TABLE OF CONTENTS

Exhibit 10.27

 

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LOAN AGREEMENT

 

Dated as of March 2, 2005

 

Between

 

TPG VALLEY SQUARE, LLC

as Borrower

 

And

 

GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.

as Lender

 

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TABLE OF CONTENTS

TABLE OF CONTENTS

 

1.

   DEFINITIONS; PRINCIPLES OF CONSTRUCTION    1      1.1    Specific Definitions
   1      1.2    Index of Other Definitions    12      1.3    Principles of
Construction    15

2.

   GENERAL LOAN TERMS    15      2.1    The Loan    15      2.2    Interest;
Monthly Payments    16           2.2.1   

Generally

   16           2.2.2   

Default Rate

   16           2.2.3   

Taxes

   16           2.2.4   

Breakage Indemnity

   16           2.2.5   

New Payment Date

   17      2.3    Loan Repayment.    17           2.3.1   

Repayment

   17           2.3.2   

Mandatory Prepayments

   17           2.3.3   

Intentionally Omitted

   18           2.3.4   

Optional Prepayments

   18      2.4    Releases    18           2.4.1   

Intentionally Omitted

   18           2.4.2   

Release on Payment in Full

   18           2.4.3   

Release of Payment Guarantees/Subordinate Mortgages

   18      2.5    Payments and Computations    18           2.5.1   

Making of Payments

   18           2.5.2   

Computations

   19           2.5.3   

Late Payment Charge

   19      2.6    Interest Rate Protection Agreements    19           2.6.1   

Tranche A Interest Rate Protection Agreement

   19           2.6.2   

Tranche B Interest Rate Protection Agreement

   20           2.6.3   

Execution of Documents

   22           2.6.4   

No Obligation of Lender

   22           2.6.5   

Receipts from Interest Rate Protection Agreements

   22      2.7    Fees    22           2.7.1   

Tranche A Origination Fee

   22           2.7.2   

Exit Fee

   22           2.7.3   

Initial Tranche B Loan Advance Fee/Advance Fees

   23      2.8    Extension Options.    23      2.9    Advances of Tranche B
Principal.    23           2.9.1   

Capital Expenditure Advances/Conditions Precedent

   23           2.9.2   

Capital Expenditure Advances/Minimum Funding Thresholds

   26           2.9.3   

Leasing Advances/Conditions Precedent

   26           2.9.4   

Leasing Advances/Minimum Funding Thresholds

   29           2.9.5   

Funding on the Outside Leasing Advance Date

   30           2.9.6   

Optional Disbursements

   32

 

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          2.9.7   

Reallocation of Capital Expenditure Tranche B Principal and Leasing Tranche B
Principal

   32

3.

   CASH MANAGEMENT AND RESERVES    33      3.1    Cash Management Arrangements
   33      3.2    Required Repairs    33           3.2.1   

Completion of Required Repairs

   33           3.2.2   

Required Repairs Reserves

   33      3.3    Taxes and Insurance    34      3.4    Capital Expense Reserve
   34      3.5    Rollover Reserves    35      3.6    Operating Expense
Subaccount    36      3.7    Casualty/Condemnation Subaccount    37      3.8   
Security Deposits    37      3.9    Cash Collateral Subaccount    38      3.10
   Grant of Security Interest; Application of Funds    38      3.11    Property
Cash Flow Allocation    39

4.

   REPRESENTATIONS AND WARRANTIES    40      4.1    Organization; Special
Purpose    40      4.2    Proceedings; Enforceability    40      4.3    No
Conflicts    40      4.4    Litigation    40      4.5    Agreements    41     
4.6    Title    41      4.7    No Bankruptcy Filing    42      4.8    Full and
Accurate Disclosure    42      4.9    Tax Filings    42      4.10    ERISA; No
Plan Assets    42      4.11    Compliance    43      4.12    Contracts    43  
   4.13    Federal Reserve Regulations; Investment Company Act    43      4.14
   Easements; Utilities and Public Access    43      4.15    Physical Condition
   44      4.16    Leases    44      4.17    Fraudulent Transfer    45      4.18
   Ownership of Borrower    45      4.19    Purchase Options    45      4.20   
Management Agreement    45      4.21    Hazardous Substances    45      4.22   
Name; Principal Place of Business    46      4.23    Other Debt    46

5.

   COVENANTS    46      5.1    Existence    46      5.2    Taxes and Other
Charges    46      5.3    Access to Property    47

 

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     5.4    Repairs; Maintenance and Compliance; Alterations    47          
5.4.1   

Repairs; Maintenance and Compliance

   47           5.4.2   

Alterations

   47      5.5    Performance of Other Agreements    48      5.6    Cooperate in
Legal Proceedings    48      5.7    Further Assurances    48      5.8   
Environmental Matters    48           5.8.1   

Hazardous Substances

   48           5.8.2   

Environmental Monitoring

   49      5.9    Title to the Property    50      5.10    Leases    50       
   5.10.1   

Generally

   50           5.10.2   

Material Leases

   51           5.10.3   

Minor Leases

   51           5.10.4   

Additional Covenants with respect to Leases

   52      5.11    Estoppel Statement    52      5.12    Property Management   
53           5.12.1   

Management Agreement

   53           5.12.2   

Termination of Manager

   53      5.13    Special Purpose Bankruptcy Remote Entity    53      5.14   
Intentionally Deleted    54      5.15    Change in Business or Operation of
Property    54      5.16    Debt Cancellation    54      5.17    Affiliate
Transactions    54      5.18    Zoning    54      5.19    No Joint Assessment   
54      5.20    Principal Place of Business    54      5.21    Change of Name,
Identity or Structure    54      5.22    Indebtedness    55      5.23   
Licenses    55      5.24    Compliance with Restrictive Covenants, Etc.    55  
   5.25    ERISA.    55      5.26    Prohibited Transfers    55      5.27   
Liens    55      5.28    Dissolution    55      5.29    Expenses    56      5.30
   Indemnity    56      5.31    Patriot Act Compliance    57

6.

   NOTICES AND REPORTING    58      6.1    Notices    58      6.2    Borrower
Notices and Deliveries    59      6.3    Financial Reporting    59          
6.3.1   

Bookkeeping

   59           6.3.2   

Annual Reports

   59           6.3.3   

Quarterly Reports

   60           6.3.4   

Monthly Reports

   60

 

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          6.3.5   

Other Reports

   61           6.3.6   

Annual Budget

   61           6.3.7   

Breach

   62

7.

   INSURANCE; CASUALTY; AND CONDEMNATION    62      7.1    Insurance    62     
     7.1.1   

Coverage

   62           7.1.2   

Policies

   64      7.2    Casualty    65           7.2.1   

Notice; Restoration

   65           7.2.2   

Settlement of Proceeds

   66      7.3    Condemnation    66           7.3.1   

Notice; Restoration

   66           7.3.2   

Collection of Award

   66      7.4    Application of Proceeds or Award    67           7.4.1   

Application to Restoration

   67           7.4.2   

Application to Debt

   68           7.4.3   

Procedure for Application to Restoration

   68

8.

   DEFAULTS    68      8.1    Events of Default    68      8.2    Remedies    70
          8.2.1   

Acceleration

   70           8.2.2   

Remedies Cumulative

   70           8.2.3   

Severance

   71           8.2.4   

Delay

   71           8.2.5   

Lender’s Right to Perform

   71

9.

   SPECIAL PROVISIONS    72      9.1    Sale of Note and Secondary Market
Transaction    72           9.1.1   

General; Borrower Cooperation

   72           9.1.2   

Use of Information

   73           9.1.3   

Borrower Obligations Regarding Disclosure Documents

   73           9.1.4   

Borrower Indemnity Regarding Filings

   74           9.1.5   

Indemnification Procedure

   74           9.1.6   

Contribution

   74           9.1.7   

Rating Surveillance

   75           9.1.8   

Severance of Loan

   75

10.

   MISCELLANEOUS    76      10.1    Exculpation    76      10.2    Brokers and
Financial Advisors    77      10.3    Retention of Servicer    78      10.4   
Survival    78      10.5    Lender’s Discretion    78      10.6    Governing Law
   78      10.7    Modification, Waiver in Writing    79

 

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10.8

 

Trial by Jury

   80    

10.9

 

Headings/Exhibits

   80    

10.10

 

Severability

   80    

10.11

 

Preferences

   80    

10.12

 

Waiver of Notice

   80    

10.13

 

Remedies of Borrower

   81    

10.14

 

Prior Agreements

   81    

10.15

 

Offsets, Counterclaims and Defenses

   81    

10.16

 

Publicity

   81    

10.17

 

No Usury

   81    

10.18

 

Conflict; Construction of Documents

   82    

10.19

 

No Third Party Beneficiaries

   82    

10.20

 

Intentionally Omitted

   82    

10.21

 

Assignment

   82    

10.22

 

Future Funding Obligations

   82    

10.23

 

Certain Additional Rights of Lender

   83    

10.24

 

Set-Off

   84    

10.25

 

Counterparts

   84

Schedule 1

  Required Repairs     

Schedule 2

  Exceptions to Representations and Warranties     

Schedule 3

  Rent Roll     

Schedule 4

  Organization of Borrower     

Schedule 5

  Definition of Special Purpose Bankruptcy Remote Entity     

Schedule 6

  Form of Request for Advance     

Schedule 7

  Approved Capital Budget     

 

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LOAN AGREEMENT

 

LOAN AGREEMENT dated as of March 2, 2005 (as the same may be modified,
supplemented, amended or otherwise changed, this “Agreement”) between TPG VALLEY
SQUARE, LLC, a Delaware limited liability company (together with its permitted
successors and assigns, “Borrower”), and GREENWICH CAPITAL FINANCIAL PRODUCTS,
INC., a Delaware corporation (together with its successors and assigns,
“Lender”).

 

1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

1.1 Specific Definitions. The following terms have the meanings set forth below:

 

Advance: any portion of the Tranche B Principal (other than the Initial Tranche
B Loan Advance) advanced by Lender to Borrower, which Advances shall consist of
Capital Expenditure Advances and Leasing Advances.

 

Affiliate: as to any Person, any other Person that, directly or indirectly, is
in Control of, is Controlled by or is under common Control with such Person or
is a director or officer of such Person or of an Affiliate of such Person.

 

Approved Capital Expenses: Capital Expenses incurred by Borrower, which Capital
Expenses shall either be (i) included in the Approved Capital Budget for the
current calendar year or (ii) approved by Lender in its reasonable discretion.
The Capital Expenses set forth in the Capital Budget delivered to, and approved
by, Lender prior to the date hereof (which Capital Budget is attached hereto as
Schedule 7) shall also constitute Approved Capital Expenses hereunder. In
addition, an additional $300,000 of Capital Expenses shall be deemed Approved
Capital Expenses hereunder, provided such amounts are applied towards Capital
Expenses incurred by Borrower which are generally consistent with the line items
set forth in the Capital Budget delivered to, and approved by, Lender prior to
the date hereof.

 

Approved Leasing Expenses: actual out-of-pocket expenses incurred by Borrower
and payable to third parties in leasing space at the Property pursuant to Leases
entered into in accordance with the Loan Documents, including brokerage
commissions and tenant improvements, which expenses (i) are (A) specifically
approved by Lender in connection with approving the applicable Lease, (B)
incurred in the ordinary course of business and on market terms and conditions
in connection with Leases which do not require Lender’s approval under the Loan
Documents, or (C) otherwise approved by Lender, which approval shall not be
unreasonably withheld or delayed, and (ii) are substantiated by executed Lease
documents and brokerage agreements.

 

Approved Mezzanine Loan: from and after the thirty-sixth (36th) Payment Date
hereunder (or (x) if the proceeds of the Approved Mezzanine Loan are used to
fully prepay the Tranche B Loan, at any time during the Term or (y) if the
Tranche B Loan has otherwise been fully repaid), a loan from an Approved
Mezzanine Loan Lender to Approved Mezzanine Loan Borrower which Approved
Mezzanine Loan: (i) will be in an amount that when added to the Loan (assuming
the Tranche B Loan has been fully funded) will result in a combined loan to “as
is” appraised value (based on an appraisal commissioned by Lender and otherwise
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acceptable to Lender) of the Property of no more than eighty percent (80%) and
is otherwise on terms and conditions reasonably acceptable to Lender and
evidenced by loan documents which have been approved by Lender, (ii) is secured
only by a pledge of all or a portion of the limited liability company interests
in Borrower or any other collateral not mortgaged or pledged to Lender under the
Loan, (iii) creates no obligations or liabilities on the part of Borrower and
results in no Liens on any portion of the Property, (iv) has a term expiring on
the Stated Maturity Date, (v) the Approved Mezzanine Lender shall enter into an
intercreditor agreement with Lender in form and substance reasonably acceptable
to Lender and the applicable Rating Agencies (the “Intercreditor Agreement”),
which Intercreditor Agreement shall, among other things, restrict the ability of
such Approved Mezzanine Loan Lender to transfer the Approved Mezzanine Loan or
the pledged limited liability company interests to another Person without first
obtaining the consent of Lender, which consent shall not be unreasonably
withheld, conditioned or delayed, and after a Secondary Market Transaction, a
Rating Comfort Letter, and (vi) if the Approved Mezzanine Loan is entered into
after a Secondary Market Transaction, no such Approved Mezzanine Loan shall be
permitted which would result in a downgrade, qualification or withdrawal of any
of the ratings of any of the Securities issued in such Secondary Market
Transaction.

 

Approved Mezzanine Loan Borrower: the borrower under the Approved Mezzanine
Loan, which shall be the holder or holders of all or a portion of the direct and
indirect ownership interests in Borrower.

 

Approved Mezzanine Loan Documents: all documents, agreements or instruments
evidencing, securing or delivered to and approved by Lender in connection with
the Approved Mezzanine Loan, as the same may be modified, amended and restated
in accordance with the terms and conditions of the Intercreditor Agreement.

 

Approved Mezzanine Loan Lender: any bank, savings and loan association,
investment bank, insurance company, trust company, commercial credit
corporation, pension plan, pension fund, pension advisory firm, mutual fund,
government entity or plan, investment company or institution substantially
similar to any of the foregoing, provided in each case that such institution:
(i) has total assets (in name or under management) in excess of $600,000,000 and
(except with respect to a pension advisory firm or similar fiduciary)
capital/statutory surplus or shareholder’s equity in excess of $250,000,000,
(ii) is regularly engaged in the business of making or owning commercial real
estate loans or operating commercial mortgage properties and (iii) has been
reasonably approved by Lender and the Rating Agencies.

 

Approved Mezzanine Loan Liens: the Liens in favor of the holder of the Approved
Mezzanine Loan created pursuant to the Approved Mezzanine Loan Documents.

 

Approved Operating Expenses: operating expenses incurred by Borrower which (i)
are included in the Approved Operating Budget for the current calendar month,
(ii) are for real estate taxes, insurance premiums, electric, gas, oil, water,
sewer or other utility service to the Property or (iii) have been approved by
Lender, such approval not to be unreasonably withheld, conditioned or delayed.

 

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Available Cash: as of each Payment Date during the continuance of a Cash Trap
Period, the amount of Rents, if any, remaining in the Deposit Account after the
application of all of the payments required under clauses (i) through (vii) of
Section 3.11(a) hereof.

 

Business Day: any day other than a Saturday, Sunday or any day on which
commercial banks in New York, New York, Philadelphia, Pennsylvania or Los
Angeles, California are authorized or required to close.

 

Calculation Date: the last day of each calendar quarter during the Term.

 

CalSTRS: California State Teachers’ Retirement System, a public entity.

 

Capital Expenditure Advance: an Advance of Tranche B Principal made by Lender to
Borrower pursuant to Section 2.9.1 hereof, to cover Approved Capital Expenses at
the Property.

 

Capital Expenses: expenses that are capital in nature or required under GAAP to
be capitalized.

 

Cash Trap Period: shall commence, if, (i) a Default or Event of Default has
occurred and is continuing, and shall end if such Default or Event of Default
has been cured and no other Default or Event of Default has occurred and is
continuing or (ii) as of any Calculation Date, the Property fails to achieve the
Minimum DSCR Requirement (a “DSCR Cash Trap Period”), and shall end upon
Lender’s determination that the Property has achieved the Minimum DSCR
Requirement for two (2) consecutive Calculation Dates.

 

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

 

Control: with respect to any Person, either (i) ownership directly or indirectly
of 49% or more of all equity interests in such Person or (ii) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, through the ownership of voting
securities, by contract or otherwise.

 

Debt: the unpaid Principal, all interest accrued and unpaid thereon, all Exit
Fees and all other sums due to Lender in respect of the Loan or under any Loan
Document.

 

Debt Service: with respect to any particular period, the greater of (i)
scheduled interest payments due under the Notes in such period or (ii) the
product of (A) the aggregate outstanding Tranche A Principal and Tranche B
Principal as of the end of such period multiplied by (B) 7.50%.

 

Debt Service Coverage Ratio: as of any date, the ratio calculated by Lender of
(i) the Net Operating Income for the trailing twelve (12)-month period ending
with the most recently completed calendar month to (ii) the Debt Service with
respect to such period.

 

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Default: the occurrence of any event under any Loan Document which, with the
giving of notice or passage of time, or both, would be an Event of Default.

 

Default Rate: a rate per annum equal to the lesser of (i) the maximum rate
permitted by applicable law, or (ii) five percent (5%) above the applicable
Interest Rate, compounded monthly.

 

Deposit Bank: Wachovia Bank, National Association, or such other bank or
depository selected by Lender in its discretion.

 

Eligible Account: a separate and identifiable account from all other funds held
by the holding institution that is either (i) an account or accounts (A)
maintained with a federal or state-chartered depository institution or trust
company which complies with the definition of Eligible Institution or (B) as to
which Lender has received a Rating Comfort Letter from each of the applicable
Rating Agencies with respect to holding funds in such account, or (ii) a
segregated trust account or accounts maintained with the corporate trust
department of a federal depository institution or state chartered depository
institution subject to regulations regarding fiduciary funds on deposit similar
to Title 12 of the Code of Federal Regulations §9.10(b), having in either case
corporate trust powers, acting in its fiduciary capacity, and a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
federal and state authorities. An Eligible Account will not be evidenced by a
certificate of deposit, passbook or other instrument.

 

Eligible Institution: a depository institution insured by the Federal Deposit
Insurance Corporation the short term unsecured debt obligations or commercial
paper of which are rated at least A-1 by S&P, P-1 by Moody’s and F-1+ by Fitch,
in the case of accounts in which funds are held for thirty (30) days or less or,
in the case of Letters of Credit or accounts in which funds are held for more
than thirty (30) days, the long term unsecured debt obligations of which are
rated at least “AA” by Fitch and S&P and “Aa2” by Moody’s.

 

ERISA: the Employment Retirement Income Security Act of 1974, as amended from
time to time, and the rules and regulations promulgated thereunder.

 

ERISA Affiliate: all members of a controlled group of corporations and all
trades and business (whether or not incorporated) under common control and all
other entities which, together with Borrower, are treated as a single employer
under any or all of Section 414(b), (c), (m) or (o) of the Code.

 

Exit Fee: with respect to any repayment or prepayment of Principal, an amount
equal to one percent (1%) of the amount of the Principal being repaid or
prepaid; provided, however, if (i) the Loan is repaid with the proceeds of a
mortgage loan from Greenwich Capital Financial Products, Inc. (or any Affiliate
thereof or syndicate including Greenwich Capital Financial Products, Inc. or any
such Affiliate) or (ii) the Loan is repaid in connection with a bona fide
third-party sale of the Property pursuant to an arms’ length agreement to a
third party not Affiliated with any Borrower or Guarantor, and in which no
Borrower and no Affiliate of any Borrower and/or Guarantor has any beneficial
interest, the Exit Fee that would otherwise be

 

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payable with respect to such repayment shall be waived, provided that Greenwich
Capital Financial Products, Inc. shall have no obligation to offer to provide
such financing.

 

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

 

Governmental Authority: any court, board, agency, commission, office or
authority of any nature whatsoever for any governmental unit (federal, state,
county, district, municipal, city or otherwise) now or hereafter in existence.

 

Guarantor: TPG/CalSTRS, LLC, a Delaware limited liability company.

 

Initial Tranche B Loan Advance: the advance of a portion of the Tranche B Loan
being made on the date hereof in the amount of $2,400,000.

 

Interest Period: (i) the period from the date hereof through the first day
thereafter that is the last day of a calendar month and (ii) each period
thereafter from the 1st day of each calendar month through the last day of each
such calendar month; except that the Interest Period, if any, that would
otherwise commence before and end after the Maturity Date shall end on the
Maturity Date. Notwithstanding the foregoing, if Lender exercises its right to
change the Payment Date to a New Payment Date in accordance with Section 2.2.5
hereof, then from and after such election, each Interest Period shall be the
period from the New Payment Date in each calendar month through the day in the
next succeeding calendar month immediately preceding the New Payment Date in
such calendar month.

 

Interest Rate: (i) the Tranche A Loan Interest Rate, with respect to the Tranche
A Loan and (ii) the Tranche B Loan Interest Rate, with respect to the Tranche B
Loan.

 

Leases: all leases and other agreements or arrangements heretofore or hereafter
entered into affecting the use, enjoyment or occupancy of, or the conduct of any
activity upon or in, the Property or the Improvements, including any guarantees,
extensions, renewals, modifications or amendments thereof and all additional
remainders, reversions and other rights and estates appurtenant thereunder.

 

Leasing Advance: an Advance of Tranche B Principal made by Lender to Borrower
pursuant to Section 2.9.3 hereof which shall be used by Borrower only to pay
Approved Leasing Expenses at the Property.

 

Lease Termination Payments: (i) all fees, penalties, commissions or other
payments made to Borrower in connection with or relating to the rejection,
buy-out, termination, surrender or cancellation of any Lease (including in
connection with any bankruptcy proceeding), (ii) any security deposits or
proceeds of letters of credit held by Borrower in lieu of cash security
deposits, which Borrower is permitted to retain pursuant to the applicable
provisions of any Lease and (iii) any payments made to Borrower relating to
unamortized tenant improvements and leasing commissions under any Lease.

 

Legal Requirements: statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of Governmental Authorities affecting
Borrower, any Loan

 

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Document or all or part of the Property or the construction, ownership, use,
alteration or operation thereof, whether now or hereafter enacted and in force,
and all permits, licenses and authorizations and regulations relating thereto,
and all covenants, agreements, restrictions and encumbrances contained in any
instrument, either of record or known to Borrower, at any time in force
affecting all or part of the Property.

 

LIBOR: with respect to any Interest Period, a floating interest rate per annum
(rounded upwards to the next 1/100 of 1%) equal to the rate for U.S. dollar
deposits with one month maturities which appears on Telerate Page 3750 as of
11:00 am, London time on the related Determination Date; provided, however, that
if such rate does not appear on Telerate Page 3750, “LIBOR” shall mean a rate
per annum equal to the rate at which U.S. dollar deposits in an amount
approximately equal to the maximum amount of the Tranche A Loan or the maximum
amount of the Tranche B Loan, as applicable, and with one month maturities, are
offered in immediately available funds in the London Interbank Market to the
London office of National Westminster Bank, Plc by leading banks in the
Eurodollar market at 11:00 a.m., London time. “Telerate Page 3750” means the
display designated as “Page 3750” on the Associated Press-Dow Jones Telerate
Service (or such other page as may replace Page 3750 on the Associated Press-Dow
Jones Telerate Service or such other service as may be nominated by the British
Bankers’ Association as the information vendor for the purpose of displaying
British Banker’s Association interest settlement rates for U.S. Dollar
deposits). Any LIBOR determined on the basis of the rate displayed on Telerate
Page 3750 in accordance with the provisions hereof shall be subject to
corrections, if any, made in such rate and displayed by the Associated Press-Dow
Jones Telerate Service within one (1) hour of the time when such rate is first
displayed by such Service. For purposes hereof, (i) “Determination Date” shall
mean, with respect to any Interest Period, the date which is two Eurodollar
Business Days prior to the commencement of such Interest Period; and (ii)
“Eurodollar Business Day” shall mean any day other than a Saturday, Sunday or
other day on which banks in the City of London, England are closed for interbank
or foreign exchange transactions.

 

Lien: any mortgage, deed of trust, lien (statutory or otherwise), pledge,
hypothecation, easement, restrictive covenant, preference, assignment, security
interest or any other encumbrance, charge or transfer of, or any agreement to
enter into or create any of the foregoing, on or affecting all or any part of
the Property or any interest therein, or any direct or indirect interest in
Borrower or Sole Member, including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, the filing of any financing statement, and mechanic’s,
materialmen’s and other similar liens and encumbrances.

 

Loan: collectively, the Tranche A Loan and the Tranche B Loan.

 

Loan Documents: this Agreement and all other documents, agreements and
instruments now or hereafter evidencing, securing or delivered to Lender in
connection with the Loan, including the following, each of which is dated as of
the date hereof: (i) the Notes, (ii) the Mortgage, Assignment of Leases and
Rents and Security Agreement made by Borrower in favor of Lender which covers
the Property (the “Mortgage”), (iii) (A) with respect to the Tranche B Loan
only, the Subordinate Mortgage, Assignment of Leases and Rents and Security
Agreement made by TPG Four Falls, LLC, an Affiliate of Borrower, in favor of
Lender which covers the

 

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property owned by TPG Four Falls, LLC and (B) the Subordinate Mortgage,
Assignment of Leases and Rents and Security Agreement made by TPG Oak
Hill/Walnut Hill, LLC, an Affiliate of Borrower, in favor of Lender which covers
the properties owned by TPG Oak Hill/Walnut Hill, LLC (collectively, the
“Subordinate Mortgages”), (iv) Assignment of Leases and Rents from Borrower to
Lender, (v) Assignment of Agreements, Licenses, Permits and Contracts from
Borrower to Lender, (vi) the Clearing Account Agreement (the “Clearing Account
Agreement”) among Borrower, Lender, Manager and Clearing Bank, (vii) the Deposit
Account Agreement (the “Deposit Account Agreement”) among Borrower, Lender,
Manager and the Deposit Bank, (viii) the Guaranty of Recourse Obligations made
by Guarantor, (ix) with respect to the Tranche B Loan only, (A) the Guaranty of
Payment made by TPG Four Falls, LLC and (B) the Guaranty of Payment made by TPG
Oak Hill/Walnut Hill, LLC (collectively, the “Payment Guarantees”) and (x) each
Assignment of Interest Rate Protection Agreement from Borrower to Lender; as
each of the foregoing may be (and each of the foregoing defined terms shall
refer to such documents as they may be) amended, restated, replaced, severed,
split, supplemented or otherwise modified from time to time (including pursuant
to Section 9.1.8 hereof).

 

Management Agreement: the management agreement between Borrower and Manager,
pursuant to which Manager is to manage the Property, as same may be amended,
restated, replaced, supplemented or otherwise modified from time to time in
accordance with Section 5.12 hereof.

 

Manager: Thomas Properties Group, L.P., a Maryland limited partnership, or any
successor, assignee or replacement manager appointed by Borrower in accordance
with Section 5.12 hereof.

 

Material Alteration: any alteration affecting structural elements of the
Property the cost of which exceeds $250,000; provided, however, that in no event
shall (i) any Required Repairs, (ii) any tenant improvement work performed
pursuant to any Lease existing on the date hereof or entered into hereafter in
accordance with the provisions of this Agreement, or (iii) alterations performed
as part of a Restoration, constitute a Material Alteration.

 

Material Lease: all Leases which individually or in the aggregate with respect
to the same tenant and its Affiliates (i) cover more than 20,000 square feet of
the Improvements or (ii) have a gross annual rent of more than eight percent
(8%) of the total annual Rents or (iii) demise at least one (1) full floor of
the Improvements.

 

Maturity Date: the date on which the final payment of Principal of the Notes
becomes due and payable as therein provided, whether at the Stated Maturity
Date, by declaration of acceleration, or otherwise.

 

Minimum DSCR Requirement: (i) during the period from the date hereof through and
including the thirty-sixth (36th) Payment Date, a Debt Service Coverage Ratio of
at least 1.00:1.00 and (ii) during the period after the thirty-sixth (36th)
Payment Date, a Debt Service Coverage Ratio of at least 1.10:1.00.

 

Minor Lease: any Lease that is not a Material Lease.

 

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Net Operating Income: for any period, the actual net operating income of the
Property determined on a cash basis of accounting, after deducting therefrom
deposits to (but not withdrawals from) any reserves required under this
Agreement, and without giving credit for non-recurring extraordinary items of
income.

 

Note or Notes: individually or collectively, the Tranche A Note and/or the
Tranche B Note, in each case to the extent applicable and as the context may
require.

 

Officer’s Certificate: a certificate delivered to Lender by Borrower which is
signed by a senior executive officer of Borrower.

 

OP: Thomas Properties Group, L.P., a Maryland limited partnership.

 

Other Charges: all ground rents, maintenance charges, impositions other than
Taxes, and any other charges, including vault charges and license fees for the
use of vaults, chutes and similar areas adjoining the Property, now or hereafter
levied or assessed or imposed against the Property or any part thereof.

 

Outside Leasing Advance Date: March 1, 2006, provided that Lender, in its sole
and absolute discretion, shall have the right to extend such date for up to two
(2) additional 364-day periods, by giving at least five (5) days written notice
of any such exercised extension of the Outside Leasing Advance Date to Borrower.

 

Payment Date: the 1st day of each calendar month or, upon Lender’s exercise of
its right to change the Payment Date in accordance with Section 2.2.5 hereof,
the New Payment Date (in either case, if such day is not a Business Day, the
Payment Date shall be the first Business Day thereafter). The first Payment Date
hereunder shall be April 1, 2005.

 

Permitted Encumbrances: (i) the Liens created by the Loan Documents, (ii) all
Liens and other matters disclosed in the Title Insurance Policy, (iii) Liens, if
any, for Taxes or Other Charges not yet due and payable and not delinquent, (iv)
any workers’, mechanics’ or other similar Liens on the Property provided that
any such Lien is bonded or discharged within thirty (30) days after Borrower
first receives notice of such Lien and (v) such other title and survey
exceptions as Lender approves in writing in Lender’s reasonable discretion and
(vi) any Approved Mezzanine Loan Liens.

 

Permitted Transfers:

 

(i) a Lease entered into in accordance with the Loan Documents;

 

(ii) a Permitted Encumbrance;

 

(iii) a Transfer of the Property in connection with a Condemnation;

 

(iv) provided that no Default or Event of Default shall then exist, a Transfer
of a direct or indirect interest in Sole Member provided that (A) such Transfer
shall not (x) cause the transferee (other than TPG, the REIT, CalSTRS or an
Approved Mezzanine Lender), together with its Affiliates, to acquire Control of
Borrower or Sole Member or to increase its direct or

 

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indirect interest in Borrower or in Sole Member to an amount which equals or
exceeds forty-nine percent (49%) or (y) result in Borrower or Sole Member no
longer being Controlled by TPG, the REIT (or an Approved Mezzanine Lender), (B)
after giving effect to such Transfer, TPG, the REIT (or an Approved Mezzanine
Lender) shall (1) continue to Control Borrower (in the sense of clause (ii) of
the defined term “Control”) and (2) own at least fifteen percent (15%) of all
equity interests (direct or indirect) in Borrower, (C) if such Transfer would
cause the transferee (other than CalSTRS) to increase its direct or indirect
interest in Borrower or in Sole Member to an amount which equals or exceeds
twenty percent (20%), Lender shall have approved in its reasonable discretion
such proposed transferee, which approval shall be based upon Lender’s
satisfactory determination as to the reputable character and creditworthiness of
such proposed transferee, as evidenced by credit and background checks performed
by Lender and such other financial statements and other information reasonably
requested by Lender, (D) Borrower shall give Lender notice of such Transfer
together with copies of all instruments effecting such Transfer not less than
ten (10) days prior to the date of such Transfer, and (E) the legal and
financial structure of Borrower and its members and the single purpose nature
and bankruptcy remoteness of Borrower and its members after such Transfer, shall
satisfy Lender’s then current applicable underwriting criteria and requirements;
or

 

(v) provided that no Event of Default shall then exist, a Transfer of interests
in TPG in connection with the conversion of TPG into a real estate investment
trust; provided that (A) after giving affect thereto, the REIT continues to (1)
Control Borrower (in the sense of clause (ii) of the defined term “Control”) and
(2) own at least fifteen percent (15%) of all equity interests (direct or
indirect) in Borrower, (B) such Transfer shall not result in a change of the day
to day management and operations of the Property, and (C) Borrower shall give
Lender notice of such Transfer together with copies of all instruments effecting
such Transfer at least 30 days prior to the date of such Transfer.

 

(vi) (A) the issuance of any securities, options, warrants or other interests in
the REIT or any entity owning an interest in the REIT, (B) the sale or pledge of
stock in the REIT, provided such stock is listed on the New York Stock Exchange
or such other nationally recognized stock exchange, (C) the merger or
consolidation of the REIT or (D) the merger or consolidation of the OP, provided
that in the case of each of (C) and (D) above, the surviving entity shall be the
REIT and/or the OP, as applicable, and after giving effect to such merger or
consolidation, the surviving entity (the REIT or the OP, as applicable) shall
continue to own not less than fifteen percent (15%) of all equity interests
(direct or indirect) in Borrower and, in the case of each of (A), (B), (C) and
(D) above, the REIT shall continue to Control (in the sense of clause (ii) of
the defined term “Control”) Borrower and the day to day operations of the
Property.

 

Person: any individual, corporation, partnership, limited liability company,
joint venture, estate, trust, unincorporated association, any other person or
entity, and 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: (i) an employee benefit or other plan established or maintained by
Borrower or any ERISA Affiliate or to which Borrower or any ERISA Affiliate
makes or is obligated to make contributions and (ii) which is subject to Title
IV of ERISA or Section 302 of ERISA or Section 412 of the Code.

 

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Principal: collectively, the Tranche A Principal (or any specified portion
thereof) and the Tranche B Principal (or any specified portion thereof).

