Exhibit 10.3

 

JUNIOR MEZZANINE  LOAN AGREEMENT

 

Dated as of August 22, 2008

 

between

 

GKK STARS JUNIOR MEZZ 2 LLC,

 

as Borrower

 

and

 

THE LENDERS NAMED HEREIN

 

collectively, as Lender

 

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TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

DEFINITIONS

1

 

 

 

 

ARTICLE I
GENERAL TERMS

 

 

 

 

Section 1.1.

 

The Loan

35

Section 1.2.

 

The Term

35

Section 1.3.

 

Interest and Principal

35

Section 1.4.

 

Interest Rate Cap Agreements

36

Section 1.5.

 

Method and Place of Payment

37

Section 1.6.

 

Regulatory Change

38

Section 1.7.

 

Taxes

38

Section 1.8.

 

Release

39

 

 

 

 

ARTICLE II

VOLUNTARY PREPAYMENT

 

Section 2.1.

 

Voluntary Prepayment

39

Section 2.2.

 

Property Releases

41

Section 2.3.

 

Value Add Pool Equity Releases

43

Section 2.4.

 

Release of Vacant Land

44

 

 

 

 

ARTICLE III
ACCOUNTS

 

 

 

 

Section 3.1.

 

Cash Management Account

46

Section 3.2.

 

Distributions from Cash Management Account

47

Section 3.3.

 

Senior Mezzanine Loan Covenants; Replacement of Senior Mezzanine Loan Collateral
Accounts

48

Section 3.4.

 

Account Collateral

49

Section 3.5.

 

Bankruptcy

50

 

 

 

 

ARTICLE IV
REPRESENTATIONS

 

 

 

 

Section 4.1.

 

Organization

50

Section 4.2.

 

Authorization

51

Section 4.3.

 

No Conflicts

51

Section 4.4.

 

Consents

51

Section 4.5.

 

Enforceable Obligations

52

Section 4.6.

 

No Default

52

Section 4.7.

 

Payment of Taxes

52

Section 4.8.

 

Compliance with Law

52

Section 4.9.

 

ERISA

52

 

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Section 4.10.

 

Investment Company Act

53

Section 4.11.

 

No Bankruptcy Filing

53

Section 4.12.

 

Other Debt

53

Section 4.13.

 

Litigation

53

Section 4.14.

 

Leases; Material Agreements

54

Section 4.15.

 

Full and Accurate Disclosure

54

Section 4.16.

 

Financial Condition

55

Section 4.17.

 

Single-Purpose Requirements

55

Section 4.18.

 

[Intentionally Omitted]

55

Section 4.19.

 

Not Foreign Person

55

Section 4.20.

 

Labor Matters

55

Section 4.21.

 

Title

55

Section 4.22.

 

No Encroachments

56

Section 4.23.

 

Physical Condition

56

Section 4.24.

 

Fraudulent Conveyance

57

Section 4.25.

 

Management

57

Section 4.26.

 

Condemnation

57

Section 4.27.

 

Utilities and Public Access

58

Section 4.28.

 

Environmental Matters

58

Section 4.29.

 

Assessments

59

Section 4.30.

 

No Joint Assessment

59

Section 4.31.

 

Separate Lots

59

Section 4.32.

 

Permits; Certificate of Occupancy

59

Section 4.33.

 

Flood Zone

59

Section 4.34.

 

Security Deposits

59

Section 4.35.

 

Acquisition Documents

59

Section 4.36.

 

Insurance

59

Section 4.37.

 

Ground Leased Parcels

60

Section 4.38.

 

Intentionally Omitted

61

Section 4.39.

 

Estoppel Certificates

61

Section 4.40.

 

Embargoed Person

61

Section 4.41.

 

Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering
Laws

62

Section 4.42.

 

Tax Basis

62

Section 4.43.

 

Survival

62

 

 

 

 

ARTICLE V
AFFIRMATIVE COVENANTS

 

 

 

 

Section 5.1.

 

Existence

63

Section 5.2.

 

Maintenance of Property

63

Section 5.3.

 

Compliance with Legal Requirements

63

Section 5.4.

 

Impositions and Other Claims

63

Section 5.5.

 

Access to Property

64

Section 5.6.

 

Cooperate in Legal Proceedings

64

Section 5.7.

 

Leases

64

Section 5.8.

 

Plan Assets, etc.

67

 

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Section 5.9.

 

Further Assurances

67

Section 5.10.

 

Management of Properties and Senior Mezzanine Loan Collatera;

67

Section 5.11.

 

Notice of Material Change

68

Section 5.12.

 

Annual Financial Statements

69

Section 5.13.

 

Quarterly Financial Statements

69

Section 5.14.

 

Monthly Financial Statements

70

Section 5.15.

 

Insurance

71

Section 5.16.

 

Casualty and Condemnation

71

Section 5.17.

 

Annual Budget

71

Section 5.18.

 

General Indemnity

72

Section 5.19.

 

Nonbinding Consultation

72

Section 5.20.

 

Compliance with Encumbrances

72

Section 5.21.

 

Encumbered Property Indebtedness

73

Section 5.22.

 

Disposition Assets

74

Section 5.23.

 

Distributions

74

Section 5.24.

 

Enumbered Property Defaults

74

 

 

 

 

ARTICLE VI
NEGATIVE COVENANTS

 

 

 

 

Section 6.1.

 

Liens on the Properties and Collateral

75

Section 6.2.

 

Ownership

75

Section 6.3.

 

Transfer

75

Section 6.4.

 

Debt

77

Section 6.5.

 

Dissolution; Merger or Consolidation

77

Section 6.6.

