benefits that have been fully provided for by fully paid up insurance or
(C) severance benefits.
     (ii) Borrower will furnish to Lender as soon as possible, and in any event
within ten (10) days after Borrower knows or has reason to believe that any of
the events or conditions specified below with respect to any Plan, Welfare 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 (or any
other relevant Governmental Authority)) by Borrower or an ERISA Affiliate with
respect to such event or condition, if such report or notice is required to be
filed with the PBGC or any other relevant Governmental Authority:
     (A) any reportable event, as defined in Section 4043 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 and of
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 and
of 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;

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     (B) the distribution under Section 4041 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;
     (C) 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 a notice from a Multiemployer
Plan that such action has been taken by PBGC with respect to such Multiemployer
Plan;
     (D) the complete or partial withdrawal from a Multiemployer Plan by
Borrower or any ERISA Affiliate that results in 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 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;
     (E) the institution of a proceeding by a fiduciary of any Multiemployer
Plan against Borrower or any ERISA Affiliate to enforce Section 515 of ERISA,
which proceeding is not dismissed within thirty (30) days;
     (F) 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 fails to timely provide security to the Plan in accordance with
the provisions of said Sections; or
     (G) the imposition of a lien or a security interest in connection with a
Plan.
     (iii) Borrower shall not knowingly engage in or permit any transaction in
connection with which Borrower or any ERISA Affiliate could be subject to either
a civil penalty or tax assessed pursuant to Section 502(i) or 502(l) 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 or any ERISA Affiliate beyond his or
her retirement or other termination of service other than (A) coverage mandated
by applicable law, (B) death or disability benefits that have been fully
provided for by paid up insurance or otherwise or (C) severance benefits, 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 employee benefit plan (including, without limitation, any
employee welfare benefit plan) or other plan, policy or arrangement maintained
by Borrower, except for adoptions, amendments or 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 or liability
to Borrower or any ERISA Affiliate; provided, however, that in the case of ERISA
Affiliates of the Borrower, the prohibition set forth in this subsection
2.02(t)(iii) shall apply only to plans covered under Title IV of ERISA or
Section 412 of the Code.
     (u) Labor Matters. No organized work stoppage or labor strike is pending or
threatened by employees or other laborers at the Property and neither Borrower
nor Manager (i) is involved in or to Borrower’s knowledge, threatened with any
labor dispute, grievance or litigation relating to labor matters involving any
employees and other laborers at the Property, including, without limitation,
violation of any federal, state or local labor, safety or employment laws
(domestic or foreign) and/or charges of unfair labor practices or discrimination
complaints; (ii) to Borrower’s knowledge, has engaged in any unfair labor
practices within the meaning of the National Labor Relations Act or the Railway
Labor Act; or (iii) except as disclosed to Lender, is a party to, or bound by,
any collective bargaining agreement or union contract with respect to employees
and other laborers at the Property and no such agreement or contract is
currently being negotiated by Borrower, Manager or any of their Affiliates.

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     (v) Borrower’s Legal Status. Borrower’s exact legal name that is indicated
on the signature page hereto, organizational identification number and place of
business or, if more than one, its chief executive office, as well as Borrower’s
mailing address, if different, which were identified by Borrower to Lender and
contained in this Security Instrument, are true, accurate and complete. Borrower
(i) will not change its name, its place of business or, if more than one place
of business, its chief executive office, or its mailing address or
organizational identification number if it has one without giving Lender at
least thirty (30) days prior written notice of such change, (ii) if Borrower
does not have an organizational identification number and later obtains one,
Borrower shall promptly notify Lender of such organizational identification
number and (iii) will not change its type of organization, jurisdiction of
organization or other legal structure.
     (w) Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering Laws.
(i) None of Borrower, General Partner, or any Person who owns any equity
interest (other than shareholders in the publicly traded stock of Grubb & Ellis
Company which do not individually own five percent (5%) or more of the stock
thereof) in or Controls Borrower or any General Partner is identified on the
OFAC List or otherwise qualifies as a Prohibited Person, and Borrower has
implemented procedures, approved by Borrower and, if applicable, General
Partner, to ensure that no Person who now or hereafter owns an equity interest
in Borrower or General Partner is a Prohibited Person or Controlled by a
Prohibited Person, (ii) no proceeds of the Loan will be used to fund any
operations in, finance any investments or activities in or make any payments to,
Prohibited Persons, and (iii) none of Borrower or General Partner is in
violation of any Legal Requirements relating to anti-money laundering or
anti-terrorism, including, without limitation, Legal Requirements related to
transacting business with Prohibited Persons or the requirements of the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56, and the related
regulations issued thereunder, including temporary regulations, all as amended
from time to time. No tenant at the Property currently is identified on the OFAC
List or otherwise qualifies as a Prohibited Person, and, to the best of
Borrower’s knowledge, no tenant at the Property is owned or Controlled by a
Prohibited Person. Borrower has determined that Manager has implemented
procedures, approved by Borrower, to ensure that no tenant at the Property is a
Prohibited Person or owned or Controlled by a Prohibited Person.
     Section 2.03. Further Acts, etc. Borrower will, at the cost of Borrower,
and without expense to Lender, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages or deeds of trust, as
applicable, assignments, notices of assignments, transfers and assurances as
Lender shall, from time to time, reasonably require for the better assuring,
conveying, assigning, transferring, and confirming unto Lender the property and
rights hereby mortgaged, given, granted, bargained, sold, alienated, enfeoffed,
conveyed, confirmed, pledged, assigned and hypothecated, or which Borrower may
be or may hereafter become bound to convey or assign to Lender, or for carrying
out or facilitating the performance of the terms of this Security Instrument or
for filing, registering or recording this Security Instrument and, within five
(5) Business Days of written demand, will execute and deliver and hereby
authorizes Lender to execute in the name of Borrower or without the signature of
Borrower to the extent Lender may lawfully do so, one or more financing
statements, chattel mortgages or comparable security instruments to evidence
more effectively the lien hereof upon the Property. Borrower grants to Lender an
irrevocable power of attorney coupled with an interest for the purpose of
protecting, perfecting, preserving and realizing upon the interests granted
pursuant to this Security Instrument and to effect the intent hereof, all as
fully and effectually as Borrower might or could do; and Borrower hereby
ratifies all that Lender shall lawfully do or cause to be done by virtue hereof;
provided, however, that Lender shall not exercise such power of attorney unless
and until Borrower fails to take the required action within the five
(5) Business Day time period stated above unless the failure to so exercise,
could, in Lender’s reasonable judgment, result in a Material Adverse Effect.
Upon (a) receipt of an affidavit of an officer of Lender as to the loss, theft,
destruction or mutilation of the Note or any other Loan Document which is not of
public record, (b) receipt of an indemnity of Lender related to losses resulting
solely from the issuance of a replacement note or other applicable Loan Document
or any claims for losses resulting from a claim by a party in possession of a
note previously deemed lost and (c) in the case of any such mutilation, upon
surrender and cancellation of such Note or other applicable Loan Document,
Borrower will issue, in lieu thereof, a replacement Note or other applicable
Loan Document, dated the date of such lost, stolen, destroyed or mutilated Note
or other Loan Document in the same principal amount thereof and otherwise of
like tenor.

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     Section 2.04. Recording of Security Instrument, etc. Borrower forthwith
upon the execution and delivery of this Security Instrument and thereafter, from
time to time, will cause this Security Instrument, and any security instrument
creating a lien or security interest or evidencing the lien hereof upon the
Property and each instrument of further assurance to be filed, registered or
recorded in such manner and in such places as may be required by any present or
future law in order to publish notice of and fully protect the lien or security
interest hereof upon, and the interest of Lender in, the Property. Borrower will
pay all filing, registration or recording fees, and all expenses incident to the
preparation, execution and acknowledgment of this Security Instrument, any
mortgage or deed of trust, as applicable, supplemental hereto, any security
instrument with respect to the Property and any instrument of further assurance,
and all federal, state, county and municipal, taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution and
delivery of this Security Instrument, any mortgage or deed of trust, as
applicable, supplemental hereto, any security instrument with respect to the
Property or any instrument of further assurance, except where prohibited by law
to do so, in which event Lender may declare the Debt to be immediately due and
payable. Borrower shall hold harmless and indemnify Lender, and its successors
and assigns, against any liability incurred as a result of the imposition of any
tax on the making and recording of this Security Instrument.
     Section 2.05. Representations, Warranties and Covenants Relating to the
Property. Borrower represents and warrants to and covenants with Lender with
respect to the Property as follows:
     (a) Lien Priority. This Security Instrument is a valid and enforceable
first lien on the Property, free and clear of all encumbrances and liens having
priority over the lien of this Security Instrument, except for the items set
forth as exceptions to or subordinate matters in the title insurance policy
insuring the lien of this Security Instrument, none of which, individually or in
the aggregate, materially interfere with the benefits of the security intended
to be provided by this Security Instrument (other than taxes and/or assessments
not yet due and payable), materially affect the value or marketability of the
Property, impair the use or operation of the Property for the use currently
being made thereof or impair Borrower’s ability to pay its obligations in a
timely manner (such items being the “Permitted Encumbrances”).
     (b) Title. Borrower has, subject only to the Permitted Encumbrances, good,
insurable and marketable fee simple title to the Premises, Improvements and
Fixtures (collectively, the “Realty”) and to all easements and rights benefiting
the Realty and has the right, power and authority to mortgage, encumber, give,
grant, bargain, sell, alien, enfeoff, convey, confirm, pledge, assign, and
hypothecate the Property. Borrower will preserve its interest in and title to
the Property and will forever warrant and defend the same to Lender against any
and all claims made by, through or under Borrower and will forever warrant and
defend the validity and priority of the lien and security interest created
herein against the claims of all Persons whomsoever claiming by, through or
under Borrower. The foregoing warranty of title shall survive the foreclosure of
this Security Instrument and shall inure to the benefit of and be enforceable by
Lender in the event Lender acquires title to the Property pursuant to any
foreclosure. In addition, there are no outstanding options or rights of first
refusal to purchase the Property or Borrower’s ownership thereof.
     (c) Taxes and Impositions. Subject to Borrower’s right to contest as set
forth in this Security Instrument, all taxes and other Impositions and
governmental assessments due and owing in respect of, and affecting, the
Property have been paid. Borrower has paid all Impositions which constitute
special governmental assessments in full, except for those assessments which are
permitted by applicable Legal Requirements to be paid in installments, in which
case all installments which are due and payable have been paid in full. There
are no pending, or to Borrower’s knowledge, proposed special or other
assessments for public improvements or otherwise affecting the Property, nor are
there any contemplated improvements to the Property that may result in such
special or other assessments.
     (d) Casualty; Flood Zone. The Realty is free and clear of any damage,
destruction or casualty (whether or not covered by insurance) that would
materially affect the value of the Realty or the use for which the Realty was
intended, to Borrower’s best knowledge, there exists no structural or other
material defects or damages in or to the Property and Borrower has not received
any written notice from any insurance company or bonding company of any material
defect or inadequacies in the Property, or any part thereof, which would
materially and

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adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond. No portion of the Premises is
located in an “area of special flood hazard,” as that term is defined in the
regulations of the Federal Insurance Administration, Department of Housing and
Urban Development, under the National Flood Insurance Act of 1968, as amended
(24 CFR § 1909.1) or Borrower has obtained the flood insurance required by
Section 3.01(a)(vi) hereof. The Premises either does not lie in a 100 year flood
plain that has been identified by the Secretary of Housing and Urban Development
or any other Governmental Authority or, if it does, Borrower has obtained the
flood insurance required by Section 3.01(a)(vi) hereof.
     (e) Completion; Encroachment. All Improvements necessary for the efficient
use and operation of the Premises, including, without limitation, all
Improvements which were included for purposes of determining the appraised value
of the Property in the Appraisal, have been completed and, except as set forth
in the survey of the Premises delivered to Lender in connection with the
origination of the Loan, none of said Improvements lie outside the boundaries
and building restriction lines of the Premises. Except as set forth in the title
insurance policy insuring the lien of this Security Instrument, no improvements
on adjoining properties encroach upon the Premises.
     (f) Separate Lot. The Premises are taxed separately without regard to any
other real estate and constitute a legally subdivided lot under all applicable
Legal Requirements (or, if not subdivided, no subdivision or platting of the
Premises is required under applicable Legal Requirements), and for all purposes
may be mortgaged, encumbered, conveyed or otherwise dealt with as an independent
parcel. The Property does not benefit from any tax abatement or exemption.
     (g) Use. The existence of all Improvements, the present use and operation
thereof and the access of the Premises and the Improvements to all of the
utilities and other items referred to in paragraph (k) below are in compliance
in all material respects with all Leases affecting the Property and all
applicable Legal Requirements, including, without limitation, Environmental
Statutes, Development Laws and Use Requirements. Borrower has not received any
written notice from any Governmental Authority alleging any uncured violation
relating to the Property of any applicable Legal Requirements.
     (h) Licenses and Permits. Borrower currently holds and will continue to
hold all certificates of occupancy, licenses, registrations, permits, consents,
franchises and approvals of any Governmental Authority or any other Person which
are material for the lawful occupancy and operation of the Realty or which are
material to the ownership or operation of the Property or the conduct of
Borrower’s business. All such certificates of occupancy, licenses,
registrations, permits, consents, franchises and approvals are current and in
full force and effect.
     (i) Intentionally Omitted.
     (j) Property Proceedings. There are no actions, suits or proceedings
pending or to Borrower’s knowledge threatened in any court or before any
Governmental Authority or arbitration board or tribunal (i) relating to (A) the
zoning of the Premises or any part thereof, (B) any certificates of occupancy,
licenses, registrations, permits, consents or approvals issued with respect to
the Property or any part thereof, (C) except as specifically disclosed in
writing to Lender by Borrower, the condemnation of the Property or any part
thereof, or (D) the condemnation or relocation of any roadways abutting the
Premises required for access or the denial or limitation of access to the
Premises or any part thereof from any point of access to the Premises, (ii)
asserting that (A) any such zoning, certificates of occupancy, licenses,
registrations, permits, consents and/or approvals do not permit the operation of
any material portion of the Realty as presently being conducted, (B) any
material improvements located on the Property or any part thereof cannot be
located thereon or operated with their intended use or (C) the operation of the
Property or any part thereof is in violation in any material respect of any
Environmental Statutes, Development Laws or other Legal Requirements or Space
Leases or Property Agreements or (iii) which might (A) affect the validity or
priority of any Loan Document or (B) have a Material Adverse Effect. Borrower is
not aware of any facts or circumstances which may give rise to any actions,
suits or proceedings described in the preceding sentence, except as otherwise
previously disclosed in writing to Lender.

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     (k) Utilities. The Premises has all necessary legal access to water, gas
and electrical supply, storm and sanitary sewerage facilities, other required
public utilities (with respect to each of the aforementioned items, by means of
either a direct connection to the source of such utilities or through
connections available on publicly dedicated roadways directly abutting the
Premises or through permanent insurable easements benefiting the Premises), fire
and police protection, parking, and means of direct access between the Premises
and public highways over recognized curb cuts (or such access to public highways
is through private roadways which may be used for ingress and egress pursuant to
permanent insurable easements).
     (l) Mechanics’ Liens. The Property is free and clear of any mechanics’
liens or liens in the nature thereof, and no rights are outstanding that under
law could give rise to any such liens, any of which liens are or may be prior
to, or equal with, the lien of this Security Instrument, except those which are
insured against by the title insurance policy insuring the lien of this Security
Instrument.
     (m) Title Insurance. Lender has received a lender’s title insurance policy
insuring this Security Instrument as a first lien on the Realty subject only to
Permitted Encumbrances.
     (n) Insurance. The Property is insured in accordance with the requirements
set forth in Article III hereof.
     (o) Space Leases.
     (i) Borrower has delivered a true, correct and complete schedule of all
Space Leases as of the date hereof, which accurately and completely sets forth
in all material respects, for each such Space Lease, the following
(collectively, the “Rent Roll”): the name and address of the tenant; the lease
expiration date; the base rent and percentage rent payable; all additional rent
and pass-through obligations; and the security deposit held thereunder.
     (ii) Each Space Lease constitutes the legal, valid and binding obligation
of Borrower and, to the knowledge of Borrower, is enforceable against the tenant
thereof. Other than as expressly disclosed to Lender on the rent roll for the
Improvements or the tenant estoppel certificates delivered to Lender in
connection with origination of the Loan, no default exists, or with the passing
of time or the giving of notice would exist, (A) under any Major Space Lease or
(B) under any other Space Leases which would, in the aggregate, have a Material
Adverse Effect.
     (iii) Other than as expressly disclosed to Lender on the rent roll for the
Improvements or the tenant estoppel certificates delivered to Lender in
connection with origination of the Loan, no tenant under any Space Lease has, as
of the date hereof, paid Rent more than thirty (30) days in advance, and the
Rents under such Space Leases have not been waived, released, or otherwise
discharged or compromised.
     (iv) Other than as expressly disclosed to Lender on the rent roll for the
Improvements or the tenant estoppel certificates delivered to Lender in
connection with origination of the Loan, all work to be performed by Borrower
under the Space Leases has been substantially performed, all contributions to be
made by Borrower to the tenants thereunder have been made except for any
held-back amounts, and all other conditions precedent to each such tenant’s
obligations thereunder have been satisfied.
     (v) Except as previously disclosed to Lender in writing, there are no
options to terminate any Space Lease.
     (vi) Other than as expressly disclosed to Lender on the rent roll for the
Improvements or the tenant estoppel certificates delivered to Lender in
connection with origination of the Loan, each tenant under a Major Space Lease
has entered into occupancy of the demised premises to the extent required under
the terms of its Major Space Lease, and each such tenant is open and conducting
business with the public in the demised premises. To the knowledge of Borrower,
other than as expressly disclosed to Lender on the rent roll for the
Improvements or the tenant estoppel certificates delivered to Lender in

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connection with origination of the Loan, each tenant under a Lease other than a
Major Space Lease has entered into occupancy of its demised premises under its
Lease to the extent required under the terms of its Lease and each such tenant
is open and conducting business with the public in the demised premises.
     (vii) Borrower has delivered to Lender true, correct and complete copies of
all Space Leases described in the Rent Roll.
     (viii) Each Space Lease is in full force and effect and (except as
disclosed on the Rent Roll or in the tenant estoppel certificates delivered to
Lender in connection with origination of the Loan) has not been assigned,
modified, supplemented or amended in any way.
     (ix) To Borrower’s knowledge, each tenant under each Space Lease is free
from bankruptcy, reorganization or arrangement proceedings or a general
assignment for the benefit of creditors.
     (x) No Space Lease provides any party with the right to obtain a lien or
encumbrance upon the Property superior to the lien of this Security Instrument.
     (p) Property Agreements.
     (i) Borrower has delivered to Lender true, correct and complete copies of
all Property Agreements.
     (ii) No Property Agreement provides any party with the right to obtain a
lien or encumbrance upon the Property superior to the lien of this Security
Instrument.
     (iii) No default exists or with the passing of time or the giving of notice
or both would exist under any Property Agreement which would, individually or in
the aggregate, have a Material Adverse Effect.
     (iv) Borrower has not received or given any written communication which
alleges that a default exists or, with the giving of notice or the lapse of
time, or both, would exist under the provisions of any Property Agreement.
     (v) No condition exists whereby Borrower or any future owner of the
Property may be required to purchase any other parcel of land which is subject
to any Property Agreement or which gives any Person a right to purchase, or
right of first refusal with respect to, the Property other than set forth in the
Space Leases.
     (vi) To the best knowledge of Borrower, no offset or any right of offset
exists respecting continued contributions to be made by any party to any
Property Agreement except as expressly set forth therein. Except as previously
disclosed to Lender in writing, no material exclusions or restrictions on the
utilization, leasing or improvement of the Property (including non-compete
agreements) exists in any Property Agreement.
     (vii) All “pre-opening” requirements contained in all Property Agreements
(including, but not limited to, all off-site and on-site construction
requirements), if any, have been fulfilled, and, to the best of Borrower’s
knowledge, no condition now exists whereby any party to any such Property
Agreement could refuse to honor its obligations thereunder.
     (viii) All work, if any, to be performed by Borrower under each of the
Property Agreements has been substantially performed, all contributions to be
made by Borrower to any party to such Property Agreements have been made, and
all other conditions to such party’s obligations thereunder have been satisfied.

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     (q) Personal Property. Borrower has delivered to Lender a true, correct and
complete schedule of all personal property, if any, owned by Borrower and
located upon the Property or used in connection with the use or operation of the
Realty and Borrower represents that it has good and marketable title to all such
personal property, free and clear of any liens, except for liens created under
the Loan Documents and liens which describe the equipment and other personal
property owned by tenants.
     (r) Leasing Brokerage and Management Fees. Except as previously disclosed
to Lender in writing, there are no brokerage fees or commissions payable by
Borrower with respect to the leasing of space at the Property and there are no
management fees payable by Borrower with respect to the management of the
Property.
     (s) Security Deposits. All cash security deposits with respect to the
Property on the date hereof have been transferred to the Security Deposit
Account on the date hereof, and Borrower is in compliance with all Legal
Requirements relating to such security deposits as to which failure to comply
might, individually or in the aggregate, have a Material Adverse Effect.
     (t) Appraisal. Borrower has no knowledge that any of the facts or
assumptions on which the Appraisal was based are false or incomplete in any
material respect and has no information that would reasonably suggest that the
fair market value determined in the Appraisal does not reflect the actual fair
market value of the Property.
     (u) Representations Generally. The representations and warranties contained
in this Security Instrument, and the review and inquiry made on behalf of
Borrower therefor, have all been made by Persons having the requisite expertise
and knowledge to provide such representations and warranties. No representation,
warranty or statement of fact made by or on behalf of Borrower in this Security
Instrument or in any certificate, document or schedule furnished to Lender
pursuant hereto, contains any untrue statement of a material fact or
intentionally omits to state any material fact necessary to make statements
contained therein or herein not misleading (which may be to Borrower’s best
knowledge where so provided herein). There are no facts presently known to
Borrower which have intentionally not been disclosed to Lender which would,
individually or in the aggregate, have a Material Adverse Effect nor as far as
Borrower can foresee might, individually or in the aggregate, have a Material
Adverse Effect.
     Section 2.06. Removal of Lien. (a) Borrower shall, at its expense, maintain
this Security Instrument as a first lien on the Property and shall keep the
Property free and clear of all liens and encumbrances of any kind and nature
other than the Permitted Encumbrances. Borrower shall, within twenty (20) days
following the filing thereof, promptly discharge of record, by bond or
otherwise, any such liens and, promptly upon request by Lender, shall deliver to
Lender evidence reasonably satisfactory to Lender of the discharge thereof.
     (b) Without limitation to the provisions of Section 2.06(a) hereof,
Borrower shall (i) pay, from time to time when the same shall become due, all
claims and demands of mechanics, materialmen, laborers, and others which, if
unpaid, might result in, or permit the creation of, a lien on the Property or
any part thereof, (ii) cause to be removed of record (by payment or posting of
bond or settlement or otherwise) any mechanics’, materialmens’, laborers’ or
other lien on the Property, or any part thereof, or on the revenues, rents,
issues, income or profit arising therefrom, and (iii) in general, do or cause to
be done, without expense to Lender, everything reasonably necessary to preserve
in full the lien of this Security Instrument. If Borrower fails to comply with
the requirements of this Section 2.06(b), then, upon five (5) Business Days’
prior notice to Borrower, Lender may, but shall not be obligated to, pay any
such lien, and Borrower shall, within five (5) Business Days after Lender’s
demand therefor, reimburse Lender for all sums so expended, together with
interest thereon at the Default Rate from the date advanced, all of which shall
be deemed part of the Debt. Nothing contained herein shall be deemed a consent
or request of Lender, express or implied, by inference or otherwise, to the
performance of any alteration, repair or other work by any contractor,
subcontractor or laborer or the furnishing of any materials by any materialmen
in connection therewith.
     (c) Notwithstanding the foregoing, Borrower may contest any lien (other
than a lien relating to non-payment of Impositions, the contest of which shall
be governed by Section 4.04 hereof) of the type set forth in subparagraph
(b)(ii) of this Section 2.06 provided that, following prior notice to Lender
(i) Borrower is contesting the validity of such lien with due diligence and in
good faith and by appropriate proceedings, without cost or

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expense to Lender or any of its agents, employees, officers, or directors,
(ii) Borrower shall preclude the collection of, or other realization upon, any
contested amount from the Property or any revenues from or interest in the
Property, (iii) neither the Property nor any part thereof nor interest therein,
shall be in any danger of being sold, forfeited or lost by reason of such
contest by Borrower, (iv) such contest by Borrower shall not affect the
ownership, use or occupancy of the Property, (v) such contest by Borrower shall
not subject Lender or Borrower to the risk of civil or criminal liability (other
than the civil liability of Borrower for the amount of the lien in question),
(vi) such lien is subordinate to the lien of this Security Instrument,
(vii) Borrower has not consented to such lien, (viii) Borrower has given Lender
prompt notice of the filing of such lien and the bonding thereof by Borrower
and, upon request by Lender from time to time, notice of the status of such
contest by Borrower and/or confirmation of the continuing satisfaction of the
conditions set forth in this Section 2.06(c), (ix) Borrower shall promptly pay
the obligation secured by such lien upon a final determination of Borrower’s
liability therefor, and (x) Borrower shall deliver to Lender cash, a bond or
other security acceptable to Lender equal to 125% of the contested amount
pursuant to collateral arrangements reasonably satisfactory to Lender.
     Section 2.07. Cost of Defending and Upholding this Security Instrument
Lien. If any action or proceeding is commenced to which Lender is made a party
relating to the Loan Documents and/or the Property or Lender’s interest therein
or in which it becomes necessary to defend or uphold the lien of this Security
Instrument or any other Loan Document, Borrower shall, on demand, reimburse
Lender for all expenses (including, without limitation, reasonable attorneys’
fees and disbursements) incurred by Lender in connection therewith, and such
sum, together with interest thereon at the Default Rate from and after such
demand until fully paid, shall constitute a part of the Debt.
     Section 2.08. Use of the Property. Borrower will use, or cause to be used,
the Property for such use as is permitted pursuant to applicable Legal
Requirements including, without limitation, under the certificate of occupancy
applicable to the Property, and which is required by the Loan Documents.
Borrower shall not suffer or permit the Property or any portion thereof to be
used by the public, any tenant, or any Person not subject to a Lease, in a
manner as is reasonably likely to impair Borrower’s title to the Property, or in
such manner as may give rise to a claim or claims of adverse usage or adverse
possession by the public, or of implied dedication of the Property or any part
thereof.
     Section 2.09. Financial Reports. (a) Borrower will keep and maintain or
will cause to be kept and maintained on a Fiscal Year basis, in accordance with
GAAP (or such other accounting basis reasonably acceptable to Lender)
consistently applied, proper and accurate books, tax returns, records and
accounts reflecting all of the financial affairs of Borrower. Lender shall have
the right from time to time at all times during normal business hours upon
reasonable notice to examine such books, tax returns, records and accounts at
the office of Borrower or other Person maintaining such books, tax returns,
records and accounts and prior to the occurrence of an Event of Default, at
Lender’s sole cost and expense and after an Event of Default, at Borrower’s sole
cost and expense, to make such copies or extracts thereof as Lender shall
desire. After the occurrence of an Event of Default and during the continuance
thereof, Borrower shall pay any reasonable costs and expenses incurred by Lender
to examine Borrower’s accounting records with respect to the Property, as Lender
shall determine to be necessary or appropriate in the protection of Lender’s
interest.
     (b) Borrower will furnish Lender (i) annually, within one hundred twenty
(120) days following the end of each Fiscal Year of Borrower and (ii) on a
quarterly basis, within sixty (60) days following the end of each fiscal quarter
of Borrower, with a complete copy of Borrower’s financial statement consistently
applied covering (i) all of the financial affairs of Borrower and (ii) the
operation of the Property for such Fiscal Year or fiscal quarters, as
applicable, and containing a statement of revenues and expenses, a statement of
assets and liabilities and a statement of Borrower’s equity. Each annual
financial statement shall be audited by an Independent certified public
accountant that is reasonably acceptable to Lender in accordance with GAAP (or
such other accounting basis reasonably acceptable to Lender). Together with the
financial statements required to be furnished pursuant to this Section 2.09(b),
Borrower shall furnish to Lender (A) an Officer’s Certificate certifying as of
the date thereof (1) that the financial statements accurately represent the
results of operations and financial condition of Borrower and the Property all
in accordance with GAAP (or such other accounting basis reasonably acceptable to
Lender) consistently applied, and (B) together with the financial statements
delivered pursuant to Section 2.09(b)(ii) above, a