 

Property: the parcel of real property and Improvements thereon owned by Borrower
and encumbered by the Mortgage; together with all rights pertaining to such real
property and Improvements, and all other collateral for the Loan as more
particularly described in the Granting Clauses of the Mortgage and referred to
therein as the Mortgaged Property. The Property is located in Plymouth Township,
Montgomery County, Pennsylvania.

 

Rating Agency: each of Standard & Poor’s, a division of The McGraw-Hill
Companies, Inc. (“S&P”), Moody’s Investors Service, Inc. (“Moody’s”), and Fitch,
Inc., a division of Fitch Ratings Ltd. (“Fitch”) or any other
nationally-recognized statistical rating organization to the extent any of the
foregoing have been engaged by Lender or its designee in connection with or in
anticipation of any Secondary Market Transaction.

 

Rating Comfort Letter: a letter issued by each of the applicable Rating Agencies
which confirms that the taking of the action referenced to therein will not
result in any qualification, withdrawal or downgrading of any existing ratings
of Securities created in a Secondary Market Transaction.

 

REIT: the resulting real estate investment trust from and after the conversion
of TPG into a real estate investment trust pursuant to clause (v) of the
definition of “Permitted Transfer” above.

 

Rents: all rents, rent equivalents, moneys payable as damages (including
payments by reason of the rejection of a Lease in a Bankruptcy Proceeding) or in
lieu of rent or rent equivalents, royalties (including all oil and gas or other
mineral royalties and bonuses), income, fees, receivables, receipts, revenues,
deposits (including security, utility and other deposits), accounts, cash,
issues, profits, charges for services rendered, and other payment and
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Borrower, Manager or any of their agents or employees
from any and all sources arising from or attributable to the Property and the
Improvements, including all receivables, customer obligations, installment
payment obligations and other obligations now existing or hereafter arising or
created out of the sale, lease, sublease, license, concession or other grant of
the right of the use and occupancy of the Property or rendering of services by
Borrower, Manager or any of their agents or employees and proceeds, if any, from
business interruption or other loss of income insurance.

 

Servicer: a servicer selected by Lender to service the Loan (or any portion
thereof), including any “master servicer” or “special servicer” appointed under
the terms of any pooling and servicing agreement or similar agreement entered
into as a result of a Secondary Market Transaction.

 

Sole Member: TPG/CalSTRS, LLC, a Delaware limited liability company, the sole
member of Borrower.

 

State: the state in which the Property is located.

 

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Stated Maturity Date: March 1, 2007, as the same may be extended pursuant to
Section 2.8 hereof, and as such date may be changed in accordance with Section
2.2.5 hereof.

 

Survey: collectively, the ALTA/ACSM Land Title Surveys by Barton & Martin
Engineers, a division of Vollmer Associates LLP, each dated 1/27/2005 and each
revised 2/25/2005 for (i) One Valley Square, (ii) Two Valley Square, (iii) Three
Valley Square, (iv) Four and Five Valley Square (Project No. 2000463215).

 

Taxes: all real estate and personal property taxes, assessments, water rates or
sewer rents, maintenance charges, impositions, vault charges and license fees,
now or hereafter levied or assessed or imposed against all or part of the
Property.

 

Term: the entire term of this Agreement, which shall expire upon repayment in
full of the Debt and full performance of each and every obligation to be
performed by Borrower pursuant to the Loan Documents.

 

Title Insurance Policy: the ALTA mortgagee title insurance policy in the form
acceptable to Lender issued with respect to the Property and insuring the Lien
of the Mortgage.

 

TPG: Thomas Properties Group, Inc., a Delaware corporation.

 

Tranche A Loan: the loan being made on the date hereof from Lender to Borrower
in the original principal amount of $27,500,000.00 (the “Tranche A Principal”),
which Tranche A Loan is evidenced by the Tranche A Note.

 

Tranche A Loan Interest Rate: for any Interest Period, 1.75% plus the greater of
LIBOR for such Interest Period and 2.25% (or, when applicable pursuant to this
Agreement or any other Loan Document, the Default Rate).

 

Tranche A Note: that certain Promissory Note (Tranche A) dated the date hereof
in the stated principal amount of $27,500,000.00 executed by Borrower and
payable to the order of Lender in evidence of the Tranche A Loan.

 

Tranche B Loan: the loan (or any portion thereof) made by Lender to Borrower
pursuant to Section 2.1 hereof and Section 2.9 hereof in the maximum amount of
up to $11,100,000.00 (the “Tranche B Principal”), which Tranche B Loan is
evidenced by the Tranche B Note.

 

Tranche B Loan Interest Rate: for any Interest Period, 3.25% plus the greater of
LIBOR for such Interest Period and 2.25% (or, when applicable pursuant to this
Agreement or any other Loan Document, the Default Rate).

 

Tranche B Note: that certain Promissory Note (Tranche B) dated the date hereof
in the maximum principal amount of up to $11,100,000.00 executed by Borrower and
payable to the order of Lender in evidence of the Tranche B Loan.

 

Transfer: (i) any sale, conveyance, transfer, Lease or assignment, or the entry
into any agreement to sell, convey, transfer, lease or assign, whether by law or
otherwise, of, on,

 

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in or affecting (x) all or part of the Property (including any legal or
beneficial direct or indirect interest therein), (y) any direct or indirect
interest in Borrower (including any profit interest), or (z) any direct or
indirect interest in Sole Member or (ii) any change of Control of Borrower or
Sole Member. For purposes hereof, (i) a Transfer of an interest in Borrower or
Sole Member shall be deemed to include (A) if Borrower or Sole Member or
controlling shareholder of Borrower or Sole Member is a corporation, the
voluntary or involuntary sale, conveyance or transfer of such corporation’s
stock (or the stock of any corporation directly or indirectly controlling such
corporation by operation of law or otherwise) or the creation or issuance of new
stock in one or a series of transactions by which an aggregate of more than ten
percent (10%) of such corporation’s stock shall be vested in a party or parties
who are not now stockholders or any change in the control of such corporation
and (B) if Borrower, Sole Member or controlling shareholder of Borrower or Sole
Member is a limited or general partnership, joint venture or limited liability
company, the change, removal, resignation or addition of a general partner,
managing partner, limited partner, joint venturer or member or the transfer of
the partnership interest of any general partner, managing partner or limited
partner or the transfer of the interest of any joint venturer or member and (ii)
a change of Control of Borrower or Sole Member shall be deemed to have occurred
if (A) there is any change in the identity of any individual or entity or any
group of individuals or entities who have the right, by virtue of any
partnership agreement, articles of incorporation, by-laws, articles of
organization, operating agreement or any other agreement, with or without taking
any formative action, to cause Borrower (or Sole Member) to take some action or
to prevent, restrict or impede Borrower (or Sole Member) from taking some action
which, in either case, Borrower (or Sole Member) could take or could refrain
from taking were it not for the rights of such individuals or (B) the individual
or entity or group of individuals or entities that Control Borrower (and Sole
Member) as described in clause (A) ever cease to own at least fifteen percent
(15%) of all equity interests (direct or indirect) in Borrower (and Sole
Member).

 

UCC: the Uniform Commercial Code as in effect in the State or the state in which
any of the Cash Management Accounts are located, as the case may be.

 

Welfare Plan: an employee welfare benefit plan, as defined in Section 3(1) of
ERISA.

 

1.2 Index of Other Definitions. The following terms are defined in the sections
or Loan Documents indicated below:

 

“Acceptable Counterparty” - 2.6

“Act” - Schedule 5

“Annual Budget” - 6.3.6

“Apex Systems TI Deposit” - 3.5

“Applicable Taxes” - 2.2.3

“Approved Annual Budget” - 6.3.6

“Approved Capital Budget” - 6.3.6

“Approved Operating Budget” - 6.3.6

“Award” - 7.3.2

“Bankruptcy Proceeding” - 4.7

“Borrower’s Optional Final Leasing Advance” - 2.9.5

 

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“Borrower’s Recourse Liabilities” - 10.1

“Broker” - 10.2

“Capital Expenditure Advance Shortfall” - 2.9.2

“Capital Reserve Subaccount” - 3.4

“Cash Collateral Subaccount” - 3.9

“Cash Management Accounts” - 3.10

“Casualty” - 7.2.1

“Casualty/Condemnation Prepayment” - 2.3.2

“Casualty/Condemnation Subaccount” - 3.7

“Clearing Account” - 3.1

“Clearing Account Agreement” - 1.1 (Definition of Loan Documents)

“Clearing Bank” - 3.1

“Condemnation” - 7.3.1

“Consumer Price Index” - 7.1.1

“Deposit Account” - 3.1

“Deposit Account Agreement” - 1.1 (Definition of Loan Documents)

“Determination Date” - 1.1 (Definition of LIBOR)

“Disclosure Document” - 9.1.2

“DSCR Cash Trap Period” - 1.1 (Definition of Cash Trap Period).

“Easements” - 4.14

“Environmental Laws” - 4.21

“Equipment” - Mortgage

“Eurodollar Business Day” - 1.1 (Definition of LIBOR)

“Event of Default” - 8.1

“Exchange Act” - 9.1.2

“First Extended Maturity Date” - 2.8

“Fitch” - 1.1 (Definition of Rating Agency)

“Future Funding Obligations” - 10.22

“GCM Group” - 9.1.3

“Government Lists” - 5.31

“Hazardous Substances” - 4.21

“Holder” - 10.22

“Improvements” - Mortgage

“Indemnified Liabilities” - 5.30

“Indemnified Party” - 5.30

“Independent Director” - Schedule 5

“Insurance Premiums” - 7.1.2

“Insured Casualty” - 7.2.2

“Hewlett-Packard TI Deposit” - 3.5

“Intercreditor Agreement” - 1.1 (Definition of Approved Mezzanine Loan)

“Issuer” - 9.1.3

“Late Payment Charge” - 2.5.3

“Leasing Advance First Year Funding Shortfall” – 2.9.4

“Leasing Advance First Year Minimum Funding Threshold” – 2.9.4

“Leasing Advance Funding Shortfall” – 2.9.4

“Leasing Advance Second Year Funding Shortfall” – 2.9.4

 

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“Leasing Advance Second Year Minimum Funding Threshold” – 2.9.4

“Leasing Advance Third Year Funding Shortfall” – 2.9.4

“Leasing Advance Third Year Minimum Funding Threshold” – 2.9.4

“Lender’s Consultant” - 5.8.1

“Liabilities” - 9.1.3

“Licenses” - 4.11

“Maximum Capital Expenditure Tranche B Principal” - 2.9.1

“Maximum Leasing Advance Tranche B Principal” - 2.9.3

“Monthly CapEx Funds” - 3.4

“Monthly Rollover Funds” - 3.5

“Moody’s” - 1.1 (Definition of Rating Agency)

“Mortgage” - 1.1 (Definition of Loan Documents)

“New Payment Date” -

“Notice” - 6.1

“OFAC” - 5.31

“Operating Expense Subaccount” - 3.6

“Patriot Act” - 5.31

“Patriot Act Offense” - 5.31

“Payment Guarantees” - 1.1 (Definition of Loan Documents)

“Permitted Indebtedness” - 5.22

“Permitted Investments” - Deposit Account Agreement

“Policies” - 7.1.2

“Proceeds” - 7.2.2

“Proposed Borrowing” - Schedule 6

“Proposed Material Lease” - 5.10.2

“Provided Information” - 9.1.1

“Qualified Carrier” - 7.1.1

“Registration Statement” - 9.1.3

“Remedial Work” - 5.7.2

“Rent Roll” - 4.16

“Required Records” - 6.3.6

“Required Repairs” - 3.2.1

“Required Repairs Subaccount” - 3.2.2

“Restoration” - 7.4.1

“Rollover Reserve Subaccount” - 3.5

“S&P” - 1.1 (Definition of Rating Agency)

“Secondary Market Transaction” - 9.1.1

“Second Extended Maturity Date” - 2.8

“Securities” - 9.1.1

“Securities Act” - 9.1.2

“Securitization” - 9.1.1

“Security Deposit Account” - 3.8

“Security Deposit Subaccount” - 3.8

“Significant Casualty” - 7.2.2

“Single Member Bankruptcy Remote LLC” - Schedule 5

“Special Member” - Schedule 5

 

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“Special Purpose Bankruptcy Remote Entity” - 5.13

“Springing Recourse Event” - 10.1

“Subaccounts” - 3.1

“Subordinate Mortgages” - 1.1 (Definition of Loan Documents)

“Successor Borrower” - 2.3.3

“Tax and Insurance Subaccount” - 3.3

“Terrorism Premium Cap” - 7.1.1

“Third Extended Maturity Date” - 2.8

“Toxic Mold” - 4.21

“Tranche A Loan Interest Payment” - 2.2.1

“Tranche A Loan Interest Rate Protection Agreement” - 2.6

“Tranche A Principal” - 1.1 (Definition of Tranche A Loan)

“Tranche B Loan Interest Payment” - 2.2.1

“Tranche B Loan Interest Rate Protection Agreement” - 2.6

“Tranche B Notional Amount” - 2.6

“Tranche B Principal” - 1.1 (Definition of Tranche B Loan)

“Underwriter Group” - 9.1.3

“Underwriters” - 9.1.3

 

1.3 Principles of Construction. Unless otherwise specified, (i) all references
to sections and schedules are to those in this Agreement, (ii) the words
“hereof,” “herein” and “hereunder” and words of similar import refer to this
Agreement as a whole and not to any particular provision, (iii) all definitions
are equally applicable to the singular and plural forms of the terms defined,
(iv) the word “including” means “including but not limited to,” and (v)
accounting terms not specifically defined herein shall be construed in
accordance with GAAP.

 

2. GENERAL LOAN TERMS

 

2.1 The Loan. Lender is making the Tranche A Loan to Borrower on the date
hereof, in the original principal amount of $27,500,000. Lender is also making
the Initial Tranche B Loan Advance to Borrower on the date hereof, in the
principal amount of $2,400,000. Subject to and upon the terms and conditions of
this Agreement, Lender agrees to make additional advances of the Tranche B Loan
to Borrower in a maximum principal amount of up to $8,700,000, which Tranche B
Loan shall be made in a series of Advances and shall consist of (i) Capital
Expenditure Advances and (ii) Leasing Advances, each as more particularly
described in Section 2.9 hereof. Lender’s obligation to make any Advance after
the date hereof is subject to the applicable terms, conditions and limitations
set forth in this Agreement. No amount repaid in respect of the Loan (or any
portion thereof) may be reborrowed. The Tranche A Loan and the Tranche B Loan
shall each mature on the Stated Maturity Date. Borrower acknowledges receipt of
the Tranche A Loan, the proceeds of which are being and shall be used to (i)
acquire the Property, (ii) fund certain of the Subaccounts, and (iii) pay
transaction costs. Borrower also acknowledges receipt of the Initial Tranche B
Loan Advance, a portion of which Initial Tranche B Loan Advance in an amount
equal to $2,200,000 shall be used to fund the Required Repairs Subaccount as
more specifically set forth in Section 3.2 hereof and a portion of which Initial
Trance B Loan Advance in an amount equal to $200,000 shall be used to fund the
Capital Reserve Subaccount as more specifically set forth in Section 3.4.
hereof. Any excess proceeds may be used for any lawful purpose.

 

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2.2 Interest; Monthly Payments.

 

2.2.1 Generally. From and after the date hereof, interest on the unpaid Tranche
A Principal shall accrue at the Tranche A Loan Interest Rate and be payable as
hereinafter provided, and interest on the unpaid Tranche B Principal shall
accrue at the Tranche B Loan Interest Rate and be payable as hereinafter
provided. On April 1, 2005 and each Payment Date thereafter through and
including the Maturity Date, Borrower shall pay interest on the unpaid Tranche A
Principal which has accrued through the last day of the Interest Period
immediately preceding such Payment Date (the “Tranche A Loan Interest Payment”).
On April 1, 2005 and each Payment Date thereafter through and including the
Maturity Date, Borrower shall pay interest on the unpaid Tranche B Principal
which has accrued through the last day of the Interest Period immediately
preceding such Payment Date (the “Tranche B Loan Interest Payment”). All accrued
and unpaid interest shall be due and payable at the applicable Interest Rate on
the Maturity Date. If the Loan (or any portion thereof) is repaid on any date
other than on a Payment Date (whether prior to or after the Stated Maturity
Date), Borrower shall also pay interest that would have accrued on such repaid
Principal to but not including the next Payment Date.

 

2.2.2 Default Rate. After the occurrence and during the continuance of an Event
of Default, the entire unpaid Debt shall bear interest at the Default Rate, and
shall be payable upon demand from time to time, to the extent permitted by
applicable law.

 

2.2.3 Taxes. Any and all payments by Borrower hereunder and under the other Loan
Documents shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding taxes imposed on Lender’s
income, and franchise taxes imposed on Lender by the law or regulation of any
Governmental Authority (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
in this Section 2.2.3 as “Applicable Taxes”). If Borrower shall be required by
law to deduct any Applicable Taxes from or in respect of any sum payable
hereunder to Lender, the following shall apply: (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.2.3), Lender receives an amount equal to the sum it would have received had no
such deductions been made, (ii) Borrower shall make such deductions and (iii)
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law. Payments pursuant to this
Section 2.2.3 shall be made within ten (10) days after the date Lender makes
written demand therefor.

 

2.2.4 Breakage Indemnity. Borrower shall indemnify Lender against any loss or
expense which Lender may actually sustain or incur in liquidating or redeploying
deposits from third parties acquired to effect or maintain the Tranche A Loan
and/or Tranche B Loan or any part thereof as a consequence of (i) any payment or
prepayment of the Tranche A Loan and/or Tranche B Loan or any portion thereof
made on a date other than a Payment Date and (ii) any default in payment or
prepayment of the Tranche A Principal and/or the Tranche B Principal or any part
thereof or interest accrued thereon, as and when due and payable (at the date
thereof or otherwise, and whether by acceleration or otherwise). Lender shall
deliver to Borrower a statement for any such sums which it is entitled to
receive pursuant to this Section 2.2.4, which statement shall be binding and
conclusive absent manifest error.

 

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2.2.5 New Payment Date. Lender shall have the right, to be exercised not more
than once during the term of the Loan, to change the Payment Date for the
Tranche A Loan and/or the Tranche B Loan to a date other than the first day of
each month (a “New Payment Date”), on thirty (30) days’ written notice to
Borrower; provided, however, that any such change in the Payment Date: (i) shall
not modify the amount of regularly scheduled monthly interest payments for the
Tranche A Loan or the Tranche B Loan (as applicable), except that the first
payment of interest on the Tranche A Loan and/or the Tranche B Loan (as
applicable) payable on the New Payment Date shall be accompanied by interest at
the interest rate herein provided for the Tranche A Loan and/or Tranche B Loan
(as applicable) for the period from the Payment Date in the month in which the
New Payment Date first occurs to the New Payment Date, and (ii) shall extend the
Stated Maturity Date to the New Payment Date occurring in the month set forth in
the definition of Stated Maturity Date.

 

2.3 Loan Repayment.

 

2.3.1 Repayment. Borrower shall repay the entire outstanding principal balance
of each Note in full on the Maturity Date, together with interest thereon to
(but excluding) the date of repayment and any other amounts due and owing under
the Loan Documents. Except during the continuance of an Event of Default, all
proceeds of any repayment, including any prepayments of the Tranche A Loan,
shall be applied by Lender as follows in the following order of priority: First,
accrued and unpaid interest at the Tranche A Loan Interest Rate; Second, to the
Tranche A Principal; and Third, to the Exit Fee and any other amounts then due
and owing under the Loan Documents with respect to the Tranche A Loan. Except
during the continuance of an Event of Default, all proceeds of any repayment,
including any prepayments of the Tranche B Loan, shall be applied by Lender as
follows in the following order of priority: First, accrued and unpaid interest
at the Tranche B Loan Interest Rate; Second, to the Tranche B Principal; and
Third, to the Exit Fee and any other amounts then due and owing under the Loan
Documents with respect to the Tranche B Loan. If prior to the Stated Maturity
Date the Debt is accelerated by reason of an Event of Default, then Lender shall
be entitled to receive, in addition to the unpaid Tranche A Principal and
accrued interest and other sums due under the Loan Documents, an amount equal to
the Exit Fee applicable to the portion of Principal so accelerated constituting
the Tranche A Principal. If prior to the Stated Maturity Date the Debt is
accelerated by reason of an Event of Default, then Lender shall be entitled to
receive, in addition to the unpaid Tranche B Principal and accrued interest and
other sums due under the Loan Documents, an amount equal to the Exit Fee
applicable to the portion of Principal so accelerated constituting the Tranche B
Principal. During the continuance of an Event of Default, all proceeds of
repayment, including any payment or recovery on the Property (whether through
foreclosure, deed-in-lieu of foreclosure, or otherwise) shall, unless otherwise
provided in the Loan Documents, be applied in such order and in such manner
(including as between the Tranche A Loan and the Tranche B Loan) as Lender shall
elect in Lender’s sole and absolute discretion.

 

2.3.2 Mandatory Prepayments. The Loan is subject to mandatory prepayment in
certain instances of Insured Casualty or Condemnation (each a
“Casualty/Condemnation Prepayment”), in the manner and to the extent set forth
in Section 7.4.2 hereof. Each Casualty/Condemnation Prepayment, after deducting
Lender’s costs and expenses (including reasonable attorneys’ fees and expenses)
in connection with the settlement or collection of the

 

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Proceeds or Award, shall be applied by Lender as follows in the following order
of priority: First, accrued and unpaid interest; Second, to Principal; and
Third, to and any other amounts then due and owing under the Loan Documents,
but, as between the Tranche A Loan and the Tranche B Loan, as Lender shall elect
in Lender’s sole and absolute discretion. If such Casualty/Condemnation Payment
is made on any date other than a Payment Date, then such Casualty/Condemnation
Payment shall include interest that would have accrued on the Principal prepaid
to but not including the next Payment Date. Any such mandatory prepayment under
this Section 2.3.2 shall be subject to the payment of the Exit Fee.
Notwithstanding anything to the contrary contained herein, each
Casualty/Condemnation Prepayment shall be applied in inverse order of maturity
and shall not extend or postpone the due dates of the monthly installments due
under the Notes or this Agreement, or change the amounts of such installments.

 

2.3.3 Intentionally Omitted.

 

2.3.4 Optional Prepayments.

 

(a) Tranche A Loan. Borrower shall have the right to prepay all or any portion
of the Tranche A Principal on any Payment Date provided that Borrower gives
Lender at least fifteen (15) days’ prior written notice thereof and such
prepayment is accompanied by the Exit Fee (if any) applicable thereto. If any
such prepayment is not made on a Payment Date, Borrower shall also pay interest
that would have accrued on such prepaid Tranche A Principal to but not including
the next Payment Date.

 

(b) Tranche B Loan. Borrower shall have the right to prepay all or any portion
of the Tranche B Principal on any Payment Date provided that Borrower gives
Lender at least fifteen (15) days prior written notice thereof and such
prepayment is accompanied by the Exit Fee (if any) applicable thereto. If any
such prepayment is not made on a Payment Date, Borrower shall also pay interest
that would have accrued on such prepaid Tranche B Principal to but not including
the next Payment Date.

 

2.4 Releases.

 

2.4.1 Intentionally Omitted.

 

2.4.2 Release on Payment in Full. Lender shall, upon the written request and at
the expense of Borrower, upon payment in full of the Debt in accordance
herewith, release or, if requested by Borrower, assign to Borrower’s designee
(without any representation or warranty by and without any recourse against
Lender whatsoever), the Lien of the Loan Documents if not theretofore released.

 

2.4.3 Release of Payment Guarantees/Subordinate Mortgages. The Payment
Guarantees and the Liens of the Subordinate Mortgages shall be released in
accordance with the terms and provisions set forth in the Payment Guarantees.

 

2.5 Payments and Computations.

 

2.5.1 Making of Payments. Each payment by Borrower shall be made in funds
settled through the New York Clearing House Interbank Payments System or other
funds

 

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immediately available to Lender by 3:00 p.m., New York City time, on the date
such payment is due, to Lender by deposit to such account as Lender may
designate by written notice to Borrower. Whenever any such payment shall be
stated to be due on a day that is not a Business Day, such payment shall be made
on the first Business Day thereafter. All such payments shall be made
irrespective of, and without any deduction, set-off or counterclaim whatsoever
and are payable without relief from valuation and appraisement laws and with all
costs and charges incurred in the collection or enforcement thereof, including
attorneys’ fees and court costs.

 

2.5.2 Computations. Interest payable under the Loan Documents shall be computed
on the basis of the actual number of days elapsed over a 360-day year.

 

2.5.3 Late Payment Charge. If any Principal, interest or other sum due under any
Loan Document is not paid by Borrower on the date on which it is due (other than
the balloon payment of Principal due on the Maturity Date or acceleration of the
Loan), Borrower shall pay to Lender upon demand an amount equal to the lesser of
five percent (5%) of such unpaid sum or the maximum amount permitted by
applicable law (the “Late Payment Charge”), in order to defray the expense
incurred by Lender in handling and processing such delinquent payment and to
compensate Lender for the loss of the use of such delinquent payment. Such
amount shall be secured by the Loan Documents. Provided no Event of Default is
then continuing, no Late Payment Charge shall apply if adequate funds are
available in the Deposit Account for any such Principal, interest or other sums
due under any Loan Document and the Deposit Bank fails to allocate such funds in
accordance with the Loan Documents.

 

2.6 Interest Rate Protection Agreements.

 

2.6.1 Tranche A Interest Rate Protection Agreement. As of the date hereof,
Borrower has entered into (or is simultaneously entering into), made (or will
make) all payments required under, and satisfied (or will simultaneously
satisfy) all conditions precedent to the effectiveness of, an interest rate
protection agreement that satisfies all of the following conditions (such
interest rate protection agreement together with (i) any extension, amendment or
modification thereof or (ii) any other interest rate protection agreement
entered into pursuant to this Section 2.6, Section 2.8 hereof or Section 2.9
hereof, being referred to herein as the “Tranche A Loan Interest Rate Protection
Agreement”):

 

(1) The Tranche A Loan Interest Rate Protection Agreement is with a financial
institution having a long term, unsecured and unsubordinated debt rating of at
least “AA-” by S&P and “Aa3” by Moody’s (an “Acceptable Counterparty”); has a
term ending no earlier than the Stated Maturity Date; is an interest rate cap in
respect of a notional amount not less than the maximum principal amount of the
Tranche A Loan that shall have the effect of capping LIBOR at 6.00% per annum;
and provides that the only obligation of Borrower thereunder is the making of a
single payment upon the execution and delivery thereof.

 

(2) Borrower’s interest in such Tranche A Loan Interest Rate Protection
Agreement has been assigned to Lender pursuant to documentation satisfactory to
Lender in form and substance, and the counterparty to such Tranche A Loan
Interest Rate Protection Agreement has executed and delivered to Lender an
acknowledgment of such assignment, which acknowledgment includes such
counterparty’s agreement to pay directly into the Deposit

 

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Account all sums payable by such counterparty pursuant to the Tranche A Loan
Interest Rate Protection Agreement and shall otherwise be satisfactory to Lender
in form and substance.

 

(3) In connection with a Tranche A Loan Interest Rate Protection Agreement,
Borrower shall obtain and deliver to Lender an opinion of counsel from counsel
(in-house or independent) for the issuer of the Tranche A Loan Interest Rate
Protection Agreement (upon which Lender and its successors and assigns may rely)
which shall provide in relevant part, that: (a) the issuer is duly organized,
validly existing, and in good standing under the laws of its jurisdiction of
incorporation and has the organizational power and authority to execute and
deliver, and to perform its obligations under, the Tranche A Loan Interest Rate
Protection Agreement; (b) the execution and delivery of the Tranche A Loan
Interest Rate Protection Agreement by the issuer, and any other agreement which
the issuer has executed and delivered pursuant thereto, and the performance of
its obligations thereunder have been and remain duly authorized by all necessary
action and do not contravene any provision of its certificate of incorporation
or by-laws (or equivalent organizational documents) or any law, regulation or
contractual restriction binding on or affecting it or its property; (c) all
consents, authorizations and approvals required for the execution and delivery
by the issuer of the Tranche A Loan Interest Rate Protection Agreement, and any
other agreement which the issuer has executed and delivered pursuant thereto,
and the performance of its obligations thereunder have been obtained and remain
in full force and effect, all conditions thereof have been duly complied with,
and no other action by, and no notice to or filing with any governmental
authority or regulatory body is required for such execution, delivery or
performance; and (d) the Tranche A Loan Interest Rate Protection Agreement, and
any other agreement which the issuer has executed and delivered pursuant
thereto, has been duly executed and delivered by the issuer and constitutes the
legal, valid and binding obligation of the issuer, enforceable against the
issuer in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally, and subject,
as to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).

 

(4) In the event of any downgrade, withdrawal or qualification of the rating of
the issuer of the Tranche A Loan Interest Rate Protection Agreement below “AA-”
by S&P and “Aa3” by Moody’s, Borrower shall replace the Tranche A Loan Interest
Rate Protection Agreement with a replacement Tranche A Loan Interest Rate
Protection Agreement from an Acceptable Counterparty (with terms identical to
the Tranche A Loan Interest Rate Protection Agreement being replaced, or
otherwise approved by Lender in its reasonable discretion and the Rating
Agencies) not later than thirty (30) days following receipt of notice from
Lender or the Servicer of such downgrade, withdrawal or qualification.

 

2.6.2 Tranche B Interest Rate Protection Agreement. As of the date hereof,
Borrower has entered into (or is simultaneously entering into), made (or will
make) all payments required under, and satisfied (or will simultaneously
satisfy) all conditions precedent to the effectiveness of, an interest rate
protection agreement that satisfies all of the following conditions (such
interest rate protection agreement together with (i) any extension, amendment or
modification thereof or (ii) any other interest rate protection agreement
entered into pursuant to this Section 2.6, Section 2.8 hereof or Section 2.9
hereof, being referred to herein as the “Tranche B Loan Interest Rate Protection
Agreement” and together with the Tranche A Loan

 

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Interest Rate Protection Agreement, each, an “Interest Rate Protection
Agreement” and collectively, the “Interest Rate Protection Agreements”):

 

(1) The Tranche B Loan Interest Rate Protection Agreement is with a financial
institution having a long term, unsecured and unsubordinated debt rating of at
least “AA-” by S&P and “Aa3” by Moody’s (an “Acceptable Counterparty”); has a
term ending no earlier than the Stated Maturity Date; is an interest rate cap in
respect of a notional amount not less than the Initial Tranche B Loan Advance
(the notional amount of the Tranche B Loan Interest Rate Protection Agreement at
any time during the Term, as the same may be increased pursuant to Section 2.9
hereof, the “Tranche B Notional Amount”) that shall have the effect of capping
LIBOR at 4.50% per annum; and provides that the only obligation of Borrower
thereunder is the making of a single payment upon the execution and delivery
thereof.

 

(2) Borrower’s interest in such Tranche B Loan Interest Rate Protection
Agreement has been assigned to Lender pursuant to documentation satisfactory to
Lender in form and substance, and the counterparty to such Tranche B Loan
Interest Rate Protection Agreement has executed and delivered to Lender an
acknowledgment of such assignment, which acknowledgment includes such
counterparty’s agreement to pay directly into the Deposit Account all sums
payable by such counterparty pursuant to the Tranche B Loan Interest Rate
Protection Agreement and shall otherwise be satisfactory to Lender in form and
substance.

 

(3) In connection with a Tranche B Loan Interest Rate Protection Agreement,
Borrower shall obtain and deliver to Lender an opinion of counsel from counsel
(in-house or independent) for the issuer of the Tranche B Loan Interest Rate
Protection Agreement (upon which Lender and its successors and assigns may rely)
which shall provide in relevant part, that: (a) the issuer is duly organized,
validly existing, and in good standing under the laws of its jurisdiction of
incorporation and has the organizational power and authority to execute and
deliver, and to perform its obligations under, the Tranche B Loan Interest Rate
Protection Agreement; (b) the execution and delivery of the Tranche B Loan
Interest Rate Protection Agreement by the issuer, and any other agreement which
the issuer has executed and delivered pursuant thereto, and the performance of
its obligations thereunder have been and remain duly authorized by all necessary
action and do not contravene any provision of its certificate of incorporation
or by-laws (or equivalent organizational documents) or any law, regulation or
contractual restriction binding on or affecting it or its property; (c) all
consents, authorizations and approvals required for the execution and delivery
by the issuer of the Tranche B Loan Interest Rate Protection Agreement, and any
other agreement which the issuer has executed and delivered pursuant thereto,
and the performance of its obligations thereunder have been obtained and remain
in full force and effect, all conditions thereof have been duly complied with,
and no other action by, and no notice to or filing with any governmental
authority or regulatory body is required for such execution, delivery or
performance; and (d) the Tranche B Loan Interest Rate Protection Agreement, and
any other agreement which the issuer has executed and delivered pursuant
thereto, has been duly executed and delivered by the issuer and constitutes the
legal, valid and binding obligation of the issuer, enforceable against the
issuer in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally, and subject,
as to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).

 

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(4) In the event of any downgrade, withdrawal or qualification of the rating of
the issuer of the Tranche B Loan Interest Rate Protection Agreement below “AA-”
by S&P and “Aa3” by Moody’s, Borrower shall replace the Tranche B Loan Interest
Rate Protection Agreement with a replacement Tranche B Loan Interest Rate
Protection Agreement from an Acceptable Counterparty (with terms identical to
the Tranche B Loan Interest Rate Protection Agreement being replaced, or
otherwise approved by Lender in its reasonable discretion and the Rating
Agencies) not later than thirty (30) days following receipt of notice from
Lender or the Servicer of such downgrade, withdrawal or qualification.

 

2.6.3 Execution of Documents. Borrower shall promptly execute and deliver to the
counterparty of the Interest Rate Protection Agreements such confirmations and
agreements as may be reasonably requested by such counterparty in connection
with any such Interest Rate Protection Agreement.