 

Change In Business

77

Section 6.7.

 

Debt Cancellation

77

Section 6.8.

 

Affiliate Transactions

77

Section 6.9.

 

Misapplication of Funds

77

Section 6.10.

 

Jurisdiction of Formation

78

Section 6.11.

 

Modifications and Waivers

78

Section 6.12.

 

ERISA

78

Section 6.13.

 

Alterations and Expansions

79

Section 6.14.

 

Advances and Investments

79

Section 6.15.

 

Single-Purpose Entity

79

Section 6.16.

 

Zoning and Uses

79

Section 6.17.

 

Waste

80

 

 

 

 

ARTICLE VII
DEFAULTS

 

 

 

 

Section 7.1.

 

Event of Default

80

Section 7.2.

 

Remedies

83

Section 7.3.

 

No Waiver

84

Section 7.4.

 

Application of Payments after an Event of Default

84

 

 

 

 

ARTICLE VIII
CONDITIONS PRECEDENT

 

 

 

 

Section 8.1.

 

Conditions Precedent to Closing

85

 

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ARTICLE IX
MISCELLANEOUS

 

 

 

 

Section 9.1.

 

Successors

88

Section 9.2.

 

GOVERNING LAW

88

Section 9.3.

 

Modification, Waiver in Writing

89

Section 9.4.

 

Notices

89

Section 9.5.

 

TRIAL BY JURY

90

Section 9.6.

 

Headings

91

Section 9.7.

 

Assignment and Participation

91

Section 9.8.

 

Severability

92

Section 9.9.

 

Preferences

92

Section 9.10.

 

Remedies of Borrower

92

Section 9.11.

 

Offsets, Counterclaims and Defenses

93

Section 9.12.

 

No Joint Venture

93

Section 9.13.

 

Conflict; Construction of Documents

93

Section 9.14.

 

Brokers and Financial Advisors

93

Section 9.15.

 

Counterparts

93

Section 9.16.

 

Estoppel Certificates

93

Section 9.17.

 

Payment of Expenses; Mortgage Recording Taxes

94

Section 9.18.

 

No Third-Party Beneficiaries

94

Section 9.19.

 

Recourse

94

Section 9.20.

 

Right of Set-Off

96

Section 9.21.

 

Exculpation of Lender

96

Section 9.22.

 

Servicer

97

Section 9.23.

 

Prior Agreements

97

 

iv

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JUNIOR MEZZANINE LOAN AGREEMENT

 

Junior Mezzanine Loan Agreement (this “Agreement”) is dated as August 22, 2008
(“Effective Date”) and is between GOLDMAN SACHS MORTGAGE COMPANY, a New York
limited partnership (“GSMC”), CITICORP NORTH AMERICA, INC., a New York
corporation (“Citigroup”), and SL GREEN REALTY CORP., a Maryland corporation
(“SL Green”, and together with GSMC, Citigroup and their respective successors
and assigns, including any lawful holder of any portion of the Indebtedness (as
hereinafter defined) collectively, “Lender”), as lender, and GKK STARS JUNIOR
MEZZ 2 LLC, a Delaware limited liability company (“Borrower”), as borrower.

 

RECITALS

 

Goldman Sachs Commercial Mortgage Capital, L.P. (“GSCMC”), as predecessor in
interest to GSMC, Citigroup and SL Green made a loan (the “Original Mezzanine
Loan”) in the original principal amount of $600,000,000 to Affiliates of
Borrower on the Closing Date on the terms and conditions set forth in that
certain Loan Agreement (“Original Loan Agreement”), dated as of April 1, 2008
(“Original Closing Date”) among Lender and such Affiliates of Borrower.

 

GSCMC assigned its right, title and interest in and to the Original Mezzanine
Loan to GSMC.

 

Lender desires to bifurcate the Original Mezzanine Loan into two separate
mezzanine loans, a senior mezzanine loan with an original principal balance of
$500,000,000 and the Loan (as hereinafter defined).  In furtherance thereof,
(i) Lender and the borrower under the Original Mezzanine Loan have amended and
restated the Original Loan Agreement and the related promissory notes and
(ii) Borrower and Lender are entering into this Agreement and Borrower is
issuing promissory notes to evidence the Loan.

 

Lender and Borrower therefore agree as follows:

 

DEFINITIONS

 

(a)           When used in this Agreement, the following capitalized terms have
the following meanings:

 

“Acceptable Counterparty” means any counterparty to an Interest Rate Cap
Agreement that has and maintains (a) either (i) a long-term unsecured debt
rating or counterparty rating of A+ or higher from S&P, or (ii) a short-term
unsecured debt rating of A-1 or higher from S&P, and (b) a long-term unsecured
debt rating of Aa3 or higher from Moody’s.

 

 “Account Collateral” means, collectively, the Collateral Accounts and all sums
at any time held, deposited or invested therein, together with any interest or
other earnings thereon, and all proceeds thereof (including proceeds of sales
and other dispositions), whether accounts, general intangibles, chattel paper,
deposit accounts, instruments, documents or securities.

 

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“Affiliate” means, with respect to any Person, any other Person controlling,
controlled by or under common control with such Person (and “unaffiliated” means
not an Affiliate).

 

“Affiliated Release Price” has the meaning set forth in Exhibit I.

 

“AFRT” means American Financial Realty Trust, a Maryland real estate investment
trust.

 

“AFRT Equity” means 100% of the real estate investment trust equity interests in
AFRT.

 

“AFRT Owner” means GKK Stars Acquisition LLC, a Delaware limited liability
company.