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statement showing (1) Pro-Forma Net Operating Income for the subsequent twelve
(12) month period adjusted to reflect the Adjusted Net Cash Flow (subject to
verification by Lender in its reasonable discretion) and (2) the calculation of
the Debt Service Coverage.
     (c) When requested by Lender, Borrower will furnish Lender monthly, within
twenty (20) days following the end of each month, with a true, complete and
correct cash flow statement with respect to the Property in the form attached
hereto as Exhibit C and made a part hereof, showing (i) all cash receipts of any
kind whatsoever and all cash payments and disbursements, (ii) year-to-date
summaries of such cash receipts, payments and disbursements, and (iii) Pro-Forma
Net Operating Income for the subsequent twelve (12) month period adjusted to
reflect the Adjusted Net Cash Flow (subject to the verification by Lender in its
reasonable discretion) and a calculation of the Debt Service Coverage, together
with a certification of Manager stating that such cash flow statement is true,
complete and correct and a list of all litigation and proceedings affecting
Borrower or the Property in which the amount involved is $250,000 or more, if
not covered by insurance (or $1,000,000 or more whether or not covered by
insurance).
     (d) When requested by Lender, Borrower will furnish Lender monthly, within
twenty (20) days following the end of each month, with a certification of
Manager stating that all Operating Expenses with respect to the Property which
had accrued as of the last day of the month preceding the delivery of the cash
flow statement referred to in clause (c) above have been fully paid or otherwise
reserved for by Manager (any such certification or any certification furnished
by a Manager pursuant to clause (c) above, a “Manager Certification”).
     (e) Borrower will furnish Lender annually, within twenty (20) days
following the end of each year but, provided no Event of Default exists, not
more than four (4) times per calendar year, and within twenty (20) days
following receipt of such request therefor, with a true, complete and correct
rent roll for the Property, including a list of which tenants are in default
under their respective Leases, dated as of the date of Lender’s request,
identifying each tenant, the monthly rent and additional rent, if any, payable
by such tenant, the expiration date of such tenant’s Lease, the security
deposit, if any, held by Borrower under the Lease, the space covered by the
Lease, each tenant that has filed a bankruptcy, insolvency, or reorganization
proceeding since delivery of the last such rent roll, and the arrearages for
such tenant, if any, and, if requested by Lender, a summary of the material
terms of the Leases, including, without limitation, the dates of occupancy, the
dates of expiration, any Rent concessions, work obligations or other inducements
granted to the tenants thereunder, and any renewal options, and such rent roll
shall be accompanied by an Officer’s Certificate, dated as of the date of the
delivery of such rent roll, certifying that such rent roll is true, correct and
complete in all material respects as of its date.
     (f) Borrower shall furnish to Lender, within thirty (30) days after
Lender’s request therefor, with such further detailed information with respect
to the operation of the Property and the financial affairs of Borrower as may be
reasonably requested by Lender.
     (g) Intentionally omitted.
     (h) Borrower will furnish Lender annually, within ninety (90) days after
the end of each Fiscal Year, with a report setting forth (i) the Net Operating
Income for such Fiscal Year, (ii) the average occupancy rate of the Property
during such Fiscal Year, (iii) the capital repairs, replacements and
improvements performed at the Property during such Fiscal Year and the aggregate
Recurring Replacement Expenditures made in connection therewith, and (iv) the
balance contained in each of the Escrow Accounts as of the end of such Fiscal
Year (which balance Lender shall provide upon Borrower’s written request
therefor).
     (i) Intentionally omitted.
     (j) Borrower shall submit to Lender for Lender’s written approval an Annual
Budget not later than sixty (60) days prior to the commencement of each Fiscal
Year or, with respect to the Fiscal Year in which the Closing Date occurs,
within sixty (60) days of the Closing Date, in form satisfactory to Lender
setting forth in reasonable detail budgeted monthly operating income and monthly
operating capital and other expenses for the Property. Each Annual Budget shall
contain, among other things, management fees, third party service fees, and

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other expenses as Borrower may reasonably determine. Lender shall have the right
to approve such Annual Budget which approval shall not be unreasonably withheld,
and in the event that Lender objects to the proposed Annual Budget submitted by
Borrower, Lender shall advise Borrower of such objections within fifteen (15)
days after receipt thereof (and deliver to Borrower a reasonably detailed
description of such objections) and Borrower shall, within five (5) days after
receipt of notice of any such objections, revise such Annual Budget and resubmit
the same to Lender. Lender shall advise Borrower of any objections to such
revised Annual Budget within five (5) days after receipt thereof (and deliver to
Borrower a reasonably detailed description of such objections) and Borrower
shall revise the same in accordance with the process described herein until
Lender approves an Annual Budget, provided, however, that if Lender shall not
advise Borrower of its objections to any proposed Annual Budget within the
applicable time period set forth in this Section, then such proposed Annual
Budget shall be deemed approved by Lender. Until such time that Lender approves
a proposed Annual Budget, the most recently Approved Annual Budget shall apply;
provided that, such Approved Annual Budget shall be adjusted to reflect actual
increases in Basic Carrying Costs and utilities expenses and to delete any
non-recurring expenses. In the event that Borrower must incur an Extraordinary
Expense, then Borrower shall promptly deliver to Lender a reasonably detailed
explanation of such proposed Extraordinary Expense for Lender’s approval, which
approval may be granted or denied in Lender’s sole and absolute discretion.
Borrower may, at its option, request Lender to approve changes to the Approved
Annual Budget not more than three (3) times per year.
     (k) In the event that Borrower fails to deliver any of the financial
statements, reports or other information required to be delivered to Lender
pursuant to this Section 2.09 on or prior to their due dates, if any such
failure shall continue for fifteen (15) days following notice thereof from
Lender, Borrower shall pay to Lender an administrative fee in the amount of Two
Thousand Dollars ($2,000) for each due date with respect to which such a failure
occurs (and not on a per-item basis). Borrower agrees that such administrative
fee (i) is a fair and reasonable fee necessary to compensate Lender for its
additional administrative costs and increased costs relating to Borrower’s
failure to deliver the aforementioned statements, reports or other items as and
when required hereunder and (ii) is not a penalty.
     Section 2.10. Litigation. Borrower will give prompt written notice to
Lender of any litigation or governmental proceedings pending or threatened (in
writing) against Borrower which could reasonably have a Material Adverse Effect.
     Section 2.11. Updates of Representations. Borrower shall deliver to Lender
within fifteen (15) Business Days of the request of Lender an Officer’s
Certificate updating all of the representations and warranties contained in this
Security Instrument and the other Loan Documents and certifying that all of the
representations and warranties contained in this Security Instrument and the
other Loan Documents, as updated pursuant to such Officer’s Certificate, are
true, accurate and complete as of the date of such Officer’s Certificate or
shall set forth the exceptions to representations and/or warranties in
reasonable detail, as applicable, and, upon Lender’s request for further
information with respect to such exceptions, shall provide Lender such
additional information as Lender may reasonably request. Notwithstanding the
foregoing, provided that no Event of Default has occurred and is continuing,
Borrower shall not be required to deliver the foregoing Officer’s Certificate
more than two (2) times during the term of the Loan.
ARTICLE III: INSURANCE AND CASUALTY RESTORATION
     Section 3.01. Insurance Coverage. Borrower shall, at its expense, maintain
the following insurance coverages with respect to the Property during the term
of this Security Instrument:
(a) (i) Insurance against loss or damage by fire, casualty and other hazards
included in an “all-risk” coverage endorsement or its equivalent (which, in the
case of insurance during the time of any construction work (“Construction”)
shall be in “builder’s risk completed value non-reporting form” together with
rents, earnings and extra expense insurance covering loss due to delay in
completion of the Improvements unless otherwise included in the “all-risk”
coverage endorsement), with such endorsements as Lender may from time to time
reasonably require and which are customarily required by Institutional Lenders
of similar properties similarly situated, including, without limitation, if the
Property constitutes a legal non-

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conforming use, an ordinance of law coverage endorsement which contains
“Demolition Cost”, “Loss Due to Operation of Law” and “Increased Cost of
Construction” coverages, covering the Property in an amount not less than the
greater of (A) 100% of the insurable replacement value of the Property
(exclusive of the Premises and footings and foundations) and (B) such other
amount as is necessary to prevent any reduction in such policy by reason of and
to prevent Borrower, Lender or any other insured thereunder from being deemed to
be a co-insurer. Not less frequently than once every three (3) years, Borrower,
at its option, shall either (A) have the Appraisal updated or obtain a new
appraisal of the Property, (B) have a valuation of the Property made by or for
its insurance carrier conducted by an appraiser experienced in valuing
properties of similar type to that of the Property which are in the geographical
area in which the Property is located or (C) provide such other evidence as
will, in Lender’s sole judgment, enable Lender to determine whether there shall
have been an increase in the insurable value of the Property and Borrower shall
deliver such updated Appraisal, new appraisal, insurance valuation or other
evidence acceptable to Lender, as the case may be, and, if such updated
Appraisal, new appraisal, insurance valuation, or other evidence acceptable to
Lender (including without limitation an insurance certificate including the then
current valuations) reflects an increase in the insurable value of the Property,
the amount of insurance required hereunder shall be increased accordingly and
Borrower shall deliver evidence satisfactory to Lender that such policy has been
so increased.
     (ii) Commercial general liability insurance against claims for personal and
bodily injury and/or death to one or more persons or property damage, occurring
on, in or about the Property (including the adjoining streets, sidewalks and
passageways therein the maintenance or upkeep of which is the responsibility of
Borrower) in such amounts as Lender may from time to time reasonably require
(but in no event shall Lender’s requirements be increased more frequently than
once during each twelve (12) month period) and which are customarily required by
Institutional Lenders for similar properties similarly situated, but not less
than $1,000,000 per occurrence and $2,000,000 general aggregate on a per
location basis and, in addition thereto, not less than $25,000,000 excess and/or
umbrella liability insurance shall be maintained for any and all claims.
     (iii) Business interruption, rent loss or other similar insurance (A) with
loss payable to Lender, (B) covering “all risks” or “special perils” required to
be covered by the insurance provided for in Section 3.01(a)(i) hereof and (C) in
an amount not less than 100% of the projected fixed or base rent plus percentage
rent for the succeeding twelve (12) month period based on an occupancy rate of
100%. The amount of such insurance shall be determined upon the execution of
this Security Instrument, and not more frequently than once each calendar year
thereafter based on Borrower’s reasonable estimate of projected fixed or base
rent plus percentage rent, from the Property for the next succeeding twelve
(12) months together with a six (6) month extended period of indemnity. Nothing
herein contained shall be deemed to relieve Borrower of its obligations to
timely pay all amounts due under the Loan Documents.
     (iv) Intentionally omitted.
     (v) Insurance against loss or damages from (A) leakage of sprinkler systems
and (B) explosion of steam boilers, air conditioning equipment, pressure vessels
or similar apparatus now or hereafter installed at the Property, in such amounts
as Lender may from time to time reasonably require and which are then
customarily required by Institutional Lenders of similar properties similarly
situated.
     (vi) Flood insurance in an amount equal to the full insurable value of the
Property or the maximum amount available, whichever is less, if the Improvements
are located in an area designated by the Secretary of Housing and Urban
Development as being “an area of special flood hazard” under the National Flood
Insurance Program (i.e., having a one percent or greater chance of flooding),
and if flood insurance is available under the National Flood Insurance Act.
     (vii) Worker’s compensation insurance or other similar insurance which may
be required by Governmental Authorities or Legal Requirements.

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     (viii) Intentionally omitted.
     (ix) Insurance against damage resulting from acts of terrorism, or an
insurance policy without an exclusion for damages resulting from terrorism, on
terms consistent with the commercial property insurance policy required under
subsections (i), (ii) and (iii) above to the extent not included in the policies
of insurance required pursuant to subsections (i), (ii) and (iii) above.
     (x) At all times during Construction relating to a casualty and/or any
condemnation the approval of which is required by Lender, contractor’s liability
insurance to a limit of not less than $25,000,000 on a per occurrence basis
covering each contractor’s construction operation at the Premises.
     (xi) Such other insurance as may from time to time be required by Lender
(excluding environmental limited liability insurance) and which is then
customarily required by Institutional Lenders for similar properties similarly
situated, against other insurable hazards, including, but not limited to,
malicious mischief, vandalism, sinkhole and mine subsidence, acts of terrorism,
windstorm, war risk and/or earthquake, due regard to be given to the size and
type of the Premises, Improvements, Fixtures and Equipment and their location,
construction and use. Additionally, Borrower shall carry such insurance coverage
as Lender may from time to time require if the failure to carry such insurance
may result in a downgrade, qualification or withdrawal of any class of
securities issued in connection with a Securitization or, if the Loan is not yet
part of a Securitization, would result in an increase in the subordination
levels of any class of securities anticipated to be issued in connection with a
proposed Securitization.
     (b) Borrower shall cause any Manager of the Property to maintain fidelity
insurance in an amount not less than $2,500,000 and payable or such lesser
amount as Lender shall approve.
     Section 3.02. Policy Terms. (a) All insurance required by this Article III
shall be in the form (other than with respect to Sections 3.01(a)(vi) and
(vii) above when insurance in those two sub-sections is placed with a
governmental agency or instrumentality on such agency’s forms) and amount and
with deductibles as, from time to time, shall be reasonably acceptable to
Lender, under valid and enforceable policies issued by financially responsible
insurers authorized to do business in the State where the Property is located,
with a general policyholder’s service rating of not less than A and a financial
rating of not less than XIII as rated in the most currently available Best’s
Insurance Reports (or the equivalent, if such rating system shall hereafter be
altered or replaced) and shall have a claims paying ability rating and/or
financial strength rating, as applicable, of not less than “A” (or its
equivalent), or such lower claims paying ability rating and/or financial
strength rating, as applicable, as Lender shall, in its sole and absolute
discretion, consent to, from a Rating Agency (one of which after a
Securitization in which Standard & Poor’s rates any securities issued in
connection with such Securitization, shall be Standard & Poor’s). Certificates
evidencing all insurance policies shall be delivered to and held by Lender. All
insurance policies shall (i) name Lender, its successors and/or assigns as a
loss payee, or with respect to liability insurance, an additional named insured,
(ii) include a standard mortgagee endorsement or its equivalent with respect to
the insurance required pursuant to Section 3.01(a)(i) above; (iii) include a
waiver of subrogation endorsement as to Lender; (iv) an endorsement indicating
that neither Lender nor Borrower shall be or be deemed to be a co-insurer with
respect to any casualty risk insured by such policies; (v) shall provide for a
deductible per loss of an amount not more than $100,000; and (vi) a provision
that such policies shall not be canceled, terminated, denied renewal or amended,
including, without limitation, any amendment reducing the scope or limits of
coverage, without at least thirty (30) days’ prior written notice to Lender in
each instance (or five (5) days with respect to termination as a result of
non-payment of premiums). Not less than five (5) days prior to the expiration
dates of the insurance policies obtained pursuant to this Security Instrument,
certificates of insurance evidencing renewals of such policies and within thirty
(30) days after renewal evidencing the payment of premiums or accompanied by
other reasonable evidence of such payment (which premiums shall not be paid by
Borrower through or by any financing arrangement which would entitle an insurer
to terminate a policy) shall be delivered by Borrower to Lender. Borrower shall
deliver originals or certified copies of the insurance policies required
hereunder promptly upon receipt thereof. Borrower shall not carry separate
insurance, concurrent in kind or form or contributing in the event of loss, with
any insurance required under this Article III.

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     (b) If Borrower fails to maintain and deliver to Lender the original
policies or certificates of insurance required by this Security Instrument, or
if there are insufficient funds in the Basic Carrying Costs Escrow Account to
pay the premiums for same, Lender may, at its option, procure such insurance,
and Borrower shall pay, or as the case may be, reimburse Lender for, all
premiums thereon promptly, upon demand by Lender, with interest thereon at the
Default Rate from the date paid by Lender to the date of repayment and such sum
shall constitute a part of the Debt.
     (c) Borrower shall notify Lender of the renewal premium of each insurance
policy and Lender shall be entitled to pay such amount on behalf of Borrower
from the Basic Carrying Costs Escrow Account.
     (d) The insurance required by this Security Instrument may, at the option
of Borrower, be effected by blanket and/or umbrella policies issued to Borrower
covering the Property provided that, in each case, the policies otherwise comply
with the provisions of this Security Instrument and allocate to the Property,
from time to time (but in no event less than once a year), the coverage
specified by this Security Instrument, without possibility of reduction or
coinsurance by reason of, or damage to, any other property (real or personal)
named therein. If the insurance required by this Security Instrument shall be
effected by any such blanket or umbrella policies, Borrower shall furnish to
Lender (i) an original certificate of insurance together with reasonable access
to the original of such policy to review such policy’s coverage of the Property,
with schedules attached thereto showing the amount of the insurance provided
under such policies applicable to the Property and (ii) an Officer’s Certificate
setting forth (A) the number of properties covered by such policy, (B) the
location by city (if available, otherwise, county) and state of the properties,
(C) the average square footage of the properties, (D) a brief description of the
typical construction type included in the blanket policy and (E) such other
information as Lender may reasonably request.
     Section 3.03. Assignment of Policies. (a) Borrower hereby assigns to Lender
the proceeds of all insurance (other than worker’s compensation and liability
insurance) obtained pursuant to this Security Instrument, all of which proceeds
shall be payable to Lender as collateral and further security for the payment of
the Debt and the performance of the Cross-collateralized Borrowers’ obligations
hereunder and under the other Loan Documents, and Borrower hereby authorizes and
directs the issuer of any such insurance to make payment of such proceeds
directly to Lender. Except as otherwise expressly provided in Section 3.04 or
elsewhere in this Article III, Lender shall have the option, in its discretion,
and without regard to the adequacy of its security, to apply all or any part of
the proceeds it may receive pursuant to this Article in such manner as Lender
may elect to any one or more of the following: (i) the payment of the Debt,
whether or not then due, in any proportion or priority as Lender, in its
discretion, may elect, (ii) the repair or restoration of the Property, (iii) the
cure of any Default or (iv) the reimbursement of the costs and expenses of
Lender incurred pursuant to the terms hereof in connection with the recovery of
the Insurance Proceeds. Nothing herein contained shall be deemed to excuse
Borrower from repairing or maintaining the Property as provided in this Security
Instrument or restoring all damage or destruction to the Property, regardless of
the sufficiency of the Insurance Proceeds, and the application or release by
Lender of any Insurance Proceeds shall not cure or waive any Default or notice
of Default.
     (b) In the event of the foreclosure of this Security Instrument or any
other transfer of title or assignment of all or any part of the Property in
extinguishment, in whole or in part, of the Debt, all right, title and interest
of Borrower in and to all policies of insurance required by this Security
Instrument shall inure to the benefit of the successor in interest to Borrower
or the purchaser of the Property. If, prior to the receipt by Lender of any
proceeds, the Property or any portion thereof shall have been sold on
foreclosure of this Security Instrument or by deed in lieu thereof or otherwise,
or any claim under such insurance policy arising during the term of this
Security Instrument is not paid until after the extinguishment of the Debt, and
Lender shall not have received the entire amount of the Debt outstanding at the
time of such extinguishment, whether or not a deficiency judgment on this
Security Instrument shall have been sought or recovered or denied, then, the
proceeds of any such insurance to the extent of the amount of the Debt not so
received, shall be paid to and be the property of Lender, together with interest
thereon at the Default Rate, and the reasonable attorney’s fees, costs and
disbursements incurred by Lender in connection with the collection of the
proceeds which shall be paid to Lender and Borrower hereby assigns, transfers
and sets over to Lender all of Borrower’s right, title and interest in and to
such proceeds. Notwithstanding any provisions of this Security Instrument to the
contrary, Lender shall not be deemed to be a trustee or other fiduciary with
respect to its receipt of any such proceeds, which may be commingled with any
other monies of

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Lender; provided, however, that Lender shall use such proceeds for the purposes
and in the manner permitted by this Security Instrument. Any proceeds deposited
with Lender shall be held by Lender in an interest-bearing account, but Lender
makes no representation or warranty as to the rate or amount of interest, if
any, which may accrue on such deposit and shall have no liability in connection
therewith. Interest accrued, if any, on the proceeds shall be deemed to
constitute a part of the proceeds for purposes of this Security Instrument. The
provisions of this Section 3.03(b) shall survive the termination of this
Security Instrument by foreclosure, deed in lieu thereof or otherwise as a
consequence of the exercise of the rights and remedies of Lender hereunder after
a Default.
Section 3.04. Casualty Restoration. (a) (i) In the event of any damage to or
destruction of the Property, Borrower shall give prompt written notice to Lender
(which notice shall set forth Borrower’s good faith estimate of the cost of
repairing or restoring such damage or destruction, or if Borrower cannot
reasonably estimate the anticipated cost of restoration, Borrower shall
nonetheless give Lender prompt notice of the occurrence of such damage or
destruction, and will diligently proceed to obtain estimates to enable Borrower
to quantify the anticipated cost and time required for such restoration,
whereupon Borrower shall promptly notify Lender of such good faith estimate)
and, provided that restoration does not violate any Legal Requirements, Borrower
shall promptly commence and diligently prosecute to completion the repair,
restoration or rebuilding of the Property so damaged or destroyed to a condition
such that the Property shall be at least equal in value to that immediately
prior to the damage to the extent practicable, in full compliance with all Legal
Requirements and the provisions of all Leases, and in accordance with Section
3.04(b) below. Such repair, restoration or rebuilding of the Property are
sometimes hereinafter collectively referred to as the “Work”.
     (ii) Borrower shall not adjust, compromise or settle any claim for
Insurance Proceeds without the prior written consent of Lender, which shall not
be unreasonably withheld or delayed and Lender shall have the right, at
Borrower’s sole cost and expense, to participate in any settlement or adjustment
of Insurance Proceeds; provided, however, that, except during the continuance of
an Event of Default, Lender’s consent shall not be required with respect to the
adjustment, compromising or settlement of any claim for Insurance Proceeds in an
amount less than $250,000.
     (iii) Subject to Section 3.04(a)(iv), Lender shall apply any Insurance
Proceeds which it may receive towards the Work in accordance with
Section 3.04(b) and the other applicable sections of this Article III.
     (iv) If (A) a Default shall have occurred and is continuing, (B) Lender is
not reasonably satisfied that the Debt Service Coverage, after substantial
completion of the Work, will be at least equal to the Required Debt Service
Coverage, (C) more than thirty percent (30%) of the reasonably estimated fair
market value of the Property is damaged or destroyed, (D) more than 30% of the
rentable area of the Improvements is rendered untenantable, (E) Lender is not
reasonably satisfied that the Work can be completed six (6) months prior to
Maturity or (F) Lender is not reasonably satisfied that the Work can be
completed within twelve (12) months of the damage to or destruction of the
Property (each, a “Substantial Casualty”), Lender shall have the option, in its
sole discretion to apply any Insurance Proceeds it may receive pursuant to this
Security Instrument (less any reasonable out of pocket cost to Lender of
recovering and paying out such proceeds incurred pursuant to the terms hereof
and not otherwise reimbursed to Lender, including, without limitation,
reasonable attorneys’ fees and expenses) to the payment of the Debt, without any
prepayment fee or charge of any kind, or to allow such proceeds to be used for
the Work pursuant to the terms and subject to the conditions of Section 3.04(b)
hereof and the other applicable sections of this Article III.
     (v) In the event that Lender elects or is obligated hereunder to allow
Insurance Proceeds to be used for the Work, any excess proceeds remaining after
completion of such Work shall be applied to the payment of the Debt without any
prepayment fee or charge of any kind.
     (b) If any Condemnation Proceeds in accordance with Section 6.01(a), or any
Insurance Proceeds in accordance with Section 3.04(a), are to be applied to the
repair, restoration or rebuilding of the Property, then such

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proceeds shall be deposited into a segregated interest-bearing bank account at
the Bank, which shall be an Eligible Account, held by Lender and shall be paid
out from time to time to Borrower as the Work progresses (less any reasonable
out of pocket cost to Lender of recovering and paying out such proceeds,
including, without limitation, reasonable attorneys’ fees and costs allocable to
inspecting the Work and the plans and specifications therefor) subject to
Section 5.13 hereof and to all of the following conditions:
     (i) An Independent architect or engineer selected by Borrower and
reasonably acceptable to Lender (an “Architect” or “Engineer”) or a Person
otherwise reasonably acceptable to Lender, shall have delivered to Lender a
certificate estimating the cost of completing the Work, and, if the amount set
forth therein is more than the sum of the amount of Insurance Proceeds then
being held by Lender in connection with a casualty and amounts agreed to be paid
as part of a final settlement under the insurance policy upon or before
completion of the Work, Borrower shall have delivered to Lender (A) cash
collateral in an amount equal to such excess, (B) an unconditional, irrevocable,
clean sight draft letter of credit, in form, substance and issued by a bank
reasonably acceptable to Lender, in the amount of such excess and draws on such
letter of credit shall be made by Lender to make payments pursuant to this
Article III following exhaustion of the Insurance Proceeds therefor or (C) a
completion bond in form, substance and issued by a surety company reasonably
acceptable to Lender.
     (ii) If the cost of the Work is reasonably estimated by an Architect or
Engineer in a certification reasonably acceptable to Lender to be equal to or
exceed five percent (5%) of the Allocated Loan Amount, such Work shall be
performed under the supervision of an Architect or Engineer, it being understood
that the plans and specifications with respect thereto shall provide for Work so
that, upon completion thereof, the Property shall be at least equal in
replacement value and general utility to the Property prior to the damage or
destruction.
     (iii) Each request for payment shall be made on not less than ten
(10) days’ prior notice to Lender and shall be accompanied by a certificate of
an Architect or Engineer, or, if the Work is not required to be supervised by an
Architect or Engineer, by an Officer’s Certificate stating (A) that payment is
for Work completed in compliance with the plans and specifications, if required
under clause (ii) above, (B) that the sum requested is required to reimburse
Borrower for payments by Borrower to date, or is due to the contractors,
subcontractors, materialmen, laborers, engineers, architects or other Persons
rendering services or materials for the Work (giving a brief description of such
services and materials), and that when added to all sums previously paid out by
Lender does not exceed the value of the Work done to the date of such
certificate, (C) if the sum requested is to cover payment relating to repair and
restoration of personal property required or relating to the Property, that
title to the personal property items covered by the request for payment is
vested in Borrower (unless Borrower is lessee of such personal property), and
(D) that the Insurance Proceeds and other amounts deposited by Borrower held by
Lender after such payment is more than the estimated remaining cost to complete
such Work; provided, however, that if such certificate is given by an Architect
or Engineer, such Architect or Engineer shall certify as to clause (A) above,
and such Officer’s Certificate shall certify as to the remaining clauses above,
and provided, further, that Lender shall not be obligated to disburse such funds
if Lender determines, in Lender’s reasonable discretion, that Borrower shall not
be in compliance with this Section 3.04(b). Additionally, each request for
payment shall contain a statement signed by Borrower stating that the requested
payment is for Work satisfactorily done to date.
     (iv) Each request for payment shall be accompanied by waivers of lien, in
customary form and substance, covering that part of the Work for which payment
or reimbursement is being requested and, if required by Lender, a search
prepared by a title company or licensed abstractor, or by other evidence
reasonably satisfactory to Lender that there has not been filed with respect to
the Property any mechanic’s or other lien or instrument for retention of title
relating to any part of the Work not discharged of record. Additionally, as to
any personal property covered by the request for payment, Lender shall be
furnished with evidence of Borrower having incurred a payment obligation
therefor and such further evidence reasonably satisfactory to assure Lender that
UCC filings therefor provide a valid first lien on the personal property.

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     (v) Lender shall have the right to inspect the Work at all reasonable times
upon reasonable prior notice and may condition any disbursement of Insurance
Proceeds upon satisfactory compliance by Borrower with the provisions hereof.
Neither the approval by Lender of any required plans and specifications for the
Work nor the inspection by Lender of the Work shall make Lender responsible for
the preparation of such plans and specifications, or the compliance of such
plans and specifications of the Work, with any applicable law, regulation,
ordinance, covenant or agreement.
     (vi) Insurance Proceeds shall not be disbursed more frequently than once
every thirty (30) days.
     (vii) Until such time as the Work has been substantially completed, Lender
shall not be obligated to disburse up to ten percent (10%) of the cost of the
Work (the “Retention Amount”) to Borrower. Upon substantial completion of the
Work, Borrower shall send notice thereof to Lender and, subject to the
conditions of Section 3.04(b)(i)-(iv), Lender shall disburse one-half of the
Retention Amount to Borrower; provided, however, that the remaining one-half of
the Retention Amount shall be disbursed to Borrower when Lender shall have
received copies of any and all final certificates of occupancy or other
certificates, licenses and permits required for the ownership, occupancy and
operation of the Property in accordance with all Legal Requirements. Borrower
hereby covenants to diligently seek to obtain any such certificates, licenses
and permits.
     (viii) Upon failure on the part of Borrower promptly to commence the Work
or to proceed diligently and continuously to completion of the Work, which
failure shall continue after notice for thirty (30) days, Lender may apply any
Insurance Proceeds or Condemnation Proceeds it then or thereafter holds to the
payment of the Debt in accordance with the provisions of the Note; provided,
however, that Lender shall be entitled to apply at any time all or any portion
of the Insurance Proceeds or Condemnation Proceeds it then holds to the extent
necessary to cure any Event of Default.
     (c) If Borrower (i) within ninety (90) days (plus, if all approvals from
Governmental Authorities have not been obtained within such period and Borrower
has continuously and expeditiously attempted to obtain such approvals within
such time period, such additional period of time required to obtain approvals
from all Governmental Authorities up to one hundred twenty (120) days in total,
provided Borrower deposits with Lender an amount, as reasonably determined by
Lender, equal to the portion of the Required Debt Service Payment allocable to
the Cross-collateralized Property which was the subject of the casualty for each
additional thirty (30) day period) after the occurrence of any damage to the
Property or any portion thereof (or such shorter period as may be required under
any Major Space Lease) shall fail to submit to Lender for approval plans and
specifications for the Work (approved by the Architect and by all Governmental
Authorities whose approval is required), (ii) after any such plans and
specifications are approved by all Governmental Authorities, the Architect and
Lender, shall fail to promptly commence such Work or (iii) shall fail to
diligently prosecute such Work to completion, then, in addition to all other
rights available hereunder, at law or in equity, Lender, or any receiver of the
Property or any portion thereof, upon five (5) days prior notice to Borrower
(except in the event of emergency in which case no notice shall be required),
may (but shall have no obligation to) perform or cause to be performed such
Work, and may take such other steps as it reasonably deems advisable. Borrower
hereby waives, for Borrower, any claim, other than for gross negligence or
willful misconduct, against Lender and any receiver arising out of any act or
omission of Lender or such receiver pursuant hereto, and Lender may apply all or
any portion of the Insurance Proceeds (without the need to fulfill any other
requirements of this Section 3.04) to reimburse Lender and such receiver, for
all costs not reimbursed to Lender or such receiver upon demand together with
interest thereon at the Default Rate from the date such amounts are advanced
until the same are paid to Lender or the receiver.
     (d) Borrower hereby irrevocably appoints Lender as its attorney-in-fact,
coupled with an interest except as otherwise provided in this Security
Instrument, to collect and receive any Insurance Proceeds paid with respect to
any portion of the Property or the insurance policies required to be maintained
hereunder, and to endorse any checks, drafts or other instruments representing
any Insurance Proceeds whether payable by reason of loss thereunder or
otherwise.