 

2.6.4 No Obligation of Lender. Borrower agrees that Lender shall not have any
obligation, duty or responsibility to Borrower or any other Person by reason of,
or in connection with, any Interest Rate Protection Agreement (including any
duty to provide or arrange any Interest Rate Protection Agreement, to consent to
any mortgage or pledge of the Property or any portion thereof as security for
Borrower’s performance of its obligations under any Interest Rate Protection
Agreement, or to provide any credit or financial support for the obligations of
Borrower or any other Person thereunder or with respect thereto). No Interest
Rate Protection Agreement shall alter, impair, restrict, limit or modify in any
respect the obligation of Borrower to pay interest on the Loan as and when the
same becomes due and payable in accordance with the provisions of the Loan
Documents.

 

2.6.5 Receipts from Interest Rate Protection Agreements. All payments made by
the counterparty to the Interest Rate Protection Agreements shall be deposited
into the Deposit Account and applied in the same manner as Rents are applied
under Section 3.11 hereof.

 

2.7 Fees.

 

2.7.1 Tranche A Origination Fee. On the date hereof, Borrower shall pay to
Lender an origination fee with respect to the Tranche A Loan of $206,250.

 

2.7.2 Exit Fee. Upon any repayment or prepayment of the Principal (including
without limitation, as a result of the acceleration of all or any portion of the
Loan), Borrower shall pay to Lender on the date of such repayment or prepayment
the Exit Fee applicable thereto. All Exit Fees hereunder are a condition to, and
shall be deemed to be part of the consideration for, Lender entering into the
Loan. Notwithstanding the foregoing, (i) to the extent that the Loan is repaid
with the proceeds of a loan from Greenwich Capital Financial Products, Inc. (or
any Affiliate thereof or syndicate including Greenwich Capital Financial
Products, Inc. or any such Affiliate) or (ii) the Loan is repaid in connection
with a bona fide third-party sale of the Property pursuant to an arms’ length
agreement to a third party not Affiliated with any Borrower or Guarantor, and in
which no Borrower and no Affiliate of any Borrower and/or Guarantor has any
beneficial interest, the Exit Fee that would otherwise be payable with respect
to such repayment shall be waived, provided that Greenwich Capital Financial
Products, Inc. shall have no obligation to offer to provide such financing.

 

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2.7.3 Initial Tranche B Loan Advance Fee/Advance Fees. On the date hereof,
Borrower shall, with respect to the Initial Tranche B Loan Advance, pay to
Lender an advance fee of $24,000. In addition, concurrently with the making of
any Advance hereunder, Borrower shall pay to Lender an advance fee of one
percent (1%) of the amount of such Advance.

 

2.8 Extension Options. Borrower shall have the right, at its option, to extend
the Stated Maturity Date until (i) March 1, 2008 (the “First Extended Maturity
Date”), (ii) March 1, 2009 (the “Second Extended Maturity Date”) and (iii) March
1, 2010 (the “Third Extended Maturity Date”) by giving notice of such extension
to Lender at least 15 days prior to (i) the originally scheduled Stated Maturity
Date, in the case of extending the Term until the First Extended Maturity Date,
(ii) the First Extended Maturity Date, in the case of extending the Term until
the Second Extended Maturity Date and (iii) the Second Extended Maturity Date,
in the case of extending the Term until the Third Extended Maturity Date. Upon
receipt of any such request to extend the Stated Maturity Date, Lender will
promptly confirm to Borrower in writing whether or not the Stated Maturity Date
will be so extended, which extension will be granted upon the satisfaction of
the following conditions:

 

(a) no Event of Default exists at the time such request is made and on the
originally scheduled Stated Maturity Date, the First Extended Maturity Date or
the Second Extended Maturity Date, as applicable;

 

(b) Borrower delivers to Lender an Officer’s Certificate confirming the accuracy
of the information contained in clause (a) above; and

 

(c) on or prior to the originally scheduled Stated Maturity Date, the First
Extended Maturity Date or the Second Extended Maturity Date, as the case may be,
Borrower either (i) extends the term of each Loan Interest Rate Protection
Agreement to a date not earlier than the First Extended Maturity Date, the
Second Extended Maturity Date or the Third Extended Maturity Date, as
applicable, or (ii) enters into a new interest rate protection agreement which
expires no earlier than the First Extended Maturity Date, the Second Extended
Maturity Date or the Third Extended Maturity Date, as applicable, and which
extension or new agreement is in respect of a notional amount of: (A) with
respect to the Tranche A Interest Rate Protection Agreement, the maximum amount
of the Tranche A Principal and (B) with respect to the Tranche B Interest Rate
Protection Agreement, the Tranche B Notional Amount and are otherwise on the
same terms set forth in Section 2.6 hereof and has the effect of capping LIBOR
at (X) 6.00% per annum with respect to the Tranche A Interest Rate Protection
Agreement and (Y) 4.50% per annum with respect to the Tranche B Interest Rate
Protection Agreement.

 

If Borrower is unable to satisfy all of the foregoing conditions within the
applicable time frames for each, Lender shall have no obligation to extend the
Stated Maturity Date hereunder.

 

2.9 Advances of Tranche B Principal.

 

2.9.1 Capital Expenditure Advances/Conditions Precedent. Lender shall, from time
to time, make Capital Expenditure Advances to be used solely to pay or reimburse

 

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Borrower for Approved Capital Expenses at the Property; provided the following
conditions precedent are satisfied:

 

(a) Lender receives a notice of borrowing in the form of Schedule 6 at least ten
(10) Business Days before the date the proposed Capital Expenditure Advance is
to be made;

 

(b) Both immediately prior to the making of the Capital Expenditure Advance and
after giving effect thereto, no Default or Event of Default shall be continuing;

 

(c) The representations and warranties made by Borrower in this Agreement and in
the other Loan Documents shall be true and correct in all material respects on
and as of the date of the making of the Capital Expenditure Advance with the
same force and effect as if made on and as of such date;

 

(d) There shall be no more than one Capital Expenditure Advance during any
calendar quarter;

 

(e) In no event will the aggregate amount of the requested Capital Expenditure
Advance, together with all prior Capital Expenditure Advances (not including the
Initial Tranche B Loan Advance) previously made by Lender exceed $2,400,000 (as
the same may be increased pursuant to Section 2.9.7 below, the “Maximum Capital
Expenditure Tranche B Principal”);

 

(f) With respect to any Capital Expenditure Advance, such Capital Expenditure
Advance will be used solely to pay (or reimburse Borrower for) Approved Capital
Expenses at the Property;

 

(g) Lender shall have received (i) a notice of title continuation showing that
since the making of the last Advance there has been no change in the state of
title to the Property and no survey exceptions with respect to the Property not
theretofore approved by Lender, together with other evidence satisfactory to
Lender that no mechanic’s Liens or other Liens have been filed and remain filed
with respect to the Property and (ii) an endorsement to the Title Insurance
Policy, which endorsement shall have the effect of (x) updating the date of such
Title Insurance Policy to the date of the making of such Capital Expenditure
Advance and (y) increasing the coverage of such Title Insurance Policy by an
amount equal to the amount of the Capital Expenditure Advance then being made;

 

(h) All fees and expenses payable to Lender, including the fees and expenses
referred to in Sections 2.7 and 5.29, to the extent then due and payable, shall
have been (or contemporaneously are being) paid in full, and all title premiums
and other title and survey charges shall have been (or contemporaneously are
being) paid in full;

 

(i) Lender shall have received reasonably satisfactory evidence that all
permits, licenses and approvals required for any work associated with such
requested disbursement have been obtained and are in full force and effect;

 

(j) Lender shall have received such affidavits and certificates as to such
matters as Lender may reasonably request, including certificates of the approved
architect or engineer, if applicable, or, of a construction consultant retained
by Lender at Borrower’s expense in

 

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connection with any work that (1) all of the work completed has been done
substantially in compliance with the plans and specifications and applicable
Legal Requirements, and (2) the disbursement of such Capital Expenditure Advance
is required to reimburse payments of costs incurred for Approved Capital
Expenses or to pay costs incurred for Approved Capital Expenses due to,
contractors, subcontractors, materialmen, laborers, engineers, architects or
other persons rendering services or materials or paying for such work;

 

(k) Borrower shall have delivered to Lender lien waivers (conditional or
otherwise) executed and delivered by the general contractor and all
subcontractors, materialmen and other Persons requested by Lender for all work
for which a Capital Expenditure Advance has previously been made or for which
the Capital Expenditure Advance in question is being requested;

 

(l) Lender shall have received from Borrower an Officer’s Certificate: (1)
certifying that all work relating to work performed on or prior to the date of
the certificate has been completed in a good and workmanlike manner in
accordance with all Legal Requirements, (2) identifying each Person that
supplied labor or materials with respect to such capital improvement, (3)
stating that each general contractor and architect retained for any work are
reputable and licensed or otherwise authorized to do business in the State and
have been engaged pursuant to arms’ length agreements entered into on market
terms and conditions and (4) stating that each such Person has been or upon
receipt of the requested Capital Expenditure Advance will be paid in full for
work for which a Capital Expenditure Advance has been made or is being
requested;

 

(m) Borrower’s notice of borrowing for such Capital Expenditure Advance is
accompanied by an Officer’s Certificate certifying (v) the amount of funds to be
advanced, (w) that such funds will be used only to pay (or reimburse Borrower
for) Approved Capital Expenses and a description thereof, (x) that all
outstanding payables (other than those to be paid from the requested
disbursement or those constituting Permitted Indebtedness) have been paid in
full, (y) that the same has not been the subject of a previous disbursement, and
(z) that all previous disbursements have been used only to pay (or reimburse
Borrower for) the previously identified Approved Capital Expenses;

 

(n) When such work has been completed, Lender shall have received a copy of any
certificate or certificates required by law to render occupancy of the
Improvements legal;

 

(o) Lender shall have received such other documents relating to the Property or
the Capital Expenditure Advance as Lender may reasonably request; and

 

(p) Borrower shall have (1) (x) obtained a new Tranche B Loan Interest Rate
Protection Agreement satisfying each of the terms and conditions set forth in
Section 2.6 hereof and in a Tranche B Notional Amount equal to the outstanding
principal balance of the Tranche B Loan after giving effect to the applicable
Capital Expenditure Advance and (y) shall have delivered to Lender an Assignment
of Tranche B Loan Interest Rate Protection Agreement on Lender’s then standard
form with respect to such new Tranche B Loan Interest Rate Protection Agreement
or (2) increased the Tranche B Notional Amount under any existing Tranche B Loan
Interest Rate Protection Agreement by an amount equal to the applicable Capital
Expenditure

 

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Advance, which Tranche B Loan Interest Rate Protection Agreement shall otherwise
remain on the same terms and shall continue to satisfy the conditions set forth
in Section 2.6 hereof.

 

2.9.2 Capital Expenditure Advances/Minimum Funding Thresholds. It is the
intention of Lender and Borrower that the entire amount of the Maximum Capital
Expenditure Tranche B Principal shall be requested by Borrower on or before
December 31, 2005. If for any reason on December 31, 2005, Lender has not made
Capital Expenditure Advances in an aggregate amount of the Maximum Capital
Expenditure Tranche B Principal, provided no Event of Default is then
continuing, Lender shall fund the amount by which the Maximum Capital
Expenditure Tranche B Principal exceeds the aggregate amount of the Capital
Expenditure Advances theretofore funded (not including the Initial Tranche B
Loan Advance) by Lender prior to December 31, 2005 (the “Capital Expenditure
Advance Shortfall”). The Capital Expenditure Advance Shortfall shall be
deposited into the Capital Reserve Subaccount and thereafter be disbursed and
applied in accordance with the terms and provisions of Section 3.4 hereof. If on
December 31, 2005, an Event of Default is then continuing, Borrower shall have
no right to request, and Lender shall have no obligation to fund, any Capital
Expenditure Advance thereafter.

 

2.9.3 Leasing Advances/Conditions Precedent. Lender shall, from time to time,
make Leasing Advances, to be used solely to pay or reimburse Borrower for
Approved Leasing Expenses at the Property; provided the following conditions
precedent are satisfied:

 

(a) Lender receives a notice of borrowing in the form of Schedule 6 at least ten
(10) Business Days before the date the proposed Leasing Advance is to be made;

 

(b) either (x) the Loan (after taking into account the Initial Tranche B Loan
Advance, the subject Leasing Advance and all prior Leasing Advances and assuming
the Maximum Capital Expenditure Tranche B Principal has been fully
funded)-to-”Acquisition Cost At Closing” ratio is no greater than 85% or (y)
after taking into account the base rent payable under the Lease which is the
subject of the Leasing Advance in question, the Property maintains an annual
“Adjusted Net Operating Income” of (1) with respect to any Leasing Advance
requested prior to February 28, 2006, at least 105% of the “Current Annual Net
Operating Income of the Property”, (2) with respect to any Leasing Advance
requested on or after February 28, 2006 but prior to February 27, 2007, at least
110% of the “Current Annual Net Operating Income of the Property” and (3) with
respect to any Leasing Advance requested on or after February 27, 2007 and prior
to the Outside Leasing Advance Date, at least 115% of the “Current Annual Net
Operating Income of the Property”. As used herein, (A) “Acquisition Cost At
Closing” shall mean $35,538,591, (B) “Current Annual Net Operating Income of the
Property” shall mean $2,300,000, and (C) “Adjusted Net Operating Income” shall
mean the actual net operating income of the Property determined on a cash basis
of accounting (based on the then “in place” rent roll and the actual operating
expenses for the then trailing four quarters), after excluding rents from
tenants (a) which have given notice of their intention not to renew their Lease
(or which have failed to renew their Lease by the last date on which such Leases
may be renewed) or (b) are not paying rent due under their Leases.

 

(c) Both immediately prior to the making of the Leasing Advance and after giving
effect thereto, no Default or Event of Default shall be continuing;

 

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(d) The representations and warranties made by Borrower in this Agreement and in
the other Loan Documents shall be true and correct in all material respects on
and as of the date of the making of the Leasing Advance with the same force and
effect as if made on and as of such date;

 

(e) There shall be no more than one Leasing Advance during any calendar quarter;

 

(f) In no event will the aggregate amount of the requested Leasing Advance,
together with all prior Leasing Advances previously made by Lender exceed
$6,300,000 (as the same may be decreased pursuant to Section 2.9.7 below, the
“Maximum Leasing Advance Tranche B Principal”);

 

(g) Such Leasing Advance will be used solely to pay (or reimburse Borrower for)
Approved Leasing Expenses at the Property;

 

(h) No Leasing Advance shall be made after the Outside Leasing Advance Date;

 

(i) No Leasing Advance shall made unless the Lease with respect to which the
Leasing Advance is being requested has been approved by Lender, if Lender’s
approval is required with respect to such Lease pursuant to the terms and
provisions of Section 5.10 hereof;

 

(j) Lender shall have received (i) a notice of title continuation showing that
since the making of the last Advance there has been no change in the state of
title to the Property and no survey exceptions with respect to the Property not
theretofore approved by Lender, together with other evidence satisfactory to
Lender that no mechanic’s Liens or other Liens have been filed and remain filed
with respect to the Property and (ii) an endorsement to the Title Insurance
Policy, which endorsement shall have the effect of (x) updating the date of such
Title Insurance Policy to the date of the making of such Leasing Advance and (y)
increasing the coverage of such Title Insurance Policy by an amount equal to the
amount of the Leasing Advance then being made;

 

(k) All fees and expenses payable to Lender, including the fees and expenses
referred to in Sections 2.7 and 5.29, to the extent then due and payable, shall
have been (or contemporaneously are being) paid in full, and all title premiums
and other title and survey charges shall have been (or contemporaneously are
being) paid in full;

 

(l) if the subject Approved Leasing Expenses (which are the subject of the
requested Advance) involves any material construction work, then each of the
following conditions shall have all been satisfied:

 

(1) Lender shall have received reasonably satisfactory evidence that all
permits, licenses and approvals required for any work associated with such
requested disbursement have been obtained and are in full force and effect;

 

(2) Lender shall have received such affidavits and certificates as to such
matters as Lender may reasonably request, including certificates of the approved
architect or engineer, if applicable, or, of a construction consultant retained
by Lender at

 

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Borrower’s expense in connection with any work that (1) all of the work
completed has been done substantially in compliance with the plans and
specifications and applicable Legal Requirements, and (2) the disbursement of
such Leasing Advance is required to reimburse payments of costs incurred for
Approved Leasing Expenses to, or to pay costs incurred for Approved Leasing
Expenses due to, contractors, subcontractors, materialmen, laborers, engineers,
architects or other persons rendering services or materials or paying for such
work;

 

(3) Borrower shall have delivered to Lender lien (conditional or otherwise)
waivers executed and delivered by the general contractor and all subcontractors,
materialmen and other Persons requested by Lender for all work for which an
Advance has previously been made or for which the Leasing Advance in question is
being requested;

 

(4) Lender shall have received from Borrower an Officer’s Certificate: (1)
certifying that all work relating to work performed on or prior to the date of
the certificate has been completed in a good and workmanlike manner in
accordance with all Legal Requirements and substantially in accordance with the
plans and specifications approved by Lender (if required pursuant to the terms
hereof), (2) identifying each Person that supplied labor or materials with
respect to such capital improvement, (3) stating that each general contractor
and architect retained for any work are reputable and licensed or otherwise
authorized to do business in the State and have been engaged pursuant to arms’
length agreements entered into on market terms and conditions and (4) stating
that each such Person has been or upon receipt of the requested Leasing Advance
will be paid in full for work for which a Leasing Advance has been made or is
being requested; and

 

(5) When such work has been completed, Lender shall have received a copy of any
certificate or certificates required by law to render occupancy of the
Improvements legal;

 

(m) Borrower’s notice of borrowing for such Leasing Advance is accompanied by an
Officer’s Certificate certifying (v) the amount of funds to be advanced, (w)
that such funds will be used only to pay (or reimburse Borrower for) Approved
Leasing Expenses and a description thereof, (x) that all outstanding payables
(other than those to be paid from the requested disbursement or those
constituting Permitted Indebtedness) have been paid in full, (y) that the same
has not been the subject of a previous disbursement, and (z) that all previous
disbursements have been used only to pay (or reimburse Borrower for) the
previously identified Approved Leasing Expenses (as applicable); and

 

(n) Borrower shall have (1) (x) obtained a new Tranche B Loan Interest Rate
Protection Agreement satisfying each of the terms and conditions set forth in
Section 2.6 hereof and in a Tranche B Notional Amount equal to the outstanding
principal balance of the Tranche B Loan after giving effect to the applicable
Leasing Advance and (y) shall have delivered to Lender an Assignment of Tranche
B Loan Interest Rate Protection Agreement on Lender’s then standard form with
respect to such new Tranche B Loan Interest Rate Protection Agreement or (2)
increased the Tranche B Notional Amount under any existing Tranche B Loan
Interest Rate

 

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Protection Agreement by an amount equal to the applicable Leasing Advance, which
Tranche B Loan Interest Rate Protection Agreement shall otherwise remain on the
same terms and shall continue to satisfy the conditions set forth in Section 2.6
hereof.

 

2.9.4 Leasing Advances/Minimum Funding Thresholds. (a) It is the intention of
Lender and Borrower that at least $2,000,000 (the “Leasing Advance First Year
Minimum Funding Threshold”) shall be requested by Borrower before February 28,
2006. If for any reason by February 28, 2006, Lender has not made Leasing
Advances in an aggregate amount of at least the Leasing Advance First Year
Minimum Funding Threshold, Borrower may, on February 28, 2006, at its option,
request that Lender fund the amount by which the Leasing Advance First Year
Minimum Funding Threshold exceeds the aggregate amount of the Leasing Advances
theretofore funded by Lender prior to February 28, 2006 (the “Leasing Advance
First Year Funding Shortfall”). If Borrower elects to have Lender fund the
Leasing Advance First Year Funding Shortfall, Lender shall, provided each of the
conditions precedent set forth in Section 2.9.3 (c), (d), (e), (f), (g), (h),
(j), (k), (m) and (n) above are satisfied, advance the Leasing Advance First
Year Funding Shortfall, which amount shall be deposited into the Rollover
Reserve Subaccount and thereafter be disbursed and applied in accordance with
the terms and provisions of Section 3.5 hereof. If Borrower fails to satisfy any
one or more of the conditions precedent set forth in Section 2.9.3 (c), (d),
(e), (f), (g), (h), (j), (k), (m) and (n) above or Borrower fails to request the
Leasing Advance First Year Funding Shortfall, Borrower shall have no right to
request, and Lender shall have no obligation to fund, the Leasing Advance First
Year Funding Shortfall.

 

(b) It is the intention of Lender and Borrower that, if Lender exercises its
first option to extend the Outside Leasing Advance Date (as described in the
definition of “Outside Leasing Advance Date”), at least $2,600,000 (the “Leasing
Advance Second Year Minimum Funding Threshold”) shall be requested by Borrower
after February 28, 2006 but before February 27, 2007. If for any reason after
February 28, 2006 and prior to February 27, 2007, Lender has not made Leasing
Advances in an aggregate amount of at least the Leasing Advance Second Year
Minimum Funding Threshold, Borrower may, on February 27, 2007, at its option,
request that Lender fund the amount by which the Leasing Advance Second Year
Minimum Funding Threshold exceeds the aggregate amount of the Leasing Advances
theretofore funded by Lender after February 28, 2006 (but not including the
Leasing Advance First Year Funding Shortfall, if applicable) but before February
27, 2007 (the “Leasing Advance Second Year Funding Shortfall”). If Borrower
elects to have Lender fund the Leasing Advance Second Year Funding Shortfall,
Lender shall, provided each of the conditions precedent set forth in Section
2.9.3 (c), (d), (e), (f), (g), (h), (j), (k), (m) and (n) above are satisfied,
advance the Leasing Advance Second Year Funding Shortfall, which amount shall be
deposited into the Rollover Reserve Subaccount and thereafter be disbursed and
applied in accordance with the terms and provisions of Section 3.5 hereof. If
Borrower fails to satisfy any one or more of the conditions precedent set forth
in Section 2.9.3 (c), (d), (e), (f), (g), (h), (j), (k), (m) and (n) above or
Borrower fails to request the Leasing Advance Second Year Funding Shortfall,
Borrower shall have no right to request, and Lender shall have no obligation to
fund, the Leasing Advance Second Year Funding Shortfall. Any amounts advanced
before February 28, 2006 which exceed the Leasing Advance First Year Minimum
Funding Threshold shall count towards the Leasing Advance Second Year Minimum
Funding Threshold.

 

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(c) It is the intention of Lender and Borrower that, if Lender exercises its
second option to extend the Outside Leasing Advance Date (as described in the
definition of “Outside Leasing Advance Date”), at least $1,700,000 (the “Leasing
Advance Third Year Minimum Funding Threshold”) shall be requested by Borrower
after February 27, 2007 but before February 26, 2008. If for any reason after
February 27, 2007 but before February 26, 2008, Lender has not made Leasing
Advances in an aggregate amount of at least the Leasing Advance Third Year
Minimum Funding Threshold, Borrower may, on February 26, 2008, at its option,
request that Lender fund the amount by which the Leasing Advance Third Year
Minimum Funding Threshold exceeds the aggregate amount of the Leasing Advances
theretofore funded by Lender after February 27, 2007 (but not including the
Leasing Advance First Year Funding Shortfall and/or the Leasing Advance Second
Year Funding Shortfall, if applicable) but before February 26, 2008 (the
“Leasing Advance Third Year Funding Shortfall” and together with the Leasing
Advance First Year Funding Shortfall and the Leasing Advance Second Year Funding
Shortfall, each a, “Leasing Advance Funding Shortfall”). If Borrower elects to
have Lender fund the Leasing Advance Third Year Funding Shortfall, Lender shall,
provided each of the conditions precedent set forth in Section 2.9.3 (c), (d),
(e), (f), (g), (h), (j), (k), (m) and (n) above are satisfied, advance the
Leasing Advance Third Year Funding Shortfall, which amount shall be deposited
into the Rollover Reserve Subaccount and thereafter be disbursed and applied in
accordance with the terms and provisions of Section 3.5 hereof. If Borrower
fails to satisfy any one or more of the conditions precedent set forth in
Section 2.9.3 (c), (d), (e), (f), (g), (h), (j), (k), (m) and (n) above or
Borrower fails to request the Leasing Advance Third Year Funding Shortfall,
Borrower shall have no right to request, and Lender shall have no obligation to
fund, the Leasing Advance Third Year Funding Shortfall. Any amounts advanced
after February 28, 2006 but before February 27, 2007 which exceed the Leasing
Advance Second Year Minimum Funding Threshold shall count towards the Leasing
Advance Third Year Minimum Funding Threshold.

 

(d) Notwithstanding anything to the contrary contained in this Section 2.9 or
this Agreement, Borrower shall have no right to request, and Lender shall have
no obligation to fund, any Leasing Advance after the earlier to occur of (i)
February 26, 2008 and (ii) the Outside Leasing Advance Date.

 

2.9.5 Funding on the Outside Leasing Advance Date.

 

(a) If Lender does not exercise its first option (as described in the definition
of “Outside Leasing Advance Date”) to extend the Outside Leasing Advance Date,
then, provided no Event of Default is then continuing, and subject to Borrower’s
satisfaction of conditions Section 2.9.3 (c), (d), (e), (f), (g), (h), (j), (k),
(m) and (n) set forth in Section 2.9.3 above, at Borrower’s option, Lender shall
make a Leasing Advance on the then-current Outside Leasing Advance Date in an
amount equal to the lesser of (i) an amount requested by Borrower and (ii) the
amount by which the Maximum Leasing Advance Tranche B Principal exceeds the then
aggregate amount of Leasing Advances theretofore made by Lender (the “Borrower’s
First Optional Final Leasing Advance”). Lender shall cause such amount to be
transferred to the Rollover Reserve Subaccount to be disbursed and applied in
accordance with the terms and provisions of Section 3.5 hereof. If Borrower does
not exercise the option set forth in this clause (a), Lender shall have no
obligation to make any further Leasing Advances. If Borrower elects to receive
an amount less than the amount by which the Maximum Leasing Advance Tranche B

 

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Principal exceeds the then aggregate amount of Leasing Advances theretofore made
by Lender as contemplated pursuant to the previous sentence, Lender shall have
no further obligation to make any further Leasing Advances.

 

(b) If Lender does exercise its first option (as described in the definition of
“Outside Leasing Advance Date”) to extend the Outside Leasing Advance Date but
does not exercise its second option (as described in the definition of “Outside
Leasing Advance Date”) to extend the Outside Leasing Advance Date, then,
provided no Event of Default is then continuing, and subject to Borrower’s
satisfaction of conditions Section 2.9.3 (c), (d), (e), (f), (g), (h), (j), (k),
(m) and (n) set forth in Section 2.9.3 above, at Borrower’s option, Lender shall
make a Leasing Advance on the then-current Outside Leasing Advance Date in an
amount equal to the lesser of (i) an amount requested by Borrower and (ii) the
amount by which the Maximum Leasing Advance Tranche B Principal exceeds the then
aggregate amount of Leasing Advances theretofore made by Lender (the “Borrower’s
Second Optional Final Leasing Advance”). Lender shall cause such amount to be
transferred to the Rollover Reserve Subaccount to be disbursed and applied in
accordance with the terms and provisions of Section 3.5 hereof. If Borrower does
not exercise the option set forth in this clause (a), Lender shall have no
obligation to make any further Leasing Advances. If Borrower elects to receive
an amount less than the amount by which the Maximum Leasing Advance Tranche B
Principal exceeds the then aggregate amount of Leasing Advances theretofore made
by Lender as contemplated pursuant to the previous sentence, Lender shall have
no further obligation to make any further Leasing Advances.

 

(c) If Borrower does exercise the option set forth in clause (a) above, (1) no
Advance Fee shall be payable by Borrower in connection therewith and (2) Lender
shall, simultaneously with the transfer of the Borrower’s First Optional Final
Leasing Advance into the Rollover Reserve Subaccount, pay to Borrower the
applicable “First Leasing Advance Rebate Payment”. As used herein, the “First
Leasing Advance Rebate Payment” shall mean 3% of the first $2,600,000 of such
Borrower’s First Optional Final Leasing Advance and 6% of the amount by which
such Borrower’s First Optional Final Leasing Advance exceeds $2,600,000,
provided however, if funds constituting the Borrower’s First Optional Final
Leasing Advance do not earn interest in the Rollover Reserve Subaccount at a
rate of interest greater than or equal to LIBOR minus 25 basis points, the First
Leasing Advance Rebate Payment shall be increased to account for the difference
between (i) the interest that would have been earned on funds constituting the
Borrower’s First Optional Final Leasing Advance in the Rollover Reserve
Subaccount had such funds earned interest at a rate of interest greater than or
equal to LIBOR minus 25 basis points and (ii) the interest actually earned by
Borrower on funds constituting the Borrower’s First Optional Final Leasing
Advance in the Rollover Reserve Subaccount. If Borrower does exercise the option
set forth in clause (b) above, (1) no Advance Fee shall be payable by Borrower
in connection therewith and (2) Lender shall, simultaneously with the transfer
of the Borrower’s Second Optional Final Leasing Advance into the Rollover
Reserve Subaccount, pay to Borrower the “Second Leasing Advance Rebate Payment”.
As used herein, the “Second Leasing Advance Rebate Payment” shall mean 3% of the
first $1,700,000 of such Borrower’s Second Optional Final Leasing Advance,
provided however, if funds constituting the Borrower’s First Optional Final
Leasing Advance do not earn interest in the Rollover Reserve Subaccount at a
rate of interest greater than or equal to LIBOR minus 25 basis points, the First
Leasing Advance Rebate Payment shall be increased to account for the difference
between (i) the interest that would have

 

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been earned on funds constituting the Borrower’s First Optional Final Leasing
Advance in the Rollover Reserve Subaccount had such funds earned interest at a
rate of interest greater than or equal to LIBOR minus 25 basis points and (ii)
the interest actually earned by Borrower on funds constituting the Borrower’s
First Optional Final Leasing Advance in the Rollover Reserve Subaccount.

 

2.9.6 Optional Disbursements.

 

(a) If any or all conditions precedent to making an Advance have not been
satisfied on the date such Advance was requested to be made, Lender may, at its
sole option (i) waive so many of such conditions precedent as it may elect,
and/or (ii) disburse only that portion of the requested Advance for which all of
the conditions precedent have been satisfied. To the extent Lender makes an
Advance for which any of the conditions precedent have not been satisfied, the
making of such Advance shall constitute a waiver of such unsatisfied conditions
for such Advance (but not for any other Advance), unless otherwise set forth in
a written notice from Lender to Borrower.

 

(b) Upon the occurrence and during the continuance of an Event of Default,
Lender shall have the right (but no obligation) to make any or all Advances
directly to contractors or any other Person to whom payment is due with respect
to any Approved Capital Expenses or Approved Leasing Expenses. The execution of
this Agreement by Borrower shall, and hereby does, constitute an irrevocable
direction and authorization to so disburse any such Advance. No further
direction or authorization from Borrower shall be necessary or required for such
direct disbursements and all such disbursements shall satisfy pro tanto the
obligations of Lender hereunder and shall be secured by the applicable Loan
Documents as fully as if made directly to Borrower, regardless of the
disposition thereof by the payee.

 

(c) Lender shall have the right (but not the obligation), by its own action (and
without any request therefor by Borrower), to disburse to itself (or retain
from) any Advance amounts to pay interest, fees and any other sums then due and
payable to Lender pursuant to the Loan Documents, after Borrower’s failure to
make such payments in accordance with the terms and provisions of the Loan
Documents.

 

2.9.7 Reallocation of Capital Expenditure Tranche B Principal and Leasing
Tranche B Principal. Notwithstanding anything to the contrary contained in this
Section 2.9, provided no Default or Event of Default is then continuing,
Borrower may request that the maximum amount of the Capital Expenditure Tranche
B Principal be increased by an amount not to exceed $480,000, provided such an
increase is necessary to pay or reimburse Borrower for Approved Capital Expenses
actually incurred by Borrower which are within 110% of the total amounts
included in the applicable line item of the applicable Approved Capital Budget.
Any increase in the maximum amount of the Capital Expenditure Tranche B
Principal shall be limited to a variance of up to ten percent (10%) between the
actual costs incurred by Borrower and the budgeted amount set forth in the
applicable Approved Capital Budget, on a line item by line item basis (i.e.,
such that, in connection with each request by Borrower to increase the Capital
Expenditure Tranche B Principal, the maximum amount by which the Capital
Expenditure Tranche B Principal may be increased shall be the lesser of (x)
$480,000 and (y) an amount equal to ten percent (10%) of the amount included in
the applicable line item of the applicable

 

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Approved Capital Budget). Any increase in the maximum amount of the Capital
Expenditure Tranche B Principal pursuant to this Section 2.9.7, shall reduce the
Leasing Tranche B Principal dollar for dollar. No increase in the maximum amount
of the Capital Expenditure Tranche B Principal shall be permitted unless there
is at least one dollar of Leasing Tranche B Principal then unfunded for each
dollar by which the Capital Expenditure Tranche B Principal is to be increased
(i.e., such that the amount of the Tranche B Principal shall never be increased
as a result of an increase in Capital Expenditure Tranche B Principal).

 

3. CASH MANAGEMENT AND RESERVES

 

3.1 Cash Management Arrangements. Borrower shall cause all Rents to be
transmitted directly by non-residential tenants of the Property into an Eligible
Account (the “Clearing Account”) maintained by Borrower at a local bank selected
by Borrower, which shall at all times be an Eligible Institution (the “Clearing
Bank”) as more fully described in the Clearing Account Agreement. Without in any
way limiting the foregoing, all Rents received by Borrower or Manager shall be
deposited into the Clearing Account within three (3) Business Days of receipt.
Funds deposited into the Clearing Account shall be swept by the Clearing Bank on
a daily basis into an Eligible Account at the Deposit Bank controlled by Lender
(the “Deposit Account”) and applied and disbursed in accordance with this
Agreement. Funds in the Deposit Account shall be invested at Borrower’s
discretion only in Permitted Investments. Lender will also establish subaccounts
of the Deposit Account which shall at all times be Eligible Accounts (and may be
ledger or book entry accounts and not actual accounts) (such subaccounts are
referred to herein as “Subaccounts”). The Deposit Account and any Subaccount
will be under the sole control and dominion of Lender, and Borrower shall have
no right of withdrawal therefrom.