 

“Aggregate Allocated Loan Amount” means, with respect to each Property listed in
Schedule E, the amount set forth in Schedule E (which reflects the portion of
the sum of (x) the Loan Amount (y) the Senior Mezzanine Loan Amount and (z) the
initial Encumbered Property Debt allocated to such Property hereunder), subject
to reduction to the extent necessary to reflect Borrower’s then direct or
indirect interest therein with respect to any Joint Venture Property permitted
hereunder.  The Aggregate Allocated Loan Amount of each Property not listed on
Schedule E shall be zero.

 

“Agreement” means this Junior Mezzanine Loan Agreement, as the same may from
time to time hereafter be modified or replaced.

 

“Allocated Loan Amount” means, with respect to each Property, (x) the Aggregate
Allocated Loan Amount, minus (y) the portion of the applicable Encumbered
Property Debt allocated to such Property pursuant to the applicable Encumbered
Property Debt Documents (but in no event shall the Allocated Loan Amount of any
Property be less than zero.

 

“ALTA” means the American Land Title Association, or any successor thereto.

 

“Alteration” means any demolition, alteration, installation, improvement  or
expansion of or to any of the Properties or any portion thereof other than
(i) Tenant Improvements required under Leases, (ii) any demolition, alteration,
installation, improvement or expansion performed in connection with the
restoration of any of the Properties as a result of a Casualty or Condemnation,
(iii) routine maintenance and repair worked performed at any of the Properties
in the ordinary course of business, and (iv) any demolition, alteration,
installation, improvement or expansion performed by any Tenant where such Tenant
is entitled to do the same without obtaining the consent or approval of the
relevant Property Owner pursuant to the applicable lease.

 

“Annual Budget” means a capital and operating expenditure budget for the
Properties prepared by Borrower and specifying amounts sufficient to operate and
maintain the Properties at a standard at least equal to that maintained on the
Closing Date.

 

2

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“Appraisal” means an as-is appraisal that is prepared by a member of the
Appraisal Institute selected by Lender, meets the minimum appraisal standards
for national banks promulgated by the Comptroller of the Currency pursuant to
Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of
1989, as amended (FIRREA) and complies with the Uniform Standards of
Professional Appraisal Practice (USPAP).

 

“Approved Accounting Firm” means (i) PricewaterhouseCoopers, (ii) Deloitte &
Touche, (iii) KPMG, (iv) The Schonbraun McCann Group, (v) Ernst & Young,
(vi) Berdon LLP or any other independent accounting firm reasonably approved by
Lender in writing.

 

“Approved Annual Budget” has the meaning set forth in Section 5.17.

 

“Approved Management Agreement” means, collectively or individually as the
context may require, those certain Property Management Agreements listed on
Schedule T, dated as of the Closing Date, between Borrower or a Property Owner
and the initial Approved Property Manager, as the same may be modified or
replaced in accordance herewith with the reasonable consent of Lender, and any
other management agreement that is approved by Lender, which approval shall not
be unreasonably withheld, conditioned or delayed, and with respect to which
Lender receives Rating Confirmation.

 

“Approved Property Manager” means (i) Sponsor, SL Green Realty Corp. and their
respective Affiliates, (ii) First States Management Corp, L.P., (iii) First
States Services Management LLC, (iv) GKK Manager LLC, so long as it is an
Affiliate of Sponsor, or (v) any other management company that is approved by
Lender, which approval shall not be unreasonably withheld, conditioned or
delayed, and with respect to which Lender receives Rating Confirmation, in each
case unless and until Lender requests the termination of that management company
pursuant to Section 5.10(d).

 

“Assignment” has the meaning set forth in Section 9.7(b).

 

“Assignment of Interest Rate Cap Agreement” means each collateral assignment of
an interest rate cap agreement executed by Borrower and an Acceptable
Counterparty in accordance herewith, each of which must be in the form executed
by Senior Mezzanine Borrower and the initial Acceptable Counterparty on the
Closing Date, as the same may from time to time be modified or replaced in
accordance therewith and herewith.

 

“Bankruptcy Code” has the meaning set forth in Section 7.1(d).

 

“Blocked Account” has the meaning set forth in Section 3.1(b).

 

“Blocked Account Agreement” has the meaning set forth in Section 3.1(b).

 

“Borrower” has the meaning set forth in the first paragraph of this agreement.

 

“Borrower’s knowledge,” “the knowledge of Borrower” and similar phrases shall
(and shall be limited to) the actual (as distinguished from imputed or
construction knowledge) of Edward J. Matey, Jr., Sonya A. Huffman, David
Schonbraun, Andrew Levine and, with respect to leasing matters, Neil Kessner
(and Borrower hereby represents that such individuals are

 

3

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charged with having knowledge regarding the Borrower and the Properties relevant
to the representations made herein); provided, however, with respect to any use
of this defined term as of a date after the Closing Date, “Borrower’s knowledge”
and “the knowledge of Borrower” shall be deemed to include such knowledge of any
Person who shall assume any actual or contemplated function of the foregoing
persons in the context in which this defined term is being used as of the date
with respect to which such knowledge is determined.  Lender acknowledges that
the foregoing individuals are identified solely for the purpose of defining the
scope of Borrower’s knowledge and not for the purpose of imposing personal
liability or creating any duties running from any such individual to Lender.

 

“Business Day” means any day other than (i) a Saturday and a Sunday and (ii) a
day on which federally insured depository institutions in the State of New York
or the state in which the offices of Lender, its trustee, its Servicer or its
Servicer’s collection account are located are authorized or obligated by law,
governmental decree or executive order to be closed. When used with respect to
an Interest Determination Date, “Business Day” shall mean a day on which banks
are open for dealing in foreign currency and exchange in London.