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     (e) Notwithstanding the foregoing provisions of this Section 3.04, upon the
occurrence of any damage to or destruction of the Property, provided that such
damage or destruction is not a Substantial Casualty, if in Lender’s sole and
absolute judgment the cost of repair of or restoration to the Property required
as a result of any damage or destruction is less than $250,000 in the aggregate
and the Work can be completed in less than one hundred twenty (120) days (but in
no event beyond the date which is six (6) months prior to the Maturity Date),
then Lender, upon written request by Borrower, shall permit Borrower to apply
for and receive the Insurance Proceeds directly from the insurer (and Lender
shall advise the insurer to pay over such Insurance Proceeds directly to
Borrower), to the extent required to pay for any such Work, with any excess
thereof to be promptly paid by Borrower to Lender to be applied against the
Debt.
     Section 3.05. Compliance with Insurance Requirements. Borrower promptly
shall comply with, and shall cause the Property to comply with, all Insurance
Requirements, even if such compliance requires structural changes or
improvements or would result in interference with the use or enjoyment of the
Property or any portion thereof provided Borrower shall have a right to contest
in good faith and with diligence such Insurance Requirements provided (a) no
Default shall exist during such contest and such contest shall not subject the
Property or any portion thereof to any lien or affect the priority of the lien
of this Security Instrument, (b) failure to comply with such Insurance
Requirements will not subject Lender or any of its agents, employees, officers
or directors to any civil or criminal liability, (c) such contest will not cause
any reduction in insurance coverage, (d) such contest shall not affect the
ownership, use or occupancy of the Property, (e) the Property or any part
thereof or any interest therein shall not be in any danger of being sold,
forfeited or lost by reason of such contest by Borrower, (f) Borrower has given
Lender prompt notice of such contest and, upon request by Lender from time to
time, notice of the status of such contest by Borrower and/or information of the
continuing satisfaction of the conditions set forth in clauses (a) through
(e) of this Section 3.05, (g) upon a final determination of such contest,
Borrower shall promptly comply with the requirements thereof, and (h) prior to
and during such contest, Borrower shall furnish to Lender security reasonably
satisfactory to Lender, in its reasonable discretion, against loss or injury by
reason of such contest or the non-compliance with such Insurance Requirement
(and if such security is cash, Lender shall deposit the same in an
interest-bearing account and interest accrued thereon, if any, shall be deemed
to constitute a part of such security for purposes of this Security Instrument,
but Lender (i) makes no representation or warranty as to the rate or amount of
interest, if any, which may accrue thereon and shall have no liability in
connection therewith and (ii) shall not be deemed to be a trustee or fiduciary
with respect to its receipt of any such security and any such security may be
commingled with other monies of Lender). If Borrower shall use the Property or
any portion thereof in any manner which could permit the insurer to cancel any
insurance required to be provided hereunder, Borrower immediately shall obtain a
substitute policy which shall satisfy the requirements of this Security
Instrument and which shall be effective on or prior to the date on which any
such other insurance policy shall be canceled. Borrower shall not by any action
or omission invalidate any insurance policy required to be carried hereunder
unless such policy is replaced as aforesaid, or materially increase the premiums
on any such policy above the normal premium charged for such policy. Borrower
shall reasonably cooperate with Lender in obtaining for Lender the benefits of
any Insurance Proceeds lawfully or equitably payable to Lender in connection
with the transaction contemplated hereby.
     Section 3.06. Event of Default During Restoration. Notwithstanding anything
to the contrary contained in this Security Instrument including, without
limitation, the provisions of this Article III, if, at the time of any casualty
affecting the Property or any part thereof, or at any time during any Work, or
at any time that Lender is holding or is entitled to receive any Insurance
Proceeds pursuant to this Security Instrument, either a Default of which
Borrower has been given notice or an Event of Default exists and is continuing,
Lender shall then have no obligation to make such proceeds available for Work
and Lender shall have the right and option, to be exercised in its sole and
absolute discretion and election, with respect to the Insurance Proceeds, either
to retain and apply such proceeds in reimbursement for the actual out of pocket
costs, fees and expenses incurred by Lender in accordance with the terms hereof
in connection with the adjustment of the loss and, after the occurrence of an
Event of Default, any balance toward payment of the Debt in such priority and
proportions as Lender, in its sole discretion, shall deem proper, or towards the
Work, upon such terms and conditions as Lender shall determine, or to cure such
Event of Default, or to any one or more of the foregoing as Lender, in its sole
and absolute discretion, may determine. If Lender shall receive and retain such
Insurance Proceeds, the lien of this Security Instrument shall be reduced only
by the amount thereof received, after reimbursement to Lender of expenses of
collection, and actually applied by Lender in reduction of the principal sum
payable under the Note in accordance with the Note.

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     Section 3.07. Application of Proceeds to Debt Reduction. (a) No damage to
the Property, or any part thereof, by fire or other casualty whatsoever, whether
such damage be partial or total, shall relieve Borrower from its liability to
pay in full the Debt and to perform its obligations under this Security
Instrument and the other Loan Documents.
     (b) If any Insurance Proceeds are applied to reduce the Debt, Lender shall
apply the same in accordance with the provisions of the Note.
ARTICLE IV: IMPOSITIONS
     Section 4.01. Payment of Impositions, Utilities and Taxes, etc. (a) Subject
to Section 5.06 of this Security Instrument, Borrower shall pay or cause to be
paid all Impositions at least five (5) days prior to the date upon which any
fine, penalty, interest or cost for nonpayment is imposed, and furnish to
Lender, upon request, receipted bills of the appropriate taxing authority or
other documentation reasonably satisfactory to Lender evidencing the payment
thereof. If Borrower shall fail to pay any Imposition in accordance with this
Section and is not contesting or causing a contesting of such Imposition in
accordance with Section 4.04 hereof, or if there are insufficient funds in the
Basic Carrying Costs Escrow Account to pay any Imposition, Lender shall have the
right, but shall not be obligated, to pay that Imposition, and Borrower shall
repay to Lender, on demand, any amount paid by Lender, with interest thereon at
the Default Rate from the date of the advance thereof to the date of repayment,
and such amount shall constitute a portion of the Debt secured by this Security
Instrument and the other Cross-collateralized Mortgages.
     (b) Borrower shall, prior to the date upon which any fine, penalty,
interest or cost for the nonpayment is imposed, pay or cause to be paid all
charges for electricity, power, gas, water and other services and utilities in
connection with the Property, and shall, upon Lender’s request, deliver to
Lender receipts or other documentation reasonably satisfactory to Lender
evidencing payment thereof. If Borrower shall fail to pay any amount required to
be paid by Borrower pursuant to this Section 4.01 and is not contesting such
charges in accordance with Section 4.04 hereof, Lender shall have the right, but
shall not be obligated, to pay that amount, and Borrower will repay to Lender,
on demand, any amount paid by Lender with interest thereon at the Default Rate
from the date of the advance thereof to the date of repayment, and such amount
shall constitute a portion of the Debt secured by this Security Instrument and
the other Cross-collateralized Mortgages.
     (c) Borrower shall pay all taxes, charges, filing, registration and
recording fees, excises and levies imposed upon Lender by reason of or in
connection with its ownership of any Loan Document or any other instrument
related thereto, or resulting from the execution, delivery and recording of, or
the lien created by, or the obligation evidenced by, any of them, other than
income, franchise and other similar taxes imposed on Lender and shall pay all
corporate stamp taxes, if any, and other taxes, required to be paid on the Loan
Documents. If Borrower shall fail to make any such payment within ten (10) days
after written notice thereof from Lender, Lender shall have the right, but shall
not be obligated, to pay the amount due, and Borrower shall reimburse Lender
therefor, on demand, with interest thereon at the Default Rate from the date of
the advance thereof to the date of repayment, and such amount shall constitute a
portion of the Debt secured by this Security Instrument and the other
Cross-collateralized Mortgages.
     Section 4.02. Deduction from Value. In the event of the passage after the
date of this Security Instrument of any Legal Requirement deducting from the
value of the Property for the purpose of taxation, any lien thereon or changing
in any way the Legal Requirements now in force for the taxation of this Security
Instrument, the other Cross-collateralized Mortgages and/or the Debt for
federal, state or local purposes, or the manner of the operation of any such
taxes so as to adversely affect the interest of Lender, or imposing any tax or
other charge on any Loan Document, then Borrower will pay such tax, with
interest and penalties thereon, if any, within the statutory period. In the
event the payment of such tax or interest and penalties by Borrower would be
unlawful, or taxable to Lender or unenforceable or provide the basis for a
defense of usury, then in any such event, Lender shall have the option, by
written notice of not less than thirty (30) days, to declare the Debt
immediately due and payable, with no prepayment fee or charge of any kind.

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     Section 4.03. No Joint Assessment. Borrower shall not consent to or
initiate the joint assessment of the Premises or the Improvements (a) with any
other real property constituting a separate tax lot and Borrower represents and
covenants that the Premises and the Improvements are and shall remain a separate
tax lot or (b) with any portion of the Property which may be deemed to
constitute personal property, or any other procedure whereby the lien of any
taxes which may be levied against such personal property shall be assessed or
levied or charged to the Property as a single lien.
     Section 4.04. Right to Contest. Borrower shall have the right, after prior
notice to Lender, at its sole expense, to contest by appropriate legal
proceedings diligently conducted in good faith, without cost or expense to
Lender or any of its agents, employees, officers or directors, the validity,
amount or application of any Imposition or any charge described in Section
4.01(b), provided that (a) no Default or Event of Default shall exist during
such proceedings and such contest shall not (unless Borrower shall comply with
clause (d) of this Section 4.04) subject the Property or any portion thereof to
any lien or affect the priority of the lien of this Security Instrument,
(b) failure to pay such Imposition or charge will not subject Lender or any of
its agents, employees, officers or directors to any civil or criminal liability,
(c) the contest suspends enforcement of the Imposition or charge (unless
Borrower first pays the Imposition or charge), (d) prior to and during such
contest, Borrower shall furnish to Lender security satisfactory to Lender, in
its reasonable discretion, against loss or injury by reason of such contest or
the non-payment of such Imposition or charge (and if such security is cash,
Lender may deposit the same in an interest-bearing account and interest accrued
thereon, if any, shall be deemed to constitute a part of such security for
purposes of this Security Instrument, but Lender (i) makes no representation or
warranty as to the rate or amount of interest, if any, which may accrue thereon
and shall have no liability in connection therewith and (ii) shall not be deemed
to be a trustee or fiduciary with respect to its receipt of any such security
and any such security may be commingled with other monies of Lender), (e) such
contest shall not affect the ownership, use or occupancy of the Property,
(f) the Property or any part thereof or any interest therein shall not be in any
danger of being sold, forfeited or lost by reason of such contest by Borrower,
(g) Borrower has given Lender notice of the commencement of such contest and
upon request by Lender, from time to time, notice of the status of such contest
by Borrower and/or confirmation of the continuing satisfaction of clauses
(a) through (f) of this Section 4.04, and (h) upon a final determination of such
contest, Borrower shall promptly comply with the requirements thereof. Upon
completion of any contest, Borrower shall immediately pay the amount due, if
any, and deliver to Lender proof of the completion of the contest and payment of
the amount due, if any, following which Lender shall return the security, if
any, deposited with Lender pursuant to clause (d) of this Section 4.04. Borrower
shall not pay any Imposition in installments unless permitted by applicable
Legal Requirements, and shall, upon the request of Lender, deliver copies of all
notices and bills relating to any Imposition or other charge covered by this
Article IV to Lender.
     Section 4.05. No Credits on Account of the Debt. Borrower will not claim or
demand or be entitled to any credit or credits on account of the Debt for any
part of the Impositions assessed against the Property or any part thereof and no
deduction shall otherwise be made or claimed from the taxable value of the
Property, or any part thereof, by reason of this Security Instrument or the
Debt. In the event such claim, credit or deduction shall be required by Legal
Requirements, Lender shall have the option, by written notice of not less than
thirty (30) days, to declare the Debt immediately due and payable, and Borrower
hereby agrees to pay such amounts not later than thirty (30) days after such
notice.
     Section 4.06. Documentary Stamps. If, at any time, the United States of
America, any State or Commonwealth thereof or any subdivision of any such State
shall require revenue or other stamps to be affixed to the Note, this Security
Instrument or any other Loan Document, or impose any other tax or charges on the
same, Borrower will pay the same, with interest and penalties thereon, if any.
ARTICLE V: CENTRAL CASH MANAGEMENT
     Section 5.01. Cash Flow. Borrower hereby acknowledges and agrees that
(a) the Rents (which for the purposes of this Section 5.01 shall not include
security deposits from tenants under Leases held by Borrower and not applied
towards Rent) derived from the Property, (b) Loss Proceeds and (c) all proceeds
of the Rate Cap Agreement shall be utilized to fund the Sub-Accounts. Borrower
shall cause Manager to collect all security deposits from tenants under valid
Leases, which shall be held by Manager, as agent for Borrower, in accordance
with applicable

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law (the “Security Deposit Account”). Borrower shall notify Lender of any
security deposits held as letters of credit and, upon Lender’s request, such
letters of credit shall be promptly delivered to Lender. Borrower shall have no
right to withdraw funds from the Security Deposit Account; provided that, prior
to the occurrence of an Event of Default, Borrower may withdraw funds from the
Security Deposit Account to refund or apply security deposits as required by the
Leases or by applicable Legal Requirements. After the occurrence of an Event of
Default, all withdrawals from the Security Deposit Account must be approved by
Lender. Borrower shall cause all Rent which is due and payable to Borrower
pursuant to the terms of the Leases (other than security deposits under valid
Leases which are held in the Security Deposit Account) to be paid by check drawn
on a bank located in the United States of America or through automated clearing
house funds (“ACH”) or by Federal wire directly to the Rent Account. Borrower
shall give each tenant under a Lease an irrevocable direction in the form of
Exhibit E attached hereto and made a part hereof to deliver all rent payments
made by tenants and other payments constituting Rent directly to the Rent
Account and shall deliver copies of such letters to Lender, together with an
Officer’s Certificate certifying that such letters will be delivered to each
tenant under the Leases within two (2) Business Days of the Closing Date.
Borrower shall cause Manager to give to the bank in which the Rent Account is
located an irrevocable written instruction, in form and substance acceptable to
Lender, that all funds deposited in such account shall be automatically
transferred through ACH or by Federal wire to the Central Account prior to 3:00
p.m. (New York City time) on a daily basis. Within two (2) Business Days of the
Closing Date, Borrower shall deliver to Lender a copy of the irrevocable notice
which Borrower has delivered to the bank in which the Rent Account is located
pursuant to the provisions of this Section 5.01, the receipt of which is
acknowledged in writing by such bank. Notwithstanding the foregoing, if any Rent
is received by Borrower or Manager, then (a) such amounts shall be held in trust
for the benefit, and as the property, of Lender, (b) such amounts shall not be
commingled with any other funds or property of Borrower or Manager and
(c) Borrower or Manager shall deposit such amounts in the Rent Account within
one (1) Business Day of receipt. Upon execution of any Space Lease after the
Closing Date, Borrower shall deliver to Lender a copy of the irrevocable
direction letter referred to above, the receipt of which has been acknowledged
by the tenant under such Space Lease, unless such instruction is included in the
applicable Space Lease and a copy of such executed Space Lease has been
delivered to Lender. Lender may elect to change the financial institution in
which the Central Account shall be maintained; however, Lender shall give
Borrower and the bank in which the Rent Account is located not fewer than five
(5) Business Days’ prior notice of such change. Neither Borrower nor Manager
shall change such bank or the Rent Account without the prior written consent of
Lender. All fees and charges of the bank(s) in which the Rent Account and
Central Account are located shall be paid by Borrower.
     Section 5.02. Establishment of Accounts. Lender has established the Escrow
Accounts and the Central Account in the name of Borrower for the benefit of
Lender and the Rent Account in the joint name of Borrower and Lender, as secured
party. The Escrow Accounts, the Rent Account and the Central Account shall be
under the sole dominion and control of Lender and funds held therein shall not
constitute trust funds. Borrower hereby irrevocably directs and authorizes
Lender to withdraw funds from the Rent Account, and to deposit into and withdraw
funds from the Central Account and the Escrow Accounts, all in accordance with
the terms and conditions of this Security Instrument. Borrower shall have no
right of withdrawal in respect of the Rent Account, the Central Account or the
Escrow Accounts except as specifically provided herein. Each transfer of funds
to be made hereunder shall be made only to the extent that funds are on deposit
in the Rent Account, the Central Account or the affected Sub-Account or Escrow
Account, and Lender shall have no responsibility to make additional funds
available in the event that funds on deposit are insufficient. The Central
Account shall contain the Basic Carrying Costs Sub-Account, the Debt Service
Payment Sub-Account, the Recurring Replacement Reserve Sub-Account, the
Operation and Maintenance Expense Sub-Account, and the Curtailment Reserve
Sub-Account, each of which accounts shall be Eligible Accounts or book-entry
sub-accounts of an Eligible Account (each a “Sub-Account” and collectively, the
“Sub-Accounts”) to which certain funds shall be allocated and from which
disbursements shall be made pursuant to the terms of this Security Instrument.
Sums held in the Sub-Accounts and the Escrow Accounts may be commingled with
other monies held by Lender.
     Section 5.03. Permitted Investments. All sums deposited into the Operation
and Maintenance Expense Escrow Account, the Curtailment Reserve Escrow Account,
the Recurring Replacement Reserve Escrow Account, the Debt Service Reserve
Escrow Account, the Reletting Reserve Escrow Account, the Underwritten Rent
Escrow Account and the Engineering Escrow Account shall be held in an interest
bearing account but Borrower acknowledges that Lender makes no representation or
warranty as to the rate of return. Lender shall not have any

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liability for any loss in investments of funds in the Operation and Maintenance
Expense Escrow Account, the Curtailment Reserve Escrow Account, the Recurring
Replacement Reserve Escrow Account, the Debt Service Reserve Escrow Account, the
Reletting Reserve Escrow Account, the Underwritten Rent Escrow Account or the
Engineering Escrow Account and no such loss shall affect Borrower’s obligation
to fund, or liability for funding, the Central Account and each Sub-Account and
Escrow Account, as the case may be. Borrower agrees that Lender shall include
all such earnings on the Recurring Replacement Reserve Escrow Account, the Debt
Service Reserve Escrow Account, the Reletting Reserve Escrow Account, the
Underwritten Rent Escrow Account, the Engineering Escrow Account, the Operation
and Maintenance Expense Escrow Account and the Curtailment Reserve Escrow
Account as income of Borrower (and, if Borrower is a partnership, limited
liability company or other pass-through entity, the partners, members or
beneficiaries of Borrower, as the case may be) for federal and applicable state
and local tax purposes. All interest paid or other earnings on funds deposited
into the Operation and Maintenance Expense Escrow Account, the Curtailment
Reserve Escrow Account, the Recurring Replacement Reserve Escrow Account, the
Debt Service Reserve Escrow Account, the Reletting Reserve Escrow Account, the
Underwritten Rent Escrow Account and the Engineering Escrow Account made
hereunder shall be deposited into the Central Account and shall be allocated to
the Operation and Maintenance Expense Escrow Account, the Curtailment Reserve
Escrow Account, the Recurring Replacement Reserve Escrow Account, the Reletting
Reserve Escrow Account, the Debt Service Reserve Escrow Account, the
Underwritten Rent Escrow Account or the Engineering Escrow Account, as
applicable. Borrower shall pay all costs, fees and expenses incurred in
connection with the establishment and maintenance of, or the disbursement from,
the Operation and Maintenance Expense Escrow Account, the Curtailment Reserve
Escrow Account, the Recurring Replacement Reserve Escrow Account, the Debt
Service Reserve Escrow Account, the Reletting Reserve Escrow Account, the
Underwritten Rent Escrow Account and the Engineering Escrow Account, which sums
shall be due and payable by Borrower upon demand and may be deducted by Lender
from amounts on deposit in the Central Account or the Escrow Accounts.
     Section 5.04. Intentionally Omitted.
     Section 5.05. Monthly Funding of Sub-Accounts and Escrow Accounts. (a) On
or before each Payment Date during the term of the Loan, commencing on the first
(1st) Payment Date occurring after the month in which the Loan is initially
funded, Borrower shall pay or cause to be paid to the Central Account all sums
required to be deposited in the Sub-Accounts pursuant to this Section 5.05(a)
and all funds transferred or deposited into the Central Account shall be
allocated among the Sub-Accounts as follows and in the following priority:
     (i) first, to the Basic Carrying Costs Sub-Account, until an amount equal
to the Basic Carrying Costs Monthly Installment for such Payment Date has been
allocated to the Basic Carrying Costs Sub-Account;
     (ii) second, but only during an O&M Operative Period, to the Operation and
Maintenance Expense Sub-Account in an amount equal to the Cash Expenses for the
Interest Accrual Period ending immediately prior to such Payment Date pursuant
to the related Approved Annual Budget;
     (iii) third, but only during an O&M Operative Period, to the Operation and
Maintenance Expense Sub-Account in an amount equal to the amount, if any, of the
Net Capital Expenditures for the Interest Accrual Period ending immediately
prior to such Payment Date pursuant to the related Approved Annual Budget;
     (iv) fourth, to the Debt Service Payment Sub-Account, until an amount equal
to the Required Debt Service Payment for such Payment Date has been allocated to
the Debt Service Payment Sub-Account; and
     (v) fifth, to the Recurring Replacement Reserve Sub-Account, until an
amount equal to the Recurring Replacement Reserve Monthly Installment for such
Payment Date has been allocated to the Recurring Replacement Reserve
Sub-Account.

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     (vi) sixth, but only during an O&M Operative Period, to the Operation and
Maintenance Expense Sub-Account in an amount equal to the amount, if any, of the
Extraordinary Expenses approved by Lender for the Interest Accrual Period ending
immediately prior to such Payment Date; and
     (vii) seventh, but only during an O&M Operative Period, the balance, if
any, to the Curtailment Reserve Sub-Account.
     Provided that no Event of Default has occurred and is continuing, Lender
agrees that in each Interest Accrual Period any amounts deposited into or
remaining in the Central Account after the Sub-Accounts have been funded as set
forth in this Section 5.05(a) with respect to such Interest Accrual Period and
any periods prior thereto, shall be disbursed by Lender to Borrower on each
Payment Date applicable to such Interest Accrual Period. The balance of the
funds distributed to Borrower after payment of all Operating Expenses then due
and payable by or on behalf of Borrower may be retained by Borrower. After the
occurrence, and during the continuance, of an Event of Default, no funds held in
the Central Account shall be distributed to, or withdrawn by, Borrower, and
Lender shall have the right to apply all or any portion of the funds held in the
Central Account or any Sub-Account or any Escrow Account to the Debt in Lender’s
sole discretion.
     (b) On each Payment Date, (i) sums held in the Basic Carrying Costs
Sub-Account shall be transferred to the Basic Carrying Costs Escrow Account,
(ii) sums held in the Debt Service Payment Sub-Account, together with any
amounts deposited into the Central Account that are either (x) Loss Proceeds
that Lender has elected to apply to reduce the Debt in accordance with the terms
of Article III hereof or (y) excess Loss Proceeds remaining after the completion
of any restoration required hereunder, shall be transferred to Lender to be
applied towards the Required Debt Service Payment, (iii) sums held in the
Recurring Replacement Reserve Sub-Account shall be transferred to the Recurring
Replacement Reserve Escrow Account, (iv) sums held in the Operation and
Maintenance Expense Sub-Account shall be transferred to the Operation and
Maintenance Expense Escrow Account and (v) sums held in the Curtailment Reserve
Sub-Account shall be transferred to the Curtailment Reserve Escrow Account.
     Section 5.06. Payment of Basic Carrying Costs. Borrower hereby agrees to
pay all Basic Carrying Costs (without regard to the amount of money in the Basic
Carrying Costs Sub-Account or the Basic Carrying Costs Escrow Account). At least
ten (10) Business Days prior to the due date of any Basic Carrying Costs, and
not more frequently than once each month, Borrower may notify Lender in writing
and request that Lender pay such Basic Carrying Costs on behalf of Borrower on
or prior to the due date thereof, and, provided that no Event of Default has
occurred and that there are sufficient funds available in the Basic Carrying
Costs Escrow Account, Lender shall make such payments out of the Basic Carrying
Costs Escrow Account before same shall be delinquent. Together with each such
request, Borrower shall furnish Lender with bills and all other documents
necessary, as reasonably determined by Lender, for the payment of the Basic
Carrying Costs which are the subject of such request. Borrower’s obligation to
pay (or cause Lender to pay) Basic Carrying Costs pursuant to this Security
Instrument shall include, to the extent permitted by applicable law, Impositions
resulting from future changes in law which impose upon Lender an obligation to
pay any property taxes or other Impositions or which otherwise adversely affect
Lender’s interests.
     Provided that no Event of Default shall have occurred, all funds deposited
into the Basic Carrying Costs Escrow Account shall be held by Lender pursuant to
the provisions of this Security Instrument and shall be applied in payment of
Basic Carrying Costs in accordance with the terms hereof. Should an Event of
Default occur, the sums on deposit in the Basic Carrying Costs Sub-Account and
the Basic Carrying Costs Escrow Account may be applied by Lender in payment of
any Basic Carrying Costs or may be applied to the payment of the Debt or any
other charges affecting all or any portion of the Cross-collateralized
Properties as Lender in its sole discretion may determine; provided, however,
that no such application shall be deemed to have been made by operation of law
or otherwise until actually made by Lender as herein provided.
     Section 5.07. Reletting Reserve Escrow Account. (a) Borrower has deposited
with Lender on the Closing Date an amount equal to the Initial Reletting Reserve
Deposit. Borrower hereby agrees to pay all Reletting Expenditures (without
regard to the amount of money then available in the Reletting Reserve Escrow
Account).