 

3.2 Required Repairs.

 

3.2.1 Completion of Required Repairs. Borrower shall apply all funds deposited
in the Required Repairs Subaccount (defined below) towards the performance the
items of the repairs and environmental remedial work at the Property described
on Schedule 1 hereto (the “Required Repairs”) within twelve (12) months of the
date hereof. The inability by Borrower to fully apply such funds or to fully
perform any one or more of the Required Repairs within the time period set forth
above, shall not in and of itself, constitute a Default or an Event of Default
hereunder, provided that Borrower is diligently and continuously taking all
commercially reasonable steps necessary to perform the Required Repair(s) in
question.

 

3.2.2 Required Repairs Reserves. On the date hereof, Borrower shall deposit with
Lender a portion of the Initial Tranche B Loan Advance in an amount equal to
$2,200,000 and Lender shall cause such portion of the Initial Tranche B Loan
Advance to be transferred to a Subaccount (the “Required Repairs Subaccount”).
Provided no Default or Event of Default shall have occurred and is continuing,
Lender shall disburse funds held in the Required Repairs Subaccount to Borrower,
within fifteen (15) days after the delivery by Borrower to Lender of a request
therefor (but not more often than once per month), in increments of at least
$5,000, accompanied by the following items (which items shall be in form and
substance satisfactory to Lender): (i) an Officer’s Certificate (A) certifying
that the Required Repairs or any portion thereof which are the subject of the
requested disbursement have been completed in a good and workmanlike manner and
in accordance with all applicable Legal Requirements, (B) identifying

 

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each Person that supplied materials or labor in connection with such Required
Repairs or any portion thereof and (C) stating that each such Person has been
or, upon receipt of the requested disbursement, will be paid in full with
respect to the portion of the Required Repairs which is the subject of the
requested disbursement; (ii) copies of appropriate Lien waivers or other
evidence of payment satisfactory to Lender; (iii) at Lender’s option, a title
search for the Property indicating that it is free from all Liens not previously
approved by Lender; (iv) a copy of each License required to be obtained with
respect to the portion of the Required Repairs which is the subject of the
requested disbursement; and (v) such other evidence as Lender shall reasonably
request that the Required Repairs which are the subject of the requested
disbursement have been completed and paid for. Upon Borrower’s completion of all
Required Repairs in accordance with this Section 3.2, Lender shall transfer any
funds remaining in the Required Repairs Subaccount, if any, to the Capital
Reserve Subaccount to be disbursed and applied in accordance with Section 3.4(a)
hereof.

 

3.3 Taxes and Insurance. Borrower shall pay to Lender on each Payment Date (i)
one-twelfth (1/12th) of the Taxes that Lender estimates will be payable during
the next twelve (12) months in order to accumulate with Lender sufficient funds
to pay all such Taxes at least thirty (30) days prior to their respective due
dates and (ii) one-twelfth (1/12th) of the Insurance Premiums that Lender
estimates will be payable for the renewal of the coverage afforded by the
Policies upon the expiration thereof in order to accumulate with Lender
sufficient funds to pay all such Insurance Premiums at least thirty (30) days
prior to the expiration of the Policies. Such amounts will be transferred by
Lender to a Subaccount (the “Tax and Insurance Subaccount”). Lender will (a)
apply funds in the Tax and Insurance Subaccount to payments of Taxes and
Insurance Premiums required to be made by Borrower pursuant to Section 5.2
hereof and Section 7.1 hereof, provided that Borrower has promptly supplied
Lender with notices of all Taxes and Insurance Premiums due, or (b) reimburse
Borrower for such amounts upon presentation of evidence of payment; subject,
however, to Borrower’s right to contest Taxes in accordance with Section 5.2
hereof. In making any payment relating to Taxes and Insurance Premiums, Lender
may do so according to any bill, statement or estimate procured from the
appropriate public office (with respect to Taxes) or insurer or agent (with
respect to Insurance Premiums), without inquiry into the accuracy of such bill,
statement or estimate or into the validity of any tax, assessment, sale,
forfeiture, tax lien or title or claim thereof. If Lender determines in its
reasonable judgment that the funds in the Tax and Insurance Subaccount will be
insufficient to pay (or in excess of) the Taxes or Insurance Premiums next
coming due, Lender may increase (or decrease) the monthly contribution required
to be made by Borrower to the Tax and Insurance Subaccount.

 

3.4 Capital Expense Reserve. (a) On the date hereof, Borrower shall deposit with
Lender a portion of the Initial Tranche B Loan Advance in an amount equal to
$200,000 (the “Initial CapEx Deposit”). In addition, from and after the earlier
of (i) April 1, 2008 and (ii) the first (1st) Payment Date following the
prepayment of the Tranche B Loan, Borrower shall pay to Lender on each Payment
Date an amount equal to $6,123. (such monthly payments are collectively referred
to herein as, the “Monthly CapEx Funds”). Lender will transfer such amounts into
a Subaccount (the “Capital Reserve Subaccount”). Additionally, upon thirty (30)
days’ prior notice to Borrower, Lender may reassess the amount of the monthly
payment required under this Section 3.4 not more than once every six (6) months
(based upon its then current underwriting standards). Provided that no Default
or Event of Default has occurred and

 

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is continuing, Lender shall disburse funds constituting the Initial CapEx
Deposit, the Monthly CapEx Funds and/or any amounts transferred from the
Required Repairs Subaccount and held in the Capital Reserve Subaccount to
Borrower, within fifteen (15) days after the delivery by Borrower to Lender of a
request therefor (but not more often than once per month), in increments of at
least $5,000 provided that (i) such disbursement is for an Approved Capital
Expense; (ii) Lender shall have (if it desires) verified (by an inspection
conducted at Borrower’s expense) performance of the work associated with such
Approved Capital Expense in excess of $50,000; and (iii) the request for
disbursement is accompanied by (A) an Officer’s Certificate certifying (1) that
such funds will be used to pay or reimburse Borrower for Approved Capital
Expenses and a description thereof, (2) that all outstanding trade payables
(other than those to be paid from the requested disbursement or those
constituting Permitted Indebtedness) have been paid in full, (3) that the same
has not been the subject of a previous disbursement, and (4) that all previous
disbursements have been used to pay the previously identified Approved Capital
Expenses, and (B) lien waivers or other evidence of payment satisfactory to
Lender, (C) at Lender’s option, a title search for the Property indicating that
the Property is free from all Liens, claims and other encumbrances not
previously approved by Lender and (D) such other evidence as Lender shall
reasonably request that the Approved Capital Expenses at the Property to be
funded by the requested disbursement have been completed and are paid for or
will be paid upon such disbursement to Borrower. Any such disbursement of more
than $10,000 to pay (rather than reimburse) Approved Capital Expenses may, at
Lender’s option, be made by joint check payable to Borrower and the payee on
such Approved Capital Expenses.

 

(b) Any amounts constituting a Capital Expenditure Advance Shortfall funded by
Lender pursuant to Section 2.9.2 hereof shall be transferred by Lender into the
Capital Reserve Subaccount. Provided that no Default or Event of Default has
occurred and is continuing and provided that each of the conditions precedent
set forth in Section 2.9.1 hereof have been satisfied, Lender shall disburse
funds held in the Capital Reserve Subaccount to Borrower, within fifteen (15)
days after the delivery by Borrower to Lender of a request therefor (but not
more often than once per month), in increments of at least $5,000 to be used to
pay or reimburse Borrower for Approved Capital Expenses. Any such disbursement
of more than $10,000 to pay (rather than reimburse) Approved Capital Expenses
may, at Lender’s option, be made by joint check payable to Borrower and the
payee on such Approved Capital Expenses.

 

3.5 Rollover Reserves. (a) On the date hereof, Borrower shall pay to Lender an
amount equal to (i) $360,958.95 (the “Hewlett-Packard TI Deposit”) and (ii)
$139,680.00 (the “Apex Systems TI Deposit”). From and after the earlier of (i)
April 1, 2008 and (ii) the first (1st) Payment Date following the prepayment of
the Tranche B Loan, Borrower shall pay to Lender on each Payment Date an amount
equal to $24,495. (such monthly payments are collectively referred to herein as,
the “Monthly Rollover Funds”). Lender will transfer such amounts, including
without limitation, the Hewlett-Packard TI Deposit and the Apex Systems TI
Deposit, into a Subaccount (the “Rollover Reserve Subaccount”). Borrower shall
also pay to Lender for transfer into the Rollover Reserve Subaccount all Lease
Termination Payments received by Borrower. Provided that no Default or Event of
Default has occurred and is continuing, Lender shall disburse funds held in the
Rollover Reserve Subaccount to Borrower, within ten (10) days after the delivery
by Borrower to Lender of a request therefor (but not more often than once per
month), in increments of at least $5,000, provided (i) such disbursement is for
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Leasing Expense; (ii) Lender shall have (if it desires) verified (by an
inspection conducted at Borrower’s expense) performance of any construction work
associated with such Approved Leasing Expense; and (iii) the request for
disbursement is accompanied by (A) an Officer’s Certificate certifying (1) that
such funds will be used only to pay (or reimburse Borrower for) Approved Leasing
Expenses and a description thereof, (2) that all outstanding trade payables
(other than those to be paid from the requested disbursement or those
constituting Permitted Indebtedness) have been paid in full, (3) that the same
has not been the subject of a previous disbursement, and (4) that all previous
disbursements have been used only to pay (or reimburse Borrower for) the
previously identified Approved Leasing Expenses, and (B) reasonably detailed
supporting documentation as to the amount, necessity and purpose therefor. Any
such disbursement of more than $10,000 to pay (rather than reimburse) Approved
Leasing Expenses may, at Lender’s option, be made by joint check payable to
Borrower and the payee of such Approved Leasing Expenses. Notwithstanding
anything to the contrary contained in this Section 3.5, (i) funds constituting
the Hewlett-Packard TI Deposit shall be allocated to pay only those Approved
Leasing Expenses with respect to the space at the Property leased to
Hewlett-Packard and (ii) funds constituting the Apex Systems TI Deposit shall be
allocated to pay only those Approved Leasing Expenses with respect to the space
at the Property leased to Apex Systems, Inc. Any unused portion of the
Hewlett-Packard TI Deposit and/or Apex Systems TI Deposit shall remain in the
Rollover Reserve Subaccount for the payment of Approved Leasing Expenses and
shall be disbursed in accordance with the provisions of this Section 3.5(a).

 

(b) Any Lease Termination Payments and any other funds deposited into the
Rollover Reserve Subaccount from the Security Deposit Subaccount in accordance
with Section 3.8 hereof shall be applied, at Lender’s election, towards either
(a) subject to the rights of Borrower under the applicable Lease, rent
arrearages under such Lease (or to cure any other tenant default under such
Lease), (b) debt service shortfalls that may arise as a result of a termination
of such Lease (and Borrower hereby authorizes Lender to disburse to itself any
such amounts without any request therefor by Borrower) or (c) funding any
Approved Leasing Expenses which are anticipated to occur in connection with the
re-tenanting of the space under the Lease that was the subject of such
termination (in accordance with the terms and conditions of Section 3.5(a)
above.

 

(c) Any amounts constituting a Leasing Advance Funding Shortfall funded by
Lender pursuant to Section 2.9.4 hereof shall be transferred by Lender into the
Rollover Reserve Subaccount. Provided that no Default or Event of Default has
occurred and is continuing and provided that each of the conditions precedent
set forth in Section 2.9.3 hereof have been satisfied, Lender shall disburse
funds held in the Rollover Reserve Subaccount to Borrower, within fifteen (15)
days after the delivery by Borrower to Lender of a request therefor (but not
more often than once per month), in increments of at least $5,000 to be used to
pay or reimburse Borrower for Approved Leasing Expenses. Any such disbursement
of more than $10,000 to pay (rather than reimburse) Approved Leasing Expenses
may, at Lender’s option, be made by joint check payable to Borrower and the
payee on such Approved Leasing Expenses.

 

3.6 Operating Expense Subaccount. (a) On each Payment Date, a portion of the
Rents that have been deposited into the Deposit Account during the immediately
preceding Interest Period in an amount equal to the monthly amount set forth in
the Approved Operating

 

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Budget for the following month as being necessary for payment of Approved
Operating Expenses at the Property for such month, shall be transferred into a
Subaccount for the payment of Approved Operating Expenses (the “Operating
Expense Subaccount”). Provided no Default or Event of Default has occurred and
is continuing (and subject to the provisions of subsection (b) below), Lender
shall disburse funds held in the Operating Expense Subaccount to Borrower,
within ten (10) days after delivery by Borrower to Lender of a request therefor
(but not more often than once per month), in increments of at least $1,000,
provided (i) such disbursement is for an Approved Operating Expense; and (ii)
such disbursement is accompanied by (A) an Officer’s Certificate certifying (1)
that such funds will be used to pay Approved Operating Expenses and a
description thereof, (2) that all outstanding trade payables (other than those
to be paid from the requested disbursement or those constituting Permitted
Indebtedness) have been paid in full, (3) that the same has not been the subject
of a previous disbursement, and (4) that all previous disbursements have been or
will be used to pay the previously identified Approved Operating Expenses, and
(B) reasonably detailed documentation satisfactory to Lender as to the amount,
necessity and purpose therefor.

 

(b) Notwithstanding anything to the contrary in subsection (a) above, on any
Payment Date on which an Event of Default is not then continuing, Lender will
automatically disburse to Borrower funds from the Operating Expense Subaccount
in an amount equal to the monthly amount set forth in the Approved Operating
Budget for the month in which such Payment Date occurs as being necessary for
payment of Approved Operating Expenses at the Property for such month (plus any
other amounts requested by Borrower for such month for payment of items
constituting Approved Operating Expenses, which are not included in the Approved
Operating Budget), which disbursement shall be made without any requirement for
any Borrower request therefor or any Officer’s Certificate in connection
therewith.

 

3.7 Casualty/Condemnation Subaccount. Borrower shall pay, or cause to be paid,
to Lender all Proceeds or Awards due to any Casualty or Condemnation to be
transferred to a Subaccount (the “Casualty/Condemnation Subaccount”) in
accordance with the provisions of Article 7 hereof. All amounts in the
Casualty/Condemnation Subaccount shall disbursed in accordance with the
provisions of Article 7 hereof.

 

3.8 Security Deposits. Borrower shall keep and hold all security deposits under
Leases in accordance with applicable Legal Requirements and at a separately
designated account under Borrower’s control at the Clearing Bank (or in another
Eligible Account at an Eligible Institution) (and in the case of a letter of
credit, assigned with full power of attorney and executed sight drafts to
Lender) so that the security deposits shall not be commingled with any other
funds of Borrower (such account, the “Security Deposit Account”). After the
occurrence of an Event of Default, Borrower shall, upon Lender’s request, if
permitted by applicable Legal Requirements, turn over to Lender the security
deposits (and any interest theretofore earned thereon) under Leases, to be held
by Lender in a Subaccount (the “Security Deposit Subaccount”) subject to the
terms of the Leases. After the occurrence of an Event of Default, Borrower shall
also deliver to Lender (for deposit into the Security Deposit Subaccount) all
amounts drawn under any letters of credit held by Borrower in lieu of cash
security deposits. Security deposits held in the Security Deposit Subaccount
will be released by Lender upon notice from Borrower together with such evidence
as Lender may reasonably request that such security deposit is required to be
returned to a tenant pursuant to the terms of a Lease. Any funds in the

 

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Security Deposit Subaccount which Borrower is permitted to retain pursuant to
the applicable provisions of any Lease which has expired or has been terminated,
cancelled or surrendered shall be paid to Lender and transferred by Lender into
the Rollover Reserve Subaccount, to be applied and disbursed in accordance with
the provisions of Section 3.5 hereof. Any letter of credit or other instrument
that Borrower receives in lieu of a cash security deposit under any Lease
entered into after the date hereof shall (i) be maintained in full force and
effect in the full amount unless replaced by a cash deposit as hereinabove
described and (ii) if permitted pursuant to any Legal Requirements, name Lender
as payee or mortgagee thereunder (or at Lender’s option, be fully assignable to
Lender).

 

3.9 Cash Collateral Subaccount. If a Cash Trap Period shall have commenced, then
on the immediately succeeding Payment Date and on each Payment Date thereafter
during the continuance of such Cash Trap Period, all Available Cash shall be
paid to Lender, which amounts shall be transferred by Lender into a Subaccount
(the “Cash Collateral Subaccount”) as cash collateral for the Debt. Any funds in
the Cash Collateral Account and not previously disbursed or applied shall, upon
the termination of such Cash Trap Period be disbursed to Borrower. Lender shall
have the right, but not the obligation, at any time during the continuance of an
Event of Default, in its sole and absolute discretion to apply all sums then on
deposit in the Cash Collateral Subaccount to the Debt, in such order and in such
manner as Lender shall elect in its sole and absolute discretion, including to
make a prepayment of Principal (together, with all Exit Fees applicable
thereto). Additionally, Lender shall have the right, but not the obligation, at
any time subsequent to the second Calculation Date following the commencement of
a DSCR Cash Trap Period (whether or not an Event of Default is then continuing),
in its sole and absolute discretion to apply all sums then on deposit in the
Cash Collateral Subaccount towards a repayment of Principal (together with the
Exit Fee applicable thereto).

 

3.10 Grant of Security Interest; Application of Funds. As security for payment
of the Debt and the performance by Borrower of all other terms, conditions and
provisions of the Loan Documents, Borrower hereby pledges and assigns to Lender,
and grants to Lender a security interest in, all Borrower’s right, title and
interest in and to all Rents and in and to all payments to or monies held in the
Clearing Account, the Deposit Account, all Subaccounts created pursuant to this
Agreement (collectively, the “Cash Management Accounts”). Borrower hereby grants
to Lender a continuing security interest in, and agrees to hold in trust for the
benefit of Lender, all Rents in its possession prior to the (i) payment of such
Rents to Lender or (ii) deposit of such Rents into the Deposit Account. Borrower
shall not, without obtaining the prior written consent of Lender, further
pledge, assign or grant any security interest in any Cash Management Account, or
permit any Lien to attach thereto, or any levy to be made thereon, or any UCC
Financing Statements, except those naming Lender as the secured party, to be
filed with respect thereto. This Agreement is, among other things, intended by
the parties to be a security agreement for purposes of the UCC. Upon the
occurrence and during the continuance of an Event of Default, Lender may apply
any sums in any Cash Management Account in any order and in any manner as Lender
shall elect in Lender’s discretion without seeking the appointment of a receiver
and without adversely affecting the rights of Lender to foreclose the Lien of
the Mortgage or exercise its other rights under the Loan Documents. Cash
Management Accounts shall not constitute trust funds and may be commingled with
other monies held by Lender. All interest which accrues on the funds in any Cash
Management Account (other than the Tax and Insurance Subaccount) shall accrue
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and shall be taxable to Borrower and shall be added to and disbursed in the same
manner and under the same conditions as the principal sum on which said interest
accrued. Upon repayment in full of the Debt, all remaining funds in the
Subaccounts, if any, shall be promptly disbursed to Borrower.

 

3.11 Property Cash Flow Allocation.

 

(a) All Rents deposited into the Deposit Account during the immediately
preceding Interest Period shall be applied on each Payment Date as follows in
the following order of priority:

 

(i) First, to make payments into the Tax and Insurance Subaccount as required
under Section 3.3 hereof;

 

(ii) Second, to pay the monthly portion of the fees charged by the Deposit Bank
in accordance with the Deposit Account Agreement;

 

(iii) Third, to Lender to pay the Tranche A Loan Interest Payment due on such
Payment Date (plus, if applicable, interest at the Default Rate and all other
amounts, other than those described under other clauses of this Section 3.11(a),
then due to Lender under the Loan Documents)

 

(iv) Fourth, to Lender to pay the Tranche B Loan Interest Payment due on such
Payment Date (plus, if applicable, interest at the Default Rate);

 

(v) Fifth, to make payments for Approved Operating Expenses as required under
Section 3.6 hereof;

 

(vi) Sixth, to make payments into the Capital Reserve Subaccount as required
under Section 3.4 hereof;

 

(vii) Seventh, to make payments into the Rollover Reserve Subaccount as required
under Section 3.5(a) hereof;

 

(viii) Eighth, during the continuance of a Cash Trap Period, to make payments in
an amount equal to all remaining Available Cash on such Payment Date into the
Cash Collateral Subaccount in accordance with Section 3.9 hereof; and

 

(ix) Lastly, payments to Borrower of any remaining amounts.

 

(b) The failure of Borrower to make all of the payments required under clauses
(i) through (viii) of Section 3.11(a) above in full on each Payment Date shall
constitute an Event of Default under this Agreement; provided, however, if
adequate funds are available in the Deposit Account for such payments, the
failure by the Deposit Bank to allocate such funds into the appropriate
Subaccounts shall not constitute an Event of Default. Nothing herein, however,
shall be construed to restrict Borrower from depositing its own funds (other
than Rents) into the Deposit Account in order to fund any of the amounts
required under clauses (i) through (vii) of Section 3.11(a) above (to the extent
that the Rents previously deposited into the Deposit Account are insufficient
for the same).

 

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(c) Notwithstanding anything to the contrary contained in this Section 3.11,
after the occurrence and during the continuance of a Default or an Event of
Default, Lender may apply all Rents deposited into the Deposit Account and other
proceeds of repayment in such order and in such manner as Lender shall elect.

 

4. REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrants to Lender as of the date hereof that, except to
the extent (if any) disclosed on Schedule 2 hereto with reference to a specific
Section of this Article 4:

 

4.1 Organization; Special Purpose. Each of Borrower and Sole Member has been
duly organized and is validly existing and in good standing under the laws of
the state of its formation, with requisite power and authority, and all rights,
licenses, permits and authorizations, governmental or otherwise, necessary to
own its properties and to transact the business in which it is now engaged. Each
of Borrower and Sole Member is duly qualified to transact business and is in
good standing in each jurisdiction where it is required to be so qualified in
connection with its properties, business and operations. Borrower is a Special
Purpose Bankruptcy Remote Entity.

 

4.2 Proceedings; Enforceability. Borrower has taken all necessary action to
authorize the execution, delivery and performance of the Loan Documents. The
Loan Documents have been duly executed and delivered by Borrower and, to
Borrower’s knowledge, constitute legal, valid and binding obligations of
Borrower enforceable against Borrower in accordance with their respective terms,
subject to applicable bankruptcy, insolvency and similar laws affecting rights
of creditors generally, and general principles of equity. The Loan Documents are
not subject to, and Borrower has not asserted, any right of rescission, set-off,
counterclaim or defense, including the defense of usury. No exercise of any of
the terms of the Loan Documents, or any right thereunder, will render any Loan
Document unenforceable.

 

4.3 No Conflicts. The execution, delivery and performance of the Loan Documents
by Borrower and the transactions contemplated hereby will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any Lien (other than pursuant
to the Loan Documents) upon any of the property of Borrower pursuant to the
terms of, any agreement or instrument to which Borrower is a party or by which
its property is subject, nor will such action result in any violation of the
provisions of any statute or any order, rule or regulation of any Governmental
Authority having jurisdiction over Borrower or any of its properties. Borrower’s
rights under the Licenses and the Management Agreement will not be adversely
affected by the execution and delivery of the Loan Documents, Borrower’s
performance thereunder, the recordation of the Mortgage, or the exercise of any
remedies by Lender. Any consent, approval, authorization, order, registration or
qualification of or with any Governmental Authority required for the execution,
delivery and performance by Borrower of the Loan Documents has been obtained and
is in full force and effect.

 

4.4 Litigation. There are no actions, suits or other proceedings at law or in
equity by or before any Governmental Authority now pending or threatened against
or affecting Borrower, Sole Member, the Manager or the Property, which, if
adversely determined, might materially

 

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adversely affect the condition (financial or otherwise) or business of Borrower
(including the ability of Borrower to carry out its obligations under the Loan
Documents), Sole Member, Manager or the use, value, condition or ownership of
the Property.

 

4.5 Agreements. Borrower is not a party to any agreement or instrument or
subject to any restriction which might adversely affect Borrower or the
Property, or Borrower’s business, properties, operations or condition, financial
or otherwise. Borrower is not in default in any material respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any Permitted Encumbrance or any other agreement or
instrument to which it is a party or by which it or the Property is bound.

 

4.6 Title. Borrower has good, marketable and indefeasible title in fee to the
real property and good title to the balance of the Property, free and clear of
all Liens except the Permitted Encumbrances. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid by any Person under applicable Legal Requirements in connection with the
transfer of the Property to Borrower have been paid. To Borrower’s knowledge,
the Mortgage when properly recorded in the appropriate records, together with
any UCC Financing Statements required to be filed in connection therewith, will
create (i) a valid, perfected first priority lien on the Borrower’s interest in
the Property and (ii) valid and perfected first priority security interests in
and to, and perfected collateral assignments of, all personality (including the
Leases), all in accordance with the terms thereof, in each case subject only to
any applicable Permitted Encumbrances. All mortgage, recording, stamp,
intangible or other similar taxes required to be paid by any Person under
applicable Legal Requirements in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement of any of the Loan
Documents have been paid. The Permitted Encumbrances do not materially adversely
affect the value, operation or use of the Property, or Borrower’s ability to
repay the Loan. No Condemnation or other proceeding has been commenced or, to
Borrower’s best knowledge, is contemplated with respect to all or part of the
Property or for the relocation of roadways providing access to the Property. To
Borrower’s knowledge, there are no claims for payment for work, labor or
materials affecting the Property which are or may become a Lien prior to, or of
equal priority with, the Liens created by the Loan Documents. To Borrower’s
knowledge, there are no outstanding options to purchase or rights of first
refusal affecting all or any portion of the Property. To Borrower’s knowledge,
the Survey does not fail to reflect any material matter affecting the Property
or the title thereto. Except as disclosed on the Survey, all of the Improvements
included in determining the appraised value of the Property lie wholly within
the boundaries and building restriction lines of the Property, and no
improvement on an adjoining property encroaches upon the Property, and no
easement or other encumbrance upon the Property encroaches upon any of the
Improvements, except those insured against by the Title Insurance Policy. Each
parcel comprising the Property is a separate tax lot and is not a portion of any
other tax lot that is not a part of the Property. There are no pending or
proposed special or other assessments for public improvements or otherwise
affecting the Property, or any contemplated improvements to the Property that
may result in such special or other assessments. To Borrower’s knowledge,
without any inquiry whatsoever, with respect to the Title Insurance Policy, (i)
the Title Insurance Policy is in full force and effect, (ii) the Title Insurance
Policy is freely assignable by Lender to and will inure to the benefit of the
transferee (subject to recordation of an assignment of mortgage) without the
consent or any notification to the insurer, (iii) the premium with respect
thereto has been paid in full (or will be paid in full with a portion

 

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of the proceeds of the Loan), (iv) the Title Insurance Policy is issued by a
title insurance company licensed to issue policies in the State, (v) no claims
have been made under the Title Insurance Policy and no other action has been
taken that would materially impair the Title Insurance Policy and (vi) the Title
Insurance Policy contains no exclusions for any of the following circumstances,
or it affirmatively insures Lender against losses relating to any of the
following circumstances (unless the Property is located in a jurisdiction where
such affirmative insurance is not available): (a) that the Property has access
to a public road and (b) that the area shown on the survey delivered to Lender
in connection with the Loan is the same as the property legally described in the
Mortgage.

 

4.7 No Bankruptcy Filing. Borrower is not contemplating either the filing of a
petition by it under any state or federal bankruptcy or insolvency law or the
liquidation of all or a major portion of its property (a “Bankruptcy
Proceeding”), and Borrower has no knowledge of any Person contemplating the
filing of any such petition against it. In addition, neither Borrower nor Sole
Member nor any principal nor Affiliate of either has been a party to, or the
subject of a Bankruptcy Proceeding for the past ten (10) years.

 

4.8 Full and Accurate Disclosure. No statement of fact made by Borrower in any
Loan Documents contains any untrue statement of a material fact or omits to
state any material fact necessary to make statements contained therein not
misleading. There is no material fact presently known to Borrower that has not
been disclosed to Lender which adversely affects the Property or the business,
operations or condition (financial or otherwise) of Borrower. All financial
data, including the statements of cash flow and income and operating expense,
that have been delivered to Lender in respect of Borrower and the Property (i)
are true, complete and correct in all material respects, (ii) fairly represent
the financial condition of Borrower and the Property as of the date of such
reports, and (iii) to the extent prepared by an independent certified public
accounting firm, have been prepared in accordance with GAAP consistently applied
throughout the periods covered, except as disclosed therein. Borrower has no
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments, unrealized or anticipated losses from any unfavorable commitments
or any liabilities or obligations not expressly permitted by this Agreement.
Since the date of such financial statements, there has been no materially
adverse change in the financial condition, operations or business of Borrower or
the Property from that set forth in said financial statements.

 

4.9 Tax Filings. To the extent required, Borrower has filed (or has obtained
effective extensions for filing) all federal, state and local tax returns
required to be filed and have paid or made adequate provision for the payment of
all federal, state and local taxes, charges and assessments payable by Borrower.
Borrower believes that its tax returns (if any) properly reflect the income and
taxes of Borrower for the periods covered thereby, subject only to reasonable
adjustments required by the Internal Revenue Service or other applicable tax
authority upon audit.

 

4.10 ERISA; No Plan Assets. As of the date hereof and throughout the Term (i)
Borrower is not and will not be an “employee benefit plan,” as defined in
Section 3(3) of ERISA, (ii) none of the assets of Borrower constitutes or will
constitute “plan assets” of one or more such plans within the meaning of 29
C.F.R. Section 2510.3-101, (iii) Borrower is not and will not be a “governmental
plan” within the meaning of Section 3(32) of ERISA, and (iv) transactions by or

 

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with Borrower are not and will not be subject to (or are in compliance with)
state statutes regulating investment of, and fiduciary obligations with respect
to, governmental plans. As of the date hereof, neither Borrower, nor any member
of a “controlled group of corporations” (within the meaning of Section 414 of
the Code) maintains, sponsors or contributes to a “defined benefit plan” (within
the meaning of Section 3(35) of ERISA) or a “multiemployer pension plan” (within
the meaning of Section 3(37)(A) of ERISA).

 

4.11 Compliance. Borrower and the Property and the use thereof comply in all
material respects with all applicable Legal Requirements (including with respect
to parking and applicable zoning and land use laws, regulations and ordinances).
Borrower is not in default or violation of any order, writ, injunction, decree
or demand of any Governmental Authority, the violation of which might materially
adversely affect the condition (financial or otherwise) or business of Borrower.
The Property is used exclusively for office and other appurtenant and related
uses. In the event that all or any part of the Improvements are destroyed or
damaged, said Improvements can be legally reconstructed to their condition prior
to such damage or destruction, and thereafter exist for the same use without
violating any zoning or other ordinances applicable thereto and currently in
effect and without the necessity of obtaining any variances or special permits.
No legal proceedings are pending or, to the knowledge of Borrower, threatened
with respect to the zoning of the Property. Neither the zoning nor any other
right to construct, use or operate the Property is in any way dependent upon or
related to any property other than the Property. All certifications, permits,
licenses and approvals, including certificates of completion and occupancy
permits required for the legal use, occupancy and operation of the Property
(collectively, the “Licenses”), have been obtained and are in full force and
effect. The use being made of the Property is in conformity with the certificate
of occupancy issued for the Property and all other restrictions, covenants and
conditions affecting the Property.

 

4.12 Contracts. There are no service, maintenance or repair contracts affecting
the Property that are not terminable on one (1) month’s notice or less without
cause and without penalty or premium. All service, maintenance or repair
contracts affecting the Property have been entered into at arms-length in the
ordinary course of Borrower’s business and provide for the payment of fees in
amounts and upon terms comparable to existing market rates.

 

4.13 Federal Reserve Regulations; Investment Company Act. No part of the
proceeds of the Loan will be used for the purpose of purchasing or acquiring any
“margin stock” within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System or for any other purpose that would be inconsistent
with such Regulation U or any other regulation of such Board of Governors, or
for any purpose prohibited by Legal Requirements or any Loan Document. Borrower
is not (i) an “investment company” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended;
(ii) a “holding company” or a “subsidiary company” of a “holding company” or an
“affiliate” of either a “holding company” or a “subsidiary company” within the
meaning of the Public Utility Holding Company Act of 1935, as amended; or (iii)
subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.

 

4.14 Easements; Utilities and Public Access. All easements, cross easements,
licenses, air rights and rights-of-way or other similar property interests
(collectively,

 

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“Easements”), if any, necessary for the full utilization of the Improvements for
their intended purposes have been obtained, are described in the Title Insurance
Policy and are in full force and effect without default thereunder. The Property
has rights of access to public ways and is served by water, sewer, sanitary
sewer and storm drain facilities adequate to service it for its intended uses.
Except as disclosed on the Survey, to Borrower’s knowledge, all public utilities
necessary or convenient to the full use and enjoyment of the Property are
located in the public right-of-way abutting the Property, and all such utilities
are connected so as to serve the Property without passing over other property
absent a valid easement. All roads necessary for the use of the Property for its
current purpose have been completed and dedicated to public use and accepted by
all Governmental Authorities.