 

“Capital Expenditure” means hard and soft costs incurred by Senior Mezzanine
Borrower or its Affiliates with respect to replacements and capital repairs made
to the Properties (including repairs to, and replacements of, structural
components, roofs, building systems, parking garages, parking lots, and
expenditures for building improvements or major repairs), Leasing Commissions
and Tenant Improvements, in each case to the extent capitalized in accordance
with GAAP.

 

“Cash Management Bank” means a depository institution selected by Lender in
which Eligible Accounts may be maintained.  The initial Cash Management Bank
shall be LaSalle Bank, N.A.

 

“Casualty” means a fire, explosion, flood, collapse, earthquake or other
casualty affecting all or any portion of any Property.

 

“Certificates” means, collectively, any senior and/or subordinate notes,
debentures or pass-through certificates, or other evidence of indebtedness, or
debt or equity securities, or any combination of the foregoing, representing a
direct or beneficial interest, in whole or in part, in the Loan or the Mortgage
Loan, as the case may be.

 

“Change of Control” means the occurrence of either or both of the following
excluding any Transfer permitted in connection with joint ventures pursuant to
Section 6.3(b) or Section 2.3: (i) the failure of Borrower or any individual
Senior Mezzanine Borrower and/or Property Owner (other than a Joint Venture
Owner or any subsidiary thereof) to be directly or indirectly 100% owned and
controlled by Sponsor, or (ii) the failure of any Single-Purpose Equityholder
(if any) to be directly or indirectly 100% owned and controlled by Sponsor.

 

“Closing Date” means August 22, 2008.

 

4

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

 

“Collateral” means all assets owned from time to time by Borrower including,
without limitation, 100% of the issued and outstanding limited liability company
interests in Senior Mezzanine Borrower and all other tangible and intangible
property in respect of which Lender is granted a Lien under the Loan Documents,
and all proceeds thereof.

 

“Collateral Accounts” means such accounts into which amounts pursuant to
Section 3.1 shall be deposited and such accounts established pursuant to
Section 3.3.

 

“Component Balance” has the meaning set forth in Section 1.3(c).

 

“Component Spread” has the meaning set forth in Section 1.3(c).

 

“Componentization Notice” has the meaning set forth in Section 1.3(c).

 

“Condemnation” means a taking or voluntary conveyance of all or part of any of
the Properties or any interest in or right accruing to or use of any of the
Properties, as the result of, or in settlement of, any condemnation or other
eminent domain proceeding by any Governmental Authority.

 

“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, such other index as Lender and Borrower, each acting reasonably, shall
agree upon in writing.

 

“Contingent Obligation” means, with respect to any Person, any obligation of
such Person directly or indirectly guaranteeing any Debt of any other Person in
any manner and any contingent obligation to purchase, to provide funds for
payment, to supply funds to invest in any other Person or otherwise to assure a
creditor against loss.

 

“Cooperation Agreement” means that certain Cooperation Agreement, dated as of
the Closing Date, among Borrower, Lender and Sponsor, as the same may from time
to time be modified or replaced in accordance herewith.

 

“Damages” to a party means any and all liabilities, obligations, losses,
damages, penalties, assessments, actions, judgments, suits, claims, costs,
expenses (including reasonable attorneys’ fees whether or not suit is brought),
settlement costs and disbursements imposed on,

 

5

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incurred by or asserted against such party; provided, however, Damages shall
exclude consequential damages incurred by Lender or Indemnified Parties, as the
case may be.

 

“Dana Portfolio” means those certain Properties specified in Schedule Q, as
modified from time to time to reflect any Transfer permitted pursuant hereto.

 

“Dana Excess Cash Flow” means, for so long as the Dana Portfolio, or any
interest therein, shall be subject to the Liens of the Loan, all Distributions
deposited into the Cash Management Account that are attributable to the Dana
Portfolio.

 

“Dana Release Price” has the meaning set forth in Exhibit I.

 

“Debt” means, with respect to any Person, without duplication:

 

(i)            all indebtedness of such Person to any other party (regardless of
whether such indebtedness is evidenced by a written instrument such as a note,
bond or debenture), including indebtedness for borrowed money or for the
deferred purchase price of property or services;

 

(ii)           all letters of credit issued for the account of such Person and
all unreimbursed amounts drawn thereunder;

 

(iii)          all indebtedness secured by a Lien on any property owned by such
Person (whether or not such indebtedness has been assumed) except obligations
for impositions which are not yet due and payable;

 

(iv)          all Contingent Obligations of such Person;

 

(v)           all payment obligations of such Person under any interest rate
protection agreement (including any interest rate swaps, floors, collars or
similar agreements) and similar agreements;

 

(vi)          all contractual indemnity obligations of such Person, other than
those made in the ordinary course of business in connection with the provision
of goods and services to one or more of the Properties; and

 

(vii)         any material actual or contingent liability to any Person or
Governmental Authority with respect to any employee benefit plan (within the
meaning of Section 3(3) of ERISA) subject to Title IV of ERISA, Section 302 of
ERISA or Section 412 of the Code.

 

“Debt Service” means, with respect to any Test Period, the product of (x) the
Principal Indebtedness plus the Senior Mezzanine Loan Principal Indebtedness as
of the last day of such Test Period, times (y) the sum of the LIBOR Strike Rate
plus the weighted average of the Spread and the “Spread” under and as defined in
the Senior Mezzanine Loan Agreement, times (z) a fraction, the numerator of
which is 365 and the denominator of which is 360.