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Upon the execution of any Space Lease with respect to which Borrower is
obligated to undertake or pay for any Reletting Expenditures, Borrower shall
submit to Lender (i) an itemized line item budget (a “Budget”) reasonably
acceptable to Lender outlining all of the expenses relating to said Reletting
Expenditures, (ii) a copy of the signed Lease for which said Reletting
Expenditures relate, in each case which has a term of at least three (3) years
and which is otherwise in compliance with the provisions of this Security
Instrument, (iii) a copy of the plans and specifications for the proposed
Reletting Expenditures and (iv) an Officer’s Certificate with respect to the
items referred to in clauses (i) through (iii) and setting forth an anticipated
completion date for the Reletting Expenditures. Thereafter, provided that no
Event of Default has occurred and is continuing and that Lender has received a
written request from Borrower for reimbursement of any costs incurred in
connection with any Reletting Expenditures, together with (i) unconditional lien
waivers, (ii) a statement from an Architect or Engineer, indicating that the
Reletting Expenditures in question have been completed in compliance with all
Legal Requirements, (iii) copies of bills for such Reletting Expenditures marked
“paid in full”, “paid” or other words of similar import, (iv) upon final
completion of such Reletting Expenditures, tenant estoppel certificates from the
tenant leasing space in the Premises for whom the Reletting Expenditures are
being made which indicate, among other things, that the tenant under such Space
Lease has been in occupancy and open for business for at least one full calendar
month and paid all rents due under the Space Lease without abatement,
suspension, deferment, diminution, reduction or other allowances for at least
one full calendar month, and (v) such other documentation as may be reasonably
requested by Lender to establish that the Reletting Expenditures or portion
thereof which are the subject of such request have been completed, all of which
are reasonably acceptable in form and substance to Lender, Lender shall disburse
to Borrower any actual expenses incurred in connection with such Reletting
Expenditures which were set forth in the approved Budget provided that Borrower
may make a request for disbursement of sums from the Reletting Reserve Escrow
Account no more than once during any month and any request shall be in a minimum
amount of $20,000. With respect to any Reletting Expenditures which relate to
brokerage commissions, upon the receipt of (i) copies of bills for such
Reletting Expenditures marked “paid in full”, “paid” or other words of similar
import, (ii) tenant estoppel certificates from the tenant leasing space in the
Premises for which Lease the brokerage commissions are due which indicate, among
other things, that the tenant under such Space Lease has been in occupancy and
open for business for at least one full calendar month and paid all rents due
under the Space Lease without abatement, suspension, deferment, diminution,
reduction or other allowances for at least one full calendar month and (iii) a
copy of the signed Lease for which said Reletting Expenditures relate, in each
case which has a term of at least three (3) years, all of which are reasonably
acceptable to Lender, Lender shall disburse to Borrower any actual expenses
incurred in connection with such Reletting Expenditures out of the Reletting
Reserve Escrow Account. Lender shall not be required to make any disbursements
out of the Reletting Reserve Escrow Account if an Event of Default shall have
occurred and is continuing, if more than one such request is made in any month
or if sufficient funds are not available in the Reletting Reserve Escrow
Account.
     (b) Provided that no Event of Default shall have occurred, all funds
deposited into the Reletting Reserve Escrow Account relating to Reletting
Expenditures shall be held by Lender pursuant to the provisions of this Security
Instrument and shall be applied in payment of Reletting Expenditures. Should an
Event of Default occur, the sums on deposit in the Reletting Reserve Escrow
Account may be applied by Lender in payment of any Reletting Expenditures or may
be applied to the payment of the Debt or any other charges affecting all or any
portion of the Cross-collateralized Properties, as Lender, in its sole
discretion, may determine; provided, however, that no such application shall be
deemed to have been made by operation of law or otherwise until actually made by
Lender as herein provided.
     (c) In the event that Borrower holds any letters of credit as security for
obligations under Leases, within thirty (30) days (or if any letters of credit
may expire within such thirty (30) day period, prior to the expiration of such
letter of credit) of the occurrence of a monetary event of default or a material
non-monetary event of default under the related Lease, Borrower shall present
for draw and use all commercially reasonable efforts to draw the full amount
which it is entitled to draw under such letter of credit; provided, however,
Borrower shall not be obliged to draw on such letter of credit if (i) Borrower
has submitted to Lender a plan of action to resolve any event of default which
gave rise to Borrower’s right to draw on the applicable letter of credit and
Lender shall, in its reasonable discretion, have consented to such plan or
Borrower is precluded from making a draw on the applicable letter of credit by
applicable law, and (ii) the term of such letter of credit will not expire prior
to the implementation of such submitted plan. Borrower shall deliver to Lender
all security deposits which are applied against sums due to

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Borrower under Leases (including, without limitation, all sums drawn on letters
of credit held as security for obligations of tenants under Leases) and Rent
paid by or on behalf of any lessee under a Space Lease in whole or partial
consideration for the termination, cancellation or surrender of any Space Lease
including, without limitation, surrender or cancellation fees, buy-out fees or
reimbursements for tenant improvements or leasing commissions, within five
(5) Business Days of receipt thereof and all such sums shall be held in the
Reletting Reserve Escrow Account and shall be disbursed therefrom as set forth
above.
     Section 5.08. Recurring Replacement Reserve Escrow Account. Borrower hereby
agrees to pay all Recurring Replacement Expenditures with respect to the
Property (without regard to the amount of money then available in the Recurring
Replacement Reserve Sub-Account or the Recurring Replacement Reserve Escrow
Account). Provided that (a) Lender has received written notice from Borrower at
least five (5) Business Days prior to the due date of any payment relating to
Recurring Replacement Expenditures and not more frequently than once each month,
and further provided that no Event of Default has occurred, (b) there are
sufficient funds available in the Recurring Replacement Reserve Escrow Account
and (c) Borrower shall have theretofore furnished Lender with lien waivers,
copies of bills, invoices and other reasonable documentation as may be required
by Lender to establish that the Recurring Replacement Expenditures which are the
subject of such request represent amounts due for completed or partially
completed capital work and improvements performed at the Property, Lender shall
make such payments out of the Recurring Replacement Reserve Escrow Account.
     Provided that no Event of Default shall have occurred, all funds deposited
into the Recurring Replacement Reserve Escrow Account shall be held by Lender
pursuant to the provisions of this Security Instrument and shall be applied in
payment of Recurring Replacement Expenditures. Should an Event of Default occur,
the sums on deposit in the Recurring Replacement Reserve Sub-Account and the
Recurring Replacement Reserve Escrow Account may be applied by Lender in payment
of any Recurring Replacement Expenditures or may be applied to the payment of
the Debt or any other charges affecting all or any portion of the
Cross-collateralized Properties, as Lender in its sole discretion may determine;
provided, however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.
     Section 5.09. Operation and Maintenance Expense Escrow Account.Borrower
hereby agrees to pay all Operating Expenses with respect to the Property
(without regard to the amount of money then available in the Operation and
Maintenance Expense Sub-Account or the Operation and Maintenance Expense Escrow
Account). All funds allocated to the Operation and Maintenance Expense Escrow
Account shall be held by Lender pursuant to the provisions of this Security
Instrument. Any sums held in the Operation and Maintenance Expense Escrow
Account shall be disbursed to Borrower within five (5) Business Days of receipt
by Lender from Borrower of (a) a written request for such disbursement which
shall indicate the Operating Expenses (exclusive of Basic Carrying Costs) for
which the requested disbursement is to pay and (b) if requested by Lender, an
Officer’s Certificate stating that no Operating Expenses with respect to the
Property are more than sixty (60) days past due; provided, however, in the event
that Borrower legitimately disputes any invoice for an Operating Expense, and
(i) no Event of Default has occurred and is continuing hereunder, (ii) Borrower
shall have set aside adequate reserves for the payment of such disputed sums
together with all interest and late fees thereon, (iii) Borrower has complied
with all the requirements of this Security Instrument relating thereto, and
(iv) the contesting of such sums shall not constitute a default under any other
instrument, agreement, or document to which Borrower is a party, then Borrower
may, after certifying to Lender as to items (i) through (iv) hereof, contest
such invoice. Together with each such request, Borrower shall furnish Lender
with bills and all other documents necessary for the payment of the Operating
Expenses which are the subject of such request. Borrower may request a
disbursement from the Operation and Maintenance Expense Escrow Account no more
than one (1) time per calendar month. Should an Event of Default occur and be
continuing, the sums on deposit in the Operation and Maintenance Expense
Sub-Account or the Operation and Maintenance Expense Escrow Account may be
applied by Lender in payment of any Operating Expenses for the
Cross-collateralized Properties or may be applied to the payment of the Debt or
any other charges affecting all or any portion of the Property as Lender, in its
sole discretion, may determine; provided, however, that no such application
shall be deemed to have been made by operation of law or otherwise until
actually made by Lender as herein provided.

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     Section 5.10. Rate Cap Agreement. (a) Borrower shall maintain the Rate Cap
Agreement at all times during the term of the Loan and pay all fees, charges and
expenses incurred in connection therewith. Borrower shall comply with all of its
obligations under the terms of the Rate Cap Agreement. All amounts paid by the
issuer of the Rate Cap Agreement (the “Counterparty”) to Borrower or Lender
shall be deposited immediately into the Central Account. Borrower shall take all
actions reasonably requested by Lender to enforce Lender’s rights under the Rate
Cap Agreement in the event of a default by the Counterparty. In the event that
(a) the long-term unsecured debt obligations of the Counterparty are downgraded
by the Rating Agency below “A+” or its equivalent or (b) the Counterparty shall
default in any of its obligations under the Rate Cap Agreement, Borrower shall,
at the request of Lender, promptly but in all events within five (5) Business
Days, replace the Rate Cap Agreement with an agreement having identical payment
terms and maturity as the Rate Cap Agreement and which is otherwise in form and
substance substantially similar to the Rate Cap Agreement and otherwise
acceptable to Lender with a cap provider, the long-term unsecured debt of which
is rated at least “AA-” (or its equivalent) by each Rating Agency, or which will
allow each Rating Agency to reaffirm their then current ratings of all rated
certificates issued in connection with the Securitization. In the event that
Borrower fails to maintain the Rate Cap Agreement as provided in this
Section 5.10, Lender may purchase the Rate Cap Agreement and the cost incurred
by Lender in connection therewith shall be paid by Borrower to Lender with
interest thereon at the Default Rate from the date such cost is incurred until
such cost is paid by Borrower to Lender.
     Section 5.11. Curtailment Reserve Escrow Account. Funds deposited into the
Curtailment Reserve Escrow Account shall be held by Lender in the Curtailment
Reserve Escrow Account as additional security for the Loan until the Loan has
been paid in full. Should an Event of Default occur, the sums on deposit in the
Curtailment Reserve Sub-Account and the Curtailment Reserve Escrow Account may
be applied by Lender to the payment of the Debt or other charges affecting all
or any portion of the Cross-collateralized Properties, as Lender, in its sole
discretion, may determine; provided, however, that no such application shall be
deemed to have been made by operation of law or otherwise until actually made by
Lender as herein provided.
     Section 5.12. Performance of Engineering Work. (a) Borrower has deposited
with Lender on the Closing Date an amount equal to the Initial Engineering
Deposit. Borrower shall promptly commence and diligently thereafter pursue to
completion (without regard to the amount of money then available in the
Engineering Escrow Account) the Required Engineering Work prior to the six (6)
month anniversary of the Closing Date. After Borrower completes an item of
Required Engineering Work, Borrower may submit to Lender an invoice therefor
with lien waivers and a statement from the Engineer, reasonably acceptable to
Lender, indicating that the portion of the Required Engineering Work in question
has been completed in compliance with all Legal Requirements, and Lender shall,
within twenty (20) days thereafter, although in no event more frequently than
once each month, reimburse such amount to Borrower from the Engineering Escrow
Account; provided, however, that Borrower shall not be reimbursed more than the
amount set forth on Exhibit D hereto as the amount allocated to the portion of
the Required Engineering Work for which reimbursement is sought.
     (b) From and after the date all of the Required Engineering Work is
completed, Borrower may submit a written request, which request shall be
delivered together with final lien waivers and a statement from the Engineer, as
the case may be, reasonably acceptable to Lender, indicating that all of the
Required Engineering Work has been completed in compliance with all Legal
Requirements, and Lender shall, within twenty (20) days thereafter, disburse any
balance of the Engineering Escrow Account to Borrower. Should an Event of
Default occur, the sums on deposit in the Engineering Escrow Account may be
applied by Lender in payment of any Required Engineering Work or may be applied
to the payment of the Debt or any other charges affecting all or any portion of
the Cross-collateralized Properties, as Lender in its sole discretion may
determine; provided, however, that no such application shall be deemed to have
been made by operation of law or otherwise until actually made by Lender as
herein provided.
     Section 5.13. Loss Proceeds. In the event of a casualty to the Property,
unless Lender elects, or is required pursuant to Article III hereof to make all
of the Insurance Proceeds available to Borrower for restoration, Lender and
Borrower shall cause all such Insurance Proceeds to be paid by the insurer
directly to the Central Account, whereupon Lender shall, after deducting
Lender’s out of pocket costs of recovering and paying out such Insurance
Proceeds, including without limitation, reasonable attorneys’ fees, apply same
to reduce the Debt in accordance with

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the terms of the Note; provided, however, that if Lender elects, or is deemed to
have elected, to make the Insurance Proceeds available for restoration, all
Insurance Proceeds in respect of rent loss, business interruption or similar
coverage shall be maintained in the Central Account, to be applied by Lender in
the same manner as Rent received with respect to the operation of the Property;
provided, further, however, that in the event that the Insurance Proceeds with
respect to such rent loss, business interruption or similar insurance policy are
paid in a lump sum in advance, Lender shall hold such Insurance Proceeds in a
segregated interest-bearing escrow account, which shall be an Eligible Account,
shall estimate, in Lender’s reasonable discretion, the number of months required
for Borrower to restore the damage caused by the casualty, shall divide the
aggregate rent loss, business interruption or similar Insurance Proceeds by such
number of months, and shall disburse from such bank account into the Central
Account each month during the performance of such restoration such monthly
installment of said Insurance Proceeds. In the event that Insurance Proceeds are
to be applied toward restoration, Lender shall hold such funds in a segregated
bank account at the Bank, which shall be an Eligible Account, and shall disburse
same in accordance with the provisions of Section 3.04 hereof. Unless Lender
elects, or is required pursuant to Section 6.01 hereof to make all of the
Condemnation Proceeds available to Borrower for restoration, Lender and Borrower
shall cause all such Condemnation Proceeds to be paid to the Central Account,
whereupon Lender shall, after deducting Lender’s out of pocket costs of
recovering and paying out such Condemnation Proceeds, including without
limitation, reasonable attorneys’ fees, apply same to reduce the Debt in
accordance with the terms of the Note; provided, however, that any Condemnation
Proceeds received in connection with a temporary Taking shall be maintained in
the Central Account, to be applied by Lender in the same manner as Rent received
with respect to the operation of the Property; provided, further, however, that
in the event that the Condemnation Proceeds of any such temporary Taking are
paid in a lump sum in advance, Lender shall hold such Condemnation Proceeds in a
segregated interest-bearing bank account, which shall be an Eligible Account,
shall estimate, in Lender’s reasonable discretion, the number of months that the
Property shall be affected by such temporary Taking, shall divide the aggregate
Condemnation Proceeds in connection with such temporary Taking by such number of
months, and shall disburse from such bank account into the Central Account each
month during the pendency of such temporary Taking such monthly installment of
said Condemnation Proceeds. In the event that Condemnation Proceeds are to be
applied toward restoration, Lender shall hold such funds in a segregated bank
account at the Bank, which shall be an Eligible Account, and shall disburse same
in accordance with the provisions of Section 3.04 hereof. If any Loss Proceeds
are received by Borrower, such Loss Proceeds shall be received in trust for
Lender, shall be segregated from other funds of Borrower, and shall be forthwith
paid into the Central Account, or paid to Lender to hold in a segregated bank
account at the Bank, in each case to be applied or disbursed in accordance with
the foregoing. Any Loss Proceeds made available to Borrower for restoration in
accordance herewith, to the extent not used by Borrower in connection with, or
to the extent they exceed the cost of, such restoration, shall be deposited into
the Central Account, whereupon Lender shall apply same to reduce the Debt in
accordance with the terms of the Note.
     Section 5.14. Underwritten Rent Escrow Account. Borrower has deposited with
Lender on the Closing Date an amount equal to the Initial Underwritten Rent
Deposit. Provided that no Event of Default has occurred and is continuing, on
each Payment Date set forth on Exhibit G, attached hereto and made a part
hereof, Lender shall transfer a sum equal to the amount specified on Exhibit G
to the Central Account from the Underwritten Rent Escrow Account. Should an
Event of Default occur, sums on deposit in the Underwritten Rent Escrow Account
may be applied by Lender to the payment of the Debt or any other charges
affecting all or any portion of the Cross-collateralized Properties, as Lender
in its sole discretion may determine; provided, however, that no such
application shall be deemed to have been made by operation of law or otherwise
until actually made by Lender as herein provided.
     Section 5.15. Debt Service Reserve Escrow Account. Borrower has deposited
with Lender on the Closing Date an amount equal to the Initial Debt Service
Reserve Deposit in the Debt Service Reserve Escrow Account. Provided that no
Event of Default has occurred and is continuing, commencing on the Payment Date
occurring in August 2007 and on each Payment Date thereafter, an amount equal to
all sums required to be allocated pursuant to clauses (i) through (iii) of
Section 5.05(a) minus Rent received during the Interest Accrual Period ending
immediately prior to such Payment Date shall be transferred from the Debt
Service Reserve Escrow Account to the Debt Service Payment Sub-Account. Should
an Event of Default occur, sums on deposit in the Debt Service Reserve Escrow
Account may be applied by Lender to the payment of the Debt or any other charges
affecting all or any portion of the Cross-collateralized Properties, as Lender
in its sole discretion may determine; provided,

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however, that no such application shall be deemed to have been made by operation
of law or otherwise until actually made by Lender as herein provided.
ARTICLE VI: CONDEMNATION
     Section 6.01. Condemnation. (a) Borrower shall notify Lender promptly of
the commencement or threat of any Taking of the Property or any portion thereof.
Lender is hereby irrevocably appointed as Borrower’s attorney-in-fact, coupled
with an interest, with exclusive power to collect, receive and retain the
proceeds of any such Taking as to which Borrower is or may be entitled and to
make any compromise or settlement in connection with such proceedings (subject
to Borrower’s reasonable approval, except after the occurrence and during the
continuation of an Event of Default, in which event Borrower’s approval shall
not be required), subject to the provisions of this Security Instrument;
provided, however, that Borrower may participate in any such proceedings
(without regard to the extent of the Taking) and Borrower shall be authorized
and entitled to compromise or settle any such proceeding with respect to
Condemnation Proceeds in an amount less than five percent (5%) of the Allocated
Loan Amount. Borrower shall execute and deliver to Lender any and all
instruments reasonably required in connection with any such proceeding promptly
after request therefor by Lender. Except as set forth above, Borrower shall not
adjust, compromise, settle or enter into any agreement with respect to such
proceedings without the prior consent of Lender. All Condemnation Proceeds are
hereby assigned to and shall be paid to Lender to be applied in accordance with
the terms hereof. With respect to Condemnation Proceeds in an amount in excess
of five percent (5%) of the Allocated Loan Amount, Borrower hereby authorizes
Lender to compromise, settle, collect and receive such Condemnation Proceeds,
and to give proper receipts and acquittance therefor. Subject to the provisions
of this Article VI, Lender may apply such Condemnation Proceeds (less any
reasonable out of pocket cost to Lender of recovering and paying out such
proceeds, including, without limitation, reasonable attorneys’ fees and
disbursements and costs allocable to inspecting any repair, restoration or
rebuilding work and the plans and specifications therefor) toward the payment of
the Debt or to allow such proceeds to be used for the Work.
     (b) “Substantial Taking” shall mean (i) a Taking of such portion of the
Property that would, in Lender’s reasonable discretion, leave remaining a
balance of the Property which would not under then current economic conditions,
applicable Development Laws and other applicable Legal Requirements, permit the
restoration of the Property so as to constitute a complete, rentable facility of
the same type as existed prior to the Taking, having adequate ingress and egress
to the Property, capable of producing a projected Net Operating Income (as
reasonably determined by Lender) yielding a projected Debt Service Coverage
therefrom for the next two (2) years of not less than the Required Debt Service
Coverage or (ii) a Taking which occurs less than two (2) years prior to the
Maturity Date or (iii) a Taking which Lender is not reasonably satisfied could
be repaired within twelve (12) months and at least six (6) months prior to the
Maturity Date or (iv) a Taking of fifteen percent (15%) or more of the Premises.
  (c) In the case of a Substantial Taking, Condemnation Proceeds shall be
payable to Lender in reduction of the Debt but without any prepayment fee or
charge of any kind and, if Borrower elects to apply any Condemnation Proceeds it
may receive pursuant to this Security Instrument to the payment of the Debt,
Borrower may prepay the balance of the Debt without any prepayment fee or charge
of any kind.
  (d) In the event of a Taking which is less than a Substantial Taking, Borrower
at its sole cost and expense (whether or not the award shall have been received
or shall be sufficient for restoration) shall proceed diligently to restore, or
cause the restoration of, the remaining Improvements not so taken, to maintain a
complete, rentable, self-contained fully operational facility of the same sort
as existed prior to the Taking in as good a condition as is reasonably possible.
In the event of such a Taking, Lender shall receive the Condemnation Proceeds
and shall pay over the same:
          (i) first, provided no Default shall have occurred and be continuing,
to Borrower to the extent of any portion of the award as may be necessary to pay
the reasonable cost of restoration of the Improvements remaining, and
          (ii) second, to Lender, in reduction of the Debt without any
prepayment premium or charge of any kind.

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If one or more Takings in the aggregate create a Substantial Taking, then, in
such event, the sections of this Article VI above applicable to Substantial
Takings shall apply.
  (e) In the event Lender is obligated to or elects to make Condemnation
Proceeds available for the restoration or rebuilding of the Property, such
proceeds shall be disbursed in the manner and subject to the conditions set
forth in Section 3.04(b) hereof. If, in accordance with this Article VI, any
Condemnation Proceeds are used to reduce the Debt, they shall be applied in
accordance with the provisions of the Note and, with no prepayment fee or charge
of any kind. Borrower shall promptly execute and deliver all instruments
requested by Lender for the purpose of confirming the assignment of the
Condemnation Proceeds to Lender. Application of all or any part of the
Condemnation Proceeds to the Debt shall be made in accordance with the
provisions of Sections 3.06 and 3.07 hereof. No application of the Condemnation
Proceeds to the reduction of the Debt shall have the effect of releasing the
lien of this Security Instrument until the remainder of the Debt has been paid
in full. In the case of any Taking, Lender, to the extent that Lender has not
been reimbursed by Borrower, shall be entitled, as a first priority out of any
Condemnation Proceeds, to reimbursement for all out of pocket costs, fees and
expenses reasonably incurred in the determination and collection of any
Condemnation Proceeds. All Condemnation Proceeds deposited with Lender pursuant
to this Section, until expended or applied as provided herein, shall be held in
accordance with Section 3.04(b) hereof and shall constitute additional security
for the payment of the Debt and the payment and performance of Borrower’s
obligations, but Lender shall not be deemed a trustee or other fiduciary with
respect to its receipt of such Condemnation Proceeds or any part thereof. All
awards so deposited with Lender shall be held by Lender in an Eligible Account,
but Lender makes no representation or warranty as to the rate or amount of
interest, if any, which may accrue on any such deposit and shall have no
liability in connection therewith. For purposes hereof, any reference to the
award shall be deemed to include interest, if any, which has accrued thereon.
ARTICLE VII: LEASES AND RENTS
     Section 7.01. Assignment. (a) Borrower does hereby bargain, sell, assign
and set over unto Lender, all of Borrower’s interest in the Leases and Rents.
The assignment of Leases and Rents in this Section 7.01 is an absolute,
unconditional and present assignment from Borrower to Lender and not an
assignment for security and the existence or exercise of Borrower’s revocable
license to collect Rent shall not operate to subordinate this assignment to any
subsequent assignment. The exercise by Lender of any of its rights or remedies
pursuant to this Section 7.01 shall not be deemed to make Lender a
mortgagee-in-possession. In addition to the provisions of this Article VII,
Borrower shall comply with all terms, provisions and conditions of the
Assignment.
     (b) So long as there shall exist and be continuing no Event of Default,
Borrower shall have a revocable license to take all actions with respect to all
Leases and Rents, present and future, including the right to collect and use the
Rents, subject to the terms of this Security Instrument and the Assignment.
     (c) In a separate instrument Borrower shall assign to Lender or its nominee
by specific or general assignment, any and all Leases, such assignments to be in
form and content reasonably acceptable to Lender, but subject to the provisions
of Section 7.01(a) and (b) hereof. Borrower agrees to deliver to Lender, within
thirty (30) days after Lender’s request, a true and complete copy of every
Lease.
     (d) The rights of Lender contained in this Article VII, the Assignment or
any other assignment of any Lease shall not result in any obligation or
liability of Lender to Borrower or any lessee under a Lease or any party
claiming through any such lessee.
     (e) At any time after an Event of Default, the license granted hereinabove
may be revoked by Lender, and Lender or a receiver appointed in accordance with
this Security Instrument may enter upon the Property, and collect, retain and
apply the Rents toward payment of the Debt in such priority and proportions as
Lender in its sole discretion shall deem proper; provided, however, that if the
Event of Default that giving rise to such revocation is (i) cured by Borrower or
(ii) waived by Lender, the Borrower’s license shall be reinstated.

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     (f) In addition to the rights which Lender may have herein, upon the
occurrence of any Event of Default and during the continuance thereof, Lender,
at its option, may require Borrower to pay monthly in advance to Lender, or any
receiver appointed to collect the Rents, the fair and reasonable rental value
for the use and occupation of such part of the Property as may be used and
occupied by Borrower and may require Borrower to vacate and surrender possession
of the Property to Lender or to such receiver and, in default thereof, Borrower
may be evicted by summary proceedings or otherwise.
     Section 7.02. Management of Property. (a) Borrower shall manage the
Property or cause the Property to be managed in a manner which is consistent
with the Approved Manager Standard. All Space Leases shall provide for rental
rates comparable to then existing local market rates and terms and conditions
which constitute good and prudent business practice and are consistent with
prevailing market terms and conditions, and shall be arms-length transactions.
All Leases shall be on a form previously approved by Lender and shall provide
that they are subordinate to this Security Instrument and that the lessees
thereunder attorn to Lender. Borrower shall deliver copies of all Leases,
amendments, modifications and renewals thereof to Lender. All proposed Leases
for the Property shall be subject to the prior written approval of Lender, such
approval not to be unreasonably withheld, conditioned or delayed, provided,
however that Borrower may enter into new leases with unrelated third parties
without obtaining the prior consent of Lender, provided that: (i) the proposed
leases conform with the applicable requirements of this Section 7.02; (ii) the
space to be leased pursuant to such proposed lease together with any space
leased or to be leased to an Affiliate of the tenant thereunder does not exceed
15,000 square feet. Lender’s consent to any Lease shall be deemed given, if the
first correspondence from Borrower to Lender requesting such approval is in an
envelope marked “PRIORITY” and contains a bold-faced, conspicuous legend at the
top of the first page thereof stating that “IF YOU FAIL TO RESPOND TO OR TO
EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN SEVEN (7) BUSINESS
DAYS, YOUR APPROVAL MAY BE DEEMED GIVEN”, and is accompanied by the information
and documents required above and any other information reasonably requested by
Lender in writing prior to the expiration of such seven (7) Business Day period
in order to adequately review the same has been delivered and, if Lender fails
to respond or to expressly deny such request for approval in writing within the
seven (7) Business Day period, a second notice is delivered to Lender from
Borrower in an envelope marked “PRIORITY” requesting approval containing a
bold-faced, conspicuous legend at the top of the first page thereof stating that
“IF YOU FAIL TO RESPOND TO OR EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN
WRITING WITHIN THREE (3) BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED GIVEN” and
Lender fails to respond or to expressly deny such request for approval within
the three (3) Business Day period. In the event Lender does not approve a Space
Lease, the approval of which has been requested by Borrower, Lender shall upon
receipt of request by Borrower, give Borrower an explanation of why such consent
was denied. In the event that all materials reasonably required by Lender in
connection with the review and approval by Lender of a Space Lease are delivered
to Lender simultaneously with Borrower’s original request for approval, Lender
shall not disapprove a Space Lease based solely upon insufficient time to review
such request.
     (b) Borrower (i) shall observe and perform all of its material obligations
under the Leases pursuant to applicable Legal Requirements and shall not do or
knowingly permit to be done anything to impair the value of the Leases as
security for the Debt; (ii) shall promptly send copies to Lender of all notices
of default which Borrower shall receive under the Leases; (iii) shall,
consistent with the Approved Manager Standard, enforce all of the terms,
covenants and conditions contained in the Leases to be observed or performed;
(iv) shall not collect any of the Rents under the Leases more than one (1) month
in advance (except that Borrower may collect in advance such security deposits
as are permitted pursuant to applicable Legal Requirements and are commercially
reasonable in the prevailing market); (v) shall not execute any other assignment
of lessor’s interest in the Leases or the Rents except as otherwise expressly
permitted pursuant to this Security Instrument; (vi) shall not cancel or
terminate any of the Leases or accept a surrender thereof in any manner
inconsistent with the Approved Manager Standard; (vii) shall not convey,
transfer or suffer or permit a conveyance or transfer of all or any part of the
Premises or the Improvements 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; (viii) shall not alter, modify or change the terms of
any guaranty of any Major Space Lease or cancel or terminate any such guaranty
(except as required pursuant to the express terms of any existing Major Space
Lease or Major Space Lease hereafter approved by Lender); (ix) shall, in
accordance with the Approved Manager Standard, make all reasonable efforts to
seek lessees for space as it becomes vacant and enter