 

4.15 Physical Condition. Except as disclosed in those certain Property
Evaluations of One Valley Square, Two Valley Square, Three Valley Square, Four
Valley Square and Five Valley Square, each prepared by Building Analytics and
dated as of December 2004, to Borrower’s knowledge, the Property, including all
Improvements, parking facilities, systems, Equipment and landscaping, are in
good condition, order and repair in all material respects; there exists no
structural or other material defect or damages to the Property, whether latent
or otherwise. Borrower has not received notice from any insurance company or
bonding company of any defect or inadequacy in the Property, or any part
thereof, which would adversely affect its insurability or cause the imposition
of extraordinary premiums or charges thereon or any termination of any policy of
insurance or bond. Except as disclosed on the Survey, to Borrower’s knowledge,
no portion of the Property is located in an area as identified by the Federal
Emergency Management Agency as an area having special flood hazards. The
Improvements have suffered no material casualty or damage which has not been
fully repaired and the cost thereof fully paid.

 

4.16 Leases. The rent roll attached hereto as Schedule 3 (the “Rent Roll”) is,
to Borrower’s knowledge, true, complete and correct and the Property is not
subject to any Leases other than the Leases described in the Rent Roll. To
Borrower’s knowledge, except as set forth on the Rent Roll: (i) each Lease is in
full force and effect; (ii) the tenants under the Leases have accepted
possession of and are in occupancy of all of their respective demised premises,
have commenced the payment of rent under the Leases, and there are no offsets,
claims or defenses to the enforcement thereof; (iii) all rents due and payable
under the Leases have been paid and no portion thereof has been paid for any
period more than thirty (30) days in advance; (iv) the rent payable under each
Lease is the amount of fixed rent set forth in the Rent Roll, and there is no
claim or basis for a claim by the tenant thereunder for an adjustment to the
rent; (v) no tenant has made any claim against the landlord under any Lease
which remains outstanding, there are no defaults on the part of the landlord
under any Lease, and no event has occurred which, with the giving of notice or
passage of time, or both, would constitute such a default; (vi) to Borrower’s
best knowledge, there is no present material default by the tenant under any
Lease; (vii) all security deposits under Leases are as set forth on the Rent
Roll and are held consistent with Section 3.8 hereof; (viii) Borrower is the
sole owner of the entire lessor’s interest in each Lease; (ix) each Lease is the
valid, binding and enforceable obligation of the Borrower and the applicable
tenant thereunder and (x) no Person has any possessory interest in, or right to
occupy, the Property except under the terms of the Lease. None of the Leases
contains any option to purchase or right of first refusal to purchase the
Property or any part thereof. Neither the Leases

 

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nor the Rents have been assigned or pledged except to Lender, and no other
Person has any interest therein except the tenants thereunder.

 

4.17 Fraudulent Transfer. Borrower has not entered into the Loan (or any portion
thereof) or any Loan Document with the actual intent to hinder, delay, or
defraud any creditor, and Borrower has received reasonably equivalent value in
exchange for its obligations under the Loan Documents. Giving effect to the
transactions contemplated by the Loan Documents, the fair saleable value of
Borrower’s assets exceeds and will, immediately following the execution and
delivery of the Loan Documents, exceed Borrower’s total probable liabilities,
including subordinated, unliquidated, disputed or contingent liabilities,
including the maximum amount of its contingent liabilities or its debts as such
debts become absolute and matured. Borrower’s assets do not and, immediately
following the execution and delivery of the Loan Documents will not, constitute
unreasonably small capital to carry out its business as conducted or as proposed
to be conducted. Borrower does not intend to, and does not believe that it will,
incur debts and liabilities (including contingent liabilities and other
commitments) beyond its ability to pay such debts as they mature (taking into
account the timing and amounts to be payable on or in respect of obligations of
Borrower).

 

4.18 Ownership of Borrower. The sole member of Borrower is the Sole Member. The
OP is the sole managing member of the Sole Member and the owner of twenty-five
percent (25%) of the limited liability company interests in the Sole Member.
CalSTRS is the only other member of the Sole Member and the owner of
seventy-five percent (75%) of the limited liability company interests in the
Sole Member. TPG is the sole general partner and the owner of 46.3% of the
partnership interests in the OP. As of the date hereof, the limited liability
company interests in Borrower and Sole Member and the partnership interests in
the OP are owned free and clear of all Liens, warrants, options and rights to
purchase. Borrower has no obligation to any Person to purchase, repurchase or
issue any ownership interest in it. The organizational chart attached hereto as
Schedule 4 is complete and accurate and illustrates all Persons who have a
direct or indirect ownership interest in Borrower.

 

4.19 Purchase Options. Neither the Property nor any part thereof is subject to
any purchase options or other similar rights in favor of third parties.

 

4.20 Management Agreement. The Management Agreement is in full force and effect.
There is no default, breach or violation existing thereunder, and no event has
occurred (other than payments due but not yet delinquent) that, with the passage
of time or the giving of notice, or both, would constitute a default, breach or
violation thereunder, by either party thereto.

 

4.21 Hazardous Substances. (i) The Property is not in violation of any Legal
Requirement pertaining to or imposing liability or standards of conduct
concerning environmental regulation, contamination or clean-up, including the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act, the Emergency Planning and Community
Right-to-Know Act of 1986, the Hazardous Substances Transportation Act, the
Solid Waste Disposal Act, the Clean Water Act, the Clean Air Act, the Toxic
Substance Control Act, the Safe Drinking Water Act, the Occupational Safety and
Health Act, any state super-lien and environmental clean-up statutes (including
with respect to Toxic Mold), any local law requiring related permits and
licenses and

 

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all amendments to and regulations in respect of the foregoing laws
(collectively, “Environmental Laws”); (ii) the Property is not subject to any
private or governmental Lien or judicial or administrative notice or action or
inquiry, investigation or claim relating to hazardous, toxic and/or dangerous
substances, toxic mold or fungus of a type that may pose a risk to human health
or the environment or would negatively impact the value of the Property (“Toxic
Mold”) or any other substances or materials which are included under or
regulated by Environmental Laws (collectively, “Hazardous Substances”); (iii) to
the best of Borrower’s knowledge, after due inquiry, no Hazardous Substances are
or have been (including the period prior to Borrower’s acquisition of the
Property), discharged, generated, treated, disposed of or stored on,
incorporated in, or removed or transported from the Property other than in
compliance with all Environmental Laws; (iv) to the best of Borrower’s
knowledge, after due inquiry, no Hazardous Substances are present in, on or
under any nearby real property which could migrate to or otherwise affect the
Property; (v) to the best of Borrower’s knowledge, after due inquiry, no Toxic
Mold is on or about the Property which requires remediation; (vi) no underground
storage tanks exist on the Property and the Property has never been used as a
landfill; and (vii) there have been no environmental investigations, studies,
audits, reviews or other analyses conducted by or on behalf of Borrower which
have not been provided to Lender.

 

4.22 Name; Principal Place of Business. Borrower does not use and will not use
any trade name and has not done and will not do business under any name other
than its actual name set forth herein. The principal place of business of
Borrower is its primary address for notices as set forth in Section 6.1 hereof,
and Borrower has no other place of business.

 

4.23 Other Debt. There is no indebtedness with respect to the Property or any
excess cash flow or any residual interest therein, whether secured or unsecured,
other than Permitted Encumbrances and Permitted Indebtedness.

 

All of the representations and warranties in this Article 4 and elsewhere in the
Loan Documents (i) shall survive for so long as any portion of the Debt remains
owing to Lender and (ii) shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf, provided, however, that the representations, warranties and
covenants set forth in Section 4.21 above shall survive in perpetuity.

 

5. COVENANTS

 

Until the end of the Term, Borrower hereby covenants and agrees with Lender
that:

 

5.1 Existence. Each of Borrower and Sole Member shall (i) do or cause to be done
all things necessary to preserve, renew and keep in full force and effect its
existence, rights, and franchises, (ii) continue to engage in the business
presently conducted by it, (iii) obtain and maintain all Licenses, and (iv)
qualify to do business and remain in good standing under the laws of each
jurisdiction, in each case as and to the extent required for the ownership,
maintenance, management and operation of the Property.

 

5.2 Taxes and Other Charges. Borrower shall pay all Taxes and Other Charges as
the same become due and payable, and deliver to Lender receipts for payment or
other evidence satisfactory to Lender that the Taxes and Other Charges have been
so paid no later than ten (10)

 

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days before they would be delinquent if not paid (provided, however, that
Borrower need not pay such Taxes nor furnish such receipts for payment of Taxes
paid by Lender pursuant to Section 3.3 hereof). Borrower shall not suffer and
shall promptly cause to be paid and discharged any Lien against the Property,
and shall promptly pay for all utility services provided to the Property. After
prior notice to Lender, Borrower, at its own expense, may contest by appropriate
legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application of any Taxes or Other Charges,
provided that (i) no Default or Event of Default has occurred and is continuing,
(ii) such proceeding shall suspend the collection of the Taxes or such Other
Charges, (iii) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Borrower is
subject and shall not constitute a default thereunder, (iv) no part of or
interest in the Property will be in danger of being sold, forfeited, terminated,
canceled or lost, (v) Borrower shall have furnished such security as may be
required in the proceeding, or as may be requested by Lender, to insure the
payment of any such Taxes or Other Charges, together with all interest and
penalties thereon, which shall not be less than 125% of the Taxes and Other
Charges being contested, and (vi) Borrower shall promptly upon final
determination thereof pay the amount of such Taxes or Other Charges, together
with all costs, interest and penalties. Lender may pay over any such security or
part thereof held by Lender to the claimant entitled thereto at any time when,
in the judgment of Lender, the entitlement of such claimant is established.

 

5.3 Access to Property. Borrower shall permit agents, representatives,
consultants and employees of Lender to inspect the Property or any part thereof
at reasonable hours upon reasonable advance notice.

 

5.4 Repairs; Maintenance and Compliance; Alterations.

 

5.4.1 Repairs; Maintenance and Compliance. Borrower shall at all times maintain,
preserve and protect all franchises and trade names, and Borrower shall cause
the Property to be maintained in a good and safe condition and repair and shall
not remove, demolish or alter the Improvements or Equipment (except for
alterations performed in accordance with Section 5.4.2 below and normal
replacement of Equipment with Equipment of equivalent value and functionality).
Borrower shall promptly comply with all Legal Requirements and immediately cure
properly any violation of a Legal Requirement. Borrower shall notify Lender in
writing within one (1) Business Day after Borrower first receives notice of any
such non-compliance. Borrower shall promptly repair, replace or rebuild any part
of the Property that becomes damaged, worn or dilapidated and shall complete and
pay for any Improvements at any time in the process of construction or repair.

 

5.4.2 Alterations. Borrower may, without Lender’s consent, perform alterations
to the Improvements and Equipment which (i) do not constitute a Material
Alteration, (ii) do not adversely affect Borrower’s financial condition or the
value or Net Operating Income of the Property and (iii) are in the ordinary
course of Borrower’s business. Borrower shall not perform any Material
Alteration without Lender’s prior written consent, which consent shall not be
unreasonably withheld or delayed; provided, however, that Lender may, in its
sole and absolute discretion, withhold consent to any alteration the cost of
which is reasonably estimated to exceed $1,000,000 or which is likely to result
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and one-half percent (2.5%) or more for a period of thirty (30) days or longer.
Lender may, as a condition to giving its consent to a Material Alteration,
require that Borrower deliver to Lender security for payment of the cost of such
Material Alteration in an amount equal to 125% of the cost of the Material
Alteration as estimated by Lender. Upon substantial completion of the Material
Alteration, Borrower shall provide evidence satisfactory to Lender that (i) the
Material Alteration was constructed in accordance with applicable Legal
Requirements and substantially in accordance with plans and specifications
approved by Lender (which approval shall not be unreasonably withheld,
conditioned or delayed), (ii) all contractors, subcontractors, materialmen and
professionals who provided work, materials or services in connection with the
Material Alteration have been paid in full and have delivered unconditional
releases of lien and (iii) all material Licenses necessary for the use,
operation and occupancy of the Material Alteration (other than those which
depend on the performance of tenant improvement work) have been issued. Borrower
shall reimburse Lender upon demand for all out-of-pocket costs and expenses
(including the reasonable fees of any architect, engineer or other professional
engaged by Lender) incurred by Lender in reviewing plans and specifications or
in making any determinations necessary to implement the provisions of this
Section 5.4.2.

 

5.5 Performance of Other Agreements. Borrower shall observe and perform each and
every term to be observed or performed by it pursuant to the terms of any
agreement or instrument affecting or pertaining to the Property, including the
Loan Documents.

 

5.6 Cooperate in Legal Proceedings. Borrower shall cooperate fully with Lender
with respect to, and permit Lender, at its option, to participate in, any
proceedings before any Governmental Authority which may in any way affect the
rights of Lender under any Loan Document.

 

5.7 Further Assurances. Borrower shall, at Borrower’s sole cost and expense, (i)
execute and deliver to Lender such documents, instruments, certificates,
assignments and other writings, and do such other acts necessary or desirable,
to evidence, preserve and/or protect the collateral at any time securing or
intended to secure the Debt and/or for the better and more effective carrying
out of the intents and purposes of the Loan Documents, as Lender may reasonably
require from time to time; and (ii) upon Lender’s request therefor given from
time to time after the occurrence of any Default or Event of Default pay for (a)
reports of UCC, federal tax lien, state tax lien, judgment and pending
litigation searches with respect to Borrower and Sole Member and (b) searches of
title to the Property, each such search to be conducted by search firms
reasonably designated by Lender in each of the locations reasonably designated
by Lender.

 

5.8 Environmental Matters.

 

5.8.1 Hazardous Substances. So long as Borrower owns or is in possession of the
Property, Borrower shall (i) keep the Property free from Hazardous Substances
and in compliance with all Environmental Laws, (ii) promptly notify Lender if
Borrower shall become aware that (A) any Hazardous Substance is on or near the
Property, (B) the Property is in violation of any Environmental Laws or (C) any
condition on or near the Property shall pose a threat to the health, safety or
welfare of humans and (iii) remove such Hazardous Substances and/or cure such
violations and/or remove such threats, as applicable, as required by law (or as

 

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shall be required by Lender in the case of removal which is not required by law,
but in response to the opinion of a licensed hydrogeologist, licensed
environmental engineer or other qualified environmental consulting firm engaged
by Lender (“Lender’s Consultant”)), promptly after Borrower becomes aware of
same, at Borrower’s sole expense. Nothing herein shall prevent Borrower from
recovering such expenses from any other party that may be liable for such
removal or cure.

 

5.8.2 Environmental Monitoring.

 

(a) Borrower shall give prompt written notice to Lender of (i) any proceeding or
inquiry by any party (including any Governmental Authority) with respect to the
presence of any Hazardous Substance on, under, from or about the Property, (ii)
all claims made or threatened by any third party (including any Governmental
Authority) against Borrower or the Property or any party occupying the Property
relating to any loss or injury resulting from any Hazardous Substance, and (iii)
Borrower’s discovery of any occurrence or condition on any real property
adjoining or in the vicinity of the Property that could cause the Property to be
subject to any investigation or cleanup pursuant to any Environmental Law. Upon
becoming aware of the presence of mold or fungus at the Property, Borrower shall
(i) undertake an investigation to identify the source(s) of such mold or fungus
and shall develop and implement an appropriate remediation plan to eliminate the
presence of any Toxic Mold, (ii) perform or cause to be performed all acts
reasonably necessary for the remediation of any Toxic Mold (including taking any
action necessary to clean and disinfect any portions of the Property affected by
Toxic Mold, including providing any necessary moisture control systems at the
Property), and (iii) provide evidence reasonably satisfactory to Lender of the
foregoing. Borrower shall permit Lender to join and participate in, as a party
if it so elects, any legal or administrative proceedings or other actions
initiated with respect to the Property in connection with any Environmental Law
or Hazardous Substance, and Borrower shall pay all reasonable attorneys’ fees
and disbursements incurred by Lender in connection therewith.

 

(b) Upon Lender’s request, at any time and from time to time, Borrower shall
provide an inspection or audit of the Property prepared by a licensed
hydrogeologist, licensed environmental engineer or qualified environmental
consulting firm approved by Lender assessing the presence or absence of
Hazardous Substances on, in or near the Property, and if Lender in its good
faith judgment determines that reasonable cause exists for the performance of
such environmental inspection or audit, then the cost and expense of such audit
or inspection shall be paid by Borrower. Such inspections and audit may include
soil borings and ground water monitoring. If Borrower fails to provide any such
inspection or audit within thirty (30) days after such request, Lender may order
same, and Borrower hereby grants to Lender and its employees and agents access
to the Property and a license to undertake such inspection or audit.

 

(c) If any environmental site assessment report prepared in connection with such
inspection or audit recommends that an operations and maintenance plan be
implemented for any Hazardous Substance, whether such Hazardous Substance
existed prior to the ownership of the Property by Borrower, or presently exists
or is reasonably suspected of existing, Borrower shall cause such operations and
maintenance plan to be prepared and implemented at its expense upon request of
Lender, and with respect to any Toxic Mold, Borrower shall take all action
necessary to clean and disinfect any portions of the Improvements affected by
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Improvements, including providing any necessary moisture control systems at the
Property. If any investigation, site monitoring, containment, cleanup, removal,
restoration or other work of any kind is reasonably necessary under an
applicable Environmental Law (“Remedial Work”), Borrower shall commence all such
Remedial Work within thirty (30) days after written demand by Lender and
thereafter diligently prosecute to completion all such Remedial Work within such
period of time as may be required under applicable law. All Remedial Work shall
be performed by licensed contractors approved in advance by Lender and under the
supervision of a consulting engineer approved by Lender. All costs of such
Remedial Work shall be paid by Borrower, including Lender’s reasonable
attorneys’ fees and disbursements incurred in connection with the monitoring or
review of such Remedial Work. If Borrower does not timely commence and
diligently prosecute to completion the Remedial Work, Lender may (but shall not
be obligated to) cause such Remedial Work to be performed at Borrower’s expense.
Notwithstanding the foregoing, Borrower shall not be required to commence such
Remedial Work within the above specified time period: (x) if prevented from
doing so by any Governmental Authority, (y) if commencing such Remedial Work
within such time period would result in Borrower or such Remedial Work violating
any Environmental Law, or (z) if Borrower, at its expense and after prior
written notice to Lender, is contesting by appropriate legal, administrative or
other proceedings, conducted in good faith and with due diligence, the need to
perform Remedial Work. Borrower shall have the right to contest the need to
perform such Remedial Work, provided that, (1) Borrower is permitted by the
applicable Environmental Laws to delay performance of the Remedial Work pending
such proceedings, (2) neither the Property nor any part thereof or interest
therein will be sold, forfeited or lost if Borrower fails to promptly perform
the Remedial Work being contested, and if Borrower fails to prevail in contest,
Borrower would thereafter have the opportunity to perform such Remedial Work,
(3) Lender would not, by virtue of such permitted contest, be exposed to any
risk of any civil liability for which Borrower has not furnished additional
security as provided in clause (4) below, or to any risk of criminal liability,
and neither the Property nor any interest therein would be subject to the
imposition of any Lien for which Borrower has not furnished additional security
as provided in clause (4) below, as a result of the failure to perform such
Remedial Work and (4) Borrower shall have furnished to Lender additional
security in respect of the Remedial Work being contested and the loss or damage
that may result from Borrower’s failure to prevail in such contest in such
amount as may be reasonably requested by Lender but in no event less than 125%
of the cost of such Remedial Work as estimated by Lender or Lender’s Consultant
and any loss or damage that may result from Borrower’s failure to prevail in
such contest.

 

(d) Borrower shall not install or permit to be installed on the Property any
underground storage tank.

 

5.9 Title to the Property. Borrower will warrant and defend the title to the
Property, and the validity and priority of all Liens granted or otherwise given
to Lender under the Loan Documents, subject only to Permitted Encumbrances,
against the claims of all Persons.

 

5.10 Leases.

 

5.10.1 Generally. Upon request, Borrower shall furnish Lender with executed
copies of all Leases then in effect. All renewals of Leases and all proposed
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for rental rates and terms comparable to existing local market rates and shall
be arm’s length transactions with bona fide, independent third-party tenants.

 

5.10.2 Material Leases. Borrower shall not enter into a proposed Material Lease
or a proposed renewal, extension or modification of an existing Material Lease
without the prior written consent of Lender, which consent shall not, so long as
no Event of Default is continuing, be unreasonably withheld, conditioned or
delayed. Prior to seeking Lender’s consent to any Material Lease, Borrower shall
deliver to Lender a copy of such proposed lease (a “Proposed Material Lease”)
blacklined to show changes from the standard form of Lease approved by Lender
and then being used by Borrower. Lender shall approve or disapprove each
Proposed Material Lease or proposed renewal, extension or modification of an
existing Material Lease for which Lender’s approval is required under this
Agreement within ten (10) Business Days of the submission by Borrower to Lender
of a written request for such approval, accompanied by a final copy of the
Proposed Material Lease or proposed renewal, extension or modification of an
existing Material Lease. If requested by Borrower, Lender will grant conditional
approvals of Proposed Material Leases or proposed renewals, extensions or
modifications of existing Material Leases at any stage of the leasing process,
from initial “term sheet” through negotiated lease drafts, provided that Lender
shall retain the right to disapprove any such Proposed Material Lease or
proposed renewal, extension or modification of an existing Material Lease, if
subsequent to any preliminary approval material changes are made to the terms
previously approved by Lender, or additional material terms are added that had
not previously been considered and approved by Lender in connection with such
Proposed Material Lease or proposed renewal, extension or modification of an
existing Material Lease. Provided that no Event of Default is continuing, if
Borrower provides Lender with a written request for approval (which written
request shall specifically refer to this Section 5.10.2 and shall explicitly
state that failure by Lender to approve or disapprove within ten (10) Business
Days will constitute a deemed approval) and Lender fails to reject the request
in writing delivered to Borrower within ten (10) Business Days after receipt by
Lender of the request, the Proposed Material Lease or proposed renewal,
extension or modification of an existing Material Lease shall be deemed approved
by Lender, and Borrower shall be entitled to enter into such Proposed Material
Lease or proposed renewal, extension or modification of an existing Material
Lease. Notwithstanding anything to the contrary in this Section 5.10.2, unless
expressly agreed to in writing by Lender, any approval or deemed approval by
Lender of a Proposed Material Lease or proposed renewal, extension or
modification of an existing Material Lease pursuant to this Section 5.10.2 shall
not be deemed to constitute an approval or deemed approval by Lender of any
Leasing Advance for purposes of Section 2.9.3 hereof.

 

5.10.3 Minor Leases. Notwithstanding the provisions of Section 5.10.2 above,
provided that no Event of Default is continuing, subject to Section 2.9 hereof,
renewals, amendments and modifications of existing Leases and proposed leases,
shall not be subject to the prior approval of Lender provided (i) the proposed
lease would be a Minor Lease or the existing Lease as amended or modified or the
renewal Lease is a Minor Lease, (ii) the proposed lease shall be written
substantially in accordance with the standard form of Lease which shall have
been approved by Lender, (iii) the Lease as amended or modified or the renewal
Lease or series of leases or proposed lease or series of leases: (a) shall
provide for net effective rental rates comparable to existing local market
rates, (b) shall have an initial term (together with all renewal options) of not
less than three (3) years or greater than ten (10) years, (c) shall provide for

 

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automatic self-operative subordination to the Mortgage and, at Lender’s option,
attornment to Lender, and (d) shall not contain any option to purchase, any
right of first refusal to purchase, any right to terminate (except in the event
of the destruction or condemnation of substantially all of the Property), any
requirement for a non-disturbance or recognition agreement (other than on
Lender’s standard form of non-disturbance or recognition agreement), or any
other provision which might adversely affect the rights of Lender under the Loan
Documents in any material respect. Borrower shall deliver to Lender copies of
all Leases which are entered into pursuant to the preceding sentence together
with Borrower’s certification that it has satisfied all of the conditions of the
preceding sentence within ten (10) days after the execution of the Lease.

 

5.10.4 Additional Covenants with respect to Leases. Borrower (i) shall observe
and perform the material obligations imposed upon the lessor under the Leases
and shall not do or permit 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 that Borrower shall send or receive under any Lease; (iii) shall
enforce, in accordance with commercially reasonable practices for properties
similar to the Property, the terms, covenants and conditions in the Leases to be
observed or performed by the lessees, short of termination thereof; (iv) shall
not collect any of the Rents more than one (1) month in advance (other than
security deposits); (v) shall not execute any other assignment of lessor’s
interest in the Leases or the Rents (except as contemplated by the Loan
Documents); (vi) shall not modify any Lease in a manner inconsistent with the
Loan Documents; (vii) shall not convey or transfer or suffer or permit a
conveyance or transfer of the Property so as to effect a merger of the estates
and rights of, or a termination or diminution of the obligations of, lessees
under Leases; (viii) shall not consent to any assignment of or subletting under
any Material Lease unless required in accordance with its terms without the
prior consent of Lender, which, with respect to a subletting, may not, so long
as no Event of Default is continuing, be unreasonably withheld or delayed; and
(ix) shall not cancel or terminate any Lease or accept a surrender thereof
(except in the exercise of Borrower’s commercially reasonable judgment in
connection with a tenant default under a Minor Lease or if such a termination or
cancellation is a condition to leasing, to another tenant which will pay net
effective rental rates comparable to existing local market rates, the space
subject to the Lease being cancelled or terminated) without the prior consent of
Lender, which consent shall not, so long as no Event of Default is continuing,
be unreasonably withheld, conditioned or delayed. Notwithstanding anything to
the contrary in this Section 5.10, unless expressly agreed to in writing by
Lender, any approval by Lender of a Proposed Material Lease or other Lease or
proposed renewal, extension or modification of an existing Material Lease or
other Lease pursuant to this Section 5.10 shall not be deemed to constitute an
approval by Lender of any Approved Leasing Expenses payable in connection
therewith for purposes of Section 2.9 hereof.

 

5.11 Estoppel Statement. After request by Lender, Borrower shall within ten (10)
days furnish Lender with a statement addressed to Lender, its successors and
assigns, duly acknowledged and certified, setting forth (i) the unpaid Tranche A
Principal, (ii) the unpaid Tranche B Principal, (iii) the Tranche A Loan
Interest Rate, (iv) the Tranche B Loan Interest Rate, (v) the date installments
of interest, Tranche A Principal and/or Tranche B Principal were last paid, (vi)
any offsets or defenses to the payment of the Debt, and (vi) that the Loan
Documents are valid, legal and binding obligations and have not been modified or
if modified, giving particulars of such modification.

 

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5.12 Property Management.

 

5.12.1 Management Agreement. Borrower shall (i) cause the Property to be managed
pursuant to the Management Agreement; (ii) promptly perform and observe all of
the covenants required to be performed and observed by it under the Management
Agreement and do all things necessary to preserve and to keep unimpaired its
rights thereunder; (iii) promptly notify Lender of any default under the
Management Agreement of which it is aware; (iv) promptly deliver to Lender a
copy of each financial statement, business plan, capital expenditure plan, and
property improvement plan and any other notice, report and estimate received by
Borrower under the Management Agreement; and (v) promptly enforce the
performance and observance of all of the covenants required to be performed and
observed by Manager under the Management Agreement. Without Lender’s prior
written consent, Borrower shall not (a) surrender, terminate, cancel, extend or
renew the Management Agreement or otherwise replace the Manager or enter into
any other management agreement (except pursuant to Section 5.12.2 below); (b)
reduce or consent to the reduction of the term of the Management Agreement; (c)
increase or consent to the increase of the amount of any charges under the
Management Agreement; (d) otherwise modify, change, supplement, alter or amend
in any material respect, or waive or release any of its rights and remedies
under, the Management Agreement; or (e) suffer or permit the occurrence and
continuance of a default beyond any applicable cure period under the Management
Agreement (or any successor management agreement) if such default permits the
Manager to terminate the Management Agreement (or such successor management
agreement).

 

5.12.2 Termination of Manager. If (i) an Event of Default shall be continuing,
or (ii) Manager is in default under the Management Agreement, or (iii) upon the
gross negligence, malfeasance or willful misconduct of the Manager, Borrower
shall, at the request of Lender, terminate the Management Agreement and replace
Manager with a replacement manager acceptable to Lender in Lender’s discretion
and the applicable Rating Agencies on terms and conditions satisfactory to
Lender and the applicable Rating Agencies. Borrower’s failure to appoint an
acceptable manager within thirty (30) days after Lender’s request of Borrower to
terminate the Management Agreement shall constitute an immediate Event of
Default. Borrower may from time to time appoint a successor manager to manage
the Property, provided that such successor manager and Management Agreement
shall be approved in writing by Lender in Lender’s discretion and the applicable
Rating Agencies (and Lender’s approval may be conditioned upon Borrower
delivering a Rating Comfort Letter as to such successor manager and Management
Agreement). If at any time Lender consents to the appointment of a new manager,
such new manager and Borrower shall, as a condition of Lender’s consent, execute
a consent and subordination of management agreement substantially in the form of
the Consent and Subordination of Manager of even date herewith executed and
delivered by Manager to Lender.

 

5.13 Special Purpose Bankruptcy Remote Entity. Borrower shall at all times be a
Special Purpose Bankruptcy Remote Entity. Borrower shall not directly or
indirectly make any change, amendment or modification to its organizational
documents, or otherwise take any action which could result in Borrower not being
a Special Purpose Bankruptcy Remote Entity. A “Special Purpose Bankruptcy Remote
Entity” shall have the meaning set forth on Schedule 5 hereto.

 

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5.14 Intentionally Deleted

 

5.15 Change in Business or Operation of Property. Borrower shall not purchase or
own any real property other than the Property and shall not enter into any line
of business other than the ownership and operation of the Property, or make any
material change in the scope or nature of its business objectives, purposes or
operations, or undertake or participate in activities other than the continuance
of its present business or otherwise cease to operate the Property as an office
property or terminate such business for any reason whatsoever (other than
temporary cessation in connection with renovations to the Property).

 

5.16 Debt Cancellation. Borrower shall not cancel or otherwise forgive or
release any claim or debt (other than termination of Leases in accordance
herewith) owed to Borrower by any Person, except for adequate consideration and
in the ordinary course of Borrower’s business.

 

5.17 Affiliate Transactions. Except for the Management and Leasing Agreement by
and between Manager and Borrower, Borrower shall not enter into, or be a party
to, any transaction with an Affiliate of Borrower or any of the members of
Borrower except in the ordinary course of business and on terms which are fully
disclosed to Lender in advance and are no less favorable to Borrower or such
Affiliate than would be obtained in a comparable arm’s-length transaction with
an unrelated third party.

 

5.18 Zoning. Borrower shall not initiate or consent to any zoning
reclassification of any portion of the Property or seek any variance under any
existing zoning ordinance or use or permit the use of any portion of the
Property in any manner that could result in such use becoming a non-conforming
use under any zoning ordinance or any other applicable land use law, rule or
regulation, without the prior consent of Lender, such consent not to be
unreasonably withheld, conditioned or delayed.

 

5.19 No Joint Assessment. Borrower shall not suffer, permit or initiate the
joint assessment of the Property (i) with any other real property constituting a
tax lot separate from the Property, and (ii) with any portion of the Property
which may be deemed to constitute personal property, or any other procedure
whereby the lien of any taxes which may be levied against such personal property
shall be assessed or levied or charged to the Property.

 

5.20 Principal Place of Business. Borrower shall not change its principal place
of business or chief executive office without first giving Lender thirty (30)
days’ prior notice.

 

5.21 Change of Name, Identity or Structure. Borrower shall not change its name,
identity (including its trade name or names) or Borrower’s corporate,
partnership or other structure without notifying Lender of such change in
writing at least thirty (30) days prior to the effective date of such change
and, in the case of a change in Borrower’s structure, without first obtaining
the prior written consent of Lender. Borrower shall execute and deliver to
Lender, prior to or contemporaneously with the effective date of any such
change, any financing statement or financing statement change required by Lender
to establish or maintain the validity, perfection and priority of the security
interest granted herein. At the request of Lender, Borrower shall execute a
certificate in form satisfactory to Lender listing the trade names under which
Borrower intends to operate the Property, and representing and warranting that
Borrower does business under no other trade name with respect to the Property.

 

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5.22 Indebtedness. Borrower shall not directly or indirectly create, incur or
assume any indebtedness other than (i) the Debt and (ii) unsecured trade
payables incurred in the ordinary course of business relating to the ownership
and operation of the Property, which in the case of such unsecured trade
payables (A) are not evidenced by a note, (B) do not exceed, at any time, a
maximum aggregate amount of two percent (2%) of the original amount of the
Tranche A Principal and (C) are paid within sixty (60) days of the date incurred
(collectively, “Permitted Indebtedness”).

 

5.23 Licenses. Borrower shall not Transfer any License required for the
operation of the Property.

 

5.24 Compliance with Restrictive Covenants, Etc. Borrower will not enter into,
modify, waive in any material respect or release any Easements, restrictive
covenants or other Permitted Encumbrances, or suffer, consent to or permit the
foregoing, without Lender’s prior written consent, which consent may be granted
or denied in Lender’s sole discretion.

 

5.25 ERISA.

 

(1) Borrower shall not engage in any transaction which would cause any
obligation, or action taken or to be taken, hereunder (or the exercise by Lender
of any of its rights under the Notes, this Agreement or the other Loan
Documents) to be a non-exempt (under a statutory or administrative class
exemption) prohibited transaction under ERISA.

 

(2) Borrower shall not permit the assets of Borrower to become “plan assets”,
whether by operation of law or under regulations promulgated under ERISA.

 

(3) Borrower shall deliver to Lender such certifications or other evidence from
time to time throughout the Term, as requested by Lender in its sole discretion,
that (A) Borrower is not and does not maintain an “employee benefit plan” as
defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a
“governmental plan” within the meaning of Section 3(32) of ERISA; (B) Borrower
is not subject to state statutes (or in compliance with state statutes)
regulating investments and fiduciary obligations with respect to governmental
plans; and (C) the assets of Borrower do not constitute “plan assets” within the
meaning of 29 C.F.R. Section 2510.3-101.

 

5.26 Prohibited Transfers. Borrower shall not directly or indirectly make,
suffer or permit the occurrence of any Transfer other than a Permitted Transfer.