 

6

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

 

“Default Rate” means, with respect to any Note or Note Component, the greater of
(x) 4% per annum in excess of the interest rate otherwise applicable to such
Note or Note Component hereunder and (y) 1% per annum in excess of the Prime
Rate from time to time.

 

“Deferred Maintenance Conditions” means the immediate repair and similar
maintenance items set forth in the Engineering Reports applicable to the
Properties and delivered to Senior Mezzanine Borrower on or prior to the Closing
Date.

 

“Disposition Assets” means the real property listed on Schedule R.

 

“Distributions” means all (i) payments and distributions and (ii) proceeds (as
defined in Article 9 of the UCC) in respect of the income, profits, payments,
returns of capital, dividends and other distributions (whether in the form of
cash or otherwise), in each case, actually distributed by the owner of an
Encumbered Property, the TRS Owner or any Joint Venture Owner to any Senior
Mezzanine Borrower.

 

“DSCR” means, with respect to any Test Period, the quotient of:

 

 (i)           Net Operating Income for such period, less actual aggregate
principal, interest and required reserve payments (in each case, due and
payable, or then required to be reserved) in respect of Encumbered Property Debt
for such Test Period (adjusted to reflect Encumbered Properties that have been
theretofore released from the Liens of the Loan Documents), calculated, in the
case of floating rate Encumbered Property Debt, as if LIBOR were at all times
equal to the LIBOR strike rate on the interest rate cap purchased in accordance
with the corresponding Encumbered Property Debt Documents (or, if no interest
rate cap was required under such Encumbered Property Debt Documents, LIBOR plus
3%), less, for purposes of calculating the LIBOR Strike Rate for the Extension
Term, projected Tenant Improvements and Leasing Commissions reasonably approved
by Lender and Normalized Capital Expenditures; divided by

 

(ii)           the Debt Service for such period.

 

Notwithstanding the foregoing, (a) rental income under the Lease with Bank of
America in respect of the Dana Portfolio for purposes of calculating DSCR during
the Extension Term or for purposes of calculating the LIBOR Strike Rate for the
Extension Term shall be deemed to be equal to the annual rental payment that is
contractually required to be paid by Bank of America in respect of such Lease in
January 2011 (i.e., rental payments received under such Lease that are in excess
of such January 2011 rental amount shall be ignored for purposes of calculating
DSCR) and (b) for purposes of calculating DSCR at the time of the exercise of
the extension option described in Section 1.2(b), the LIBOR strike price for the
interest rate cap applicable to the Mortgage Loan shall be the LIBOR strike
price applicable to the extension term as described in clause (2) of the
definition of “LIBOR Strike Rate” in the Mortgage Loan Agreement.

 

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“Eligible Account” means (i) a segregated account maintained with a federal or
state-chartered depository institution or trust company which complies with the
definition of Eligible Institution, or (ii) a segregated trust account or
accounts maintained with the corporate trust department of a federal depository
institution or state-chartered depository institution which has an
investment-grade rating and is subject to regulations regarding fiduciary funds
on deposit under, or similar to, Title 12 of the Code of Federal Regulations
Section 9.10(b) which, in either case, has corporate trust powers, acting in its
fiduciary capacity.

 

“Eligible Institution” means an institution (i) whose commercial paper,
short-term debt obligations or other short-term deposits are rated at least A–1,
Prime-1 or F-1, as applicable, by each of the Rating Agencies and
whose long-term senior unsecured debt obligations are rated at least A or A2, as
applicable, by each of the Rating Agencies, and whose deposits are insured by
the FDIC or (ii) with respect to which Lender shall have received Rating
Confirmation.

 

“Embargoed Person” has the meaning set forth in Section 4.40.

 

“Encumbered Property” means, individually or collectively, as the context may
require, each of the properties listed on Schedule A-2, including each of the
Properties securing the Mortgage Loan or otherwise owned by the Mortgage Loan
Property Owner, as modified from time to time to reflect any Transfer permitted
pursuant to Section 2.2.

 

“Encumbered Property Collateral” means the applicable percentage of the direct
and indirect equity interests in each Person that owns Encumbered Property, as
set forth on Schedule H hereto, as modified from time to time to reflect any
Transfer permitted pursuant to Section 6.3(b) or Section 2.2.

 

“Encumbered Property Debt” or “Encumbered Property Loan” means the Mortgage Loan
and all indebtedness secured by Liens on Encumbered Property pursuant to
Encumbered Property Debt Documents.

 

“Encumbered Property Debt Documents” means, collectively or individually, as the
context may require, all loan documents in favor of any Encumbered Property
Lender with respect to each Encumbered Property as and to the extent listed on
Schedule U, as the same may be amended, replaced (including, without limitation,
in connection with any refinancing thereof permitted hereunder) or otherwise
modified from time to time with the prior reasonable consent of Lender (Borrower
acknowledging it shall be reasonable for Lender to withhold such consent in
connection with any amendment, replacement or modification that would result in
(i) an increase in the principal amount, interest rate or the amortization of
principal, (ii) limitations on prepayments or the imposition of a fee in
connection therewith, (iii) a reduction on cash available for distribution or
(iv) a Material Adverse Effect).  Lender hereby consents to the modifications
made to the Encumbered Property Debt Documents relating to the Dana Portfolio as
contemplated by that certain approval letter dated March 28, 2008 from the
lender thereunder, a copy of which was provided to Lender prior to the date
hereof.

 

“Encumbered Property Lender” means, individually or collectively, as the context
may require, each holder of Encumbered Property Debt.