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into Leases in accordance with the terms hereof; (x) shall not cancel or
terminate or materially modify, alter or amend any Major Space Lease or Property
Agreement without Lender’s consent, which consent will not be unreasonably
withheld or delayed; and (xi) shall, without limitation to any other provision
hereof, execute and deliver at the request of Lender all such further
assurances, confirmations and assignments in connection with the Property as are
required herein and as Lender shall from time to time reasonably require.
     (c) All security deposits of lessees, whether held in cash or any other
form, shall be treated by Borrower as trust funds, shall not be commingled with
any other funds of Borrower and, if cash, shall be deposited by Borrower in the
Security Deposit Account. Any bond or other instrument which Borrower is
permitted to hold in lieu of cash security deposits under applicable Legal
Requirements shall be maintained in full force and effect unless replaced by
cash deposits as hereinabove described, shall be issued by a Person reasonably
satisfactory to Lender, shall, if permitted pursuant to Legal Requirements, at
Lender’s option, name Lender as payee or mortgagee thereunder or be fully
assignable to Lender and shall, in all respects, comply with applicable Legal
Requirements and otherwise be reasonably satisfactory to Lender. Borrower shall,
upon request, provide Lender with evidence reasonably satisfactory to Lender of
Borrower’s compliance with the foregoing. Following the occurrence and during
the continuance of any Event of Default, Borrower shall, upon Lender’s request,
if permitted by applicable Legal Requirements, turn over the security deposits
(and any interest thereon) to Lender to be held by Lender in accordance with the
terms of the Leases and all Legal Requirements.
     (d) If requested by Lender, Borrower shall use commercially reasonable
efforts to furnish, or shall cause the applicable lessee to furnish, to Lender
financial data and/or financial statements in accordance with Regulation AB for
any lessee of the Property if, in connection with a Securitization, Lender
expects there to be, with respect to such lessee or any group of affiliated
lessees, a concentration within all of the mortgage loans included or expected
to be included, as applicable, in such Securitization such that such lessee or
group of affiliated lessees would constitute a Significant Obligor; provided,
however, that in the event the related Space Lease does not require the related
lessee to provide the foregoing information, Borrower shall use commercially
reasonable efforts to cause the applicable lessee to furnish such information.
     (e) Borrower covenants and agrees with Lender that (i) the Property will be
managed at all times by Manager pursuant to the management agreement reasonably
approved by Lender (the “Management Agreement”), (ii) after Borrower has
knowledge of a fifty percent (50%) or more change in control of the ownership of
Manager, Borrower will promptly give Lender notice thereof (a “Manager Control
Notice”) and (iii) the Management Agreement may be terminated by Lender at any
time for cause (including, but not limited to, Manager’s gross negligence,
misappropriation of funds, willful misconduct or fraud) or at any time following
(A) the occurrence of an Event of Default, or (B) the receipt of a Manager
Control Notice, and a substitute managing agent shall be appointed by Borrower,
subject to Lender’s prior written approval, which may be given or withheld in
Lender’s sole discretion and which may be conditioned on, inter alia, a letter
from each Rating Agency confirming that any rating issued by the Rating Agency
in connection with a Securitization will not, as a result of the proposed change
of Manager, be downgraded from the then current ratings thereof, qualified or
withdrawn. Borrower may from time to time appoint a successor manager to manage
the Property with Lender’s prior written consent which consent shall not be
unreasonably withheld or delayed, provided that any such successor manager shall
be a reputable management company which meets the Approved Manager Standard and
each Rating Agency shall have confirmed in writing that any rating issued by the
Rating Agency in connection with a Securitization will not, as a result of the
proposed change of Manager, be downgraded from the then current ratings thereof,
qualified or withdrawn. Lender hereby approves as of the date hereof Grubb &
Ellis Management Services, Inc., a Delaware corporation, Grubb & Ellis Realty
Advisers, Inc., a Delaware corporation, Grubb & Ellis Company, a Delaware
corporation or any Affiliate of any such entities that is controlled by or under
common control with either Grubb and Ellis Company or Grubb & Ellis Realty
Advisers, Inc. as Manager. Borrower further covenants and agrees that Borrower
shall require Manager (or any successor managers) to maintain at all times
during the term of the Loan worker’s compensation insurance as required by
Governmental Authorities.
     (f) Lender shall, upon request of Borrower, enter into a subordination,
nondisturbance and attornment agreement (“SNDA”) with respect to each proposed
tenant entering into a Lease in compliance with the requirements of this
Security Instrument; provided, that such Lease is (i) for at least five percent
(5%) of the Total

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GLA, (ii) with a tenant reasonably approved by Lender in writing prior to
Borrower’s execution of any such Lease and (iii) on the standard form of Lease
previously approved in writing by Lender. Any SNDA executed by Lender shall be
in Lender’s then standard form and provide that in the event Lender or any
purchaser at foreclosure shall succeed to Borrower’s interest in the Property,
the Leases of such tenants will remain in full force and effect and be binding
upon Lender or such purchaser and such tenant as though each were original
parties thereto.
ARTICLE VIII: MAINTENANCE AND REPAIR
     Section 8.01. Maintenance and Repair of the Property; Alterations;
Replacement of Equipment. Borrower hereby covenants and agrees:
     (a) Borrower shall not (i) desert or abandon the Property, (ii) change the
use of the Property or cause or permit the use or occupancy of any part of the
Property to be discontinued if such discontinuance or use change would violate
any zoning or other law, ordinance or regulation; (iii) consent to or seek any
lowering of the zoning classification, or greater zoning restriction affecting
the Property; or (iv) take any steps whatsoever to convert the Property, or any
portion thereof, to a condominium or cooperative form of ownership.
     (b) Borrower shall, at its expense, (i) take good care of the Property
including grounds generally, and utility systems and sidewalks, roads, alleys,
and curbs therein, and shall keep the same in good, safe and insurable condition
and in compliance with all applicable Legal Requirements, (ii) promptly make all
repairs to the Property, above grade and below grade, interior and exterior,
structural and nonstructural, ordinary and extraordinary, unforeseen and
foreseen, and maintain the Property in a manner appropriate for the facility in
Borrower’s prudent business judgment and (iii) not commit or suffer to be
committed any intentional waste of the Property or do or suffer to be done
anything which will increase the risk of fire or other hazard to the Property or
impair the value thereof. Borrower shall keep the sidewalks, vaults, gutters and
curbs comprising, or adjacent to, the Property, clean and free from dirt, snow,
ice, rubbish and obstructions. All repairs made by Borrower shall be made with
first-class materials, in a good and workmanlike manner, shall be equal or
better in quality and class to the original work and shall comply with all
applicable Legal Requirements and Insurance Requirements. To the extent any of
the above obligations are obligations of tenants under Space Leases or Pad
Owners or other Persons under Property Agreements, Borrower may fulfill its
obligations hereunder by causing such tenants, Pad Owners or other Persons, as
the case may be, to perform their obligations thereunder. As used herein, the
terms “repair” and “repairs” shall be deemed to include all necessary
replacements.
     (c) Borrower shall not demolish, remove, construct, or, except as otherwise
expressly provided herein, restore, or alter the Property or any portion
thereof; nor consent to or permit any such demolition, removal, construction,
restoration, addition or alteration (hereinafter, referred to as an
“Alteration”) which would diminish the value of the Property without Lender’s
prior written consent in each instance, which consent shall not be unreasonably
withheld, conditioned or delayed; provided, however, notwithstanding the
foregoing, Borrower may make Alterations to the Improvements provided that:
(i) a Default (whether or not it constitutes an Event of Default) shall not have
occurred and be continuing; (ii) the pro-forma Debt Service Coverage (as
determined by Lender in its reasonable discretion), during and after completion
of said Alterations will be at least equal to the Debt Service Coverage prior to
the Alteration; (iii) Borrower shall provide plans and specifications, which
were prepared by an Architect or Engineer and which were previously approved by
all Governmental Authorities the approval of which is required, to Lender for
Lender’s approval, which approval shall not be unreasonably withheld; (iv) such
Alterations shall be performed by a licensed, if required by applicable law,
reputable construction company with experience with work similar in scope and
type to the Alterations and under the supervision of an Architect or Engineer;
(v) such Alterations shall not result in the Property violating any
Environmental Laws, Legal Requirements, Leases or Property Agreements; (vi) such
Alterations shall not result in a Material Adverse Effect; (vii) such
Alterations shall be performed in a first class manner, (viii) Lender shall have
the right to inspect the Alterations at all reasonable times during the
construction process upon reasonable prior notice; (ix) such Alterations shall
be completed within nine (9) months of commencement and at least twelve (12)
months prior to Maturity; (x) an Architect or Engineer or Person otherwise
reasonably acceptable to Lender shall have delivered to Lender a

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certificate estimating the costs of completing the Alterations and Borrower
shall have delivered to Lender (A) evidence satisfactory to Lender in its
reasonable discretion of cash in an amount equal to the estimated costs of
completion of the Alterations, or (B) a completion bond in form, substance and
issued by a surety company reasonably acceptable to Lender; (xi) the total cost
of the Alterations shall not exceed five percent (5%) of the Allocated Loan
Amount, obtained by Borrower at Borrower’s sole cost and expense or such other
evidence as may be acceptable to Lender; and (xii) Borrower shall diligently
pursue completion of the Alterations; provided, however, Borrower may make
structural or exterior Alterations to the Improvements or interior Alterations
of a non-structural type without Lender’s prior written consent provided that
the aggregate cost of such Alterations does not exceed $250,000.00. Neither the
approval by Lender of any required plans and specifications for the Alterations
nor the inspection by Lender of the Alterations shall make Lender responsible
for the preparation of such plans and specifications, or the compliance of such
plans and specifications or the Alterations, with any applicable law,
regulation, ordinance, covenant or agreement.
     (d) Borrower represents and warrants to Lender that (i) there are no
fixtures, machinery, apparatus, tools, equipment or articles of personal
property attached or appurtenant to, or located on, or used in connection with
the management, operation or maintenance of the Property, except for the
Equipment and equipment leased by Borrower for the management, operation or
maintenance of the Property in accordance with the Loan Documents; (ii) the
Equipment and the leased equipment constitute all of the fixtures, machinery,
apparatus, tools, equipment and articles of personal property necessary to the
proper operation and maintenance of the Property; and (iii) all of the Equipment
is free and clear of all liens, except for the lien of this Security Instrument
and the Permitted Encumbrances. All right, title and interest of Borrower in and
to all extensions, improvements, betterments, renewals and appurtenances to the
Property hereafter acquired by, or released to, Borrower or constructed,
assembled or placed by Borrower in the Property, and all changes and
substitutions of the security constituted thereby, shall be and, in each such
case, without any further mortgage, encumbrance, conveyance, assignment or other
act by Lender or Borrower, shall become subject to the lien and security
interest of this Security Instrument as fully and completely, and with the same
effect, as though now owned by Borrower and specifically described in this
Security Instrument, but at any and all times Borrower shall execute and deliver
to Lender any documents Lender may reasonably deem necessary or appropriate for
the purpose of specifically subjecting the same to the lien and security
interest of this Security Instrument.
     (e) Notwithstanding the provisions of this Security Instrument to the
contrary, Borrower shall have the right, at any time and from time to time, to
remove and dispose of Equipment which may have become obsolete or unfit for use
or which is no longer useful in the management, operation or maintenance of the
Property. Borrower shall promptly replace any such Equipment so disposed of or
removed with other Equipment of equal value and utility, free of any security
interest or superior title, liens or claims; except that, if by reason of
technological or other developments, replacement of the Equipment so removed or
disposed of is not necessary or desirable for the proper management, operation
or maintenance of the Property, Borrower shall not be required to replace the
same. All such replacements or additional equipment shall be deemed to
constitute “Equipment” and shall be covered by the security interest herein
granted.
ARTICLE IX: TRANSFER OR ENCUMBRANCE OF THE PROPERTY
     Section 9.01. Other Encumbrances. Borrower shall not further encumber or
permit the further encumbrance in any manner (whether by grant of a pledge,
security interest or otherwise) of the Property or any part thereof or interest
therein, including, without limitation, of the Rents therefrom. In addition,
Borrower shall not further encumber and shall not permit the further encumbrance
in any manner (whether by grant of a pledge, security interest or otherwise) of
Borrower or any direct or indirect interest in Borrower except as expressly
permitted pursuant to this Security Instrument.
     Section 9.02. No Transfer. Borrower acknowledges that Lender has examined
and relied on the expertise of Borrower and, if applicable, General Partner, in
owning and operating properties such as the Property in agreeing to make the
Loan and will continue to rely on Borrower’s ownership of the Property as a
means of maintaining the value of the Property as security for repayment of the
Debt and Borrower acknowledges that Lender has a valid interest in maintaining
the value of the Property. Borrower shall not Transfer, nor permit any Transfer,
without the

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prior written consent of Lender, which consent Lender may withhold in its sole
and absolute discretion. Lender shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Debt immediately due and payable upon a Transfer without Lender’s
consent. This provision shall apply to every Transfer regardless of whether
voluntary or not, or whether or not Lender has consented to any previous
Transfer.
     Section 9.03. Due on Sale. Lender may declare the Debt immediately due and
payable upon any Transfer or further encumbrance without Lender’s consent
without regard to whether any impairment of its security or any increased risk
of default hereunder can be demonstrated. This provision shall apply to every
Transfer or further encumbrance of the Property or any part thereof or interest
in the Property or in Borrower regardless of whether voluntary or not, or
whether or not Lender has consented to any previous Transfer or further
encumbrance of the Property or interest in Borrower.
     Section 9.04. Permitted Transfers. Notwithstanding any provisions of this
Security Instrument or any other Loan Documents to the contrary, Lender hereby
permits transfers of the Property or any part thereof or direct or indirect
interests in Borrower (i) to Grubb & Ellis Realty Advisors, Inc. (“GAV”), and
(ii) to a member of Borrower (or a wholly owned Affiliate of such member) in
each case of which Lender has received notice and provided that (x) either the
Person which Controls directly or indirectly Borrower, shall remain in Control
of Borrower or Borrower shall be controlled by GAV, and (y) GERA Property
Acquisition LLC (“GP”) shall continue to own, directly or indirectly, at least
thirty-five percent (35%) interest in, Borrower. In addition, Lender hereby
permits (a) transfers of indirect interests in Borrower and GP provided that the
Person which Controls directly or indirectly Borrower, shall remain in control
of Borrower and GP shall continue to own, directly or indirectly, at least a
thirty-five percent (35%) interest in, Borrower; and (b) any Grubb Transfer (as
defined below). “Grubb Transfer” means any of the following transfers or events:
     (A) the issuance, conveyance, sale, assignment, transfer, pledge,
encumbrance or other disposition of any direct or indirect interest in Grubb &
Ellis Company (“G&E”), GAV or any Grubb Successor (hereinafter defined) or one
of their wholly-owned Affiliates, provided that G&E, GAV or one of its
wholly-owned Affiliates shall at all times be the sole trustee, general partner
or managing member, as the case may be, of Borrower; or
     (B) the issuance, conveyance, sale, assignment, transfer, pledge,
encumbrance or other disposition of any direct or indirect interest in G&E or
GAV; or
     (C) the merger between GP, G&E and/or GAV and another entity, or any other
reorganization of GP, G&E and/or GAV so long as (i) GP, G&E and/or GAV, as the
case may be, is the surviving entity after such merger or consolidation, or
(ii) the individuals constituting GP’s, G&E’s or GAV’s Board of Trustees or
Board of Directors immediately prior to such merger or consolidation represent a
majority of G&E’s or GAV’s Board of Directors of Board of Trustees immediately
after such merger or consolidation (the surviving entity in any such merger or
reorganization permitted by this proviso, is referred to as the “Grubb
Successor”) and G&E or GAV or a wholly owned subsidiary is the sole trustee,
general partner or managing member of GP (or any Grubb Successor); and
     (D) provided that Lender is given prior written notice thereof, a Transfer
of the Property to any wholly-owned Affiliate of Borrower, GP, G&E, or GAV.
provided that in each of the foregoing cases (a) no such Transfer shall release
the liability of Borrower under the Loan Documents and Lender may require, as a
condition to the assumption, that all such obligations be assumed (subject to
the limitations on recourse herein) by the transferee under as assumption
agreement in form and substance reasonably acceptable to Lender which may
include such financial reporting requirements with respect to the transferee as
Lender may reasonably require and (b) Lender shall have received information
satisfactory to it confirming that neither the proposed transferee nor any
Affiliate of the proposed transferee (i) is a Prohibited Person or would, if
such Person assumes the Loan or obtains an interest in Borrower, cause Lender to
be in violation of Legal Requirements or (ii) has been within the seven
(7) years prior to the proposed transfer, subject to any material uncured event
of default in connection with a loan financing which resulted in litigation or
acceleration of

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indebtedness or the subject to any bankruptcy, reorganization or insolvency
proceeding and, in the event any Person (as “Principal Transferee”) who does
not, as of the Closing Date, own of Control, directly or indirectly, 49% or more
of the stock, partnership interest or membership interest, as applicable, in
Borrower acquires directly or indirectly, 49% or more of the stock, partnership
interest or membership interest, as applicable, in Borrower as a result of such
transfer, conveyance, assignment, sale, mortgaging, encumbrance, pledging,
hypothecation or granting of a security interest, Lender shall be furnished an
opinion, in form and substance and from counsel reasonably satisfactory to
Lender, substantially similar to the Insolvency Opinion which discusses the
substantive non-consolidation of Borrower with the Principal Transferee in the
event of bankruptcy, insolvency or similar proceeding relating to the Principal
Transferee.
ARTICLE X: CERTIFICATES
     Section 10.01. Estoppel Certificates. (a) After request by Lender not more
than three (3) times in any calendar year, Borrower, within fifteen (15) days
and at its expense, will furnish Lender with a statement, duly acknowledged and
certified, setting forth (i) the amount of the original principal amount of the
Note, and the unpaid principal amount of the Note, (ii) the rate of interest of
the Note, (iii) the date payments of interest and/or principal were last paid,
(iv) any offsets or defenses to the payment of the Debt, and if any are alleged,
the nature thereof, (v) that the Note, this Security Instrument and the other
Loan Documents have not been modified or if modified, giving particulars of such
modification and (vi) that there has occurred and is then continuing no Default
or if such Default exists, the nature thereof, the period of time it has
existed, and the action being taken to remedy such Default.
     (b) Within fifteen (15) days after written request by Borrower, Lender
shall furnish to Borrower a written statement confirming the amount of the Debt,
the maturity date of the Note, the rate of interest of the Note and the date to
which interest has been paid.
     (c) After request by Lender, provided an Event of Default has not occurred,
not more than once in any calendar year, Borrower shall use all reasonable
efforts to obtain estoppel certificates from tenants in form and substance
reasonably acceptable to Lender.
ARTICLE XI: NOTICES
     Section 11.01. Notices. Any notice, demand, statement, request or consent
made hereunder shall be in writing and delivered personally or sent to the party
to whom the notice, demand or request is being made by Federal Express or other
nationally recognized overnight delivery service, as follows and shall be deemed
given when delivered personally or one (1) Business Day after being deposited
with Federal Express or such other nationally recognized delivery service:

         
 
  If to Lender:   Wachovia Bank, National Association
 
      Commercial Real Estate Services
 
      8739 Research Drive URP 4
 
      NC 1075
 
      Charlotte, North Carolina 28262
 
      Loan Number: 502861373
 
      Attention: Portfolio Management
 
      Fax No.: (704) 715-0036
 
       
 
  with a copy to:   Proskauer Rose llp
 
      1585 Broadway
 
      New York, New York 10036
 
      Attn: David J. Weinberger, Esq.
 
      Fax No.: (212) 969-2900
 
       
 
  If to Borrower:   To Borrower, at the address first written above,

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  with copies to:   Grubb & Ellis
 
      500 West Monroe – Suite 2800
 
      Chicago, Illinois 60661
 
      Attn: General Counsel
 
      Fax No.: (312) 207-1822
 
       
 
  and   DLA Piper US llp
 
      203 North LaSalle Street – Suite 1900
 
      Chicago, Illinois 60601
 
      Attn: James L. Beard, Esq.
 
      Fax No.: (312) 630-7379

or such other address as Borrower or Lender shall hereafter specify by not less
than ten (10) days prior written notice as provided herein; provided, however,
that notwithstanding any provision of this Article to the contrary, such notice
of change of address shall be deemed given only upon actual receipt thereof.
Rejection or other refusal to accept or the inability to deliver because of
changed addresses of which no notice was given as herein required shall be
deemed to be receipt of the notice, demand, statement, request or consent.
ARTICLE XII: INDEMNIFICATION
     Section 12.01. Indemnification Covering Property. In addition, and without
limitation, to any other provision of this Security Instrument or any other Loan
Document, Borrower shall protect, indemnify and save harmless Lender and its
successors and assigns, and each of their agents, employees, officers,
directors, stockholders, partners and members (collectively, “Indemnified
Parties”) for, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, known or unknown, contingent or otherwise, whether incurred or imposed
within or outside the judicial process, including, without limitation,
reasonable attorneys’ fees and disbursements imposed upon or incurred by or
asserted against any of the Indemnified Parties by reason of (a) ownership of
this Security Instrument, the Assignment, the Property or any part thereof or
any interest therein or receipt of any Rents; (b) any accident, injury to or
death of any person or loss of or damage to property occurring in, on or about
the Property or any part thereof or on the adjoining sidewalks, curbs, parking
areas, streets or ways; (c) any use, nonuse or condition in, on or about, or
possession, alteration, repair, operation, maintenance or management of, the
Property or any part thereof or on the adjoining sidewalks, curbs, parking
areas, streets or ways; (d) any failure on the part of Borrower to perform or
comply with any of the terms of this Security Instrument or the Assignment;
(e) performance of any labor or services or the furnishing of any materials or
other property in respect of the Property or any part thereof; (f) any claim by
brokers, finders or similar Persons claiming to be entitled to a commission in
connection with any Lease or other transaction involving the Property or any
part thereof; (g) any Imposition including, without limitation, any Imposition
attributable to the execution, delivery, filing, or recording of any Loan
Document, Lease or memorandum thereof; (h) any lien or claim arising on or
against the Property or any part thereof under any Legal Requirement or any
liability asserted against any of the Indemnified Parties with respect thereto;
(i) any claim arising out of or in any way relating to any tax or other
imposition on the making and/or recording of this Security Instrument, the Note
or any of the other Loan Documents; (j) a Default under Sections 2.02(f),
2.02(g), 2.02(k), 2.02(t) or 2.02(w) hereof, (k) the failure of any Person 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 the Loan, or to supply a
copy thereof in a timely fashion to the recipient of the proceeds of the Loan;
(l) the claims of any lessee or any Person acting through or under any lessee or
otherwise arising under or as a consequence of any Lease or (m) the failure to
pay any insurance premiums. Notwithstanding the foregoing provisions of this
Section 12.01 to the contrary, Borrower shall have no obligation to indemnify
the Indemnified Parties pursuant to this Section 12.01 for liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
relative to the foregoing which result from Lender’s, and its successors’ or
assigns’, willful misconduct or gross negligence. Any amounts payable to Lender
by reason of the application of this Section 12.01 shall constitute a part of
the Debt secured by this Security Instrument and the other Loan Documents and
shall become immediately due and payable and shall bear interest at the Default
Rate from the date the liability, obligation, claim, cost or expense is
sustained

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by Lender, as applicable, until paid. The provisions of this Section 12.01 shall
survive the termination of this Security Instrument whether by repayment of the
Debt, foreclosure or delivery of a deed in lieu thereof, assignment or
otherwise. In case any action, suit or proceeding is brought against any of the
Indemnified Parties by reason of any occurrence of the type set forth in
(a) through (m) above, Borrower shall, at Borrower’s expense, resist and defend
such action, suit or proceeding or will cause the same to be resisted and
defended by counsel at Borrower’s expense for the insurer of the liability or by
counsel designated by Borrower (unless reasonably disapproved by Lender promptly
after Lender has been notified of such counsel); provided, however, that nothing
herein shall compromise the right of Lender (or any other Indemnified Party) to
appoint its own counsel at Borrower’s expense for its defense with respect to
any action which, in the reasonable opinion of Lender or such other Indemnified
Party, as applicable, presents a conflict or potential conflict between Lender
or such other Indemnified Party that would make such separate representation
advisable. Any Indemnified Party will give Borrower prompt notice after such
Indemnified Party obtains actual knowledge of any potential claim by such
Indemnified Party for indemnification hereunder. The Indemnified Parties shall
not settle or compromise any action, proceeding or claim as to which it is
indemnified hereunder without notice to Borrower. Notwithstanding the foregoing,
so long as no Default has occurred and is continuing and Borrower is resisting
and defending such action, suit or proceeding as provided above in a prudent and
commercially reasonable manner, in order to obtain the benefit of this
Section 12.01 with respect to such action, suit or proceeding, Lender and the
Indemnified Parties agree that they shall not settle such action, suit or
proceeding without obtaining Borrower’s consent which Borrower agrees not to
unreasonably withhold, condition or delay; provided, however, (x) if Borrower is
not diligently defending such action, suit or proceeding in a prudent and
commercially reasonable manner as provided above and Lender has provided
Borrower with thirty (30) days’ prior written notice, or shorter period if
mandated by the requirements of the applicable law, and Borrower has failed to
correct such failure, or (y) failure to settle could, in Lender’s reasonable
judgment, expose leader to criminal liability, Lender may settle such action,
suit or proceeding without the consent of Borrower and be entitled to the
benefits of this Section 12.01 with respect to the settlement of such action,
suit or proceeding.
ARTICLE XIII: DEFAULTS
     Section 13.01. Events of Default. The Debt shall become immediately due at
the option of Lender upon any one or more of the following events (“Event of
Default”):
     (a) if the final payment or prepayment premium, if any, due under the Note
shall not be paid on Maturity;
     (b) if any monthly payment of interest and/or principal due under the Note
(other than the sums described in (a) above) shall not be fully paid on the date
upon which the same is due and payable thereunder;
     (c) if payment of any sum (other than the sums described in (a) above or
(b) above) required to be paid pursuant to the Note, this Security Instrument or
any other Loan Document shall not be paid within five (5) days after Lender
delivers written notice to Borrower that same is due and payable thereunder or
hereunder;
     (d) if Borrower, or if Borrower is a partnership, any general partner of
Borrower, or, if Borrower is a limited liability company, any member of Borrower
shall institute or cause to be instituted any proceeding for the termination or
dissolution of Borrower or any such general partner or member;
     (e) if the insurance policies required hereunder are not kept in full force
and effect, or if the insurance policies are not assigned and delivered to
Lender as herein provided;
     (f) if Borrower attempts to assign its rights under this Security
Instrument or any other Loan Document or any interest herein or therein, or if
any Transfer occurs other than in accordance with the provisions hereof;

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     (g) if any representation or warranty of Borrower made herein or in any
other Loan Document or in any certificate, report, financial statement or other
instrument or agreement furnished to Lender shall prove false or misleading in
any material respect as of the date the representation or warranty was made;
     (h) if Borrower or any general partner of Borrower shall make an assignment
for the benefit of creditors or shall admit in writing its inability to pay its
debts generally as they become due;
     (i) if a receiver, liquidator or trustee of Borrower, or any general
partner of Borrower shall be appointed or if Borrower, 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 if any proceeding for the dissolution or liquidation of Borrower shall be
instituted; however, if such appointment, adjudication, petition or proceeding
was involuntary and not consented to by Borrower upon the same not being
discharged, stayed or dismissed within seventy five (75) days or if Borrower
shall generally not be paying its debts as they become due;
     (j) if Borrower shall be in default beyond any notice or grace period, if
any, under any other mortgage or deed of trust or security agreement covering
any part of the Property without regard to its priority relative to this
Security Instrument; provided, however, this provision shall not be deemed a
waiver of the provisions of Article IX prohibiting further encumbrances
affecting the Property or any other provision of this Security Instrument;
     (k) if the Property becomes subject (i) to any lien which is superior to
the lien of this Security Instrument, other than a lien for real estate taxes
and assessments not due and payable, or (ii) to any mechanic’s, materialman’s or
other lien which is or is asserted to be superior to the lien of this Security
Instrument, and such lien shall remain undischarged (by payment, bonding, or
otherwise) for twenty (20) days unless contested in accordance with the terms
hereof;
     (l) if Borrower abandons all or a material portion of the Property, the
Improvements or any part thereof;
     (m) except as permitted in this Security Instrument, any material
alteration, demolition or removal of any of the Improvements without the prior
consent of Lender;
     (n) if Borrower consummates a transaction which would cause this Security
Instrument or Lender’s rights under this Security Instrument, the Note or any
other Loan Document to constitute a non-exempt prohibited transaction under
ERISA or result in a violation of a state statute regulating government plans
subjecting Lender to liability for a violation of ERISA or a state statute; or
     (o) if an Event of Default shall occur under any of the other
Cross-collateralized Mortgages; or
     (p) if a default shall occur under any of the other terms, covenants or
conditions of the Note, this Security Instrument or any other Loan Document,
other than as set forth in (a) through (o) above, for ten (10) days after notice
from Lender in the case of any default which can be cured by the payment of a
sum of money, or for thirty (30) days after notice from Lender in the case of
any other default or an additional thirty (30) days if Borrower is diligently
and continuously effectuating a cure of a curable non-monetary default, other
than as set forth in (a) through (o) above.
     Section 13.02. Remedies. (a) Upon the occurrence and during the continuance
of any Event of Default, Lender may, in addition to any other rights or remedies
available to it hereunder or under any other Loan Document, at law or in equity,
take such action, without notice or demand, as it reasonably deems advisable to
protect and enforce its rights against Borrower or any one or more of the
Cross-collateralized Borrowers and in and to the Property or any one or more of
the Cross-collateralized Properties including, but not limited to, the following
actions, each of which may be pursued singly, concurrently or otherwise, at such
time and in such order as Lender may determine, in its sole discretion, without
impairing or otherwise affecting any other rights and remedies of Lender
hereunder, at law or in equity: (i) declare all or any portion of the unpaid
Debt to be immediately due and

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payable; provided, however, that upon the occurrence of any of the events
specified in Section 13.01(i), the entire Debt will be immediately due and
payable without notice or demand or any other declaration of the amounts due and
payable; or (ii) bring an action to foreclose this Security Instrument and
without applying for a receiver for the Rents, but subject to the rights of the
tenants under the Leases, enter into or upon the Property or any part thereof,
either personally or by its agents, nominees or attorneys, and dispossess
Borrower and its agents and servants therefrom, and thereupon Lender may
(A) use, operate, manage, control, insure, maintain, repair, restore and
otherwise deal with all and every part of the Property and conduct the business
thereat, (B) make alterations, additions, renewals, replacements and
improvements to or on the Property or any part thereof, (C) exercise all rights
and powers of Borrower with respect to the Property or any part thereof, whether
in the name of Borrower or otherwise, including, without limitation, the right
to make, cancel, enforce or modify Leases, obtain and evict tenants, and demand,
sue for, collect and receive all earnings, revenues, rents, issues, profits and
other income of the Property and every part thereof, and (D) apply the receipts
from the Property or any part thereof to the payment of the Debt, after
deducting therefrom all expenses (including, without limitation, reasonable
attorneys’ fees and disbursements) reasonably incurred in connection with the
aforesaid operations and all amounts necessary to pay the Impositions, insurance
and other charges in connection with the Property or any part thereof, as well
as just and reasonable compensation for the services of Lender’s third-party
agents; or (iii) have an appraisal or other valuation of the Property or any
part thereof performed by an Appraiser (and Borrower covenants and agrees it
shall cooperate in causing any such valuation or appraisal to be performed) and
any cost or expense incurred by Lender in connection therewith shall constitute
a portion of the Debt and be secured by this Security Instrument and shall be
immediately due and payable to Lender with interest, at the Default Rate, until
the date of receipt by Lender; or (iv) sell the Property or institute
proceedings for the complete foreclosure of this Security Instrument, or take
such other action as may be allowed pursuant to Legal Requirements, at law or in
equity, for the enforcement of this Security Instrument in which case the
Property or any part thereof may be sold for cash or credit in one or more
parcels; or (v) with or without entry, and to the extent permitted and pursuant
to the procedures provided by applicable Legal Requirements, institute
proceedings for the partial foreclosure of this Security Instrument, or take
such other action as may be allowed pursuant to Legal Requirements, at law or in
equity, for the enforcement of this Security Instrument for the portion of the
Debt then due and payable, subject to the lien of this Security Instrument
continuing unimpaired and without loss of priority so as to secure the balance
of the Debt not then due; or (vi) sell the Property or any part thereof and any
or all estate, claim, demand, right, title and interest of Borrower therein and
rights of redemption thereof, pursuant to power of sale or otherwise, at one or
more sales, in whole or in parcels, in any order or manner, at such time and
place, upon such terms and after such notice thereof as may be required or
permitted by law, at the discretion of Lender, and in the event of a sale, by
foreclosure or otherwise, of less than all of the Property, this Security
Instrument shall continue as a lien on the remaining portion of the Property; or
(vii) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained in the Loan
Documents, or any of them; or (viii) recover judgment on the Note or any
guaranty either before, during or after (or in lieu of) any proceedings for the
enforcement of this Security Instrument; or (ix) apply, ex parte, for the
appointment of a custodian, trustee, receiver, keeper, liquidator or conservator
of the Property or any part thereof, irrespective of the adequacy of the
security for the Debt and without regard to the solvency of Borrower or of any
Person liable for the payment of the Debt, to which appointment Borrower does
hereby consent and such receiver or other official shall have all rights and
powers permitted by applicable law and such other rights and powers as the court
making such appointment may confer, but the appointment of such receiver or
other official shall not impair or in any manner prejudice the rights of Lender
to receive the Rent with respect to any of the Property pursuant to this
Security Instrument or the Assignment; or (x) require, at Lender’s option,
Borrower to pay monthly in advance to Lender, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of any portion of the Property occupied by Borrower and may require
Borrower to vacate and surrender possession to Lender of the Property or to such
receiver and Borrower may be evicted by summary proceedings or otherwise; or
(xi) without notice to Borrower (A) apply all or any portion of the cash
collateral in any Sub-Account and Escrow Account, including any interest and/or
earnings therein, to carry out the obligations of Borrower under this Security
Instrument and the other Loan Documents, to protect and preserve the Property
and for any other purpose permitted under this Security Instrument and the other
Loan Documents and/or (B) have all or any portion of such cash collateral
immediately paid to Lender to be applied against the Debt in the order and
priority set forth in the Note; or (xii) pursue any or all such other rights or
remedies as Lender may have under applicable law or in equity; provided,
however, that the provisions of this Section 13.02(a) shall not be construed to
extend or modify any of the notice requirements or grace periods provided for
hereunder or under any of the other Loan Documents.