 

5.27. Liens. Without Lender’s prior written consent, Borrower shall not create,
incur, assume, permit or suffer to exist any Lien on all or any portion of the
Property or any direct or indirect legal or beneficial ownership interest in
Borrower or Sole Member, except Liens in favor of Lender and Permitted
Encumbrances, unless such Lien is bonded or discharged within thirty (30) days
after Borrower first receives notice of such Lien.

 

5.28 Dissolution. Borrower shall not (i) to the fullest extent permitted by
applicable law, engage in any dissolution, liquidation or consolidation or
merger with or into any other business entity, (ii) engage in any business
activity not related to the ownership and operation of the Property or (iii)
transfer, lease or sell, in one transaction or any combination of transactions,

 

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all or substantially all of the property or assets of Borrower except to the
extent expressly permitted by the Loan Documents.

 

5.29 Expenses. Borrower shall reimburse Lender upon receipt of notice for all
reasonable out-of-pocket costs and expenses (including reasonable attorneys’
fees and disbursements) reasonably incurred by Lender in connection with the
Loan (or any portion thereof), including (i) the preparation, negotiation,
execution and delivery of the Loan Documents and the consummation of the
transactions contemplated thereby and all the costs of furnishing all opinions
(other than the non-consolidation opinion prepared by Lender’s counsel) by
counsel for Borrower; (ii) Borrower’s ongoing performance under and compliance
with the Loan Documents, including confirming compliance with environmental and
insurance requirements; (iii) the negotiation, preparation, execution, delivery
and administration of any consents, amendments, waivers or other modifications
of or under any Loan Document and any other documents or matters requested by
Borrower; (iv) filing and recording of any Loan Documents; (v) title insurance,
surveys, inspections and appraisals; (vi) the creation, perfection or protection
of Lender’s Liens in the Property and the Cash Management Accounts (including
fees and expenses for title and lien searches, intangibles taxes, personal
property taxes, mortgage, recording taxes, due diligence expenses, travel
expenses, accounting firm fees, costs of appraisals, environmental reports and
Lender’s Consultant, surveys and engineering reports); (vii) enforcing or
preserving any rights in response to third party claims or the prosecuting or
defending of any action or proceeding or other litigation, in each case against,
under or affecting Borrower, the Loan Documents, the Property, or any other
security given for the Loan; (viii) fees charged by Servicer or the Rating
Agencies in connection with any modification of the Loan requested by Borrower
and (ix) enforcing any obligations of or collecting any payments due from
Borrower under any Loan Document or with respect to the Property or in
connection with any refinancing or restructuring of the Loan (or any portion
thereof) in the nature of a “work-out”, or any insolvency or bankruptcy
proceedings. Any costs and expenses due and payable by Borrower hereunder which
are not paid by Borrower within ten (10) days after written demand may be paid
from any amounts in the Deposit Account, with notice thereof to Borrower. The
obligations and liabilities of Borrower under this Section 5.29 shall survive
the Term and the exercise by Lender of any of its rights or remedies under the
Loan Documents, including the acquisition of the Property by foreclosure or a
conveyance in lieu of foreclosure.

 

5.30 Indemnity. Borrower shall defend, indemnify and hold harmless Lender and
each of its Affiliates and their respective successors and assigns, including
the directors, officers, partners, members, shareholders, participants,
employees, professionals and agents of any of the foregoing (including any
Servicer) and each other Person, if any, who Controls Lender, its Affiliates or
any of the foregoing (each, an “Indemnified Party”), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including the reasonable fees and disbursements of counsel for an
Indemnified Party in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not Lender shall be
designated a party thereto, court costs and costs of appeal at all appellate
levels, investigation and laboratory fees, consultant fees and litigation
expenses), that may be imposed on, incurred by, or asserted against any
Indemnified Party (collectively, the “Indemnified Liabilities”) in any manner,
relating to or arising out of or by reason of the Loan (or any portion thereof),
including: (i) any breach by Borrower of its obligations under, or any
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contained in, any Loan Document; (ii) the use or intended use of the proceeds of
the Loan (or any portion thereof); (iii) any information provided by or on
behalf of Borrower, or contained in any documentation approved by Borrower; (iv)
ownership of the Mortgage, the Property or any interest therein, or receipt of
any Rents; (v) any accident, injury to or death of persons or loss of or damage
to property occurring in, on or about the Property or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(vi) any use, nonuse or condition in, on or about the Property or on adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(vii) performance of any labor or services or the furnishing of any materials or
other property in respect of the Property; (viii) the presence, disposal,
escape, seepage, leakage, spillage, discharge, emission, release, or threatened
release of any Hazardous Substance on, from or affecting the Property; (ix) any
personal injury (including wrongful death) or property damage (real or personal)
arising out of or related to such Hazardous Substance; (x) any lawsuit brought
or threatened, settlement reached, or government order relating to such
Hazardous Substance; (xi) any violation of the Environmental Laws which is based
upon or in any way related to such Hazardous Substance, including the costs and
expenses of any Remedial Work; (xii) any failure of the Property to comply with
any Legal Requirement; (xiii) 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, or any liability
asserted against Lender with respect thereto; and (xiv) the claims of any lessee
of any portion of the Property or any Person acting through or under any lessee
or otherwise arising under or as a consequence of any Lease; provided, however,
that Borrower shall not have any obligation to any Indemnified Party hereunder
to the extent that it is finally judicially determined that such Indemnified
Liabilities arise from the gross negligence, illegal acts, fraud or willful
misconduct of such Indemnified Party. Any amounts payable to any Indemnified
Party by reason of the application of this paragraph shall be payable on demand
and shall bear interest at the Default Rate from the date loss or damage is
sustained by any Indemnified Party until paid. The obligations and liabilities
of Borrower under this Section 5.30 shall survive the Term and the exercise by
Lender of any of its rights or remedies under the Loan Documents, including the
acquisition of the Property by foreclosure or a conveyance in lieu of
foreclosure. Notwithstanding the foregoing, however, Borrower shall not be
obligated to indemnify any Indemnified Party for any event or condition, that
first arises on or after the date on which Lender (or its transferee) acquires
title or control of the Property (whether at foreclosure sale, conveyance in
lieu of foreclosure or similar transfer) or after a receiver has been appointed
for the Property; provided that Borrower’s obligation to indemnify the
Indemnified Parties with respect to an event or condition specified in clauses
(viii) through (xi) above shall continue in perpetuity after Lender (or its
transferee) acquires title or control of the Property unless such specified
event or condition occurs during Lender’s period of ownership and provided that
Borrower shall bear the burden of proving that such specified event or condition
occurred during Lender’s period of ownership.

 

5.31 Patriot Act Compliance. (a) Borrower will use its good faith and
commercially reasonable efforts to comply with the Patriot Act (as defined
below) and all applicable requirements of governmental authorities having
jurisdiction over Borrower and the Property, including those relating to money
laundering and terrorism. Lender shall have the right to audit Borrower’s
compliance with the Patriot Act and all applicable requirements of governmental
authorities having jurisdiction over Borrower and the Property, including those
relating to money laundering and terrorism. In the event that Borrower fails to
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such requirements of governmental authorities, then Lender may, at its option,
cause Borrower to comply therewith and any and all reasonable costs and expenses
incurred by Lender in connection therewith shall be secured by the Mortgage and
the other Loan Documents and shall be immediately due and payable. For purposes
hereof, the term “Patriot Act” means the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT ACT) Act of 2001, as the same may be amended from time to time, and
corresponding provisions of future laws.

 

(b) Neither Borrower nor any partner in Borrower or member of such partner nor
any owner of a direct or indirect interest in Borrower (other than shareholders
having less than a twenty-five percent (25%) economic interest in TPG) (a) is
listed on any Government Lists (as defined below), (b) is a person who has been
determined by competent authority to be subject to the prohibitions contained in
Presidential Executive Order No. 13224 (Sept. 23, 2001) or any other similar
prohibitions contained in the rules and regulations of OFAC (as defined below)
or in any enabling legislation or other Presidential Executive Orders in respect
thereof, (c) has been previously indicted for or convicted of any felony
involving a crime or crimes of moral turpitude or for any Patriot Act Offense
(as defined below), or (d) is currently under investigation by any governmental
authority for alleged criminal activity. For purposes hereof, the term “Patriot
Act Offense” means any violation of the criminal laws of the United States of
America or of any of the several states, or that would be a criminal violation
if committed within the jurisdiction of the United States of America or any of
the several states, relating to terrorism or the laundering of monetary
instruments, including any offense under (a) the criminal laws against
terrorism; (b) the criminal laws against money laundering, (c) the Bank Secrecy
Act, as amended, (d) the Money Laundering Control Act of 1986, as amended, or
the (e) Patriot Act. “Patriot Act Offense” also includes the crimes of
conspiracy to commit, or aiding and abetting another to commit, a Patriot Act
Offense. For purposes hereof, the term “Government Lists” means (i) the
Specially Designated Nationals and Blocked Persons Lists maintained by Office of
Foreign Assets Control (“OFAC”), (ii) any other list of terrorists, terrorist
organizations or narcotics traffickers maintained pursuant to any of the Rules
and Regulations of OFAC that Lender notified Borrower in writing is now included
in “Governmental Lists”, or (iii) any similar lists maintained by the United
States Department of State, the United States Department of Commerce or any
other government authority or pursuant to any Executive Order of the President
of the United States of America that Lender notified Borrower in writing is now
included in “Governmental Lists”.

 

6. NOTICES AND REPORTING

 

6.1 Notices. All notices, consents, approvals and requests required or permitted
hereunder or under any other Loan Document (a “Notice”) shall be given in
writing and shall be effective for all purposes if either hand delivered with
receipt acknowledged, or by a nationally recognized overnight delivery service
(such as Federal Express), or by certified or registered United States mail,
return receipt requested, postage prepaid, or by facsimile and confirmed by
facsimile answer back, in each case addressed as follows (or to such other
address or Person as a party shall designate from time to time by notice to the
other party): If to Lender: Greenwich Capital Financial Products, Inc., 600
Steamboat Road, Greenwich, Connecticut 06830, Attention: Mortgage Loan
Department, Telecopier (203) 618-2052, with a copy to: Kaye Scholer LLP, 425
Park Avenue, New York, New York 10022, Attention: Stephen Gliatta, Esq.,
Telecopier: (212)

 

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836-8689; if to Borrower: c/o Thomas Properties Group, Inc., City National
Plaza, 515 South Flower Street, Sixth Floor, Los Angeles, California 90071,
Attention: John Sischo, Telecopier: (213) 633-4760, with a copy to: Cox Castle &
Nicholson, LLP, 2049 Century Park East, 28th Floor, Los Angeles, California
90067-3284, Attention: Douglas P. Snyder, Telecopier: (310) 277-7889. A notice
shall be deemed to have been given: in the case of hand delivery, at the time of
delivery; in the case of registered or certified mail, when delivered or the
first attempted delivery on a Business Day; in the case of overnight delivery,
upon the first attempted delivery on a Business Day; or in the case of
facsimile, upon the confirmation of such facsimile transmission.

 

6.2 Borrower Notices and Deliveries. Borrower shall (a) give prompt written
notice to Lender of: (i) any litigation, governmental proceedings or claims or
investigations pending or threatened against Borrower or Sole Member which might
materially adversely affect Borrower’s or Sole Member’s condition (financial or
otherwise) or business or the Property; (ii) any material adverse change in
Borrower’s or Sole Member’s condition, financial or otherwise, or of the
occurrence of any Default or Event of Default of which Borrower has knowledge;
and (b) furnish and provide to Lender: (i) any Securities and Exchange
Commission or other public filings, if any, of Borrower, Sole Member, Manager,
or any Affiliate of any of the foregoing within two (2) Business Days of such
filing and (ii) all instruments, documents, boundary surveys, footing or
foundation surveys, certificates, plans and specifications, appraisals, title
and other insurance reports and agreements, reasonably requested, from time to
time, by Lender. In addition, after request by Lender (but no more frequently
than twice in any year), Borrower shall furnish to Lender (x) within ten (10)
days, a certificate addressed to Lender, its successors and assigns reaffirming
all representations and warranties of Borrower set forth in the Loan Documents
as of the date requested by Lender or, to the extent of any changes to any such
representations and warranties, so stating such changes, and (y) within thirty
(30) days, tenant estoppel certificates addressed to Lender, its successors and
assigns from each tenant at the Property in form and substance reasonably
satisfactory to Lender.

 

6.3 Financial Reporting.

 

6.3.1 Bookkeeping. Borrower shall keep on a calendar year basis, in accordance
with GAAP or federal income tax accounting principles, consistently applied,
proper and accurate books, records and accounts reflecting all of the financial
affairs of Borrower and all items of income and expense and any services,
Equipment or furnishings provided in connection with the operation of the
Property, whether such income or expense is realized by Borrower, Manager or any
Affiliate of Borrower. Lender shall have the right from time to time during
normal business hours upon reasonable notice to examine such books, records and
accounts at the office of Borrower or other Person maintaining them, and to make
such copies or extracts thereof as Lender shall desire. After an Event of
Default, Borrower shall pay any costs incurred by Lender to examine such books,
records and accounts, as Lender shall determine to be necessary or appropriate
in the protection of Lender’s interest.

 

6.3.2 Annual Reports. Borrower shall furnish to Lender annually, within 120 days
after each calendar year, a complete copy of Borrower’s annual financial
statements audited by a “big four” accounting firm or another independent
certified public accountant (accompanied by an unqualified opinion from such
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accountant) reasonably acceptable to Lender, each in accordance with GAAP or
federal income tax accounting principles, consistently applied, and containing
balance sheets and statements of profit and loss for Borrower and the Property
in such detail as Lender may request. Each such statement (x) shall be in form
and substance satisfactory to Lender, (y) shall set forth the financial
condition and the income and expenses for the Property for the immediately
preceding calendar year, including statements of annual Net Operating Income as
well as a list of tenants, if any, occupying more than twenty percent (20%) of
the rentable space of the Property and (z) shall be accompanied by an Officer’s
Certificate certifying (1) that such statement is true, correct, complete and
accurate and presents fairly the financial condition of the Property and has
been prepared in accordance with GAAP or federal income tax accounting
principles, consistently applied, and (2) whether there exists a Default or
Event of Default, and if so, the nature thereof, the period of time it has
existed and the action then being taken to remedy it.

 

6.3.3 Quarterly Reports. Borrower shall furnish to Lender within thirty (30)
days after the end of each calendar quarter (as indicated below) the following
items: (i) quarterly and year-to-date operating statements, noting Net Operating
Income and other information necessary and sufficient under GAAP or federal
income tax accounting principles, consistently applied, to fairly represent the
financial position and results of operation of the Property during such calendar
month, all in form satisfactory to Lender; (ii) a balance sheet for such
calendar quarter; (iii) a comparison of the budgeted income and expenses and the
actual income and expenses for each month and year-to-date for the Property,
together with a detailed explanation of any variances of the greater of (x)
$10,000 and (y) ten percent (10%) or more between budgeted and actual amounts
for such period and year-to-date; (iv) a statement of the actual Capital
Expenses made by Borrower during each calendar quarter as of the last day of
such calendar quarter; (v) to the extent not already disclosed by operating
statements delivered pursuant to this Section 6.3.3, a statement that Borrower
has not incurred any indebtedness other than indebtedness permitted hereunder;
(vi) an aged receivables report, (vii) rent rolls identifying the leased
premises, names of all tenants, units leased, monthly rental and all other
charges payable under each Lease, term of Lease and date of expiration, (viii) a
year-by-year schedule showing by percentage the rentable area of the
Improvements and the total base rent attributable to Leases expiring each year)
and a delinquency report for the Property. Each such statement shall be
accompanied by an Officer’s Certificate certifying (1) that such items are true,
correct, accurate, and complete and fairly present the financial condition and
results of the operations of Borrower and the Property in accordance with GAAP
or federal income tax accounting principles, consistently applied, (subject to
normal year-end adjustments) and (2) whether there exists a Default or Event of
Default, and if so, the nature thereof, the period of time it has existed and
the action then being taken to remedy it and (ix) during a Cash Trap Period, a
reconciliation of Operating Expenses identifying those funds which were
disbursed to Borrower from the Operating Expense Subaccount during the prior
calendar quarter which have not been used to pay Approved Operating Expenses.

 

6.3.4 Monthly Reports. Prior to the securitization of the Tranche A Loan,
Borrower shall furnish to Lender within thirty (30) days after the end of each
calendar month, the following items: (i) monthly and year-to-date operating
statements, noting Net Operating Income and other information necessary and
sufficient under GAAP or federal income tax accounting principles, consistently
applied, to fairly represent the financial position and results of operation of
the Property during such calendar month, all in form satisfactory to Lender;
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receivables report and (iii) rent rolls identifying the leased premises, names
of all tenants, units leased, monthly rental and all other charges payable under
each Lease, term of Lease and date of expiration. Each such statement shall be
accompanied by an Officer’s Certificate certifying (1) that such items are true,
correct, accurate, and complete and fairly present the financial condition and
results of the operations of Borrower and the Property in accordance with GAAP
or federal income tax accounting principles, consistently applied, (subject to
normal year-end adjustments) and (2) whether there exists a Default or Event of
Default, and if so, the nature thereof, the period of time it has existed and
the action then being taken to remedy it.

 

6.3.5 Other Reports. Borrower shall furnish to Lender, within ten (10) Business
Days after request, such further detailed information with respect to the
operation of the Property and the financial affairs of Borrower, Sole Member or
Manager as may be reasonably requested by Lender or any applicable Rating
Agency.

 

6.3.6 Annual Budget. On the date hereof Borrower has delivered to Lender an
Approved Operating Budget (as defined below) and an Approved Capital Budget (as
defined below). On or about May 1, 2005 and thereafter, by November 30th of each
year during the Term, Borrower shall prepare and submit (or shall cause Manager
to prepare and submit) to Lender, for approval by Lender, which approval shall
not be unreasonably withheld, conditioned or delayed, a proposed pro forma
operating expense budget for the Property for the succeeding calendar year (or,
with respect to the budgets delivered on or about May 1, 2005, the remainder of
the 2005 calendar year). In addition by November 30th of each year during the
Term, Borrower shall prepare and submit (or shall cause Manager to prepare and
submit) to Lender, for approval by Lender, which approval shall not be
unreasonably withheld, conditioned or delayed, a proposed pro forma Capital
Expense budget for the Property for the succeeding calendar year (such operating
expenses budget and Capital Expense budget, hereinafter referred to as, the
“Annual Budget”, and each Annual Budget approved (or deemed approved pursuant to
the terms of this Section 6.3.6) by Lender is referred to herein as the
“Approved Annual Budget”)), and, promptly after preparation thereof, any
revisions to such Annual Budget. Lender’s failure to approve or disapprove any
Annual Budget or revision within thirty (30) days after Lender’s receipt thereof
shall be deemed to constitute Lender’s approval thereof. The Annual Budget shall
consist of (i) an operating expense budget showing, on a month-by-month basis,
in reasonable detail, each line item of the Borrower’s anticipated operating
income and operating expenses (on an accrual basis), including amounts required
to establish, maintain and/or increase any monthly payments required hereunder
(and once such Annual Budget has been approved (or deemed approved pursuant to
the terms of this Section 6.3.6) by Lender, such operating expense budget shall
be referred to herein as the “Approved Operating Budget”), and (ii) a Capital
Expense budget showing, on a month-by-month basis, in reasonable detail, each
line item of anticipated Capital Expenses (and once such Annual Budget has been
approved (or deemed approved pursuant to the terms of this Section 6.3.6) by
Lender, such Capital Expense budget shall be referred to herein as the “Approved
Capital Budget”). Until such time that any Annual Budget has been approved (or
deemed to have been approved) by Lender, the prior Approved Annual Budget shall
apply for all purposes hereunder (with such adjustments as reasonably determined
by Lender (including increases for any non-discretionary expenses)). The
Approved Operating Budget and the Approved Capital Budget delivered to Lender as
of the date hereof shall remain effective until Borrower has prepared and
submitted, and Lender has approved (or

 

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deemed to have approved), a proposed pro forma budget for the Property for the
remainder of the 2005 calendar year, as contemplated above.

 

6.3.7 Breach. If Borrower fails to provide to Lender or its designee any of the
financial statements, certificates, reports or information (the “Required
Records”) required by this Article 6 within thirty (30) days after the date upon
which such Required Record is due, Borrower shall pay to Lender, at Lender’s
option and in its discretion, an amount equal to $200.00 per day for each
Required Record that is not delivered; provided Lender has given Borrower at
least fifteen (15) days prior notice of such failure. In addition, thirty (30)
days after Borrower’s failure to deliver any Required Records, Lender shall have
the option, upon fifteen (15) days notice to Borrower to gain access to
Borrower’s books and records and prepare or have prepared at Borrower’s expense,
any Required Records not delivered by Borrower.

 

7. INSURANCE; CASUALTY; AND CONDEMNATION

 

7.1 Insurance.

 

7.1.1 Coverage. Borrower, at its sole cost, for the mutual benefit of Borrower
and Lender, shall obtain and maintain during the Term the following policies of
insurance:

 

(a) Property insurance insuring against loss or damage customarily included
under so called “all risk” or “special form” policies including fire, lightning,
vandalism, and malicious mischief, boiler and machinery and, if required by
Lender, flood and/or earthquake coverage and subject to subsection (j) below,
coverage for damage or destruction caused by the acts of “Terrorists” (or such
policies shall have no exclusion from coverage with respect thereto) and such
other insurable hazards as, under good insurance practices, from time to time
are insured against for other property and buildings similar to the premises in
nature, use, location, height, and type of construction. Such insurance policy
shall also insure for ordinance of law coverage, loss of replacement cost value
due to non-conforming use, costs of demolition and increased cost of
construction in amounts satisfactory to Lender. Each such insurance policy shall
(i) be in an amount equal to 100% of the then replacement cost of the
Improvements without deduction for physical depreciation, (ii) have deductibles
no greater than the lesser of $25,000 or five percent (5%) of Net Operating
Income per occurrence, (iii) be paid annually in advance and (iv) be on a
replacement cost basis and contain either no coinsurance or, if coinsurance, an
agreed amount endorsement, and shall cover, without limitation, all tenant
improvements and betterments that Borrower is required to insure on a
replacement cost basis. Lender shall be named Mortgagee and Loss Payee on a
Standard Mortgagee Endorsement.

 

(b) Flood insurance if any part of the Property is located in an area now or
hereafter designated by the Federal Emergency Management Agency as a Zone “A” &
“V” Special Hazard Area, or such other Special Hazard Area if Lender so requires
in its sole discretion. Such policy shall be in an amount equal to the lesser of
(1) $25,000,000 or (2) such other amount as is approved by Lender.

 

(c) Public liability insurance, including (i) ”Commercial General Liability
Insurance”, (ii) ”Owned”, “Hired” and “Non Owned Auto Liability”; and (iii)
umbrella liability coverage for personal injury, bodily injury, death, accident
and property damage, such insurance

 

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providing in combination no less than containing minimum limits per occurrence
of $1,000,000 and $2,000,000 in the aggregate for any policy year with no
deductible or self insured retention; together with at least $25,000,000 excess
and/or umbrella liability insurance for any and all claims. The policies
described in this subsection shall also include coverage for elevators,
escalators, independent contractors, “Contractual Liability” (covering, to the
maximum extent permitted by law, Borrower’s obligation to indemnify Lender as
required under this Agreement and the other Loan Documents), “Products” and
“Completed Operations Liability” coverage.

 

(d) Rental loss and/or business interruption insurance (i) with Lender being
named as “Lender Loss Payee”, (ii) in an amount equal to 100% of the projected
Rents from the Property during the period of restoration; and (iii) containing
an extended period of indemnity endorsement which provides that after the
physical loss to the Property has been repaired, the continued loss of income
will be insured until such income either returns to the same level it was at
prior to the loss, or the expiration of twelve (12) months from the date that
the Property is repaired or replaced and operations are resumed, whichever first
occurs, and notwithstanding that the policy may expire prior to the end of such
period. The amount of such insurance shall be increased from time to time during
the Term as and when the estimated or actual Rents increase.

 

(e) If the Borrower installs high pressure steam machinery at the Property,
comprehensive boiler and machinery insurance covering all mechanical and
electrical equipment against physical damage, rent loss and improvements loss
and covering, without limitation, all tenant improvements and betterments that
Borrower is required to insure pursuant to the lease on a replacement cost basis
and in an amount equal to the lesser of (i) $2,000,000 and (ii) 100% of the full
replacement cost of the Improvements on such Property (without any deduction for
depreciation).

 

(f) Worker’s compensation and disability insurance with respect to any employees
of Borrower, as required by any Legal Requirement.

 

(g) To the extent not covered by the coverage required under Section 7.1.1(a)
above, during any period of repair or restoration, builder’s “all-risk”
insurance on the so called completed value basis in an amount equal to not less
than the full insurable value of the Property, against such risks (including
fire and extended coverage and collapse of the Improvements to agreed limits) as
Lender may request, in form and substance acceptable to Lender.

 

(h) Coverage to compensate for ordinance of law, loss of replacement cost value
due to non-conforming use, the cost of demolition and the increased cost of
construction in an amount satisfactory to Lender.

 

(i) Such other insurance (including earthquake insurance, mine subsidence
insurance and windstorm insurance) as may from time to time be reasonably
required by Lender in order to protect its interests.

 

(j) Notwithstanding anything in subsection (a) above to the contrary, Borrower
shall be required to obtain and maintain coverage in its property insurance
Policy (or by a separate Policy) against loss or damage by terrorist acts in an
amount equal to 100% of the “Full Replacement Cost” of the Property; provided
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such coverage with respect to terrorist acts is not included as part of the “all
risk” property policy required by subsection (a) above, Borrower shall,
nevertheless be required to obtain coverage for terrorism (as stand alone
coverage) in an amount equal to 100% of the “Full Replacement Cost” of the
Property; provided that such coverage is available. Notwithstanding the
foregoing, with respect to any such stand-alone policy covering terrorist acts,
Borrower shall not be required to pay any Insurance Premiums solely with respect
to such terrorism coverage in excess of the Terrorism Premium Cap (hereinafter
defined); provided that if the Insurance Premiums payable with respect to such
terrorism coverage exceeds the Terrorism Premium Cap, Lender may, at its option
(1) purchase such stand-alone terrorism Policy, with Borrower paying such
portion of the Insurance Premiums with respect thereto equal to the Terrorism
Premium Cap and the Lender paying such portion of the Insurance Premiums in
excess of the Terrorism Premium Cap or (2) modify the deductible amounts, policy
limits and other required policy terms to reduce the Insurance Premiums payable
with respect to such stand-alone terrorism Policy to the Terrorism Premium Cap.
As used herein, (i) “Terrorism Premium Cap” means an amount equal to 150% of the
aggregate Insurance Premiums payable with respect to all the insurance coverage
under Section 7.1.1(a) above for the last policy year in which coverage for
terrorism was included as part of the “all risk” (excluding California
earthquake, tier 1 wind and Flood insurance) property policy required by
subsection (a) above, adjusted annually by a percentage equal to the increase in
the Consumer Price Index (hereinafter defined) and (ii) “Consumer Price Index”
means the Consumer Price Index for All Urban Consumers published by the Bureau
of Labor Statistics of the United States Department of Labor, New York
Metropolitan Statistical Area, All Items (1982-84 = 100), or any successor index
thereto, approximately adjusted, and in the event that the Consumer Price Index
is converted to a different standard reference base or otherwise revised, the
determination of adjustments provided for herein shall be made with the use of
such conversion factor, formula or table for converting the Consumer Price Index
as may be published by the Bureau of Labor Statistics or, if said Bureau shall
not publish the same, then with the use of such conversion factor, formula or
table as may be published by Prentice-Hall, Inc., or any other nationally
recognized publisher of similar statistical information; and if the Consumer
Price Index ceases to be published, and there is no successor thereto (i) such
other index as Lender and Borrower shall agree upon in writing or (ii) if Lender
and Borrower cannot agree on a substitute index, such other index, as reasonably
selected by Lender. Borrower shall obtain the coverage required under this
subsection (j) from a carrier which otherwise satisfies the rating criteria
specified in Section 7.1.2 below (a “Qualified Carrier”) or in the event that
such coverage is not available from a Qualified Carrier, Borrower shall obtain
such coverage from the highest rated insurance company providing such coverage.

 

7.1.2 Policies. All policies of insurance (the “Policies”) required pursuant to
Section 7.1.1 above shall (i) be issued by companies approved by Lender and
authorized to do business in the State, with a claims paying ability rating of
“A” or better by S&P (and the equivalent by any other Rating Agency) (provided,
however for multi-layered policies, (A) if four (4) or less insurance companies
issue the Policies, then at least 75% of the insurance coverage represented by
the Policies must be provided by insurance companies with a claims paying
ability rating of “A” or better by S&P (and the equivalent by any other Rating
Agency), with no carrier below “BBB” (and the equivalent by any other Rating
Agency) or (B) if five (5) or more insurance companies issue the Policies, then
at least sixty percent (60%) of the insurance coverage represented by the
Policies must be provided by insurance companies with a claims paying ability
rating of “A” or better by S&P (and the equivalent by any other Rating Agency),

 

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with no carrier below “BBB” (and the equivalent by any other Rating Agency), and
a rating of A:VIII or better in the current Best’s Insurance Reports; (ii) name
Lender and its successors and/or assigns as their interest may appear as the
mortgagee (in the case of property insurance), loss payee (in the case of
business interruption/loss of rents coverage) and an additional insured (in the
case of liability insurance); (iii) contain (in the case of property insurance)
a Non-Contributory Standard Mortgagee Clause and a Lender’s Loss Payable
Endorsement, or their equivalents, naming Lender as the person to which all
payments made by such insurance company shall be paid; (iv) contain a waiver of
subrogation against Lender; (v) be assigned and the originals thereof delivered
to Lender; (vi) contain such provisions as Lender deems reasonably necessary or
desirable to protect its interest, including (A) endorsements providing that
neither Borrower, Lender nor any other party shall be a co-insurer under the
Policies, (B) that Lender shall receive at least thirty (30) days’ prior written
notice of any modification, reduction or cancellation of any of the Policies,
(C) providing that Lender is permitted to make payments to effect the
continuation of such policy upon notice of cancellation due to non-payment of
premiums and (vii) in the event any insurance policy (except for general public
and other liability and workers compensation insurance) shall contain breach of
warranty provisions, such policy shall provide that with respect to the interest
of Lender, such insurance policy shall not be invalidated by and shall insure
Lender regardless of (A) any act, failure to act or negligence of or violation
of warranties, declarations or conditions contained in such policy by any named
insured, (B) the occupancy or use of the premises for purposes more hazardous
than permitted by the terms thereof, or (C) any foreclosure or other action or
proceeding taken by Lender pursuant to any provision of the Loan Documents.
Borrower shall pay the premiums for such Policies (the “Insurance Premiums”) as
the same become due and payable and furnish to Lender evidence of the renewal of
each of the Policies together with (unless such Insurance Premiums have been
paid by Lender pursuant to Section 3.3 hereof) receipts for or other evidence of
the payment of the Insurance Premiums reasonably satisfactory to Lender. If
Borrower does not furnish such evidence and receipts at least ten (10) days
prior to the expiration of any expiring Policy, then Lender may, but shall not
be obligated to, procure such insurance and pay the Insurance Premiums therefor,
and Borrower shall reimburse Lender for the cost of such Insurance Premiums
promptly on demand, with interest accruing at the Default Rate. Borrower shall
deliver to Lender a certified copy of each Policy (or binders with respect to
the coverage provided under each such Policy together with Accord Certificates
evidencing such coverage) within thirty (30) days after its effective date.
Within thirty (30) days after request by Lender, Borrower shall obtain such
increases in the amounts of coverage required hereunder as may be reasonably
requested by Lender, taking into consideration changes in the value of money
over time, changes in liability laws, changes in prudent customs and practices,
and the like.

 

7.2 Casualty.

 

7.2.1 Notice; Restoration. If the Property is damaged or destroyed, in whole or
in part, by fire or other casualty (a “Casualty”), Borrower shall give prompt
notice thereof to Lender. Following the occurrence of a Casualty, Borrower,
regardless of whether insurance proceeds are available, shall promptly proceed
to restore, repair, replace or rebuild the Property in accordance with Legal
Requirements to be of at least equal value and of substantially the same
character as prior to such damage or destruction.

 

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7.2.2 Settlement of Proceeds. If a Casualty covered by any of the Policies (an
“Insured Casualty”) occurs where the loss does not exceed $250,000 provided no
Event of Default has occurred and is continuing, Borrower may settle and adjust
any claim without the prior consent of Lender; provided such adjustment is
carried out in a competent and timely manner, and Borrower is hereby authorized
to collect and receipt for the insurance proceeds (the “Proceeds”). In the event
of an Insured Casualty where the loss equals or exceeds $250,000 (a “Significant
Casualty”), Borrower may settle and adjust any claim with the prior consent of
Lender (which consent shall not be unreasonably withheld or delayed) unless an
Event of Default has occurred and is continuing, in which case Lender may, in
its sole discretion, settle and adjust any claim without the consent of Borrower
and agree with the insurer(s) on the amount to be paid on the loss, and the
Proceeds shall be due and payable solely to Lender and held by Lender in the
Casualty/Condemnation Subaccount and disbursed in accordance herewith. If
Borrower or any party other than Lender is a payee on any check representing
Proceeds with respect to a Significant Casualty, Borrower shall immediately
endorse, and cause all such third parties to endorse, such check payable to the
order of Lender. During the continuance of an Event of Default, Borrower hereby
irrevocably appoints Lender as its attorney-in-fact, coupled with an interest,
to endorse such check payable to the order of Lender. The actual, out-of-pocket
expenses incurred by Lender in the settlement, adjustment and collection of the
Proceeds shall become part of the Debt and shall be reimbursed by Borrower to
Lender upon demand. Notwithstanding anything to the contrary contained herein,
if in connection with a Casualty any insurance carrier makes a payment under a
property insurance Policy that Borrower proposes be treated as business or
rental interruption insurance, then, notwithstanding any designation (or lack of
designation) by the insurance carrier as to the purpose of such payment, as
between Lender and Borrower, such payment shall not be treated as business or
rental interruption insurance proceeds unless Borrower has demonstrated to
Lender’s satisfaction that the remaining net Proceeds that will be received from
the property insurance carriers are sufficient to pay 100% of the cost of fully
restoring the Improvements or, if such net Proceeds are to be applied to repay
the Debt in accordance with the terms hereof, that such remaining net Proceeds
will be sufficient to pay the Debt in full.