 

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“Encumbered Property Owner” means each owner of an Encumbered Property.

 

“Encumbered Property Pledgor” means, individually or collectively, as the
context may require, each Person listed on Schedule H hereto, as modified from
time to time to reflect any Transfer permitted pursuant to Section 6.3(b) or
Section 2.2.

 

“Engineering Report” means a structural and seismic engineering report or
reports with respect to each of the Properties prepared by an independent
engineer reasonably approved by Lender and delivered to Lender in connection
with the Loan, and any amendments or supplements thereto delivered to Lender.

 

“Environmental Claim” means any written notice, claim, proceeding, investigation
or demand by any Person or Governmental Authority alleging or asserting
liability with respect to Borrower, Senior Mezzanine Borrower, any Property
Owner or any of the Properties arising out of, based on or resulting from
(i) the alleged presence, Use or Release of any Hazardous Substance, (ii) any
alleged violation of any Environmental Law, or (iii) any alleged injury or
threat of injury to property, health or safety or to the environment caused by
Hazardous Substances.

 

“Environmental Indemnity” means, with respect to each Property, that certain
environmental indemnity agreement executed by Borrower and the Sponsor as of the
Closing Date, as the same may from time to time be modified or replaced in
accordance herewith.

 

“Environmental Laws” means any and all present and future federal, state and
local laws, statutes, ordinances, rules, regulations and the like, as well as
common law, any judicial or administrative orders, decrees or judgments
thereunder, and any permits, approvals, licenses, registrations, filings and
authorizations, in each case as now or hereafter in effect, relating to the
pollution, protection or cleanup of the environment, relating to the impact of
Hazardous Substances on property, health or safety, or the Use or Release of
Hazardous Substances, or relating to the liability for or costs of other actual
or threatened danger to health or the environment.  The term “Environmental Law”
includes, but is not limited to, the following statutes, as amended, any
successors thereto, and any regulations promulgated pursuant thereto, and any
state or local statutes, ordinances, rules, regulations and the like addressing
similar issues:  the Comprehensive Environmental Response, Compensation and
Liability Act; the Emergency Planning and Community Right-to-Know Act; the
Hazardous Materials Transportation Act; the Resource Conservation and Recovery
Act (including Subtitle I relating to underground storage tanks); the Clean
Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe
Drinking Water Act; the Occupational Safety and Health Act; the Federal Water
Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act;
the Endangered Species Act; the National Environmental Policy Act; and the River
and Harbors Appropriation Act.  The term “Environmental Law” also includes, but
is not limited to, any present and future federal, state and local laws,
statutes, ordinances, rules, regulations and the like, as well as common law,
conditioning transfer of property upon a negative declaration or other approval
of a Governmental Authority of the environmental condition of a property; or
requiring notification or disclosure of Releases of Hazardous Substances or
other environmental conditions of a property to any Governmental Authority or
other Person, whether or not in connection with transfer of title to or interest
in property.

 

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“Environmental Reports” means “Phase I Environmental Site Assessments” as
referred to in the ASTM Standards on Environmental Site Assessments for
Commercial Real Estate, E 1527-05 (and, if necessary, “Phase II Environmental
Site Assessments”), prepared by an independent environmental auditor reasonably
approved by Lender and delivered to Lender and any amendments or supplements
thereto delivered to Lender or Mortgage Lender, and shall also include any other
environmental reports delivered to Lender pursuant to this Agreement, the
Mortgage Loan Documents and the Environmental Indemnities.

 

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

 

“ERISA Affiliate,” at any time, means each trade or business (whether or not
incorporated) that would, at the time, be treated together with Borrower or any
Property Owner as a single employer under Title IV or Section 302 of ERISA or
Section 412 of the Code.

 

“ERISA Event” means (i) the occurrence of a “reportable event” described in
Section 4043 of ERISA (other than a “reportable event” not subject to the
provisions for 30-day notice to the PBGC) or (ii) the provision or filing of a
notice of intent to terminate a Plan other than in a standard termination within
the meaning of Section 4041 of ERISA or the treatment of a Plan amendment as a
distress termination under Section 4041 of ERISA, or (iii) the institution of
proceedings to terminate a Plan by the PBGC, or (iv) the existence of any
“accumulated funding deficiency” or “liquidity shortfall” (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether or not waived, or
(v) the occurrence or existence of any other event or condition which might
reasonably be expected to constitute grounds for the termination of, or the
appointment of a trustee to administer, any Plan other than in a standard
termination within the meaning of Section 4041 of ERISA or the imposition of any
lien on the assets of Borrower under ERISA, including as a result of the
operation of Section 4069 of ERISA.

 

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

 

“Exception Report” means the report prepared by Borrower and attached to this
Agreement as Schedule B, setting forth any exceptions to the representations set
forth in Article IV.

 

“Excess Transfer Proceeds” means Net Proceeds arising from the Transfer of a
Property to the extent such Net Proceeds exceed the applicable Release Price.

 

“Extension Interest Rate Cap Agreement” means an interest rate cap confirmation
between an Acceptable Counterparty and Borrower, relating to the Extension Term,
which is, at all times, in substantially the form of Exhibit C (together with an
interest rate cap agreement and schedules relating thereto, which are consistent
in form and substance with the terms set forth in such confirmation).

 

“Extension Term” has the meaning set forth in Section 1.2(b).

 

“Fiscal Quarter” means the three-month period ending on March 31, June 30,
September 30 and December 31 of each year, or such other fiscal quarter of
Borrower as

 

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Borrower may select from time to time with the prior consent of Lender, such
consent not to be unreasonably withheld.