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Borrower hereby waives, to the fullest extent permitted by Legal Requirements,
any defense Borrower might otherwise raise or have by the failure to make any
tenants parties defendant to a foreclosure proceeding and to foreclose their
rights in any proceeding instituted by Lender.
     (b) Any time after an Event of Default Lender shall have the power to sell
the Property or any part thereof at public auction, in such manner, at such time
and place, upon such terms and conditions, and upon such public notice as Lender
may deem best for the interest of Lender, or as may be required or permitted by
applicable law, consisting of advertisement in a newspaper of general
circulation in the jurisdiction and for such period as applicable law may
require and at such other times and by such other methods, if any, as may be
required by law to convey the Property in fee simple by Lender’s deed with
special warranty of title to and at the cost of the purchaser, who shall not be
liable to see to the application of the purchase money. The proceeds or avails
of any sale made under or by virtue of this Section 13.02, together with any
other sums which then may be held by Lender under this Security Instrument,
whether under the provisions of this Section 13.02 or otherwise, shall be
applied as follows:
First: To the payment of the third-party costs and expenses reasonably incurred
in connection with any such sale and to advances, fees and expenses, including,
without limitation, reasonable fees and expenses of Lender’s legal counsel as
applicable, and of any judicial proceedings wherein the same may be made, and of
all expenses, liabilities and advances reasonably made or incurred by Lender
under this Security Instrument, together with interest as provided herein on all
such advances made by Lender, and all Impositions, except any Impositions or
other charges subject to which the Property shall have been sold;
Second: To the payment of the whole amount then due, owing and unpaid under the
Note for principal and interest thereon, with interest on such unpaid principal
at the Default Rate from the date of the occurrence of the earliest Event of
Default that formed a basis for such sale until the same is paid;
Third: To the payment of any other portion of the Debt required to be paid by
Borrower pursuant to any provision of this Security Instrument, the Note, or any
of the other Loan Documents; and
Fourth: The surplus, if any, to Borrower unless otherwise required by Legal
Requirements.
Lender and any receiver or custodian of the Property or any part thereof shall
be liable to account for only those rents, issues, proceeds and profits actually
received by it.
     (c) Lender may adjourn from time to time any sale by it to be made under or
by virtue of this Security Instrument by announcement at the time and place
appointed for such sale or for such adjourned sale or sales and, except as
otherwise provided by any applicable provision of Legal Requirements, Lender,
without further notice or publication, may make such sale at the time and place
to which the same shall be so adjourned.
     (d) Upon the completion of any sale or sales made by Lender under or by
virtue of this Section 13.02, Lender, or any officer of any court empowered to
do so, shall execute and deliver to the accepted purchaser or purchasers a good
and sufficient instrument, or good and sufficient instruments, granting,
conveying, assigning and transferring all estate, right, title and interest in
and to the property and rights sold. Lender is hereby irrevocably appointed the
true and lawful attorney-in-fact of Borrower (coupled with an interest), in its
name and stead, to make all necessary conveyances, assignments, transfers and
deliveries of the property and rights so sold and for that purpose Lender may
execute all necessary instruments of conveyance, assignment, transfer and
delivery, and may substitute one or more Persons with like power, Borrower
hereby ratifying and confirming all that its said attorney-in-fact or such
substitute or substitutes shall lawfully do by virtue hereof. Nevertheless,
Borrower, if so requested by Lender, shall ratify and confirm any such sale or
sales by executing and delivering to Lender, or to such purchaser or purchasers
all such instruments as may be advisable, in the sole judgment of Lender, for
such purpose, and as may be designated in such request. Any such sale or sales
made under or by virtue of this Section 13.02, whether made under the power of
sale herein granted or under or by virtue of judicial proceedings or a judgment
or decree of foreclosure and sale, shall operate to divest all the estate,
right, title, interest, claim and demand whatsoever, whether at law or in
equity, of Borrower in and to the property and rights so sold, and shall, to the
fullest extent permitted under Legal Requirements, be a perpetual bar, both at
law and in equity against

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Borrower and against any and all Persons claiming or who may claim the same, or
any part thereof, from, through or under Borrower.
     (e) In the event of any sale made under or by virtue of this Section 13.02
(whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or a judgment or decree of foreclosure and sale), the
entire Debt immediately thereupon shall, anything in the Loan Documents to the
contrary notwithstanding, become due and payable.
     (f) Upon any sale made under or by virtue of this Section 13.02 (whether
made under the power of sale herein granted or under or by virtue of judicial
proceedings or a judgment or decree of foreclosure and sale), Lender may bid for
and acquire the Property or any part thereof and in lieu of paying cash therefor
may make settlement for the purchase price by crediting upon the Debt the net
sales price after deducting therefrom the expenses of the sale and the costs of
the action.
     (g) No recovery of any judgment by Lender and no levy of an execution under
any judgment upon the Property or any part thereof or upon any other property of
Borrower shall release the lien of this Security Instrument upon the Property or
any part thereof, or any liens, rights, powers or remedies of Lender hereunder,
but such liens, rights, powers and remedies of Lender shall continue unimpaired
until all amounts due under the Note, this Security Instrument and the other
Loan Documents are paid in full.
     (h) Upon the exercise by Lender of any power, right, privilege, or remedy
pursuant to this Security Instrument which requires any consent, approval,
registration, qualification, or authorization of any Governmental Authority,
Borrower agrees to execute and deliver, or will cause the execution and delivery
of, all applications, certificates, instruments, assignments and other documents
and papers that Lender or any purchaser of the Property may be required to
obtain for such governmental consent, approval, registration, qualification, or
authorization and Lender is hereby irrevocably appointed the true and lawful
attorney-in-fact of Borrower (coupled with an interest), in its name and stead,
to execute all such applications, certificates, instruments, assignments and
other documents and papers.
     Section 13.03. Payment of Debt After Default. If, following the occurrence
of any Event of Default, Borrower shall tender payment of an amount sufficient
to satisfy the Debt in whole or in part at any time prior to a foreclosure sale
of the Property, and if at the time of such tender prepayment of the principal
balance of the Note is not permitted by the Note or this Security Instrument,
Borrower shall, in addition to the entire Debt, also pay to Lender a sum equal
to interest which would have accrued on the principal balance of the Note at an
interest rate equal to the LIBOR Margin for the Note plus the greater of (x) the
then current LIBOR Rate and (y) the then current average yield for “This Week”
as published by the Federal Reserve Board during the most recent full week
preceding the date on which Borrower tenders such payment in Federal Reserve
Statistical Release H.15 (519) for instruments having a ten (10) year maturity,
from the date of such tender to the earlier of (a) the Maturity Date or (b) the
first day of the period during which prepayment of the principal balance of the
Note would have been permitted together with a prepayment consideration equal to
the prepayment consideration which would have been payable as of the first day
of the period during which prepayment would have been permitted. If at the time
of such tender, prepayment of the principal balance of the Note is permitted,
such tender by Borrower shall be deemed to be a voluntary prepayment of the
principal balance of the Note and Borrower shall, in addition to the entire
Debt, also pay to Lender the applicable prepayment consideration specified in
the Note and this Security Instrument.
     Section 13.04. Possession of the Property. Upon the occurrence of any Event
of Default and the acceleration of the Debt or any portion thereof, Borrower, if
an occupant of the Property or any part thereof, upon demand of Lender, shall
immediately surrender possession of the Property (or the portion thereof so
occupied) to Lender, and if Borrower is permitted to remain in possession, the
possession shall be as a month-to-month tenant of Lender and, on demand,
Borrower shall pay to Lender monthly, in advance, a reasonable rental for the
space so occupied and in default thereof Borrower may be dispossessed. The
covenants herein contained may be enforced by a receiver of the Property or any
part thereof. Nothing in this Section 13.04 shall be deemed to be a waiver of
the provisions of this Security Instrument making the Transfer of the Property
or any part thereof without Lender’s prior written consent an Event of Default.

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     Section 13.05. Interest After Default. If any amount due under the Note,
this Security Instrument or any of the other Loan Documents is not paid within
any applicable notice and grace period after same is due, whether such date is
the stated due date, any accelerated due date or any other date or at any other
time specified under any of the terms hereof or thereof, then, in such event,
Borrower shall pay interest on the amount not so paid from and after the date on
which such amount first becomes due at the Default Rate; and such interest shall
be due and payable at such rate until the earlier of the cure of all Events of
Default or the payment of the entire amount due to Lender, whether or not any
action shall have been taken or proceeding commenced to recover the same or to
foreclose this Security Instrument. All unpaid and accrued interest shall be
secured by this Security Instrument as part of the Debt. Nothing in this
Section 13.05 or in any other provision of this Security Instrument shall
constitute an extension of the time for payment of the Debt.
     Section 13.06. Borrower’s Actions After Default. After the happening of any
Event of Default and immediately upon the commencement of any action, suit or
other legal proceedings by Lender to obtain judgment for the Debt, or of any
other nature in aid of the enforcement of the Loan Documents, Borrower will
(a) after receipt of notice of the institution of any such action, waive the
issuance and service of process and enter its voluntary appearance in such
action, suit or proceeding, and (b) if required by Lender, consent to the
appointment of a receiver or receivers of the Property or any part thereof and
of all the earnings, revenues, rents, issues, profits and income thereof.
     Section 13.07. Control by Lender After Default. Notwithstanding the
appointment of any custodian, receiver, liquidator or trustee of Borrower, or of
any of its property, or of the Property or any part thereof, to the extent
permitted by Legal Requirements, Lender shall be entitled to obtain possession
and control of all property now and hereafter covered by this Security
Instrument and the Assignment in accordance with the terms hereof.
     Section 13.08. Right to Cure Defaults. (a) Upon the occurrence of any Event
of Default, Lender or its agents may, but without any obligation to do so and
without notice to or demand on Borrower and without releasing Borrower from any
obligation hereunder, make or do the same in such manner and to such extent as
Lender may deem necessary to protect the security hereof. Lender and its agents
are authorized to enter upon the Property or any part thereof for such purposes,
or appear in, defend, or bring any action or proceedings to protect Lender’s
interest in the Property or any part thereof or to foreclose this Security
Instrument or collect the Debt, and the cost and expense thereof (including
reasonable attorneys’ fees to the extent permitted by law), with interest as
provided in this Section 13.08, shall constitute a portion of the Debt and shall
be immediately due and payable to Lender upon demand. All such costs and
expenses incurred by Lender or its agents in remedying such Event of Default or
in appearing in, defending, or bringing any such action or proceeding shall bear
interest at the Default Rate, for the period from the date so demanded to the
date of payment to Lender. All such costs and expenses incurred by Lender or its
agents together with interest thereon calculated at the above rate shall be
deemed to constitute a portion of the Debt and be secured by this Security
Instrument.
     (b) If Lender makes any payment or advance that Lender is authorized by
this Security Instrument to make in the place and stead of Borrower (i) relating
to the Impositions or tax liens asserted against the Property, Lender may do so
according to any bill, statement or estimate procured from the appropriate
public office without inquiry into the accuracy of the bill, statement or
estimate or into the validity of any of the Impositions or the tax liens or
claims thereof; (ii) relating to any apparent or threatened adverse title, lien,
claim of lien, encumbrance, claim or charge, Lender will be the sole judge of
the legality or validity of same; or (iii) relating to any other purpose
authorized by this Security Instrument but not enumerated in this Section 13.08,
Lender may do so whenever, in its judgment and discretion, the payment or
advance seems necessary or desirable to protect the Property and the full
security interest intended to be created by this Security Instrument. In
connection with any payment or advance made pursuant to this Section 13.08,
Lender has the option and is authorized, but in no event shall be obligated, to
obtain a continuation report of title prepared by a title insurance company. The
payments and the advances made by Lender pursuant to this Section 13.08 and the
cost and expenses of said title report will be due and payable by Borrower on
demand, together with interest at the Default Rate, and will be secured by this
Security Instrument.
     Section 13.09. Late Payment Charge. If any portion of the Debt is not paid
in full on or before the day on which it is due and payable hereunder, Borrower
shall pay to Lender an amount equal to five percent (5%) of such

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unpaid portion of the Debt (“Late Charge”) to defray the expense incurred by
Lender in handling and processing such delinquent payment, and such amount shall
constitute a part of the Debt.
     Section 13.10. Recovery of Sums Required to Be Paid. Lender shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due and payable hereunder
(after the expiration of any grace period or the giving of any notice herein
provided, if any), without regard to whether or not the balance of the Debt
shall be due, and without prejudice to the right of Lender thereafter to bring
an action of foreclosure, or any other action, for a default or defaults by
Borrower existing at the time such earlier action was commenced.
     Section 13.11. Marshalling and Other Matters. Borrower hereby waives, to
the fullest extent permitted by law, the benefit of all appraisement, valuation,
stay, extension, reinstatement, redemption (both equitable and statutory) and
homestead laws now or hereafter in force and all rights of marshalling in the
event of any sale hereunder of the Property or any part thereof or any interest
therein. Nothing herein or in any other Loan Document shall be construed as
requiring Lender to resort to any particular Cross-collateralized Property for
the satisfaction of the Debt in preference or priority to any other
Cross-collateralized Property but Lender may seek satisfaction out of all the
Cross-collateralized Properties or any part thereof in its absolute discretion.
Further, Borrower hereby expressly waives any and all rights of redemption from
sale under any order or decree of foreclosure of this Security Instrument on
behalf of Borrower, whether equitable or statutory and on behalf of each and
every Person acquiring any interest in or title to the Property or any part
thereof subsequent to the date of this Security Instrument and on behalf of all
Persons to the fullest extent permitted by applicable law.
     Section 13.12. Tax Reduction Proceedings. After an Event of Default,
Borrower shall be deemed to have appointed Lender as its attorney-in-fact to
seek a reduction or reductions in the assessed valuation of the Property for
real property tax purposes or for any other purpose and to prosecute any action
or proceeding in connection therewith. This power, being coupled with an
interest, shall be irrevocable for so long as any part of the Debt remains
unpaid and any Event of Default shall be continuing.
     Section 13.13. General Provisions Regarding Remedies.
     (a) Right to Terminate Proceedings. Lender may terminate or rescind any
proceeding or other action brought in connection with its exercise of the
remedies provided in Section 13.02 at any time before the conclusion thereof, as
determined in Lender’s sole discretion and without prejudice to Lender.
     (b) No Waiver or Release. The failure of Lender to exercise any right,
remedy or option provided in the Loan Documents shall not be deemed a waiver of
such right, remedy or option or of any covenant or obligation contained in the
Loan Documents. No acceptance by Lender of any payment after the occurrence of
an Event of Default and no payment by Lender of any payment or obligation for
which Borrower is liable hereunder shall be deemed to waive or cure any Event of
Default. No sale of all or any portion of the Property, no forbearance on the
part of Lender, and no extension of time for the payment of the whole or any
portion of the Debt or any other indulgence given by Lender to Borrower or any
other Person, shall operate to release or in any manner affect the interest of
Lender in the Property or the liability of Borrower to pay the Debt. No waiver
by Lender shall be effective unless it is in writing and then only to the extent
specifically stated.
     (c) No Impairment; No Releases. The interests and rights of Lender under
the Loan Documents shall not be impaired by any indulgence, including (i) any
renewal, extension or modification which Lender may grant with respect to any of
the Debt; (ii) any surrender, compromise, release, renewal, extension, exchange
or substitution which Lender may grant with respect to the Property or any
portion thereof; or (iii) any release or indulgence granted to any maker,
endorser, guarantor or surety of any of the Debt.
     (d) Effect on Judgment. No recovery of any judgment by Lender and no levy
of an execution under any judgment upon any Property or any portion thereof
shall affect in any manner or to any extent the lien of the other
Cross-collateralized Mortgages upon the remaining Cross-collateralized
Properties or any portion thereof, or

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any rights, powers or remedies of Lender hereunder or thereunder. Such lien,
rights, powers and remedies of Lender shall continue unimpaired as before.
ARTICLE XIV: COMPLIANCE WITH REQUIREMENTS
     Section 14.01. Compliance with Legal Requirements. (a) Borrower shall
promptly comply with all present and future Legal Requirements, foreseen and
unforeseen, ordinary and extraordinary, whether requiring structural or
nonstructural repairs or alterations including, without limitation, all zoning,
subdivision, building, safety and environmental protection, land use and
development Legal Requirements, all Legal Requirements which may be applicable
to the curbs adjoining the Property or to the use or manner of use thereof, and
all rent control, rent stabilization and all other similar Legal Requirements
relating to rents charged and/or collected in connection with the Leases.
Borrower represents and warrants that the Property is in compliance in all
respects with all Legal Requirements as of the date hereof, no notes or notices
of violations of any Legal Requirements have been entered or received by
Borrower and there is no basis for the entering of such notes or notices.
     (b) Borrower shall have the right to contest by appropriate legal
proceedings diligently conducted in good faith, without cost or expense to
Lender, the validity or application of any Legal Requirement and to suspend
compliance therewith if permitted under applicable Legal Requirements, provided
(i) failure to comply therewith may not subject Lender to any civil or criminal
liability, (ii) prior to and during such contest, Borrower shall furnish to
Lender security reasonably satisfactory to Lender, in its discretion, against
loss or injury by reason of such contest or non-compliance with such Legal
Requirement, (iii) no Default or Event of Default shall exist during such
proceedings and such contest shall not otherwise violate any of the provisions
of any of the Loan Documents, (iv) such contest shall not (unless Borrower shall
comply with the provisions of clause (ii) of this Section 14.01(b)) subject the
Property to any lien or encumbrance the enforcement of which is not suspended or
otherwise affect the priority of the lien of this Security Instrument; (v) such
contest shall not affect the ownership, use or occupancy of the Property;
(vi) the Property or any part thereof or any interest therein shall not be in
any danger of being sold, forfeited or lost by reason of such contest by
Borrower; (vii) Borrower shall give Lender prompt notice of the commencement of
such proceedings and, upon request by Lender, notice of the status of such
proceedings and/or confirmation of the continuing satisfaction of the conditions
set forth in clauses (i) — (vi) of this Section 14.01(b); and (viii) upon a
final determination of such proceeding, Borrower shall take all steps necessary
to comply with any requirements arising therefrom.
     (c) Borrower shall at all times comply with all applicable Legal
Requirements with respect to the construction, use and maintenance of any vaults
adjacent to the Property. If by reason of the failure to pay taxes, assessments,
charges, permit fees, franchise taxes or levies of any kind or nature, the
continued use of the vaults adjacent to Property or any part thereof is
discontinued, Borrower nevertheless shall, with respect to any vaults which may
be necessary for the continued use of the Property, take such steps (including
the making of any payment) to ensure the continued use of vaults or
replacements.
     Section 14.02. Compliance with Recorded Documents; No Future Grants.
Borrower shall promptly perform and observe or cause to be performed and
observed, all of the terms, covenants and conditions of all Property Agreements
and all things necessary to preserve intact and unimpaired any and all
appurtenances or other interests or rights affecting the Property.
ARTICLE XV: PREPAYMENT
     Section 15.01. Prepayment. (a) Except as set forth in Section 15.01(b)
hereof, no prepayment of the Debt may be made in whole or in part.
     (b) At any time subsequent to the first (1st) anniversary of the date
hereof, Borrower may prepay the Loan, in whole, but not in part (except pursuant
to the provisions of Section 5.11 hereof), as of the last day of an Interest
Accrual Period in accordance with the following provisions:

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     (i) Lender shall have received from Borrower, not less than ten (10) days’,
nor more than ninety (90) days’, prior written notice specifying the date
proposed for such prepayment and the amount which is to be prepaid.
     (ii) Borrower shall also pay to Lender all interest due through and
including the last day of the Interest Accrual Period in which such prepayment
is being made, together with any and all other amounts due and owing pursuant to
the terms of the Note, this Security Instrument or the other Loan Documents.
     (iii) Except as to partial prepayments in connection with a casualty or
condemnation as provided in this Security Instrument, any partial prepayment
shall be in a minimum amount not less than $25,000 and shall be in whole
multiples of $1,000 in excess thereof.
     (iv) No Event of Default shall have occurred and be continuing.
     (v) Any partial prepayment of the Principal Amount, including, without
limitation, Unscheduled Payments, shall be applied to the installments of
principal last due hereunder and shall not release or relieve Borrower from the
obligation to pay the regularly scheduled installments of principal and interest
becoming due under the Note.
     (vi) Borrower shall pay to Lender, together with such prepayment and all
other amounts due in connection therewith, a non-refundable amount which shall
be deemed earned by Lender upon the funding of the Loan and shall not count to
or be credited to payment of the Principal Amount, any interest thereon or any
other amounts payable under the Note, this Security Instrument or any of the
other Loan Document, equal to one percent (1%) of the Principal Amount being
repaid if such prepayment occurs on or prior to the Payment Date occurring in
July, 2008. The Loan may be prepaid after the Payment Date occurring in July,
2008 or, unless an Event of Default exists, in the event of a casualty or
Taking, if Lender elects to apply Loss Proceeds to the payment of the Debt as a
result of a Substantial Casualty or a Substantial Taking, without such
additional fee or charge.
     (c) Borrower shall have the right to revoke any notice of prepayment twice
during the term of the Loan by giving Lender not less than two (2) Business Days
prior written notice of such revocation, provided that Borrower shall pay any
and all costs and expenses, including, but not limited to, breakage costs,
incurred by Lender in connection with any such revocation.
ARTICLE XVI: ENVIRONMENTAL COMPLIANCE
     Section 16.01. Covenants, Representations and Warranties. (a) Borrower has
not, at any time, and, to Borrower’s best knowledge after due inquiry and
investigation, except as set forth in the Environmental Report, no other Person
has at any time, handled, buried, stored, retained, refined, transported,
processed, manufactured, generated, produced, spilled, allowed to seep, leak,
escape or leach, or pumped, poured, emitted, emptied, discharged, injected,
dumped, transferred or otherwise disposed of or dealt with Hazardous Materials
on, to or from the Premises except for use and storage for use of heating oil,
cleaning fluids, pesticides and other substances customarily used in the
operation of properties that are being used for the same purposes as the
Property is presently being used, provided such use and/or storage for use is in
compliance with the requirements hereof and the other Loan Documents and does
not give rise to liability under applicable Legal Requirements or Environmental
Statutes or be the basis for a lien against the Property or any part thereof,
and Borrower does not intend to and shall not use the Property or any part
thereof for the purpose of handling, burying, storing, retaining, refining,
transporting, processing, manufacturing, generating, producing, spilling,
seeping, leaking, escaping, leaching, pumping, pouring, emitting, emptying,
discharging, injecting, dumping, transferring or otherwise disposing of or
dealing with Hazardous Materials, except for use and storage for use of heating
oil, cleaning fluids, pesticides and other substances customarily used in the
operation of properties that are being used for the same purposes as the
Property is presently being used, provided such use and/or storage for use is in
compliance with the requirements hereof and the other Loan Documents and does
not give rise to liability under applicable Legal Requirements or Environmental

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Statutes or be the basis for a lien against the Property or any part thereof. In
addition, without limitation to the foregoing provisions, Borrower represents
and warrants that, to the best of its knowledge, after due inquiry and
investigation, except as previously disclosed in writing to Lender, there is no
asbestos in, on, over, or under all or any portion of the fire-proofing or any
other portion of the Property.
     (b) Borrower, after due inquiry and investigation, knows of no seepage,
leak, escape, leach, discharge, injection, release, emission, spill, pumping,
pouring, emptying or dumping of Hazardous Materials into waters on, under or
adjacent to the Property or any part thereof or any other real property owned
and/or occupied by Borrower, or onto lands from which such Hazardous Materials
might seep, flow or drain into such waters, except as disclosed in the
Environmental Report.
     (c) Except for Hazardous Materials disclosed in the Environmental Report,
Borrower shall not permit any Hazardous Materials to be handled, buried, stored,
retained, refined, transported, processed, manufactured, generated, produced,
spilled, allowed to seep, leak, escape or leach, or to be pumped, poured,
emitted, emptied, discharged, injected, dumped, transferred or otherwise
disposed of or dealt with on, under, to or from the Property or any portion
thereof at any time, except for use and storage for use of heating oil, ordinary
cleaning fluids, pesticides and other substances customarily used in the
operation of properties that are being used for the same purposes as the
Property is presently being used, provided such use and/or storage for use is in
compliance with the requirements hereof and the other Loan Documents and does
not give rise to liability under applicable Legal Requirements or be the basis
for a lien against the Property or any part thereof.
     (d) Borrower represents and warrants that no actions, suits, or proceedings
have been commenced, or are pending, or to the best knowledge of Borrower, are
threatened with respect to any Legal Requirement governing the use, manufacture,
storage, treatment, transportation, or processing of Hazardous Materials with
respect to the Property or any part thereof. Borrower has received no notice of,
and, except as disclosed in the Environmental Report, has no knowledge of any
fact, condition, occurrence or circumstance which with notice or passage of time
or both would give rise to a claim under or pursuant to any Environmental
Statute pertaining to Hazardous Materials on, in, under or originating from the
Property or any part thereof or any other real property owned or occupied by
Borrower or arising out of the conduct of Borrower, including, without
limitation, pursuant to any Environmental Statute.
     (e) Borrower has not waived any Person’s liability with regard to Hazardous
Materials in, on, under or around the Property, nor has Borrower retained or
assumed, contractually or by operation of law, any other Person’s liability
relative to Hazardous Materials or any claim, action or proceeding relating
thereto.
     (f) In the event that there shall be filed a lien against the Property or
any part thereof pursuant to any Environmental Statute pertaining to Hazardous
Materials, Borrower shall, within sixty (60) days or, in the event that the
applicable Governmental Authority has commenced steps to cause the Premises or
any part thereof to be sold pursuant to the lien, within twenty five (25) days,
from the date that Borrower receives notice of such lien, either (i) pay the
claim and remove the lien from the Property, or (ii) furnish (A) a bond
satisfactory to Lender in the amount of the claim out of which the lien arises,
(B) a cash deposit in the amount of the claim out of which the lien arises, or
(C) other security reasonably satisfactory to Lender in an amount sufficient to
discharge the claim out of which the lien arises.
     (g) Borrower represents and warrants that (i) except as disclosed in the
Environmental Report, Borrower has no knowledge of any violation of any
Environmental Statute or any Environmental Problem in connection with the
Property, nor has Borrower been requested or required by any Governmental
Authority to perform any remedial activity or other responsive action in
connection with any Environmental Problem and (ii) neither the Property nor any
other property owned by Borrower is included or, to Borrower’s best knowledge,
after due inquiry and investigation, proposed for inclusion on the National
Priorities List issued pursuant to CERCLA by the United States Environmental
Protection Agency (the “EPA”) or on the inventory of other potential “Problem”
sites issued by the EPA or has been identified by the EPA as a potential CERCLA
site or included or, to Borrower’s knowledge, after due inquiry and
investigation, proposed for inclusion on any list or inventory issued pursuant
to any other Environmental Statute, if any, or issued by any other Governmental
Authority. Borrower