 

7.3 Condemnation.

 

7.3.1 Notice; Restoration. Borrower shall promptly give Lender notice of the
actual or threatened commencement of any condemnation or eminent domain
proceeding affecting the Property (a “Condemnation”) and shall deliver to Lender
copies of any and all papers served in connection with such Condemnation.
Following the occurrence of a Condemnation, Borrower, regardless of whether an
Award is available, shall promptly proceed to restore, repair, replace or
rebuild the Property in accordance with Legal Requirements to the extent
practicable to be of at least equal value and of substantially the same
character (and to have the same utility) as prior to such Condemnation.

 

7.3.2 Collection of Award. If a Condemnation occurs where the award or payment
in respect thereof (an “Award”) does not exceed $250,000, provided no Event of
Default has occurred and is continuing, Borrower may make any compromise,
adjustment or settlement in connection with such Condemnation with the prior
consent of Lender, not to be unreasonably withheld, provided such adjustment is
carried out in a competent and timely manner, and Borrower is hereby authorized
to collect and receipt for the Award. In the event of

 

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a Condemnation where the Award is in excess of $250,000, Lender may collect,
receive and retain such Award and make any compromise, adjustment or settlement
in connection with such Condemnation with the prior consent of Borrower (unless
an Event of Default is continuing, in which case, Borrower’s prior consent shall
not be required, and Lender is hereby irrevocably appointed as Borrower’s
attorney-in-fact, coupled with an interest, with exclusive power to take such
actions during the continuance of an Event of Default), not to be unreasonably
withheld (which shall be deemed consented to if Borrower fails to respond to any
request for consent therefor within ten (10) days of request. Notwithstanding
any Condemnation (or any transfer made in lieu of or in anticipation of such
Condemnation), Borrower shall continue to pay the Debt at the time and in the
manner provided for in the Loan Documents, and the Debt shall not be reduced
unless and until any Award shall have been actually received and applied by
Lender to expenses of collecting the Award and to discharge of the Debt. Lender
shall not be limited to the interest paid on the Award by the condemning
authority but shall be entitled to receive out of the Award interest at the rate
or rates provided in the Notes. If the Property is sold, through foreclosure or
otherwise, prior to the receipt by Lender of such Award, Lender shall have the
right, whether or not a deficiency judgment on the Notes shall be recoverable or
shall have been sought, recovered or denied, to receive all or a portion of the
Award sufficient to pay the Debt. Borrower shall cause any Award that is payable
to Borrower to be paid directly to Lender. Lender shall hold such Award in the
Casualty/Condemnation Subaccount and disburse such Award in accordance with the
terms hereof.

 

7.4 Application of Proceeds or Award.

 

7.4.1 Application to Restoration. If an Insured Casualty or Condemnation occurs
where (i) the loss is in an aggregate amount less than the fifteen percent (15%)
of the unpaid Principal; (ii) in the reasonable judgment of Lender, the Property
can be restored within six (6) months, and prior to six (6) months before the
Stated Maturity Date and prior to the expiration of the rental or business
interruption insurance with respect thereto, to the Property’s pre-existing
condition and utility as existed immediately prior to such Insured Casualty or
Condemnation and to an economic unit not less valuable and not less useful than
the same was immediately prior to the Insured Casualty or Condemnation, and
after such restoration will adequately secure the Debt; (iii) less than (x)
thirty percent (30%), in the case of an Insured Casualty or (y) fifteen percent
(15%), in the case of a Condemnation, of the rentable area of the Improvements
has been damaged, destroyed or rendered unusable as a result of such Insured
Casualty or Condemnation; (iv) Leases demising in the aggregate at least
sixty-five percent (65%) of the total rentable space in the Property and in
effect as of the date of the occurrence of such Insured Casualty or Condemnation
remain in full force and effect during and after the completion of the
Restoration (hereinafter defined); and (v) no Default or Event of Default shall
have occurred and be then continuing, then the Proceeds or the Award, as the
case may be (after reimbursement of any expenses incurred by Lender), shall be
applied to reimburse Borrower for the cost of restoring, repairing, replacing or
rebuilding the Property (the “Restoration”), in the manner set forth herein.
Borrower shall commence and diligently prosecute such Restoration.
Notwithstanding the foregoing, in no event shall Lender be obligated to apply
the Proceeds or Award to reimburse Borrower for the cost of Restoration unless,
in addition to satisfaction of the foregoing conditions, both (x) Borrower shall
pay (and if required by Lender, Borrower shall deposit with Lender in advance)
all costs of such Restoration in excess of the net amount of the Proceeds or the
Award made available pursuant to the terms hereof; and (y) Lender shall have

 

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received evidence reasonably satisfactory to it that during the period of the
Restoration, the Rents will be at least equal to the sum of the operating
expenses and Debt Service and other reserve payments required hereunder, as
reasonably determined by Lender.

 

7.4.2 Application to Debt. Except as provided in Section 7.4.1 above, any
Proceeds and/or Award may, at the option of Lender in its discretion, be applied
to the payment of (i) accrued but unpaid interest on the Notes, (ii) the unpaid
Principal and (iii) other charges due under the Notes and/or any of the other
Loan Documents (as between the Tranche A Loan and the Tranche B Loan, as Lender
shall elect in Lender’s sole and absolute discretion), or applied to reimburse
Borrower for the cost of any Restoration, in the manner set forth in Section
7.4.3 below. Any such prepayment of the Loan shall subject to the Exit Fee
applicable thereto.

 

7.4.3 Procedure for Application to Restoration. If Borrower is entitled to
reimbursement out of the Proceeds or an Award held by Lender, such Proceeds or
Award shall be disbursed from time to time from the Casualty/Condemnation
Subaccount upon Lender being furnished with (i) evidence satisfactory to Lender
of the estimated cost of completion of the Restoration, (ii) a fixed price or
guaranteed maximum cost construction contract for Restoration satisfactory to
Lender, (iii) prior to the commencement of Restoration, all immediately
available funds in addition to the Proceeds or Award that in Lender’s judgment
are required to complete the proposed Restoration, (iv) such architect’s
certificates, waivers of lien, contractor’s sworn statements, title insurance
endorsements, bonds, plats of survey, permits, approvals, licenses and such
other documents and items as Lender may reasonably require and approve in
Lender’s discretion, and (iv) all plans and specifications for such Restoration,
such plans and specifications to be approved by Lender prior to commencement of
any work. Lender may, at Borrower’s expense, retain a consultant to review and
approve all requests for disbursements, which approval shall also be a condition
precedent to any disbursement. No payment made prior to the final completion of
the Restoration shall exceed ninety percent (90%) of the value of the work
performed from time to time; funds other than the Proceeds or Award shall be
disbursed prior to disbursement of such Proceeds or Award; and at all times, the
undisbursed balance of such Proceeds or Award remaining in the hands of Lender,
together with funds deposited for that purpose or irrevocably committed to the
satisfaction of Lender by or on behalf of Borrower for that purpose, shall be at
least sufficient in the reasonable judgment of Lender to pay for the cost of
completion of the Restoration, free and clear of all Liens or claims for Lien.
Provided no Default or Event of Default then exists, any surplus that remains
out of the Proceeds held by Lender after payment of such costs of Restoration
shall be paid to Borrower. Any surplus that remains out of the Award received by
Lender after payment of such costs of Restoration shall, in the discretion of
Lender, be retained by Lender and applied to payment of the Debt (without Exit
Fee or any other prepayment premium or penalty) or returned to Borrower.

 

8. DEFAULTS

 

8.1 Events of Default. An “Event of Default” shall exist with respect to the
Loan if any of the following shall occur:

 

(a) any portion of the Debt is not paid when due or any other amount under
Section 3.11(a)(i) through (viii) hereof is not paid in full on each Payment
Date (provided,

 

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however, if adequate funds are available in the Deposit Account for such
payments, the failure by the Deposit Bank to allocate such funds into the
appropriate Subaccounts shall not constitute an Event of Default);

 

(b) any of the Taxes are not paid when due (unless Lender is paying such Taxes
pursuant to Section 3.3 hereof), subject to Borrower’s right to contest Taxes in
accordance with Section 5.2 hereof;

 

(c) the Policies are not kept in full force and effect, or are not delivered to
Lender upon request;

 

(d) a Transfer other than a Permitted Transfer occurs;

 

(e) any representation or warranty made by Borrower or Guarantor or in any Loan
Document, or in any report, certificate, financial statement or other
instrument, agreement or document furnished by Borrower or Guarantor in
connection with any Loan Document, shall be false or misleading in any material
respect as of the date the representation or warranty was made;

 

(f) Borrower, Sole Member or Guarantor shall make an assignment for the benefit
of creditors, or shall generally not be paying its debts as they become due;

 

(g) a receiver, liquidator or trustee shall be appointed for Borrower, Sole
Member or Guarantor; or Borrower, Sole Member or Guarantor shall be adjudicated
a bankrupt or insolvent; or any petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by or against, consented to, or acquiesced in by, Borrower,
Sole Member or Guarantor, as the case may be; or any proceeding for the
dissolution or liquidation of Borrower, Sole Member or Guarantor shall be
instituted; provided, however, if such appointment, adjudication, petition or
proceeding was involuntary and not consented to by Borrower, Sole Member or
Guarantor, as the case may be, only upon the same not being discharged, stayed
or dismissed within sixty (60) days;

 

(h) Borrower breaches any covenant contained in Sections 5.12.1 (a) - (e), 5.13,
5.15, 5.22, 5.25 or 5.28 hereof;

 

(i) except as expressly permitted hereunder, the alteration, improvement,
demolition or removal of all or any portion of the Improvements without the
prior written consent of Lender;

 

(j) an Event of Default as defined or described elsewhere in this Agreement or
in any other Loan Document occurs; or any other event shall occur or condition
shall exist, if the effect of such event or condition is to accelerate or to
permit Lender to accelerate the maturity of any portion of the Debt;

 

(k) a default occurs under any term, covenant or provision set forth herein or
in any other Loan Document which specifically contains a notice requirement or
grace period and such notice has been given and such grace period has expired
without the cure of such default;

 

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(l) any of the assumptions contained in any substantive non-consolidation
opinion, delivered to Lender by Lender’s counsel in connection with the Loan or
otherwise hereunder, were not true and correct as of the date of such opinion or
thereafter became untrue or incorrect in any material respects;

 

(m) a default shall be continuing under any of the other terms, covenants or
conditions of this Agreement or any other Loan Document not otherwise specified
in this Section 8.1, for ten (10) days after notice to Borrower (and Guarantor,
if applicable) from Lender, in the case of any default which can be cured by the
payment of a sum of money, or for thirty (30) days after notice from Lender in
the case of any other default; provided, however, that if such non-monetary
default is susceptible of cure but cannot reasonably be cured within such thirty
(30)-day period, and Borrower (or Guarantor, if applicable) shall have commenced
to cure such default within such thirty (30)-day period and thereafter
diligently and expeditiously proceeds to cure the same, such thirty (30)-day
period shall be extended for an additional period of time as is reasonably
necessary for Borrower (or Guarantor, if applicable) in the exercise of due
diligence to cure such default, such additional period not to exceed sixty (60)
days.

 

8.2 Remedies.

 

8.2.1 Acceleration. Upon the occurrence of an Event of Default (other than an
Event of Default described in paragraph (f) or (g) of Section 8.1 above) and at
any time and from time to time thereafter, in addition to any other rights or
remedies available to it pursuant to the Loan Documents or at law or in equity,
Lender may take such action, without notice or demand, that Lender deems
advisable to protect and enforce its rights against Borrower and in and to the
Property; including declaring the Debt to be immediately due and payable
(including unpaid interest), Default Rate interest, Late Payment Charges, Exit
Fees and any other amounts owing by Borrower), without notice or demand; and
upon any Event of Default described in paragraph (f) or (g) of Section 8.1
above, the Debt (including unpaid interest, Default Rate interest, Late Payment
Charges, Exit Fees and any other amounts owing by Borrower) shall immediately
and automatically become due and payable, without notice or demand, and Borrower
hereby expressly waives any such notice or demand, anything contained in any
Loan Document to the contrary notwithstanding.

 

8.2.2 Remedies Cumulative. Upon the occurrence of an Event of Default, all or
any one or more of the rights, powers, privileges and other remedies available
to Lender against Borrower under the Loan Documents or at law or in equity may
be exercised by Lender at any time and from time to time, whether or not all or
any of the Debt shall be declared, or be automatically, due and payable, and
whether or not Lender shall have commenced any foreclosure proceeding or other
action for the enforcement of its rights and remedies under any of the Loan
Documents. Any such actions taken by Lender shall be cumulative and concurrent
and may be pursued independently, singly, successively, together or otherwise,
at such time and in such order as Lender may determine in its discretion, to the
fullest extent permitted by law, without impairing or otherwise affecting the
other rights and remedies of Lender permitted by law, equity or contract or as
set forth in the Loan Documents. Without limiting the generality of the
foregoing, Borrower agrees that if an Event of Default is continuing, (i) to the
extent permitted by applicable law, Lender is not subject to any “one action” or
“election of remedies” law or rule, and (ii) all Liens and other rights,
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remain in full force and effect until Lender has exhausted all of its remedies
against the Property, the Mortgage has been foreclosed, the Property has been
sold and/or otherwise realized upon in satisfaction of the Debt or the Debt has
been paid in full. To the extent permitted by applicable law, nothing contained
in any Loan Document shall be construed as requiring Lender to resort to any
portion of the Property for the satisfaction of any of the Debt in preference or
priority to any other portion, and Lender may seek satisfaction out of the
entire Property or any part thereof, in its discretion.

 

8.2.3 Severance. Lender shall have the right from time to time to sever either
Note and the other Loan Documents into one or more separate notes, mortgages and
other security documents in such denominations and priorities of payment and
liens as Lender shall determine in its discretion for purposes of evidencing and
enforcing its rights and remedies. Borrower shall execute and deliver to Lender
from time to time, promptly after the request of Lender, a severance agreement
and such other documents as Lender shall request in order to effect the
severance described in the preceding sentence, all in form and substance
reasonably satisfactory to Lender. Borrower hereby absolutely and irrevocably
appoints Lender as its true and lawful attorney, coupled with an interest, in
its name and stead to make and execute all documents necessary or desirable to
effect such severance, Borrower ratifying all that such attorney shall do by
virtue thereof.

 

8.2.4 Delay. No delay or omission to exercise any remedy, right or power
accruing upon an Event of Default, or the granting of any indulgence or
compromise by Lender shall impair any such remedy, right or power hereunder or
be construed as a waiver thereof, but any such remedy, right or power may be
exercised from time to time and as often as may be deemed expedient. A waiver of
one Default or Event of Default shall not be construed to be a waiver of any
subsequent Default or Event of Default or to impair any remedy, right or power
consequent thereon. Notwithstanding any other provision of this Agreement,
Lender reserves the right to seek a deficiency judgment or preserve a deficiency
claim in connection with the foreclosure of the Mortgage to the extent necessary
to foreclose on all or any portion of the Property, the Rents, the Cash
Management Accounts or any other collateral, provided that any deficiency
judgment obtained by Lender shall be subject to the terms and provisions of
Section 10.1 hereof.

 

8.2.5 Lender’s Right to Perform. If Borrower fails to perform any covenant or
obligation contained herein and such failure shall continue for a period of the
greater of (a) five (5) Business Days after Borrower’s receipt of written notice
thereof from Lender and (b) any longer notice requirement or grace period (if
any) specifically set forth in this Agreement after Borrower’s receipt of
written notice thereof from Lender, without in any way limiting Lender’s right
to exercise any of its rights, powers or remedies as provided hereunder, or
under any of the other Loan Documents, Lender may, but shall have no obligation
to, perform, or cause performance of, such covenant or obligation, and all
costs, expenses, liabilities, penalties and fines of Lender incurred or paid in
connection therewith shall be payable by Borrower to Lender upon demand and if
not paid shall be added to the Debt (and to the extent permitted under
applicable laws, secured by the Mortgage and other Loan Documents) and shall
bear interest thereafter at the Default Rate. Notwithstanding the foregoing,
Lender shall have no obligation to send notice to Borrower of any such failure.

 

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9. SPECIAL PROVISIONS

 

9.1 Sale of Note and Secondary Market Transaction.

 

9.1.1 General; Borrower Cooperation. Lender shall have the right at any time and
from time to time (i) to sell or otherwise transfer the Tranche A Loan or any
portion thereof or the Tranche B Loan or any portion thereof or the Loan
Documents or any interest therein to one or more investors, (ii) to sell
participation interests in the Tranche A Loan or the Tranche B Loan to one or
more investors or (iii) to securitize the Tranche A Loan (or any portion
thereof) or the Tranche B Loan (or any portion thereof) in a single asset
securitization or a pooled loan securitization of rated single or multi-class
securities (the “Securities”) secured by or evidencing ownership interests in
either (or both) Note(s) and the Mortgage (each such sale, assignment,
participation and/or securitization is referred to herein as a “Secondary Market
Transaction” and the transactions referred to in this subsection (iii) shall be
referred to herein as a “Securitization”). In connection with any Secondary
Market Transaction, Borrower shall, at Borrower’s reasonable expense, use all
reasonable efforts and cooperate fully and in good faith with Lender and
otherwise assist Lender in satisfying the market standards to which Lender
customarily adheres or which may be reasonably required in the marketplace or by
the Rating Agencies in connection with any such Secondary Market Transactions,
including: (a) to (i) to provide such financial and other information with
respect to the Property, Borrower and its Affiliates, Manager and any tenants of
the Property, (ii) provide business plans and budgets relating to the Property
and (iii) perform or permit or cause to be performed or permitted such site
inspection, appraisals, surveys, market studies, environmental reviews and
reports, engineering reports and other due diligence investigations of the
Property, as may be reasonably requested from time to time by Lender or the
Rating Agencies or as may be necessary or appropriate in connection with a
Secondary Market Transaction or Exchange Act requirements (the items provided to
Lender pursuant to this paragraph (a) being called the “Provided Information”),
together, if customary, with appropriate verification of and/or consents to the
Provided Information through letters of auditors or opinions of counsel of
independent attorneys acceptable to Lender and the Rating Agencies; (b) at
Borrower’s expense, cause counsel to render opinions customary in securitization
transactions (other than a non-consolidation opinion, which shall be obtained by
Lender, at Lender’s expense) with respect to the Property, Borrower and its
Affiliates, which counsel and opinions shall be reasonably satisfactory to
Lender and the Rating Agencies; (c) make such representations and warranties as
of the closing date of any Secondary Market Transaction with respect to the
Property, Borrower and the Loan Documents as are customarily provided in such
transactions and as may be reasonably requested by Lender or the Rating Agencies
and consistent with the facts covered by such representations and warranties as
they exist on the date thereof, including the representations and warranties
made in the Loan Documents; (d) provide current certificates of good standing
and qualification with respect to Borrower and Sole Member from appropriate
Governmental Authorities; and (e) execute such amendments to the Loan Documents
and Borrower’s organizational documents, as may be requested by Lender or the
Rating Agencies or otherwise to effect a Secondary Market Transaction, provided
that nothing contained in this subsection (e) shall result in an adverse
economic change or a material increase in Borrower’s non-economic obligations in
the transaction. Borrower’s cooperation obligations set forth herein shall
continue until the Loan has been paid in full. Notwithstanding anything to the
contrary contained in this Section 9.1.1, Borrower shall not be required to
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expenses of Borrower’s attorneys, accountants and consultants) in the
performance of its obligations under this Section 9.1.1.

 

9.1.2 Use of Information. Borrower understands that all or any portion of the
Provided Information and the Required Records may be included in disclosure
documents in connection with a Secondary Market Transaction, including a
prospectus or private placement memorandum (each, a “Disclosure Document”) and
may also be included in filings with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or
the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers or other parties relating
to the Secondary Market Transaction. If the Disclosure Document is required to
be revised, Borrower shall cooperate with Lender in updating the Provided
Information or Required Records for inclusion or summary in the Disclosure
Document or for other use reasonably required in connection with a Secondary
Market Transaction by providing all current information pertaining to Borrower,
Manager and the Property necessary to keep the Disclosure Document accurate and
complete in all material respects with respect to such matters. Notwithstanding
anything to the contrary contained in this Section 9.1.2, Borrower shall not be
required to incur any out-of-pocket expenses (other than the fees and expenses
of Borrower’s attorneys, accountants and consultants) in the performance of its
obligations under this Section 9.1.2.

 

9.1.3 Borrower Obligations Regarding Disclosure Documents. In connection with a
Disclosure Document, Borrower shall: (a) if requested by Lender, certify in
writing that Borrower has carefully examined those portions of such Disclosure
Document, pertaining to Borrower, the Property, Manager and the Tranche A Loan
and/or the Tranche B Loan, and that such portions do not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in the light of the circumstances under which they
were made, not misleading; and (b) indemnify (in a separate instrument of
indemnity, if so requested by Lender) (i) any underwriter, syndicate member or
placement agent (collectively, the “Underwriters”) retained by Lender or its
issuing company affiliate (the “Issuer”) in connection with a Secondary Market
Transaction, (ii) Lender and (iii) the Issuer that is named in the Disclosure
Document or registration statement relating to a Secondary Market Transaction
(the “Registration Statement”), and each of the Issuer’s directors, each of its
officers who have signed the Registration Statement and each person or entity
who controls the Issuer or the Lender within the meaning of Section 15 of the
Securities Act or Section 30 of the Exchange Act (collectively within (iii), the
“GCM Group”), and each of its directors and each person who controls each of the
Underwriters, within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act (collectively, the “Underwriter Group”) for any losses,
claims, damages or liabilities (the “Liabilities”) to which Lender, the GCM
Group or the Underwriter Group may become subject (including reimbursing all of
them for any legal or other expenses actually incurred in connection with
investigating or defending the Liabilities) insofar as the Liabilities arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any of the Provided Information or in any of the
applicable portions of such sections of the Disclosure Document applicable to
Borrower, Manager, the Property, the Tranche A Loan and/or the Tranche B Loan,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated in the applicable portions of such
sections or necessary in order to make the

 

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statements in the applicable portions of such sections in light of the
circumstances under which they were made, not misleading; provided, however,
that Borrower shall not be required to indemnify Lender for any Liabilities
relating to untrue statements or omissions which Borrower identified to Lender
in writing at the time of Borrower’s examination of such Disclosure Document.

 

9.1.4 Borrower Indemnity Regarding Filings. In connection with filings under the
Exchange Act, Borrower shall (i) indemnify Lender, the GCM Group and the
Underwriter Group for any Liabilities to which Lender, the GCM Group or the
Underwriter Group may become subject insofar as the Liabilities arise out of or
are based upon the omission or alleged omission to state in the Provided
Information a material fact required to be stated in the Provided Information in
order to make the statements in the Provided Information, in light of the
circumstances under which they were made not misleading and (ii) reimburse
Lender, the GCM Group or the Underwriter Group for any legal or other expenses
actually incurred by Lender, GCM Group or the Underwriter Group in connection
with defending or investigating the Liabilities.

 

9.1.5 Indemnification Procedure. Promptly after receipt by an indemnified party
under Section 9.1.3 above or Section 9.1.4 above of notice of the commencement
of any action for which a claim for indemnification is to be made against
Borrower, such indemnified party shall notify Borrower in writing of such
commencement, but the omission to so notify Borrower will not relieve Borrower
from any liability that it may have to any indemnified party hereunder except to
the extent that failure to notify causes prejudice to Borrower. If any action is
brought against any indemnified party, and it notifies Borrower of the
commencement thereof, Borrower will be entitled, jointly with any other
indemnifying party, to participate therein and, to the extent that it (or they)
may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice of commencement, to assume the defense thereof
with counsel satisfactory to such indemnified party in its discretion. After
notice from Borrower to such indemnified party under this Section 9.1.5,
Borrower shall not be responsible for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, if the defendants in
any such action include both Borrower and an indemnified party, and any
indemnified party shall have reasonably concluded that there are any legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to Borrower, then the indemnified party or
parties shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Borrower shall not be liable for the expenses
of more than one separate counsel unless there are legal defenses available to
it that are different from or additional to those available to another
indemnified party.

 

9.1.6 Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 9.1.3
above or Section 9.1.4 above is for any reason held to be unenforceable by an
indemnified party in respect of any Liabilities (or action in respect thereof)
referred to therein which would otherwise be indemnifiable under Section 9.1.3
above or Section 9.1.4 above, Borrower shall contribute to the amount paid or
payable by the indemnified party as a result of such Liabilities (or action in
respect thereof); provided, however, that no Person guilty of fraudulent
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(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person not guilty of such fraudulent misrepresentation. In
determining the amount of contribution to which the respective parties are
entitled, the following factors shall be considered: (i) the GCM Group’s and
Borrower’s relative knowledge and access to information concerning the matter
with respect to which the claim was asserted; (ii) the opportunity to correct
and prevent any statement or omission; and (iii) any other equitable
considerations appropriate in the circumstances. Lender and Borrower hereby
agree that it may not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation.

 

9.1.7 Rating Surveillance. Lender will retain the Rating Agencies to provide
rating surveillance services on Securities. The pro rata expenses of such
surveillance will be paid for by Borrower based on the applicable percentage of
such expenses determined by dividing the then outstanding Tranche A Principal
and/or Tranche B Principal, to the extent applicable, by the then aggregate
outstanding amount of the pool created in the Secondary Market Transaction which
includes the Tranche A Loan and/or the Tranche B Loan.

 

9.1.8 Severance of Loan. Lender shall have the right, at any time (whether prior
to, in connection with, or after any Secondary Market Transaction), with respect
to all or any portion of the Tranche A Loan and/or the Tranche B Loan, to
modify, split and/or sever all or any portion of the Tranche A Loan and/or the
Tranche B Loan as hereinafter provided. Without limiting the foregoing, Lender
may (i) cause either or both of the Notes and the Mortgage to be split into a
first and second mortgage loan, (ii) create one more senior and subordinate
notes (i.e., an A/B or A/B/C structure), (iii) create multiple components of
either or both of the Notes (and allocate or reallocate the principal balance of
the Tranche A Loan and/or the Tranche B Loan (as applicable) among such
components) or (iv) otherwise sever the Tranche A Loan and/or the Tranche B Loan
into two (2) or more loans secured by mortgages and by a pledge of partnership
or membership interests (directly or indirectly) in Borrower (i.e., a senior
loan/mezzanine loan structure), in each such case, in whatever proportion and
whatever priority Lender determines; provided, however, in each such instance
the outstanding principal balance of all the Notes evidencing the Tranche A Loan
and/or the Tranche B Loan (as applicable) (or components of the Notes for the
Tranche A Loan or Tranche B Loan (as applicable)) immediately after the
effective date of such modification equals the outstanding principal balance of
the Tranche A Loan and/or the Tranche B Loan (as applicable) immediately prior
to such modification and the weighted average of the interest rates for all such
Notes (or components of such Notes) immediately after the effective date of such
modification equals the interest rate of the original Tranche A Note or Tranche
B Note (as applicable) immediately prior to such modification. If requested by
Lender, Borrower (and Borrower’s constituent members, if applicable, and
Guarantor) shall execute within two (2) Business Days after such request, such
documentation as Lender may reasonably request to evidence and/or effectuate any
such modification or severance. Borrower shall not be required to incur any out
of pocket costs or expenses in connection with the foregoing (other than the
fees and expenses of Borrower’s attorneys, accountants and consultants) or to
reduce its rights or increase its obligations or decrease its rights in respect
of the Loan (or any portion thereof). Notwithstanding anything to the contrary
contained in this Section 9.1.8, Borrower shall not be required to incur any
out-of-pocket expenses (other than the fees and expenses of Borrower’s
attorneys, accountants and consultants) in the performance of its obligations
under this Section 9.1.8.

 

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10. MISCELLANEOUS

 

10.1 Exculpation. Subject to the qualifications below, Lender shall not enforce
the liability and obligation of Borrower to perform and observe the obligations
contained in the Loan Documents by any action or proceeding wherein a money
judgment shall be sought against Borrower, except that Lender may bring a
foreclosure action, an action for specific performance or any other appropriate
action or proceeding to enable Lender to enforce and realize upon its interest
and rights under the Loan Documents, or in the Property, the Rents or any other
collateral given to Lender pursuant to the Loan Documents; provided, however,
that, except as specifically provided herein, any judgment in any such action or
proceeding shall be enforceable against Borrower only to the extent of
Borrower’s interest in the Property, in the Rents and in any other collateral
given to Lender, and Lender shall not sue for, seek or demand any deficiency
judgment against Borrower in any such action or proceeding under or by reason of
or under or in connection with any Loan Document. The provisions of this Section
10.1 shall not, however, (i) constitute a waiver, release or impairment of any
obligation evidenced or secured by any Loan Document; (ii) impair the right of
Lender to name Borrower as a party defendant in any action or suit for
foreclosure and sale under the Mortgage; (iii) affect the validity or
enforceability of any of the Loan Documents or any guaranty made in connection
with the Loan or any of the rights and remedies of Lender thereunder; (iv)
impair the right of Lender to obtain the appointment of a receiver; (v) impair
the enforcement of the Assignment of Leases; (vi) constitute a prohibition
against Lender to commence any other appropriate action or proceeding in order
for Lender to fully realize the security granted by the Mortgage or to exercise
its remedies against the Property; or (vii) constitute a waiver of the right of
Lender to enforce the liability and obligation of Borrower, by money judgment or
otherwise, to the extent of any loss, damage, cost, expense, liability, claim or
other obligation incurred by Lender (including attorneys’ fees and costs
reasonably incurred) arising out of or in connection with the following (all
such liability and obligation of Borrower for any or all of the following being
referred to herein as “Borrower’s Recourse Liabilities”):

 

(a) fraud or intentional misrepresentation by Borrower, Sole Member or Guarantor
in connection with obtaining the Loan (or any portion thereof);

 

(b) intentional physical waste of the Property or any portion thereof, or after
an Event of Default the removal or disposal of any portion of the Property
without replacement;

 

(c) any Proceeds paid by reason of any Insured Casualty or any Award received in
connection with a Condemnation or other sums or payments attributable to the
Property not applied in accordance with the provisions of the Loan Documents
(except to the extent that Borrower did not have the legal right, because of a
bankruptcy, receivership or similar judicial proceeding, to direct disbursement
of such sums or payments);

 

(d) all Rents of the Property received or collected by or on behalf of the
Borrower after an Event of Default and not deposited into the Deposit Account or
applied to payment of Principal and interest due under the Notes, and to the
payment of actual and reasonable operating expenses of the Property, as they
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(except to the extent that such application of such funds is prevented by
bankruptcy, receivership, or similar judicial proceeding in which Borrower is
legally prevented from directing the disbursement of such sums);

 

(e) misappropriation (including failure to turn over to Lender on demand
following an Event of Default) of tenant security deposits and rents collected
in advance, or of funds held by Borrower for the benefit of another party;

 

(f) the failure to pay Taxes, provided Borrower shall not be liable to the
extent funds to pay such amounts are available in the Tax and Insurance
Subaccount and Lender failed to pay same; or

 

(g) the breach of any representation, warranty, covenant or indemnification in
any Loan Document concerning Environmental Laws or Hazardous Substances,
including Section 4.21 hereof and Section 5.8 hereof, and clauses (viii) through
(xi) of Section 5.30 hereof.

 

Notwithstanding anything to the contrary in this Agreement or any of the Loan
Documents, (A) Lender shall not be deemed to have waived any right which Lender
may have under Section 506(a), 506(b), 1111(b) or any other provisions of the
U.S. 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 in
accordance with the Loan Documents, and (B) Lender’s agreement not to pursue
personal liability of Borrower as set forth above SHALL BECOME NULL AND VOID and
shall be of no further force and effect, and the Debt shall be fully recourse to
Borrower in the event that one or more of the following occurs (each, a
“Springing Recourse Event”): (i) an Event of Default described in Section 8.1(d)
hereof shall have occurred or (ii) a breach of the covenants set forth in
Section 5.13 hereof, or (iii) the occurrence of any condition or event described
in either Section 8.1(f) hereof or Section 8.1(g) hereof and, with respect to
such condition or event described in Section 8.1(g) hereof, either Borrower,
Sole Member, Guarantor or any Person owning an interest (directly or indirectly)
in Borrower, Sole Member or Guarantor consents to, aids, solicits, supports, or
otherwise cooperates or colludes to cause such condition or event or fails to
contest such condition or event.

 

10.2 Brokers and Financial Advisors. (a) Borrower hereby represents that it has
dealt with no financial advisors, brokers, underwriters, placement agents,
agents or finders in connection with the Loan other than Secured Capital
(“Broker”) whose fees shall be paid by Borrower pursuant to a separate
agreement. Borrower shall indemnify and hold Lender harmless from and against
any and all claims, liabilities, costs and expenses (including attorneys’ fees,
whether incurred in connection with enforcing this indemnity or defending claims
of third parties) of any kind in any way relating to or arising from a claim by
any Person (including Broker) that such Person acted on behalf of Borrower in
connection with the transactions contemplated herein. The provisions of this
Section 10.2 shall survive the expiration and termination of this Agreement and
the repayment of the Debt.