 

“Fiscal Year” means the 12-month period ending on December 31 of each year, or
such other fiscal year of Borrower as Borrower may select from time to time with
the prior consent of Lender, not to be unreasonably withheld.

 

“Fitch” means Fitch, Inc. and its successors.

 

“Force Majeure” means a delay due to acts of God, governmental restrictions,
stays, judgments, orders, decrees, enemy actions, civil commotion, fire,
casualty, strikes, work stoppage, shortages of labor or materials or similar
causes beyond the reasonable control of Borrower; provided that, with respect to
any of such circumstances, for the purposes of this Agreement, (1) any period of
Force Majeure shall apply only to performance of the obligations necessarily
affected by such circumstance and shall continue only so long as Borrower is
continuously and diligently using all reasonable efforts to minimize the effect
and duration thereof; and (2) Force Majeure shall not include the unavailability
or insufficiency of funds.

 

“Form W-8BEN” means Form W-8BEN (Certificate of Foreign Status of Beneficial
Owner for United States Tax Withholding) of the Department of Treasury of the
United States of America, and any successor form.

 

“Form W-8ECI” means Form W-8ECI (Certificate of Foreign Person’s Claim for
Exemption from Withholding of Tax on Income Effectively Connected with the
Conduct of a Trade or Business in the United States) of the Department of the
Treasury of the United States of America, and any successor form.

 

“GAAP” means generally accepted accounting principles in the United States of
America, consistently applied, or such other method of accounting used by
Borrower for books and records which is reasonably acceptable to Lender.

 

“Governmental Authority” means any federal, state, county, regional, local or
municipal government, any bureau, department, agency or political subdivision
thereof and any Person with jurisdiction exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
(including any court).

 

“Ground Lease” means, with respect to each Property, any ground lease (but not a
space lease) encumbering such Property or otherwise creating the interest of
Borrower, Senior Mezzanine Borrower or its applicable Affiliate therein, which
ground leases are more fully described on Schedule V, as such ground lease may
be modified or replaced from time to time in accordance herewith.

 

“Ground Leased Parcel” means, with respect to each Property, any portion of such
Property with respect to which Borrower or its applicable Affiliate is the
lessee under a Ground Lease.

 

“Ground Rent” means rent payable pursuant to a Ground Lease, if any.

 

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“Guaranty” means that certain guaranty, dated as of the Closing Date, executed
by Sponsor for the benefit of Lender.

 

“Hazardous Substances” means any and all substances (whether solid, liquid or
gas) defined, listed, or otherwise classified as pollutants, hazardous wastes,
hazardous substances, hazardous materials, extremely hazardous wastes, toxic
substances, toxic pollutants, contaminants, pollutants or words of similar
meaning or regulatory effect under any present or future Environmental Laws or
that may have a negative impact on human health or the environment or the
presence of which on, in or under any of the Properties is prohibited under
Environmental Law, including petroleum and petroleum products, asbestos and
asbestos-containing materials, polychlorinated biphenyls, lead and radon, and
compounds containing them (including gasoline, diesel fuel, oil and lead-based
paint), and radioactive materials, flammables and explosives and compounds
containing them, but excluding substances of kinds and in amounts which may
ordinarily and customarily be used or stored in bank branch or office properties
(as the case may be) of the same quality as the Property as of the date hereof
for the purposes of cleaning or other maintenance or operations or otherwise
ordinarily found in bank branch or office properties (as the case may be) of the
same quality as the Property as of the date hereof and otherwise in compliance
in all material respects with all Environmental Laws.

 

“Increased Costs” has the meaning set forth in Section 1.6.

 

“Indebtedness” means the Principal Indebtedness, together with interest and all
other obligations and liabilities of Borrower under the Loan Documents,
including all transaction costs and other amounts due or to become due to Lender
pursuant to this Agreement, under the Notes or in accordance with any of the
other Loan Documents, and all other amounts, sums and expenses reimbursable by
Borrower to Lender hereunder or pursuant to the Notes or any of the other Loan
Documents.

 

“Indemnified Liabilities” has the meaning set forth in Section 9.19(b).

 

“Indemnified Parties” has the meaning set forth in Section 5.18.

 

“Independent Director” of any corporation or limited liability company means an
individual who is duly admitted as an independent member of Borrower or
appointed as a member of the board of directors, board of managers or other
governing body of such corporation or limited liability company or, in the case
of a limited liability company, is a member of such limited liability company
and who is not, and has never been, and will not while serving as Independent
Director, be any of the following:

 

(i)            a partner, equityholder, manager, director, officer or employee
of Borrower, any Single-Purpose Equityholder, Senior Mezzanine Borrower, any
Property Owner or any of their respective equityholders or Affiliates (other
than as an independent member, director or manager of an Affiliate of Borrower,
Senior Mezzanine Borrower, any Property Owner or any Single-Purpose Equityholder
that is not in the direct chain of ownership of Borrower and that is required by
a creditor to be a single purpose bankruptcy remote entity, provided that such
independent director or manager is

 

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employed by a company that routinely provides professional independent directors
or managers);

 

(ii)           a creditor, supplier or service provider (including provider of
professional services) to Borrower, Senior Mezzanine Borrower, any Property
Owner, any Single-Purpose Equityholder or any of their respective equityholders
or Affiliates (other than a company that routinely provides professional
independent managers or directors and which also provides lien search and other
similar services to Borrower, Senior Mezzanine Borrower, any Property Owner  any
Single-Purpose Equityholder or any of their respective equityholders or
Affiliates in the ordinary course of business);

 

(iii)          a family member of any such member, partner, equityholder,
manager, director, officer, employee, creditor, supplier or service provider; or

 

(iv)          a Person that controls (whether directly, indirectly or otherwise)
any of (i), (ii) or (iii) above.