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covenants that Borrower will comply with all Environmental Statutes affecting or
imposed upon Borrower or the Property.
     (h) Borrower covenants that it shall promptly notify Lender of the presence
and/or release of any Hazardous Materials and of any request for information or
any inspection of the Property or any part thereof by any Governmental Authority
with respect to any Hazardous Materials and provide Lender with copies of such
request and any response to any such request or inspection. Borrower covenants
that it shall, in compliance with applicable Legal Requirements, conduct and
complete all investigations, studies, sampling and testing (and promptly shall
provide Lender with copies of any such studies and the results of any such test)
and all remedial, removal and other actions required by Governmental Authorities
to clean up and remove all Hazardous Materials in, on, over, under, from or
affecting the Property or any part thereof in accordance with all such Legal
Requirements applicable to the Property or any part thereof.
     (i) Following the occurrence of an Event of Default hereunder, and without
regard to whether Lender shall have taken possession of the Property or a
receiver has been requested or appointed or any other right or remedy of Lender
has or may be exercised hereunder or under any other Loan Document, Lender shall
have the right (but no obligation) to conduct such investigations, studies,
sampling and/or testing of the Property or any part thereof as Lender may, in
its discretion, determine to conduct, relative to Hazardous Materials. All costs
and expenses incurred in connection therewith including, without limitation,
consultants’ fees and disbursements and laboratory fees, shall constitute a part
of the Debt and shall, upon demand by Lender, be immediately due and payable and
shall bear interest at the Default Rate from the date so demanded by Lender
until reimbursed. Borrower shall, at its sole cost and expense, fully and
expeditiously cooperate in all such investigations, studies, samplings and/or
testings including, without limitation, providing all relevant information and
making knowledgeable people available for interviews.
     (j) To Borrower’s knowledge, except as disclosed to Lender in the
Environmental Report, Borrower represents and warrants that all paint and
painted surfaces existing within the interior or on the exterior of the
Improvements are not flaking, peeling, cracking, blistering, or chipping, and do
not contain lead or are maintained in a condition that prevents exposure of
young children to lead-based paint, as of the date hereof, and that the current
inspections, operation, and maintenance program at the Property with respect to
lead-based paint is consistent with FNMA guidelines and sufficient to ensure
that all painted surfaces within the Property shall be maintained in a condition
that prevents exposure of tenants to lead-based paint. To Borrower’s knowledge,
except as disclosed to Lender in the Environmental Report, there have been no
claims for adverse health effects from exposure on the Property to lead-based
paint or requests for the investigation, assessment or removal of lead-based
paint at the Property.
     (k) Borrower represents and warrants that except in accordance with all
applicable Environmental Statutes and as disclosed in the Environmental Report,
(i) no underground treatment or storage tanks or pumps or water, gas, or oil
wells are or have been located about the Property, (ii) no PCBs or transformers,
capacitors, ballasts or other equipment that contain dielectric fluid containing
PCBs are located about the Property, (iii) no insulating material containing
urea formaldehyde is located about the Property and (iv) no asbestos-containing
material is located about the Property.
     Section 16.02. Environmental Indemnification. Borrower shall defend,
indemnify and hold harmless the Indemnified Parties for, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages (excluding
consequential or punitive damages), costs and expenses of whatever kind or
nature, known or unknown, contingent or otherwise, whether incurred or imposed
within or outside the judicial process, including, without limitation,
reasonable attorneys’ and consultants’ fees and disbursements and investigations
and laboratory fees arising out of, or in any way related to any Environmental
Problem, including without limitation:
     (a) the presence, disposal, escape, seepage, leakage, spillage, discharge,
emission, release or threat of release of any Hazardous Materials in, on, over,
under, from or affecting the Property or any part thereof whether or not
disclosed by the Environmental Report;

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     (b) any personal injury (including wrongful death, disease or other health
condition related to or caused by, in whole or in part, any Hazardous Materials)
or property damage (real or personal) arising out of or related to any Hazardous
Materials in, on, over, under, from or affecting the Property or any part
thereof whether or not disclosed by the Environmental Report;
     (c) any action, suit or proceeding brought or threatened, settlement
reached, or order of any Governmental Authority relating to such Hazardous
Material whether or not disclosed by the Environmental Report; and/or
     (d) any violation of the provisions, covenants, representations or
warranties of Section 16.01 hereof or of any Legal Requirement which is based on
or in any way related to any Hazardous Materials in, on, over, under, from or
affecting the Property or any part thereof including, without limitation, the
cost of any work performed and materials furnished in order to comply therewith
whether or not disclosed by the Environmental Report.
     Notwithstanding the foregoing provisions of this Section 16.02 to the
contrary, Borrower shall have no obligation to indemnify Lender for liabilities,
claims, damages, penalties, causes of action, costs and expenses relative to the
foregoing which result directly from Lender’s willful misconduct or gross
negligence. Additionally, the obligations and liabilities of Borrower under this
Section 16.02 shall terminate and be of no further force and effect if all of
the following conditions are satisfied in full: (i) there has been no change,
between the date hereof and the date the Loan is paid in full, in any
Environmental Law, the effect of which change may be to make a lender or
mortgagee liable in respect to any matter for which the Indemnified Parties are
entitled to indemnification pursuant to this Section 16.02, notwithstanding the
fact that the Loan is paid in full; (ii) Lender shall have received, at
Borrower’s sole cost and expense, an environmental report relating to the
Property in form and substance and prepared by a qualified Person, in each case
acceptable to Lender, dated no earlier than the date upon which the Loan is paid
in full showing, to the satisfaction of Lender, that there exists no matter for
which the Indemnified Parties are entitled to indemnification pursuant to this
Section 16.02; (iii) no Event of Default shall have occurred; (iv) Lender shall
have received an opinion letter in form and substance and from counsel
satisfactory to Lender that none of the Indemnified Persons shall be deemed an
“owner” or “operator” (or any other analogous definition) under any
Environmental Law; and (iii) five (5) years have passed since the date on which
the Debt shall have been paid in full. Any amounts payable to Lender by reason
of the application of this Section 16.02 shall be secured by this Security
Instrument and shall, upon demand by Lender, become immediately due and payable
and shall bear interest at the Default Rate from the date so demanded by Lender
until paid.
     This indemnification shall survive the termination of this Security
Instrument whether by repayment of the Debt, foreclosure or deed in lieu
thereof, assignment, or otherwise. The indemnity provided for in this
Section 16.02 shall not be included in any exculpation of Borrower or its
principals from personal liability provided for in this Security Instrument or
in any of the other Loan Documents. Nothing in this Section 16.02 shall be
deemed to deprive Lender of any rights or remedies otherwise available to
Lender, including, without limitation, those rights and remedies provided
elsewhere in this Security Instrument or the other Loan Documents.
ARTICLE XVII: ASSIGNMENTS
     Section 17.01. Participations and Assignments. Lender shall have the right,
at no cost to Borrower, to assign this Security Instrument and/or any of the
Loan Documents, and to transfer, assign or sell participations and
subparticipations (including blind or undisclosed participations and
subparticipations) in the Loan Documents and the obligations hereunder to any
Person; provided, however, that no such participation shall increase, decrease
or otherwise affect either Borrower’s or Lender’s obligations under this
Security Instrument or the other Loan Documents.
ARTICLE XVIII: MISCELLANEOUS
     Section 18.01. Right of Entry. Lender and its agents shall have the right
to enter and at no cost to Borrower, to inspect the Property or any part thereof
at all reasonable times, and, except in the event of an

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emergency, upon reasonable notice and to inspect Borrower’s books and records
and to make abstracts and reproductions thereof.
     Section 18.02. Cumulative Rights. The rights of Lender under this Security
Instrument shall be separate, distinct and cumulative and none shall be given
effect to the exclusion of the others. No act of Lender shall be construed as an
election to proceed under any one provision herein to the exclusion of any other
provision. Lender shall not be limited exclusively to the rights and remedies
herein stated but shall be entitled, subject to the terms of this Security
Instrument, to every right and remedy now or hereafter afforded by law.
     Section 18.03. Liability. If Borrower consists of more than one Person, the
obligations and liabilities of each such Person hereunder shall be joint and
several.
     Section 18.04. Exhibits Incorporated. The information set forth on the
cover hereof, and the Exhibits annexed hereto, are hereby incorporated herein as
a part of this Security Instrument with the same effect as if set forth in the
body hereof.
     Section 18.05. Severable Provisions. If any term, covenant or condition of
the Loan Documents including, without limitation, the Note or this Security
Instrument, is held to be invalid, illegal or unenforceable in any respect, such
Loan Document shall be construed without such provision.
     Section 18.06. Duplicate Originals. This Security Instrument may be
executed in any number of duplicate originals and each such duplicate original
shall be deemed to constitute but one and the same instrument.
     Section 18.07. No Oral Change. The terms of this Security Instrument,
together with the terms of the Note and the other Loan Documents, constitute the
entire understanding and agreement of the parties hereto and supersede all prior
agreements, understandings and negotiations between Borrower and Lender with
respect to the Loan. This Security Instrument, and any provisions hereof, may
not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act on the part of Borrower or Lender, but only by an agreement
in writing signed by the party against whom enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is sought.
     Section 18.08. Waiver of Counterclaim, Etc. BORROWER HEREBY WAIVES THE
RIGHT TO ASSERT A COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN ANY
ACTION OR PROCEEDING BROUGHT AGAINST IT BY LENDER OR ITS AGENTS, AND WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT BY EITHER PARTY HERETO AGAINST
THE OTHER OR IN ANY COUNTERCLAIM BORROWER MAY BE PERMITTED TO ASSERT HEREUNDER
OR WHICH MAY BE ASSERTED BY LENDER OR ITS AGENTS, AGAINST BORROWER, OR IN ANY
MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS SECURITY
INSTRUMENT OR THE DEBT.
     Section 18.09. Headings; Construction of Documents; etc. The table of
contents, headings and captions of various paragraphs of this Security
Instrument are for convenience of reference only and are not to be construed as
defining or limiting, in any way, the scope or intent of the provisions hereof.
Borrower acknowledges that it was represented by competent counsel in connection
with the negotiation and drafting of this Security Instrument and the other Loan
Documents and that neither this Security Instrument nor the other Loan Documents
shall be subject to the principle of construing the meaning against the Person
who drafted same.
     Section 18.10. Sole Discretion of Lender. Whenever Lender exercises any
right given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide that arrangements or terms are satisfactory or not satisfactory shall be
in the sole discretion of Lender and shall be final and conclusive, except as
may be otherwise specifically provided herein.
     Section 18.11. Waiver of Notice. Borrower shall not be entitled to any
notices of any nature whatsoever from Lender except with respect to matters for
which this Security Instrument specifically and expressly provides

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for the giving of notice by Lender to Borrower and except with respect to
matters for which Borrower is not, pursuant to applicable Legal Requirements,
permitted to waive the giving of notice.
     Section 18.12. Covenants Run with the Land. All of the grants, covenants,
terms, provisions and conditions herein shall run with the Premises, shall be
binding upon Borrower and shall inure to the benefit of Lender, subsequent
holders of this Security Instrument and their successors and assigns. Without
limitation to any provision hereof, the term “Borrower” shall include and refer
to the borrower named herein, any subsequent owner of the Property, and its
respective heirs, executors, legal representatives, successors and assigns. The
representations, warranties and agreements contained in this Security Instrument
and the other Loan Documents are intended solely for the benefit of the parties
hereto, shall confer no rights hereunder, whether legal or equitable, in any
other Person and no other Person shall be entitled to rely thereon.
     Section 18.13. Applicable Law. THIS SECURITY INSTRUMENT WAS NEGOTIATED IN
NEW YORK, AND MADE BY BORROWER AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK,
AND THE PROCEEDS OF THE NOTE 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
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE. THIS SECURITY INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH ANY APPLICABLE LAW OF THE
UNITED STATES OF AMERICA AND THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO INTERNAL CHOICE OF
LAW DOCTRINES, THE PARTIES HEREBY AGREEING TO HAVE NEW YORK LAW GOVERN AS
PROVIDED FOR IN NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401; PROVIDED,
HOWEVER THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, PRIORITY,
ENFORCEMENT AND FORECLOSURE OF THE LIENS AND SECURITY INTERESTS CREATED
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE
IN WHICH THE PREMISES ARE LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST
EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK
SHALL GOVERN THE VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS, AND THE DEBT
OR OBLIGATIONS ARISING HEREUNDER.
     Section 18.14. Security Agreement. (a) (i) This Security Instrument is both
a real property mortgage, deed to secure debt or deed of trust, as applicable,
and a “security agreement” within the meaning of the UCC. The Property includes
both real and personal property and all other rights and interests, whether
tangible or intangible in nature, of Borrower in the Property. This Security
Instrument is filed as a fixture filing and covers goods which are or are to
become fixtures on the Property. Borrower by executing and delivering this
Security Instrument has granted to Lender, as security for the Debt, a security
interest in the Property to the full extent that the Property may be subject to
the UCC (said portion of the Property so subject to the UCC being called in this
Section 18.14 the “Collateral”). If an Event of Default shall occur, Lender, in
addition to any other rights and remedies which it may have, shall have and may
exercise immediately and without demand, any and all rights and remedies granted
to a secured party upon default under the UCC, including, without limiting the
generality of the foregoing, the right to take possession of the Collateral or
any part thereof, and to take such other measures as Lender may deem necessary
for the care, protection and preservation of the Collateral. Upon request or
demand of Lender following an Event of Default, Borrower shall, at its expense,
assemble the Collateral and make it available to Lender at a convenient place
acceptable to Lender. Borrower shall pay to Lender on demand any and all
expenses, including reasonable legal expenses and attorneys’ fees, incurred or
paid by Lender in protecting its interest in the Collateral and in enforcing its
rights hereunder with respect to the Collateral. Any disposition pursuant to the
UCC of so much of the Collateral as may constitute personal property shall be
considered commercially reasonable if made pursuant to a public sale which is
advertised at least twice in a newspaper in which sheriff’s sales are advertised
in the county where the Premises is located. Any notice of sale, disposition or
other intended action by Lender with respect to the Collateral given to Borrower
in accordance with the provisions hereof at least ten (10) days prior to such
action, shall constitute reasonable notice to Borrower. The proceeds of any
disposition of the Collateral, or any part thereof, may be applied by Lender to
the payment of the Debt in such priority and proportions as Lender in its
discretion shall

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deem proper. It is not necessary that the Collateral be present at any
disposition thereof. Lender shall have no obligation to clean-up or otherwise
prepare the Collateral for disposition.
     (ii) The mention in a financing statement filed in the records normally
pertaining to personal property of any portion of the Property shall not
derogate from or impair in any manner the intention of this Security Instrument.
Lender hereby declares that all items of Collateral are part of the real
property encumbered hereby to the fullest extent permitted by law, regardless of
whether any such item is physically attached to the Improvements or whether
serial numbers are used for the better identification of certain items.
Specifically, the mention in any such financing statement of any items included
in the Property shall not be construed to alter, impair or impugn any rights of
Lender as determined by this Security Instrument or the priority of Lender’s
lien upon and security interest in the Property in the event that notice of
Lender’s priority of interest as to any portion of the Property is required to
be filed in accordance with the UCC to be effective against or take priority
over the interest of any particular class of persons, including the federal
government or any subdivision or instrumentality thereof. No portion of the
Collateral constitutes or is the proceeds of “Farm Products”, as defined in the
UCC.
     (iii) If Borrower is at any time a beneficiary under a letter of credit now
or hereafter issued in favor of Borrower, Borrower shall promptly notify Lender
thereof and, at the request and option of Lender, Borrower shall, pursuant to an
agreement in form and substance satisfactory to Lender, either (A) arrange for
the issuer and any confirmer of such letter of credit to consent to an
assignment to Lender of the proceeds of any drawing under the letter of credit
or (B) arrange for Lender to become the transferee beneficiary of the letter of
credit, with Lender agreeing, in each case, that the proceeds of any drawing
under the letter to credit are to be applied as provided in this Security
Instrument.
     (iv) Borrower and Lender acknowledge that for the purposes of Article 9 of
the UCC, the law of the State of New York shall be the law of the jurisdiction
of the bank in which the Central Account is located.
     (v) Lender may comply with any applicable Legal Requirements in connection
with the disposition of the Collateral, and Lender’s compliance therewith will
not be considered to adversely affect the commercial reasonableness of any sale
of the Collateral.
     (vi) Lender may sell the Collateral without giving any warranties as to the
Collateral. Lender may specifically disclaim any warranties of title,
possession, quiet enjoyment or the like. This procedure will not be considered
to adversely affect the commercial reasonableness of any sale of the Collateral.
     (vii) If Lender sells any of the Collateral upon credit, Borrower will be
credited only with payments actually made by the purchaser, received by Lender
and applied to the indebtedness of Borrower. In the event the purchaser of the
Collateral fails to fully pay for the Collateral, Lender may resell the
Collateral and Borrower will be credited with the proceeds of such sale.
     (b) Borrower hereby irrevocably appoints Lender as its attorney-in-fact,
coupled with an interest, to file with the appropriate public office on its
behalf any financing or other statements signed only by Lender, as secured
party, or, to the extent permitted under the UCC, unsigned, in connection with
the Collateral covered by this Security Instrument.
     Section 18.15. Actions and Proceedings. Lender has the right to appear in
and defend any action or proceeding brought with respect to the Property in its
own name or, if required by Legal Requirements or, if an Event of Default exists
and in Lender’s reasonable judgment, it is necessary, in the name and on behalf
of Borrower, which Lender believes will adversely affect the Property or this
Security Instrument and to bring any action or proceedings, in its name or in
the name and if an Event of Default exists on behalf of Borrower, which Lender,
in its discretion, decides should be brought to protect its interest in the
Property.

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     Section 18.16. Usury Laws. This Security Instrument and the Note are
subject to the express condition, and it is the expressed intent of the parties,
that at no time shall Borrower be obligated or required to pay interest on the
principal balance due under the Note at a rate which could subject the holder of
the Note to either civil or criminal liability as a result of being in excess of
the maximum interest rate which Borrower is permitted by law to contract or
agree to pay. If by the terms of this Security Instrument or the Note, Borrower
is at any time required or obligated to pay interest on the principal balance
due under the Note at a rate in excess of such maximum rate, such rate of
interest shall be deemed to be immediately reduced to such maximum rate and the
interest payable shall be computed at such maximum rate and all prior interest
payments in excess of such maximum rate shall be applied and shall be deemed to
have been payments in reduction of the principal balance of the Note. No
application to the principal balance of the Note pursuant to this Section 18.16
shall give rise to any requirement to pay any prepayment fee or charge of any
kind due hereunder, if any.
     Section 18.17. Remedies of Borrower. In the event that a claim or
adjudication is made that Lender has acted unreasonably or unreasonably delayed
acting in any case where by law or under the Note, this Security Instrument or
the Loan Documents, it has an obligation to act reasonably or promptly, Lender
shall not be liable for any monetary damages, and Borrower’s remedies shall be
limited to injunctive relief or declaratory judgment.
     Section 18.18. Offsets, Counterclaims and Defenses. Any assignee of this
Security Instrument, the Assignment and the Note shall take the same free and
clear of all offsets, counterclaims or defenses which are unrelated to the Note,
the Assignment or this Security Instrument which Borrower may otherwise have
against any assignor of this Security Instrument, the Assignment and the Note
and no such unrelated counterclaim or defense shall be interposed or asserted by
Borrower in any action or proceeding brought by any such assignee upon this
Security Instrument, the Assignment or the Note and any such right to interpose
or assert any such unrelated offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by Borrower.
     Section 18.19. No Merger. If Borrower’s and Lender’s estates become the
same including, without limitation, upon the delivery of a deed by Borrower in
lieu of a foreclosure sale, or upon a purchase of the Property by Lender in a
foreclosure sale, this Security Instrument and the lien created hereby shall not
be destroyed or terminated by the application of the doctrine of merger and in
such event Lender shall continue to have and enjoy all of the rights and
privileges of Lender as to the separate estates; and, as a consequence thereof,
upon the foreclosure of the lien created by this Security Instrument, any Leases
or subleases then existing and created by Borrower shall not be destroyed or
terminated by application of the law of merger or as a result of such
foreclosure unless Lender or any purchaser at any such foreclosure sale shall so
elect. No act by or on behalf of Lender or any such purchaser shall constitute a
termination of any Lease or sublease unless Lender or such purchaser shall give
written notice thereof to such lessee or sublessee.
     Section 18.20. Restoration of Rights. In case Lender shall have proceeded
to enforce any right under this Security Instrument by foreclosure sale, entry
or otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely, then, in every such case,
Borrower and Lender shall be restored to their former positions and rights
hereunder with respect to the Property subject to the lien hereof.
     Section 18.21. Waiver of Statute of Limitations. The pleadings of any
statute of limitations as a defense to any and all obligations secured by this
Security Instrument are hereby waived to the full extent permitted by Legal
Requirements.
     Section 18.22. Advances. This Security Instrument shall cover any and all
advances made pursuant to the Loan Documents, rearrangements and renewals of the
Debt and all extensions in the time of payment thereof, even though such
advances, extensions or renewals be evidenced by new promissory notes or other
instruments hereafter executed and irrespective of whether filed or recorded.
Likewise, the execution of this Security Instrument shall not impair or affect
any other security which may be given to secure the payment of the Debt, and all
such additional security shall be considered as cumulative. The taking of
additional security, execution of partial releases of the security, or any
extension of time of payment of the Debt shall not diminish the force, effect or
lien of this Security Instrument and shall not affect or impair the liability of
Borrower and shall not affect or impair the liability of any maker, surety, or
endorser for the payment of the Debt.

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     Section 18.23. Application of Default Rate Not a Waiver. Application of the
Default Rate shall not be deemed to constitute a waiver of any Default or Event
of Default or any rights or remedies of Lender under this Security Instrument,
any other Loan Document or applicable Legal Requirements, or a consent to any
extension of time for the payment or performance of any obligation with respect
to which the Default Rate may be invoked.
     Section 18.24. Intervening Lien. To the fullest extent permitted by law,
any agreement hereafter made pursuant to this Security Instrument shall be
superior to the rights of the holder of any intervening lien.
     Section 18.25. No Joint Venture or Partnership. Borrower and Lender intend
that the relationship created hereunder be solely that of mortgagor and
mortgagee or grantor and beneficiary or borrower and lender, as the case may be.
Nothing herein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between Borrower and Lender nor
to grant Lender any interest in the Property other than that of mortgagee,
beneficiary or lender.
     Section 18.26. Time of the Essence. Time shall be of the essence in the
performance of all obligations of Borrower hereunder.
     Section 18.27. Borrower’s Obligations Absolute. Borrower acknowledges that
Lender and/or certain Affiliates of Lender are engaged in the business of
financing, owning, operating, leasing, managing, and brokering real estate and
in other business ventures which may be viewed as adverse to or competitive with
the business, prospect, profits, operations or condition (financial or
otherwise) of Borrower. Except as set forth to the contrary in the Loan
Documents, all sums payable by Borrower hereunder shall be paid without notice
or demand, counterclaim, set-off, deduction or defense and without abatement,
suspension, deferment, diminution or reduction, and the obligations and
liabilities of Borrower hereunder shall in no way be released, discharged, or
otherwise affected (except as expressly provided herein) by reason of: (a) any
damage to or destruction of or any Taking of the Property or any portion thereof
or any other Cross-collateralized Property; (b) any restriction or prevention of
or interference with any use of the Property or any portion thereof or any other
Cross-collateralized Property; (c) any title defect or encumbrance or any
eviction from the Premises or any portion thereof by title paramount or
otherwise; (d) any bankruptcy proceeding relating to Borrower, any General
Partner, or any guarantor or indemnitor, or any action taken with respect to
this Security Instrument or any other Loan Document by any trustee or receiver
of Borrower or any other Cross-collateralized Borrower or any such General
Partner, guarantor or indemnitor, or by any court, in any such proceeding;
(e) any claim which Borrower has or might have against Lender; (f) any default
or failure on the part of Lender to perform or comply with any of the terms
hereof or of any other agreement with Borrower or any other Cross-collateralized
Borrower; or (g) any other occurrence whatsoever, whether similar or dissimilar
to the foregoing, whether or not Borrower shall have notice or knowledge of any
of the foregoing.
     Section 18.28. Publicity. All promotional news releases, publicity or
advertising by Manager, Borrower or their respective Affiliates through any
media intended to reach the general public shall not refer to the Loan Documents
or the financing evidenced by the Loan Documents, or to Lender or to any of its
Affiliates without the prior written approval of Lender or such Affiliate, as
applicable, in each instance, such approval not to be unreasonably withheld or
delayed. Notwithstanding anything herein to the contrary, without obtaining
Lender’s consent, Borrower shall be authorized to provide information relating
to the Loan Documents or the financing evidenced by the Loan Documents, or to
Lender or to any of its Affiliates, (i) to rating agencies, underwriters,
potential securities investors, auditors, regulatory authorities and to any
Persons which may be entitled to such information by operation of law and
without limiting the foregoing to issue press releases, and make Form 8-K and
other securities filings containing the above-described information as it or its
counsel reasonably deems required by law, (ii) in the GAV proxy statement (the
“Proxy Statement”) pertaining to the proposed purchase of GERA Property
Acquisition LLC by GAV and to GAV’s stockholders and potential investors in
communications related to the Proxy Statement, (iii) in the S-4 related to the
proposed transaction between Grubb & Ellis Company (“GBE”) and NNN Realty
Advisors, Inc. (“NNN”) and to GBE’s and NNN’s stockholders and GBE’s potential
investors in communications related to such proposed transactions, and (iv) in
GBE’s and GAV’s ‘34 Act filings and earnings releases and to GBE’s and NNN’s
stockholders and GBE’s potential investors in connection with such earnings
releases. Lender shall be authorized to provide information relating to the
Property, the Loan and matters relating thereto to rating agencies,
underwriters, potential securities investors, auditors, regulatory authorities
and to any

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Persons which may be entitled to such information by operation of law and may
use basic transaction information (including, without limitation, the name of
Borrower, the name and address of the Property and the Loan Amount) in press
releases or other marketing materials.
     Section 18.29. Securitization Opinions. In the event the Loan is included
as an asset of a Securitization by Lender or any of its Affiliates, Borrower
shall, within thirty (30) days after Lender’s written request therefor, at
Borrower’s sole cost and expense, deliver opinions in form and substance and
delivered by counsel reasonably acceptable to Lender and each Rating Agency, as
may be reasonably required by Lender and/or the Rating Agency in connection with
such securitization provided in no event shall Borrower be obligated to cause
its counsel to deliver a “10b-5” opinion or a “true sale” opinion unless said
opinion is paid for by Lender . Borrower’s failure to deliver the opinions
required hereby within such thirty (30) days period shall constitute an “Event
of Default” hereunder.
     Section 18.30. Cooperation with Rating Agencies; etc. At the request of
Lender and, to the extent not already required to be provided by Borrower under
this Security Instrument, Borrower shall use commercially reasonable efforts to
cooperate with Lender’s efforts in accordance with the market standards which
may be reasonably required in the marketplace or by the Rating Agencies in
connection with a Securitization of rated single or multi-class securities (the
“Securities”) secured by or evidencing ownership interests in the Note and this
Security Instrument (but not resecuritization or an further secondary market
transaction with respect to the sale of the Note), by satisfying (or cause to be
satisfied) the conditions in this Section 18.30 and in Sections 18.29 and 18.31
(but borrower shall not in any event be required to incur, suffer or accept) any
lesser rights or greater obligations than as currently set forth in the Loan
Documents. Borrower covenants and agrees that in the event the Loan is to be
included as an asset of a Securitization, Borrower shall (a) gather any
information with respect to the Property, Borrower and/or Manager reasonably
required by each Rating Agency in connection with such a Securitization, (b) at
Lender’s request, meet with representatives of each Rating Agency to discuss the
business and operations of the Property, and (c) cooperate with the reasonable
requests of each Rating Agency and Lender in connection with all of the
foregoing as well as in connection with all other matters and the preparation of
any offering documents with respect thereto, including, without limitation,
entering into any amendments or modifications to this Security Instrument or to
any other Loan Document which may be requested by Lender to conform to Rating
Agency or market standards for a Securitization provided that no such
modification shall modify (a) the interest rate payable under the Note, (b) the
stated maturity of the Note, (c) the amortization of principal under the Note,
(d) Section 18.32 hereof, (e) any other economic term of the Loan or (f) any
provision, the effect of which would increase Borrower’s obligations or decrease
Borrower’s rights under the Loan Documents. Borrower acknowledges that the
information provided by Borrower to Lender may be incorporated into the offering
documents for a Securitization and to the fullest extent permitted, Borrower
irrevocably waives all rights, if any, to prohibit such disclosures including,
without limitation, any right of privacy. Lender and each Rating Agency shall be
entitled to rely on the information supplied by, or on behalf of, Borrower and
Borrower indemnifies and holds harmless the Indemnified Parties, their
Affiliates and each Person who controls such Persons within the meaning of
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934, as same may be amended from time to time, for, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, known or unknown, contingent or otherwise,
whether incurred or imposed within or outside the judicial process, including,
without limitation, reasonable attorneys’ fees and disbursements that arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in such information or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated in such 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 (collectively, “Securities Liabilities”); provided, however, that
Borrower will be liable under the foregoing indemnity only to the extent that
such Securities Liabilities arise out of, or are based upon, any such untrue
statement or omission made therein in reliance upon, and in conformity with,
information furnished to Lender by or on behalf of Borrower or its Affiliates in
connection with the preparation of the disclosure documents or in connection
with the underwriting of the Loan; and provided further, however, that with
respect to information provided by third parties and with respect to statements
made in the disclosure documents that are based upon information provided by
third parties, Borrower will be liable only if Borrower or its Affiliates knew
that such information was false or omitted to state a material fact known to