 

(b) Notwithstanding anything in Section 10.2(a) above to the contrary, Borrower
hereby acknowledges that (i) at Lender’s sole discretion, Broker may receive
further consideration from Lender relating to the Loan (or any portion thereof)
or any other matter for

 

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which Lender may elect to compensate Broker pursuant to a separate agreement
between Lender and Broker and (ii) Lender shall have no obligation to disclose
to Borrower the existence of any such agreement or the amount of any such
additional consideration paid or to be paid to Broker whether in connection with
the Loan (or any portion thereof) or otherwise.

 

10.3 Retention of Servicer. Lender reserves the right to retain the Servicer to
act as its agent hereunder with such powers as are specifically delegated to the
Servicer by Lender, whether pursuant to the terms of this Agreement, any pooling
and servicing agreement or similar agreement entered into as a result of a
Secondary Market Transaction, the Deposit Account Agreement or otherwise,
together with such other powers as are reasonably incidental thereto. Borrower
shall pay any reasonable fees and expenses of the Servicer (i) in connection
with a release of the Property (or any portion thereof), (ii) from and after a
transfer of the Loan (or any portion thereof) to any “master servicer” or
“special servicer” for any reason, including without limitation, as a result of
a decline in the occupancy level of the Property, (iii) in connection with an
assumption or modification of the Loan (or any portion thereof), (iv) in
connection with the enforcement of the Loan Documents or (v) in connection with
any other action or approval taken by Servicer hereunder on behalf of Lender.

 

10.4 Survival. This Agreement and all covenants, agreements, representations and
warranties made herein and in the certificates delivered pursuant hereto shall
survive the making by Lender of the Loan and the execution and delivery to
Lender of the Notes, and shall continue in full force and effect so long as any
of the Debt is unpaid or such longer period if expressly set forth in this
Agreement. All Borrower’s covenants and agreements in this Agreement shall inure
to the benefit of the respective legal representatives, successors and assigns
of Lender.

 

10.5 Lender’s Discretion. Whenever pursuant to this Agreement or any other Loan
Document, Lender exercises any right given to it to approve or disapprove, or
consent or withhold consent, or any arrangement or term is to be satisfactory to
Lender or is to be in Lender’s discretion, except as otherwise specified herein,
the decision of Lender to approve or disapprove, to consent or withhold consent,
or to decide whether arrangements or terms are satisfactory or not satisfactory,
or acceptable or unacceptable or in Lender’s discretion shall (except as is
otherwise specifically herein provided) be in the sole discretion of Lender and
shall be final and conclusive.

 

10.6 Governing Law.

 

(a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK AND THE PROCEEDS OF
THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK,
WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND
TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA,
EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND
ENFORCEMENT

 

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OF THE LIENS CREATED PURSUANT TO THE LOAN DOCUMENTS SHALL BE GOVERNED BY AND
CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS 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 THE
ENFORCEABILITY OF ALL LOAN DOCUMENTS AND THE DEBT. TO THE FULLEST EXTENT
PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT
AND THE NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO § 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW.

 

(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST OR BORROWER OR LENDER ARISING
OUT OF OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN ANY FEDERAL OR STATE
COURT IN NEW YORK COUNTY, NEW YORK AND BORROWER WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER HEREBY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO IT AT ITS ADDRESS AS SET FORTH IN SECTION 6.1 ABOVE, WHICH
MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE
COURT IN NEW YORK, NEW YORK, AND AGREES THAT SAID SERVICE OF BORROWER MAILED OR
DELIVERED TO THE BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER (UNLESS LOCAL LAW REQUIRES
ANOTHER METHOD OF SERVICE), IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE
OF NEW YORK. BORROWER (i) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED
ADDRESS OF ITS ADDRESS AND/OR APPOINTED OR CHANGED AUTHORIZED AGENT HEREUNDER,
AND (ii) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE AN AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH OFFICE SHALL BE DESIGNATED AS THE
ADDRESS FOR SERVICE OF PROCESS).

 

10.7 Modification, Waiver in Writing. No modification, amendment, extension,
discharge, termination or waiver of any provision of this Agreement or of any
other Loan Document, nor consent to any departure by Borrower therefrom, shall
in any event be effective unless the same shall be in a writing signed by the
party against whom enforcement is sought, and then such waiver or consent shall
be effective only in the specific instance, and for the purpose, for which
given. Except as otherwise expressly provided herein, no notice to or demand on
Borrower shall entitle Borrower to any other or future notice or demand in the
same, similar or other circumstances. Neither any failure nor any delay on the
part of Lender in insisting upon strict performance of any term, condition,
covenant or agreement, or exercising any right, power, remedy or privilege
hereunder, or under any other Loan Document, shall

 

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operate as or constitute a waiver thereof, nor shall a single or partial
exercise thereof preclude any other future exercise, or the exercise of any
other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under
any Loan Document, Lender shall not be deemed to have waived any right either to
require prompt payment when due of all other amounts due under the Loan
Documents, or to declare an Event of Default for failure to effect prompt
payment of any such other amount.

 

10.8 Trial by Jury. BORROWER AND LENDER HEREBY AGREE NOT TO ELECT A TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY
FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD
TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN
CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY
AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. EITHER PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE
OTHER.

 

10.9 Headings/Exhibits. The Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose. The Exhibits attached hereto, are hereby
incorporated by reference as a part of the Agreement with the same force and
effect as if set forth in the body hereof.

 

10.10 Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

 

10.11 Preferences. Upon the occurrence and continuance of an Event of Default,
Lender shall have the continuing and exclusive right to apply or reverse and
reapply any and all payments by Borrower to any portion of the Debt. To the
extent Borrower makes a payment to Lender, or Lender receives proceeds of any
collateral, which is in whole or part subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or proceeds
received, the Debt or part thereof intended to be satisfied shall be revived and
continue in full force and effect, as if such payment or proceeds had not been
received by Lender. This provision shall survive the expiration or termination
of this Agreement and the repayment of the Debt.

 

10.12 Waiver of Notice. Borrower shall not be entitled to any notices of any
nature whatsoever from Lender except with respect to matters for which this
Agreement or any other Loan Document specifically and expressly requires the
giving of notice by Lender to Borrower and except with respect to matters for
which Borrower is not, pursuant to applicable Legal Requirements, permitted to
waive the giving of notice. Borrower hereby expressly waives the

 

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right to receive any notice from Lender with respect to any matter for which no
Loan Document specifically and expressly requires the giving of notice by Lender
to Borrower.

 

10.13 Remedies of Borrower. If a claim or adjudication is made that Lender or
any of its agents, including Servicer, has acted unreasonably or unreasonably
delayed acting in any case where by law or under any Loan Document, Lender or
any such agent, as the case may be, has an obligation to act reasonably or
promptly, Borrower agrees that neither Lender nor its agents, including
Servicer, shall be liable for any monetary damages, and Borrower’s sole remedy
shall be to commence an action seeking injunctive relief or declaratory
judgment. Any action or proceeding to determine whether Lender has acted
reasonably shall be determined by an action seeking declaratory judgment.
Borrower specifically waives any claim against Lender and its agents, including
Servicer, with respect to actions taken by Lender or its agents on Borrower’s
behalf. Nothing in this Section 10.13 shall limit Borrower’s remedies against
Lender under this Agreement to the extent that both (i) Lender’s breach of this
Agreement arises from the illegal acts, fraud or willful misconduct of Lender
and (ii) as a result of such breach, Borrower incurs liability or actual damages
to third parties.

 

10.14 Prior Agreements. This Agreement and the other Loan Documents contain the
entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior agreements,
understandings and negotiations among or between such parties, whether oral or
written, are superseded by the terms of this Agreement and the other Loan
Documents.

 

10.15 Offsets, Counterclaims and Defenses. 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, including Servicer, or
otherwise offset any obligations to make payments required under the Loan
Documents. Any assignee of Lender’s interest in and to the Loan Documents shall
take the same free and clear of all offsets, counterclaims or defenses which
Borrower may otherwise have (including with respect to any Future Funding
Obligation or any default or dispute relating thereto) against any assignor of
such documents, and no such offset, counterclaim or defense shall be interposed
or asserted by Borrower in any action or proceeding brought by any such assignee
upon such documents, and any such right to interpose or assert any such offset,
counterclaim or defense in any such action or proceeding is hereby expressly
waived by Borrower.

 

10.16 Publicity. All news releases, publicity or advertising by Borrower or its
Affiliates through any media intended to reach the general public, which refers
to the Loan Documents, the Loan, Lender or any member of the GCM Group, a
purchaser of the Loan (or any portion thereof), the Servicer or the trustee in a
Secondary Market Transaction, shall be subject to the prior written approval of
Lender. Lender shall have the right to issue any of the foregoing without
Borrower’s approval.

 

10.17 No Usury. Borrower and Lender intend at all times to comply with
applicable state law or applicable United States federal law (to the extent that
it permits Lender to contract for, charge, take, reserve or receive a greater
amount of interest than under state law) and that this Section 10.17 shall
control every other agreement in the Loan Documents. If the applicable law
(state or federal) is ever judicially interpreted so as to render usurious any
amount called for

 

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under either Note or any other Loan Document, or contracted for, charged, taken,
reserved or received with respect to the Debt, or if Lender’s exercise of the
option to accelerate the maturity of the Tranche A Loan and/or the Tranche B
Loan or any prepayment by Borrower results in Borrower having paid any interest
in excess of that permitted by applicable law, then it is Borrower’s and
Lender’s express intent that all excess amounts theretofore collected by Lender
shall be credited against the unpaid Principal and all other Debt (or, if the
Debt has been or would thereby be paid in full, refunded to Borrower), and the
provisions of the Loan Documents immediately be deemed reformed and the amounts
thereafter collectible thereunder reduced, without the necessity of the
execution of any new document, so as to comply with applicable law, but so as to
permit the recovery of the fullest amount otherwise called for thereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance or detention
of the Loan (or any portion thereof) shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Loan until payment in full so that the rate or amount of
interest on account of the Debt does not exceed the maximum lawful rate from
time to time in effect and applicable to the Debt for so long as the Debt is
outstanding. Notwithstanding anything to the contrary contained in any Loan
Document, it is not the intention of Lender to accelerate the maturity of any
interest that has not accrued at the time of such acceleration or to collect
unearned interest at the time of such acceleration.

 

10.18 Conflict; Construction of Documents. In the event of any conflict between
the provisions of this Agreement and any of the other Loan Documents, the
provisions of this Agreement shall control. The parties hereto acknowledge that
each is represented by separate counsel in connection with the negotiation and
drafting of the Loan Documents and that the Loan Documents shall not be subject
to the principle of construing their meaning against the party that drafted
them.

 

10.19 No Third Party Beneficiaries. The Loan Documents are solely for the
benefit of Lender and Borrower and nothing contained in any Loan Document shall
be deemed to confer upon anyone other than the Lender and Borrower any right to
insist upon or to enforce the performance or observance of any of the
obligations contained therein.

 

10.20 Intentionally Omitted

 

10.21 Assignment. The Tranche A Loan, the Tranche B Loan, the Tranche A Note,
the Tranche B Note, the Loan Documents and/or Lender’s rights, title,
obligations and interests therein may be assigned by Lender and any of its
successors and assigns to any Person at any time in its discretion, in whole or
in part, whether by operation of law (pursuant to a merger or other successor in
interest) or otherwise. Upon such assignment, all references to Lender in this
Loan Agreement and in any Loan Document shall be deemed to refer to such
assignee or successor in interest and such assignee or successor in interest
shall thereafter stand in the place of Lender. Borrower may not assign its
rights, title, interests or obligations under this Loan Agreement or under any
of the Loan Documents.

 

10.22 Future Funding Obligations. Notwithstanding anything to the contrary
contained herein (including the provisions of Sections 9.1.1 9.1.8, 10.19 and
10.21 hereof), the parties acknowledge that the obligations of the Lender
hereunder to fund the Advances (the “Future Funding Obligations”) will be solely
the obligation of Greenwich Capital Financial

 

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Products, Inc. and/or any subsequent holder of the Tranche B Note which,
together with its Affiliates, maintains a net worth of at least $50,000,000 (the
“Holder”), provided however, in connection with any Securitization of the
Tranche B Loan, no Future Funding Obligation will be transferred or assigned to
any Servicer or any trust or trustee or substituted or successor trustee
established in connection with any such Securitization. Greenwich Capital
Financial Products, Inc. and/or the Holder will have a participation interest in
the Tranche B Note to the extent of any funds advanced pursuant to the Future
Funding Obligations. Any funds advanced pursuant to a Future Funding Obligation
shall be owing to Greenwich Capital Financial Products, Inc. or the Holder, but
in the event that Borrower has insufficient funds to pay both the holder of the
Tranche A Note and the holder of the Tranche B Note, the holder of the Tranche A
Note shall have a prior right to such payment and a prior lien on the Property.

 

10.23 Certain Additional Rights of Lender. Notwithstanding anything to the
contrary which may be contained in this Agreement, Lender shall have:

 

(i) the right to routinely consult with Borrower’s management regarding the
significant business activities and business and financial developments of
Borrower, provided, however, that such consultations shall not include
discussions of environmental compliance programs or disposal of hazardous
substances. Consultation meetings should occur on a regular basis (no less
frequently than quarterly) with Lender having the right to call special meetings
at any reasonable times;

 

(ii) the right, in accordance with the terms of this Agreement, to examine the
books and records of Borrower at any time upon reasonable notice;

 

(iii) the right, in accordance with the terms of this Agreement, to receive
monthly, quarterly and year-end financial reports, including balance sheets,
statements of income, shareholder’s equity and cash flow, a management report
and schedules of outstanding indebtedness;

 

(iv) the right, without restricting any other rights of Lender under this
Agreement (including any similar right), to restrict financing to be obtained
with respect to the Property so long as any portion of the Debt remains
outstanding;

 

(v) the right, without restricting any other right of Lender under this
Agreement or the other Loan Documents (including any similar right), to
restrict, upon the occurrence of an Event of Default, Borrower’s payments of
management, consulting, director or similar fees to Affiliates of Borrower from
the Rents;

 

(vi) the right, without restricting any other rights of Lender under this
Agreement (including any similar right), to approve any operating budget and/or
capital budget of Borrower;

 

(vii) the right, without restricting any other rights of Lender under this
Agreement (including any similar right), to approve any acquisition by Borrower
of any other significant property (other than personal property required for the
day to day operation of the Property); and

 

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(viii) the right, without restricting any other rights of Lender under this
Agreement (including any similar right), to restrict the transfer of interests
in Borrower held by its members, and the right to restrict the transfer of
interests in such member, except for any transfer that is a Permitted Transfer.

 

The rights described above may be exercised directly or indirectly by any Person
that owns substantially all of the ownership interests in Lender. The provisions
of this Section are intended to satisfy the requirement of management rights for
purposes of the Department of Labor “plan assets” regulation 29 C.F.R., Section
2510.3-101.

 

10.24 Set-Off. In addition to any rights and remedies of Lender provided by this
Loan Agreement and by law, Lender shall have the right, without prior notice to
Borrower, any such notice being expressly waived by Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by Lender or any Affiliate thereof to or
for the credit or the account of Borrower. Lender agrees promptly to notify
Borrower after any such set-off and application made by Lender; provided that
the failure to give such notice shall not affect the validity of such set-off
and application.

 

10.25 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.

 

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

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

 

TPG VALLEY SQUARE, LLC, a Delaware limited liability company By:        

Name:

       

Title:

    GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware corporation By:      
 

Name:

       

Title:

   

 

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Schedule 1

 

Required Repairs

 

[see attached pages]

 

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Schedule 2

 

Exceptions to Representations and Warranties

 

NONE

 

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Schedule 3

 

Rent Roll

 

[see attached pages]

 

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Schedule 4

 

Organization of Borrower

 

[see attached page(s)]

 

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Schedule 5

 

Definition of Special Purpose Bankruptcy Remote Entity

 

A “Special Purpose Bankruptcy Remote Entity” means (x) a limited liability
company that is a Single Member Bankruptcy Remote LLC or (y) a corporation,
limited partnership or limited liability company which at all times since its
formation and at all times thereafter

 

(i) was and will be organized solely for the purpose of (A) owning and operating
the Property or (B) acting as a general partner of the limited partnership that
owns the Property or member of the limited liability company that owns the
Property;

 

(ii) has not engaged and will not engage in any business unrelated to (A) the
ownership of the Property, (B) acting as general partner of the limited
partnership that owns the Property or (C) acting as a member of the limited
liability company that owns the Property, as applicable;

 

(iii) has not had and will not have any assets other than those related to the
Property or its partnership or limited liability company interest in the limited
partnership or limited liability company that owns the Property, as applicable;

 

(iv) to the fullest extent permitted by law, has not engaged, sought or
consented to and will not engage in, seek or consent to any dissolution, winding
up, liquidation, consolidation, merger, asset sale (except as expressly
permitted by this Agreement), transfer of partnership or limited liability
company interests or the like, or amendment of its limited partnership
agreement, articles of incorporation, articles of organization, certificate of
formation or limited liability company agreement (as applicable);

 

(v) if such entity is a limited partnership, has and will have, as its only
general partners, Special Purpose Bankruptcy Remote Entities that are
corporations;

 

(vi) if such entity is a corporation, has and will have at least one Independent
Director, and has not caused or allowed and will not cause or allow the board of
directors of such entity to take any action requiring the unanimous affirmative
vote of 100% of the members of its board of directors unless all of the
directors and all Independent Directors shall have participated in such vote;

 

(vii) if such entity is a limited liability company, has and will have at least
one member that has been and will be a Special Purpose Bankruptcy Remote Entity
that has been and will be a corporation or limited liability company and such
corporation or limited liability company is the managing member of such limited
liability company;

 

(viii) if such entity is a limited liability company, has and will have articles
of organization, a certificate of formation and/or a limited liability company
agreement, as applicable, providing that (A) such entity will dissolve only upon
the first to occur of the following: (x) the termination of the legal existence
of the last remaining member of Borrower or the occurrence of any other event
which terminates the continued

 

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membership of the last remaining member of Borrower in Borrower unless the
business of Borrower is continued without dissolution in a manner permitted by
its limited liability company agreement or the Delaware Limited Liability
Company Act (the “Act”) or (y) the entry of a decree of judicial dissolution
under Section 18-802 of the Act; (B) upon the occurrence of any event that
causes the last remaining member of Borrower to cease to be a member of Borrower
or that causes Sole Member to cease to be a member of Borrower (other than (x)
upon an assignment by Sole Member of all of its limited liability company
interest in Borrower and the admission of the transferee, if permitted pursuant
to the organizational documents of Borrower, or (y) the resignation of Sole
Member and the admission of an additional member of Borrower, if permitted
pursuant to the organizational documents of Borrower), to the fullest extent
permitted by law, the personal representative of such member shall be authorized
to, and shall, within 90 days after the occurrence of the event that terminated
the continued membership of such member in Borrower, agree in writing to
continue the existence of Borrower and to the admission of the personal
representative or its nominee or designee, as the case may be, as a substitute
member of Borrower, effective as of the occurrence of the event that terminated
the continued membership of such member in Borrower; (C) the bankruptcy of Sole
Member or a Special Member shall not cause such member or Special Member,
respectively, to cease to be a member of Borrower and upon the occurrence of
such an event, the business of Borrower shall continue without dissolution; (D)
in the event of dissolution of Borrower, Borrower shall conduct only such
activities as are necessary to wind up its affairs (including the sale of the
assets of Borrower in an orderly manner), and the assets of Borrower shall be
applied in the manner, and in the order of priority, set forth in Section 18-804
of the Act; and (E) to the fullest extent permitted by law, each of Sole Member
and the Special Members shall irrevocably waive any right or power that they
might have to cause Borrower or any of its assets to be partitioned, to cause
the appointment of a receiver for all or any portion of the assets of Borrower,
to compel any sale of all or any portion of the assets of Borrower pursuant to
any applicable law or to file a complaint or to institute any proceeding at law
or in equity to cause the dissolution, liquidation, winding up or termination of
Borrower;

 

(ix) has not, and without the unanimous consent of all of its partners,
directors or members (including all Independent Directors), as applicable, will
not, with respect to itself or to any other entity in which it has a direct or
indirect legal or beneficial ownership interest (A) file, or consent to the
filing of, a bankruptcy, insolvency or reorganization petition or otherwise
institute insolvency proceedings or otherwise seek any relief under any laws
relating to the relief from debts or the protection of debtors generally, (B)
seek or consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for such entity or for all or
any portion of such entity’s properties, (C) make any assignment for the benefit
of such entity’s creditors or (D) take any action that might cause such entity
to become insolvent;

 

(x) has remained and will remain solvent and has maintained and will maintain
adequate capital in light of its contemplated business operations, provided,
however, the foregoing shall not require the Sole Member to make any additional
capital contributions to the Borrower;

 

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

 

(xii) has maintained and will maintain its accounts, books and records separate
from any other Person and will file its own tax returns;

 

(xiii) has maintained and will maintain its books, records, resolutions and
agreements as official records;

 

(xiv) has not commingled and will not commingle its funds or assets with those
of any other Person;

 

(xv) has held and will hold its assets in its own name;

 

(xvi) has conducted and will conduct its business in its name,

 

(xvii) has maintained and will maintain its financial statements, accounting
records and other entity documents separate from any other Person;

 

(xviii) has paid and will pay its own liabilities, including the salaries of its
own employees, out of its own funds and assets, provided, however, the foregoing
shall not require the Sole Member to make any additional capital contributions
to the Borrower;

 

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

 

(xx) has maintained and will maintain an arm’s-length relationship with its
Affiliates;

 

(xxi) (a) if such entity owns the Property, has and will have no indebtedness
other than the Loan and unsecured trade payables in the ordinary course of
business relating to the ownership and operation of Property which (1) do not
exceed, at any time, a maximum amount of 2% of the original amount of the
Tranche A Principal and (2) are paid within sixty (60) days of the date
incurred, or (b) if such entity acts as the general partner of a limited
partnership which owns the Property, has and will have no indebtedness other
than unsecured trade payables in the ordinary course of business relating to
acting as general partner of the limited partnership which owns the Property
which (1) do not exceed, at any time, $10,000 and (2) are paid within thirty
(30) days of the date incurred, or (c) if such entity acts as a managing member
of a limited liability company which owns the Property, has and will have no
indebtedness other than unsecured trade payables in the ordinary course of
business relating to acting as a member of the limited liability company which
owns the Property which (1) do not exceed, at any time, $10,000 and (2) are paid
within thirty (30) days of the date incurred;

 

(xxii) has not and will not assume or guarantee or become obligated for the
debts of any other Person or hold out its credit as being available to satisfy
the obligations of any other Person except for the Loan and the Payment
Guarantees in favor of Lender

 

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pursuant to those certain loans made as of the date hereof by Lender to
Affiliates of Borrower;

 

(xxiii) has not and will not acquire obligations or securities of its partners,
members or shareholders;

 

(xxiv) has allocated and will allocate fairly and reasonably shared expenses,
including shared office space, and uses separate stationery, invoices and
checks;

 

(xxv) except in connection with the Loan, has not pledged and will not pledge
its assets for the benefit of any other Person;

 

(xxvi) has held itself out and identified itself and will hold itself out and
identify itself as a separate and distinct entity under its own name and not as
a division or part of any other Person;

 

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

 

(xxviii) has not made and will not make loans to any Person;

 

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

 

(xxx) has not entered into or been a party to, and will not enter into or be a
party to, any transaction with its partners, members, shareholders or Affiliates
except in the ordinary course of its business and on terms which are
intrinsically fair and are no less favorable to it than would be obtained in a
comparable arm’s-length transaction with an unrelated third party;

 

(xxxi) has and will have no obligation to indemnify its partners, officers,
directors, members or Special Members, as the case may be, or has such an
obligation that is fully subordinated to the Debt and will not constitute a
claim against it if cash flow in excess of the amount required to pay the Debt
is insufficient to pay such obligation; and

 

(xxxii) to the fullest extent permitted by law, will consider the interests of
its creditors in connection with all corporate, partnership or limited liability
actions, as applicable.

 

“Independent Director” means (x) in the case of a Single Member Bankruptcy
Remote LLC: a natural person selected by Borrower and reasonably satisfactory to
Lender who shall not have been at the time of such individual’s appointment as
an Independent Director of the Single Member Bankruptcy Remote LLC, does not
thereafter become while serving as an Independent Director (except pursuant to
an express provision in the Single Member Bankruptcy Remote LLC’s limited
liability company agreement providing for the Independent Director to become a
Special Member (defined below) upon the sole member of such Single Member
Bankruptcy

 

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Remote LLC ceasing to be a member in such Single Member Bankruptcy Remote LLC)
and shall not have been at any time during the preceding five (5) years (i) a
shareholder/partner/member of, or an officer or employee of, Borrower or any of
its shareholders, subsidiaries or Affiliates, (ii) a director (other than as an
Independent Director of the Borrower or in a similar capacity with an Affiliate
of the Borrower) of any shareholder, subsidiary or Affiliate of Borrower, (iii)
a customer of, or supplier to, Borrower or any of its shareholders, subsidiaries
or Affiliates (other than an Independent Director provided by a company in the
business of providing independent directors and other related services), (iv) a
Person who Controls any such shareholder, supplier or customer, or (v) a member
of the immediate family of any such shareholder/ director/partner/member,
officer, employee, supplier or customer or of any director of Borrower (other
than as an Independent Director); and (y) in the case of a corporation, an
individual selected by Borrower and reasonably satisfactory to Lender who shall
not have been at the time of such individual’s appointment as a director, does
not thereafter become while serving as an Independent Director and shall not
have been at any time during the preceding five (5) years (i) a
shareholder/partner/member of, or an officer, employee, consultant, agent or
advisor of, Borrower or any of its shareholders, subsidiaries, members or
Affiliates, (ii) a director of any shareholder, subsidiary, member, or Affiliate
of Borrower other than Borrower’s general partner or managing member, (iii) a
customer of, or supplier to, Borrower or any of its shareholders, subsidiaries
or Affiliates that derives more than 10% of its purchases or income from its
activities with Borrower or any Affiliate of Borrower, (iv) a Person who
Controls any such shareholder, supplier or customer, or (v) a member of the
immediate family (including a grandchild or sibling) of any such
shareholder/director/partner/member, officer, employee, supplier or customer or
of any other director of Borrower’s general partner or managing member.

 

“Single Member Bankruptcy Remote LLC” means a limited liability company
organized under the laws of the State of Delaware which at all times since its
formation and at all times thereafter (i) complies with the following clauses of
the definition of Special Purpose Bankruptcy Remote Entity above: (i)(A),
(ii)(A), (iii), (iv), (ix), (x), (xi) and (xiii) through (xxxii); (ii) has
maintained and will maintain its accounts, books and records separate from any
other person; (iii) has and will have a limited liability company agreement
which provides that the business and affairs of Borrower shall be managed by or
under the direction of a board of one or more directors designated by Sole
Member, and at all times there shall be at least one (1) duly appointed
Independent Director on the board of directors, and the board of directors will
not take any action requiring the unanimous affirmative vote of 100% of the
members of its board of directors unless, at the time of such action there are
at least one (1) member of the board of directors who are Independent Directors,
and all of the directors and all Independent Directors shall have participated
in such vote; (iv) has and will have a limited liability company agreement which
provides that, as long as any portion of the Debt remains outstanding, (A) upon
the occurrence of any event that causes Sole Member to cease to be a member of
Borrower (other than upon continuation of the Borrower without dissolution (x)
upon an assignment by Sole Member of all of its limited liability company
interest in Borrower and the admission of the transferee, if permitted pursuant
to the organizational documents of Borrower, or (y) the resignation of Sole
Member and the admission of an additional member of Borrower, if permitted
pursuant to the organizational documents of Borrower), the person acting as an
Independent Director of Borrower shall, without any action of any Person and
simultaneously with Sole Member ceasing to be a member of Borrower,
automatically be admitted as a member

 

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of Borrower (the “Special Member”) and shall preserve and continue the existence
of Borrower without dissolution, (B) no Special Member may resign or transfer
its rights as Special Member unless (x) a successor Special Member has been
admitted to Borrower as a Special Member, and (y) such successor Special Member
has also accepted its appointment as an Independent Director, provided, however,
the Special Member shall automatically cease to be a member of the Borrower upon
the admission to the Borrower of a substitute member and (C) except as expressly
permitted pursuant to the terms of this Agreement or the limited liability
company agreement of the Borrower, Sole Member may not resign and no additional
member shall be admitted to Borrower; (v) has and will have a limited liability
company agreement which provides that, as long as any portion of the Debt
remains outstanding, (A) Borrower shall be dissolved, and its affairs shall be
would up only upon the first to occur of the following: (x) the termination of
the legal existence of the last remaining member of Borrower or the occurrence
of any other event which terminates the continued membership of the last
remaining member of Borrower in Borrower unless the business of Borrower is
continued without dissolution in a manner permitted by its limited liability
company agreement or the Delaware Limited Liability Company Act (the “Act”) or
(y) the entry of a decree of judicial dissolution under Section 18-802 of the
Act; (B) upon the occurrence of any event that causes the last remaining member
of Borrower to cease to be a member of Borrower or that causes Sole Member to
cease to be a member of Borrower (other than (x) upon an assignment by Sole
Member of all of its limited liability company interest in Borrower and the
admission of the transferee, if permitted pursuant to the organizational
documents of Borrower, or (y) the resignation of Sole Member and the admission
of an additional member of Borrower, if permitted pursuant to the organizational
documents of Borrower), to the fullest extent permitted by law, the personal
representative of such member shall be authorized to, and shall, within 90 days
after the occurrence of the event that terminated the continued membership of
such member in Borrower, agree in writing to continue the existence of Borrower
and to the admission of the personal representative or its nominee or designee,
as the case may be, as a substitute member of Borrower, effective as of the
occurrence of the event that terminated the continued membership of such member
in Borrower; (C) the bankruptcy of Sole Member or a Special Member shall not
cause such member or Special Member, respectively, to cease to be a member of
Borrower and upon the occurrence of such an event, the business of Borrower
shall continue without dissolution; (D) in the event of dissolution of Borrower,
Borrower shall conduct only such activities as are necessary to wind up its
affairs (including the sale of the assets of Borrower in an orderly manner), and
the assets of Borrower shall be applied in the manner, and in the order of
priority, set forth in Section 18-804 of the Act; and (E) to the fullest extent
permitted by law, each of Sole Member and the Special Members shall irrevocably
waive any right or power that they might have to cause Borrower or any of its
assets to be partitioned, to cause the appointment of a receiver for all or any
portion of the assets of Borrower, to compel any sale of all or any portion of
the assets of Borrower pursuant to any applicable law or to file a complaint or
to institute any proceeding at law or in equity to cause the dissolution,
liquidation, winding up or termination of Borrower.

 

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Schedule 6

 

Form of Request for Advance

 

                    , 200  

 

___________________

 

___________________

 

___________________

 

___________________

 

Ladies and Gentlemen:

 

We refer to the Loan Agreement dated as of March 2, 2005 (as amended or
otherwise modified from time to time, the “Loan Agreement”), between the
undersigned (“Borrower”) and Greenwich Capital Financial Products, Inc.
(“Lender”).

 

Capitalized terms used herein without definition shall have the meanings
ascribed to them in the Loan Agreement.

 

Borrower hereby gives Lender notice pursuant to Section [2.9.1/2.9.3] of the
Loan Agreement that Borrower requests a [Capital Expenditure] [Leasing] Advance
under the Loan Agreement and, in that connection, sets forth below the
information relating to such proposed borrowing (the “Proposed Borrowing”) as
required by Article 2 of the Loan Agreement.

 

(i) The aggregate principal amount of the Proposed Borrowing is
$[                    ], which, together with the aggregate principal amount of
all prior Advances of the Tranche B Loan will not exceed
$[                    ].

 

(ii) Borrower hereby authorizes Lender to disburse to itself out of the Proposed
Borrowing an advance fee equal to 1% of the amount of the Proposed Borrowing in
accordance with Section 2.7.3 of the Loan Agreement.

 

(iii) The Business Day of the Proposed Borrowing is                     , 200  .

 

(iv) The Advance should be disbursed to the following account(s):

 

Amount

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Wiring Instructions

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The undersigned hereby certifies to Lender that to his/her knowledge as of the
date set forth above, and as of the date of the Proposed Borrowing, (i) both
immediately prior to the date of the Proposed Borrowing and also after giving
effect thereto, no Default or Event of Default has occurred and is continuing,
and (ii) to the best knowledge of the undersigned, each representation and
warranty of Borrower in Section 4.1 of the Loan Agreement and in the other

 

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Loan Documents is true and complete in all material respects on and as of the
date of the Proposed Borrowing with the same force and effect as though made on
and as of such date.

 

Additionally, the undersigned hereby certifies to Lender that to his/her
knowledge that:

 

(i) the funds from the Proposed Borrowing will be used only to pay (or reimburse
Borrower for) [Approved Capital Expenses] [Approved Leasing Expenses] and,
attached hereto as Exhibit A, is a description of all such [Approved Capital
Expenses] [Approved Leasing Expenses];

 

(ii) all outstanding payables (other than those to be paid from the requested
disbursement or those constituting Permitted Indebtedness) have been paid in
full;

 

(iii) the same has not been the subject of a previous disbursement;

 

(iv) all previous disbursements have been used only to pay (or reimburse
Borrower for) the previously identified Approved Capital Expenses or Approved
Leasing Expenses (as applicable);

 

(v) all work relating to work performed on or prior to the date hereof has been
completed in a good and workmanlike manner in accordance with all Legal
Requirements and substantially in accordance with the plans and specifications
approved by Lender (if required pursuant to the terms of the Loan Agreement)

 

(vi) attached hereto as Exhibit B is a list identifying each Person that
supplied labor or materials with respect to the requested disbursement, and each
such Person has been or upon receipt of the Proposed Borrowing will be paid in
full for work for which such Proposed Borrowing (or any previous Proposed
Borrowing) has been made or is being requested;

 

Very truly yours,

 

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Schedule 7

 

Approved Capital Budget

 

[see attached page(s)]