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Borrower and necessary to make the statements made, in light of the
circumstances under which they were made, not misleading.
     Section 18.31. Securitization Financials. Borrower covenants and agrees
that, upon Lender’s written request therefor in connection with a
Securitization, Borrower shall, at Borrower’s sole cost and expense, promptly
deliver if, at the time one or more Disclosure Documents are being prepared in
connection with a Securitization, and if required by Regulation AB Lender
expects that Borrower alone or Borrower and one or more of its Affiliates
collectively, or the Property alone or the Property and any other parcel(s) of
real property, together with improvements thereon and personal property related
thereto, that is “related”, within the meaning of the definition of Significant
Obligor, to the Property (a “Related Property”) collectively, will be a
Significant Obligor, (i) the selected financial data or, if applicable, net
operating income, required under Item 1112(b)(1) of Regulation AB and meeting
the requirements thereof, if Lender expects that the principal amount of the
Loan, together with any loans made to an Affiliate of Borrower or secured by a
Related Property that is included in a Securitization with the Loan (a “Related
Loan”), as of the cut-off date for such Securitization may, or if the principal
amount of the Loan together with any Related Loans as of the cut-off date for
such Securitization and at any time during which the Loan and any Related Loans
are included in a Securitization does, equal or exceed ten percent (10%) (but
less than twenty percent (20%)) of the aggregate principal amount of all
mortgage loans included or expected to be included, as applicable, in the
Securitization or (ii) the financial statements required under Item 1112(b)(2)
of Regulation AB and meeting the requirements thereof, if Lender expects that
the principal amount of the Loan together with any Related Loans as of the
cut-off date for such Securitization may, or if the principal amount of the Loan
together with any Related Loans as of the cut-off date for such Securitization
and at any time during which the Loan and any Related Loans are included in a
Securitization does, equal or exceed twenty percent (20%) of the aggregate
principal amount of all mortgage loans included or expected to be included, as
applicable, in the Securitization. Such financial data or financial statements
shall be furnished to Lender within ten (10) Business Days after notice from
Lender in connection with the preparation of Disclosure Documents for the
Securitization and, with respect to the data or financial statements required
pursuant to clause (b) hereof, (A) not later than thirty (30) days after the end
of each fiscal quarter of Borrower and (B) not later than seventy-five (75) days
after the end of each Fiscal Year; provided, however, that Borrower shall not be
obligated to furnish financial data or financial statements pursuant to clauses
(A) or (B) of this sentence with respect to any period for which a filing
pursuant to the Securities Exchange Act of 1934 in connection with or relating
to the Securitization is not required.
     Section 18.32. Exculpation. Notwithstanding anything herein or in any other
Loan Document to the contrary, except as otherwise set forth in this
Section 18.32 to the contrary, Lender shall not enforce the liability and
obligation of Borrower or any Person holding a direct or indirect interest in
Borrower or (a) if Borrower or any of its direct or indirect owners is a
partnership, its or their direct or indirect constituent partners or any of
their respective partners, (b) if Borrower or any of its direct or indirect
owners is a trust, its or their beneficiaries or any of their respective
Partners (as hereinafter defined), (c) if Borrower or any of its direct or
indirect owners is a corporation, any of its or their direct or indirect
shareholders, directors, principals, officers or employees, or (d) if Borrower
or any of its direct or indirect owners is a limited liability company, any of
its or their direct or indirect members (the Persons described in the foregoing
clauses (a) — (d), as the case may be, are hereinafter referred to as the
“Partners”) to perform and observe the obligations contained in this Security
Instrument or any of the other Loan Documents by any action or proceeding,
including, without limitation, any action or proceeding wherein a money judgment
shall be sought against Borrower or the Partners, except that Lender may bring a
foreclosure action, action for specific performance, or other appropriate action
or proceeding (including, without limitation, an action to obtain a deficiency
judgment) against Borrower solely for the purpose of enabling Lender to realize
upon (i) Borrower’s interest in the Property, (ii) the Rent to the extent
received by Borrower during the existence of an Event of Default (all Rent
covered by this clause (ii) being hereinafter referred to as the “Recourse
Distributions”) and not applied towards Debt Service or the operation or
maintenance of the Property and (iii) any other collateral then subject to the
Loan Documents (the collateral described in the foregoing clauses (i) — (iii) is
hereinafter referred to as the “Default Collateral”); provided, however, that
any judgment in any such action or proceeding shall be enforceable against
Borrower and the Partners only to the extent of any such Default Collateral. The
provisions of this Section shall not, however, (a) impair the validity of the
Debt evidenced by the Note or in any way affect or impair the lien of this
Security Instrument or any of the other Loan Documents or the right of Lender to
foreclose this Security Instrument during the existence of an Event of Default;
(b) impair the right of Lender to name Borrower as a party defendant in

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any action or suit for judicial foreclosure and sale under this Security
Instrument; (c) affect the validity or enforceability of the Note, this Security
Instrument, or any of the other Loan Documents; (d) impair the right of Lender
to obtain the appointment of a receiver; (e) impair the enforcement of the
Assignment; (f) impair the right of Lender to bring suit for a monetary judgment
against Borrower with respect to fraud or material misrepresentation by
Borrower, or any Affiliate of Borrower in connection with this Security
Instrument, the Note or the other Loan Documents, and the foregoing provisions
shall not modify, diminish or discharge the liability of Borrower; (g) impair
the right of Lender to bring suit for a monetary judgment to obtain the Recourse
Distributions received by Borrower and the foregoing provisions shall not
modify, diminish or discharge the liability of Borrower with respect to same;
(h) impair the right of Lender to bring suit for a monetary judgment against
Borrower with respect to Borrower’s misappropriation of tenant security deposits
or Rent collected more than one (1) month in advance and not applied to the
operation of the Property (including the Basic Carrying Costs), and the
foregoing provisions shall not modify, diminish or discharge the liability of
Borrower; (i) impair the right of Lender to obtain Loss Proceeds due to Lender
pursuant to this Security Instrument; (j) impair the right of Lender to enforce
the provisions of Sections 2.02(g) (other than the provisions of clause
(vii) thereof), 16.01 or 16.02, inclusive of this Security Instrument, even
after repayment in full by Borrower of the Debt or to bring suit for a monetary
judgment against Borrower with respect to any obligation set forth in said
Sections; (k) prevent or in any way hinder Lender from exercising, or constitute
a defense, or counterclaim, or other basis for relief in respect of the exercise
of, any other remedy against any or all of the collateral securing the Note as
provided in the Loan Documents; (l) impair the right of Lender to bring suit for
a monetary judgment against Borrower with respect to any misapplication or
conversion of Loss Proceeds, and the foregoing provisions shall not modify,
diminish or discharge the liability of Borrower; (m) impair the right of Lender
to sue for, seek or demand a deficiency judgment against Borrower solely for the
purpose of foreclosing the Property or any part thereof, or realizing upon the
Default Collateral; provided, however, that any such deficiency judgment
referred to in this clause (m) shall be enforceable against Borrower only to the
extent of any of the Default Collateral; (n) impair the ability of Lender to
bring suit for a monetary judgment against Borrower with respect to arson or
physical waste to or of the Property or damage to the Property resulting from
the gross negligence or willful misconduct of Borrower or, to the extent that
there is sufficient cash flow, failure to pay any Imposition, or in lieu
thereof, deposit a sum equal to any Impositions into the Basic Carrying Costs
Sub-Account; (o) impair the right of Lender to bring a suit for a monetary
judgment against Borrower in the event of the exercise of any right or remedy
under any federal, state or local forfeiture laws resulting in the loss of the
lien of this Security Instrument, or the priority thereof, against the Property;
(p) be deemed a waiver of any right which Lender may have under Sections 506(a),
506(b), 1111(b) or any other provision of the Bankruptcy Code to file a claim
for the full amount of the Debt or to require that all collateral shall continue
to secure all of the Debt; (q) impair the right of Lender to bring suit for
monetary judgment against Borrower with respect to any actual losses resulting
from any claims, actions or proceedings initiated by Borrower (or any Affiliate
of Borrower) alleging that the relationship of Borrower and Lender is that of
joint venturers, partners, tenants in common, joint tenants or any relationship
other than that of debtor and creditor; or (r) impair the right of Lender to
bring suit for a monetary judgment against Borrower in the event of a Transfer
in violation of the provisions of Article IX hereof. The provisions of this
Section 18.32 shall be inapplicable to Borrower if (a) any proceeding, action,
petition or filing under the Bankruptcy Code, or any similar state or federal
law now or hereafter in effect relating to bankruptcy, reorganization or
insolvency, or the arrangement or adjustment of debts, shall be (A) filed by
Borrower or (B) filed against Borrower and consented to or acquiesced in by
Borrower or if any Affiliate of Borrower, or if Borrower or any Affiliate of
Borrower shall institute any proceeding for Borrower’s dissolution or
liquidation, or Borrower shall make an assignment for the benefit of creditors,
or (b) Borrower or any Affiliate contests or in any material way interferes
with, directly or indirectly (collectively, a “Contest”), any foreclosure
action, UCC sale or other material remedy exercised by Lender upon the
occurrence of an Event of Default under the Loan Documents whether by making any
motion, bringing any counterclaim (other than a compulsory counterclaim),
claiming any defense, seeking any injunction or other restraint, commencing any
action, or otherwise (provided that if any such Person obtains a non-appealable
order successfully asserting a Contest, Borrower shall have no liability under
this clause (b) and provided, further, that the liability under this clause (b)
shall be limited to the actual costs, expenses and damages of Lender which
result from any such Contest). Nothing contained in this Section 18.32 is
intended to impose any liability upon the Partners or any of them which the
Partners would not otherwise have as a matter of law or equity.
     Section 18.33. Intentionally Omitted.

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     Section 18.34. Intentionally Omitted.
     Section 18.35. Mezzanine Loan Option. (a) Lender shall have the right at
any time to divide the Loan into two or more parts (the “Mezzanine Option”): a
“mortgage loan” and one or more “mezzanine loans.” The principal amount of the
mortgage loan plus the principal amount of the mezzanine loan(s) shall equal the
outstanding principal balance of the Loan immediately prior to the creation of
the mortgage loan and the mezzanine loan(s). In effectuating the foregoing,
Lender will make one or more loans to one or more entities that will be the
direct or indirect equity owner(s) of Borrower as described in Section 18.35(b)
(collectively, the “Mezzanine Borrower”). The Mezzanine Borrower will contribute
the amount of the mezzanine loan(s) to Borrower (in its capacity as borrower
under the mortgage loan, “mortgage borrower”) and the mortgage borrower will
apply the contribution to pay down the Loan to the mortgage loan amount. The
mortgage loan and the mezzanine loan(s) will be on the same terms and subject to
the same conditions set forth in the Loan Documents except as follows. The
mezzanine loan(s) shall be made pursuant to Lender’s standard mezzanine loan
documents as reasonably negotiated by the parties to such mezzanine loan
documents.
     (b) Lender shall have the right to establish different interest rates and
debt service payments for the mortgage loan and the mezzanine loan(s) and to
require the payment of the mortgage loan and the mezzanine loan(s) in such order
of priority as may be designated by Lender; provided, that (i) the total loan
amounts for the mortgage loan and the mezzanine loan(s) shall equal the amount
of the Loan immediately prior to the creation of the mortgage loan and the
mezzanine loan(s), (ii) the weighted average interest rate of the mortgage loan
and the mezzanine loan(s) shall on the date created equal the interest rate
which was applicable to the Loan immediately prior to creation of the mortgage
loan and mezzanine loan(s) and (iii) the debt service payments on the mortgage
loan note and the mezzanine loan note(s) shall on the date created equal the
debt service payment which was due under the Loan immediately prior to creation
of a mortgage loan and a mezzanine loan(s).
     (c) The Mezzanine Borrower shall be a special purpose, bankruptcy remote
entity pursuant to applicable Rating Agency criteria and shall own directly or
indirectly one hundred percent (100%) of the mortgage borrower. The security for
the mezzanine loan(s) shall be a pledge of one hundred percent (100%) of the
direct and indirect ownership interests in the mortgage borrower.
     (d) Borrower shall cooperate with all reasonable requests of Lender in
order to convert the Loan into a mortgage loan and one or more mezzanine loans
and shall execute and deliver such documents as shall reasonably be required by
Lender in connection therewith, including, without limitation, the delivery of
non-consolidation, enforceability, authorization and execution opinions (which
opinions may include qualifications and assumptions consistent with those set
forth in any opinions delivered on the Closing Date) and an “Eagle 9” or “UCC
plus” (or equivalent) UCC insurance policy and the modification of
organizational documents and loan documents and the transfer of the membership
interest in Borrower to the Mezzanine Borrower.
     It shall be an Event of Default if Borrower fails to comply with any of the
terms, covenants or conditions of this Section 18.35 after expiration of fifteen
(15) Business Days notice thereof.
     Section 18.36. Component Notes. Lender, without in any way limiting
Lender’s other rights hereunder, in its sole and absolute discretion, shall have
the right at any time to require Borrower to execute and deliver “component”
notes (including senior and junior notes), which notes may be paid in such order
of priority as may be designated by Lender, provided that (a) the aggregate
principal amount of such “component” notes shall equal the outstanding principal
balance of the Loan immediately prior to the creation of such “component” notes,
(b) the weighted average interest rate of all such “component” notes shall on
the date created equal the interest rate which was applicable to the Loan
immediately prior to the creation of such “component” notes, (c) the debt
service payments on all such “component” notes shall on the date created equal
the debt service payment which was due under the Loan immediately prior to the
creation of such component notes and (d) the other terms and provisions of each
of the “component” notes shall be identical in substance and substantially
similar in form to the Loan Documents. Borrower shall cooperate with all
reasonable requests of Lender in order to establish the “component” notes and
shall execute and deliver such documents as shall reasonably be required by
Lender in connection therewith, all in form and substance reasonably
satisfactory to Lender, including, without limitation, the severance

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of security documents if requested. It shall be an Event of Default if Borrower
fails to comply with any of the terms, covenants or conditions of this
Section 18.36 after the expiration of fifteen (15) Business Days after notice
thereof.
     Section 18.37. Intentionally Omitted.
     Section 18.38. Certain Matters Relating to Property located in the State of
Illinois. With respect to the Property which is located in the State of
Illinois, notwithstanding anything contained herein to the contrary:
     (a) COMPLIANCE WITH ILLINOIS MORTGAGE FORECLOSURE LAW.
     If any provision in this Security Instrument is determined to be
inconsistent with any provision of the Illinois Mortgage Foreclosure Law (735
ILCS 5/15-1101 et seq., as amended) (the “IMFL”), the provisions of the IMFL
shall take precedence over the provisions of this Security Instrument, but shall
not invalidate or render unenforceable any other provisions of this Security
Instrument that can be construed in a manner consistent with the IMFL.
     If any provision of this Security Instrument shall grant to Lender any
rights or remedies upon an Event of Default which are more limited than the
rights that would otherwise be vested in Lender under the IMFL in the absence of
such provision, Lender shall be vested with the rights granted in the IMFL to
the full extent permitted by law.
     Without limiting the generality of the foregoing, all expenses incurred by
Lender to the extent reimbursable under Sections 15-1510 and 15-1512 of the
IMFL, whether incurred before or after any decree or judgment of foreclosure,
and whether enumerated in this Security Instrument, shall be added to the Debt
secured by this Security Instrument or by the judgment of foreclosure.
     Without limitation on anything contained in this Security Instrument, all
advances, disbursements and expenditures made by Lender before and during a
foreclosure, and before and after a judgment of foreclosure, and at any time
prior to sale, and, where applicable, after sale and during the pendency of any
related proceedings, for the following purposes, in addition to those otherwise
authorized by this Security Instrument or by the IMFL, shall have the benefit of
all applicable provisions of the IMFL, including those provisions of the IMFL
referred to below (collectively, “Protective Advances”):
     (i) all advances by Lender in accordance with the terms of this Security
Instrument to: (A) preserve or maintain, repair, restore or rebuild any
improvements upon the Property; (B) preserve the lien of this Security
Instrument or the priority thereof; or (C) enforce this Security Instrument, as
referred to in Subsection (b)(5) of Section 5-1302 of the IMFL;
     (ii) payments by Lender of: (A) when due installments of principal,
interest or other obligations in accordance with the terms of any senior
mortgage or other prior lien or encumbrance on the Property; (B) when due
installments of real estate taxes and assessments, general and special and all
other taxes and assessments of any kind or nature whatsoever which are assessed
or imposed upon the Property or any part hereof; (C) other obligations
authorized by this Security Instrument; or (D) with court approval, any other
amounts in connection with other liens, encumbrances or interests reasonably
necessary to preserve the status of title, as referred to in Section 15-1505 of
the IMFL;
     (iii) advances by Lender in settlement or compromise of any claims asserted
by claimants under senior mortgages or any prior liens;
     (iv) reasonable attorneys’ fees and other expenses incurred: (A) in
connection with the foreclosure of this Security Instrument as referred to in
Section 15-1504(d)(2) and 15-1510 of the IMFL; (B) in connection with any
action, suit or proceeding brought by or against Lender for the enforcement of
this Security Instrument or arising from the interest of Lender hereunder; or
(C) in the preparation for the commencement or defense of any such foreclosure
or other action;

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     (v) Lender’s fees and costs, including reasonable attorneys’ fees, arising
between the entry of judgment of foreclosure and confirmation hearing as
referred to in Subsection (b)(1) of Section 15-1508 of the IMFL;
     (vi) expenses deductible from proceeds of sale as referred to in
subsections (a) and (b) of Section 15-1512 of the IMFL;
     (vii) expenses incurred and expenditures made by Lender for any one or more
of the following: (A) if all or any portion thereof constitutes one or more
units under a condominium declaration, assessments imposed upon the unit owner
thereof; (B) if any interest in the Property is a leasehold estate under a lease
or sublease, rentals or other payments required to be made by the lessee under
the terms of the lease or sublease; (C) premiums for casualty and liability
insurance paid by Lender whether or not Lender or a receiver is in possession,
if reasonably required, in reasonable amounts, and all renewals thereof, without
regard to the limitation to maintaining existing insurance in effect at the time
any receiver or mortgagee takes possession of the Property as imposed by
subsection (c)(1) of Section 15-1704 of the IMFL; (D) repair or restoration of
damage or destruction in excess of available insurance proceeds or condemnation
awards; (E) payments required or deemed by Lender to be for the benefit of the
Property or required to be made by the owner of the Property under any grant or
declaration of easement, easement agreement, agreement with any adjoining land
owners or instruments creating covenants or restrictions for the benefit of or
affecting the Property; (F) shared or common expense assessments payable to any
association or corporation in which the owner of the Property is a member if in
any way affecting the Property; (G) costs incurred by Lender for demolition,
preparation for and completion of construction; and (H) pursuant to any lease or
other agreement, for occupancy of the Property.
All Protective Advances shall be so much additional Indebtedness secured by this
Security Instrument, and shall become immediately due and payable without notice
and with interest thereon from the date of the advance until paid at the Default
Rate. This Security Instrument shall be a lien for all Protective Advances as to
subsequent purchasers and judgment creditors from the time this Security
Instrument is recorded pursuant to subsection (b)(1) of Section 15-1302 of the
IMFL. All Protective Advances shall, except to the extent, if any, that any of
the same are clearly contrary to or inconsistent with the provisions of the
IMFL, apply to and be included in: (A) determination of the amount of
Indebtedness secured by this Security Instrument at any time; (B) the amount of
the Indebtedness found due and owing to Lender in a judgment of foreclosure and
any subsequent, supplemental judgments, orders, adjudications or findings by any
court of any additional Indebtedness becoming due after such entry of judgment
(it being agreed that in any foreclosure judgment, the court may reserve
jurisdiction for such purpose): (C) if right of redemption is deemed not to be
waived by this Security Instrument, computation of any amounts required to
redeem, pursuant to Subsections (d)(2) and (e) of Section 5-1603 of the IMFL;
(D) determination of amounts deductible from sale proceeds pursuant to
Section 15-1512 of the IMFL; (E) application of income in the hands of any
receiver or Lender in possession; and (F) computation of any deficiency judgment
pursuant to subsections (b) (2) and (e) of Section 15-1508 and Section 15-1511
of the IMFL.
     Wherever provision is made in the Security Instrument or the other Loan
Documents for insurance policies to bear lender clauses or other loss payable
clauses or endorsements in favor of Lender, or to confer authority upon Lender
to settle or participate in the settlement of losses under policies of insurance
or to hold and disburse or otherwise control use of insurance proceeds, from and
after the entry of judgment of foreclosure all such rights and powers of the
Lender shall continue in the Lender as judgment creditor or Lender until
confirmation of sale.
     (b) WAIVER OF STATUTORY RIGHTS. Borrower acknowledges that the transaction
of which this Security Instrument is a part is a transaction which does not
include either agricultural real estate (as defined in Section 15-1201 (1992) of
the IMFL), or residential real estate (as defined in Section 15-1219 (1992) of
the IMFL), and to the full extent permitted by law, voluntarily and knowingly
waives Borrower’s rights AND THE RIGHTS OF EACH AND EVERY PERSON ACQUIRING AN
INTEREST IN OR TITLE TO THE PROPERTY OF ANY

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NATURE WHATSOEVER SUBSEQUENT TO THE DATE OF THIS SECURITY INSTRUMENT to
reinstatement and redemption as allowed under Section 15-1601(b) of the IMFL and
Section 15-1602, and to the full extent permitted by law, the benefits of all
present and future valuation, appraisement, homestead, exemption, stay,
redemption and moratorium laws under any state or federal law.
     (c) FIXTURE FILING. THIS INSTRUMENT IS EFFECTIVE AND SHALL BE EFFECTIVE AS
A FINANCING STATEMENT FILED AS A FIXTURE FILING WITH RESPECT TO ALL GOODS WHICH
ARE OR ARE TO BECOME FIXTURES INCLUDED WITHIN THE PROPERTY AND IS TO BE FILED
FOR RECORD OR REGISTERED IN THE REAL ESTATE RECORDS OF THE COUNTY IN WHICH THE
PREMISES IS LOCATED. THE ADDRESS OF LENDER [SECURED PARTY] AND THE MAILING
ADDRESS OF BORROWER [DEBTOR] ARE SET FORTH WITHIN. A PHOTOGRAPHIC OR OTHER
REPRODUCTION OF THIS INSTRUMENT OR ANY FINANCING STATEMENT RELATING TO THIS
INSTRUMENT SHALL BE SUFFICIENT AS A FINANCING STATEMENT.
     (d) MAXIMUM AMOUNT SECURED. Borrower and Lender intend that this Security
Instrument shall secure not only sums advanced as of the date hereof but also
all advances provided for in the Loan Documents; provided however that the
maximum amount secured by this Security Instrument shall in no event exceed
$88,000,000.
     (e) BUSINESS LOAN. Borrower represents and agrees that the obligations
secured hereby constitute a business loan within the purview of paragraph 1(c)
of Section 4 of the Illinois Interest Act, 815 ILCS 205/4 et seq., as amended,
transacted solely for the purpose of carrying on or acquiring the business of
Borrower, and also constitutes a loan secured by a mortgage which comes within
the purview of subparagraph 1(l) of said Section.
     (f) MATURITY DATE. The maturity date of the Loan is the Payment Date
occurring in July 2009, subject to extensions as provided in the Note.
     (g) MORTGAGEE-IN-POSSESSION. In addition to any provision of this Security
Instrument authorizing Lender to take or be placed in possession of the
Premises, or for the appointment of a receiver, Lender shall have the right, in
accordance with Sections 5/15-1701 and 5/15-1702 of the IMFL, to be placed in
possession of the Premises or at its request to have a receiver appointed, and
such receiver, or Lender, if and when placed in possession, shall have, in
addition to any other powers provided in this Security Instrument, all powers,
immunities and duties as provided for in Sections 2/15-1701 and 5/15-1703 of the
IMFL.
     (h) INSURANCE. Notwithstanding the provisions of Article III hereof, if
Borrower fails to provide Lender evidence of the insurance coverages required
pursuant to the provisions of this Security Instrument, Lender may purchase such
insurance at Borrower’s expense to cover Lender’s interest in the Premises. The
insurance may, but need not, protect Borrower’s interest. The coverages that
Lender purchases may not pay any claim that Borrower makes or any claim that is
made against Borrower in connection with the Premises. Borrower may later cancel
any insurance purchased by Lender but only after providing Lender with evidence
that Borrower has obtained such insurance as required pursuant to Article III of
this Security Instrument. If Lender purchased insurance for the Premises,
Borrower will be responsible for the costs of such insurance, including, without
limitation, interest and any other charges which Lender may impose in connection
with the placement of the insurance, until the effective date of the
cancellation and the expiration of the insurance. The cost of the insurance may
be added to the Debt. The cost of the insurance may be more than the cost of the
insurance Borrower may be able to obtain on its own.
[Intentionally left blank]

83

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     IN WITNESS WHEREOF, Borrower has duly executed this Security Instrument the
day and year first above written.

          Borrower’s Organizational Identification Number: 4278923 GERA 6400
SHAFER LLC, Borrower
      By:           Name:           Title:        

 

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ACKNOWLEDGEMENTS

             
STATE OF                     
    )      
 
    )     ss.:
COUNTY OF                     
    )      

     On the ___day of                      in the year                     ,
before me, the undersigned, a Notary Public in and for said State, personally
appeared                                          and
                                        , personally known to me or proved to me
on the basis of satisfactory evidence to be the individuals whose names are
subscribed to the within instrument and acknowledged to me that they executed
the same in their capacities, and that by their signatures on the instrument,
the individuals, or the person upon behalf of which the individuals acted,
executed the instrument.

         
 
 
 
Notary Public (SEAL)    

 

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EXHIBIT A
Legal Description of Premises

 

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EXHIBIT B
SUMMARY OF RESERVES

 

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EXHIBIT C
Property:                                                             
Location:                                                             
Cash Flow Statement for Month of:                      Year:

              Current   Year to     Month   Date
REVENUE
       
Net Rental Revenue
       
Other Revenue
       
 
       
Effective Gross Income
       
OPERATING EXPENSES
       
Common Area Maintenance
       
Payroll
       
Administration
       
Leasing
       
Service
       
Clean & Decorate
       
Utilities
       
Repairs & Maintenance
       
Taxes
       
Insurance
       
Management Fees
       
Other
       
 
       
Total Operating Expenses
       
 
       
Net Operating Income
       
 
       
RECURRING EXPENSES
       
To Include Expenses for: Carpet Replacement, Appliance Replacement, HVAC/Water
Heater Replacement; Miniblinds/Drapes/Ceiling Fans:
       
 
       
 
       
 
       
NON-RECURRING EXPENSES
       
To Include Capital Expenses for: Playground, Major Signage, Lawns/Trees/Shrubs,
Paving/Parking, Roof Replacement, Carpentry/Siding/Balconies, Exterior Paint,
Major Concrete/Sidewalks, Foundations, Major Exterior, Boiler Replacement, Major
HVAC Replacement, Plumbing Replace, Electrical Replace, Other Major, Fire &
Storm, Ins. Loss Recovery:
       
Net Cash Flow
       
 
       

Certified By:                                                            
Name:                                                            
Title:                                                            
Management Company:                                                            

 

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EXHIBIT D
Required Engineering Work

 

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EXHIBIT E
Form of Direction Letter
[Letterhead of Landlord]
[Name and Address of tenant]
Re: [Address of Premises]
Dear tenant:
     You are hereby directed to make all future payments of rent and other sums
due to Landlord under the Lease payable as follows:

Payable To:   Borrower and Wachovia Bank, National Association, as secured party

                         
 
                       
 
  ABA #                    
 
                       
 
  Account #                    
 
         
 
           
 
                       
 
  Address:                                      
 
                                         
 
                                         

     Only funds paid as set forth above will be credited against sums due by you
to landlord. Until otherwise advised in writing by Landlord and the
above-mentioned bank (or its successor), you should continue to make your
payments for rent and other sums as directed by the terms of this letter.
  Thank you in advance for your cooperation with this change in payment
procedures.

             
 
  By:        
 
     
 
   
 
                     

 

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EXHIBIT F
Initial Allocated Loan Amount and
Cross-collateralized Properties

 

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EXHIBIT G
Underwritten Rent
None.