 

“Initial Interest Rate Cap Agreement” means an interest rate cap confirmation
between an Acceptable Counterparty and Borrower, relating to the initial term of
the Loan, which is, at all times, in substantially the form of Exhibit C
(together with an interest rate cap agreement and schedules relating thereto,
which are consistent in form and substance with the terms set forth in such
confirmation), as amended to reflect the reallocation of principal between the
Loan and the Senior Mezzanine Loan.

 

“Insurance Requirements” means, collectively, (i) all material terms of any
insurance policy required pursuant to this Agreement and (ii) all material
regulations and then-current standards applicable to or affecting any of the
Properties or any portion thereof or any use or condition thereof, which may, at
any time, be recommended by the board of fire underwriters, if any, having
jurisdiction over any of the Properties, or any other body exercising similar
functions.

 

“Interest Accrual Period” means, with respect to any specified Payment Date, the
period from and including the 15th day of the calendar month preceding such
specified Payment Date to but excluding the 15th day of the calendar month
containing such specified Payment Date; provided that, prior to a
Securitization, Lender shall have the right, in connection with a change in the
Payment Date in accordance with the definition thereof, to make a corresponding
change to the Interest Accrual Period provided same has no adverse effect on
Borrower in more than a de minimis extent.  Notwithstanding the foregoing, the
first Interest Accrual Period shall commence on and include the Closing Date.

 

“Interest Determination Date” means, in connection with the calculation of
interest accrued for any Interest Accrual Period, the second Business Day
preceding the first day of such Interest Accrual Period.

 

“Interest Rate Cap Agreements” means collectively, the Initial Interest Rate Cap
Agreement and any Extension Interest Rate Cap Agreements.

 

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“Joint Venture Owner” means each joint venture that directly or indirectly owns
a Joint Venture Property.

 

“Joint Venture Property” means, individually or collectively, as the context may
require, each Property subject, directly or indirectly, to a  Qualified Joint
Venture Agreement as listed on Schedule P, as modified from time to time to
reflect any Transfer permitted pursuant to Section 6.3(b) or Section 2.2 and any
additional joint venture permitted hereunder (including pursuant to
Section 2.3).

 

“Junior Mezzanine Loan Permitted Encumbrances” means collectively, (i) the Liens
created by the Loan Documents, (ii) Liens, if any, for Taxes not yet delinquent,
(iii) any attachment or judgment Lien on the Collateral, provided, that the
judgment it secures shall, within 60 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall have been
discharged within 60 days after the expiration of any such stay, provided, that
no such Lien is in imminent danger of foreclosure and (iv) any Liens which are
hereafter approved in writing by Lender in its sole discretion.

 

“Lease” means any lease, license, letting, concession, occupancy agreement,
sublease to which Borrower is a party or has a consent right, or other agreement
(whether written or oral and whether now or hereafter in effect) under which
Borrower, Senior Mezzanine Borrower or a Property Owner is a lessor, existing as
of the Closing Date or hereafter entered into by Borrower, Senior Mezzanine
Borrower or Property Owner, in each case pursuant to which any Person is granted
a possessory interest in, or right to use or occupy all or any portion of any
space in any of the Properties, and every modification or amendment thereof, and
every guarantee of the performance and observance of the covenants, conditions
and agreements to be performed and observed by the other party thereto.

 

“Lease Term Sheet” has the meaning set forth in Section 5.7(b).

 

“Leasing Commissions” means leasing commissions required to be paid by Borrower,
Senior Mezzanine Borrower or its Affiliates in connection with the leasing of
space to Tenants at any of the Properties pursuant to Leases either in effect on
the date hereof or entered into by Borrower, Senior Mezzanine Borrower or its
Affiliates in accordance herewith and payable in accordance with
third-party/arm’s-length brokerage agreements, provided that the commissions
payable pursuant thereto are commercially reasonable based upon the then current
brokerage market for property of a similar type and quality to such Property in
the geographic market in which such Property is located.

 

“Legal Requirements” means all governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of Governmental
Authorities (including Environmental Laws) affecting Borrower, Senior Mezzanine
Borrower any Property Owner, the Collateral or any of the Properties or any
portion of or the construction, ownership, use, alteration or operation of, or
any portion of any Property (whether now or hereafter enacted and in force), and
all permits, licenses and authorizations and regulations relating thereto.

 

“Lender” has the meaning set forth in the first paragraph of this Agreement and
in Section 9.7.

 

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“Letter of Credit” shall mean an irrevocable, unconditional, freely
transferable, clean sight draft evergreen letter of credit in favor of Lender,
with respect to which Borrower has no reimbursement obligation, entitling Lender
to draw thereon in New York, New York, issued by a domestic Eligible Institution
or the U.S. agency or branch of a foreign Eligible Institution.

 

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

 

(i)            On each Interest Determination Date, LIBOR for the applicable
period will be the rate for deposits in United States dollars for a one-month
period which appears as the London interbank offered rate on the display
designated as “LIBOR01” on the Reuters Screen (or such other page as may replace
that page on that service, or such page or replacement therefor on any successor
service) as the London interbank offered rate as of 11:00 a.m., London time, on
such date.

 

(ii)           With respect to an Interest Determination Date on which no such
rate appears as the London interbank offered rate on “LIBOR01” on the Reuters
Screen (or such other page as may replace that page on that service, or such
page or replacement therefor on any successor service) as described above, LIBOR
for the applicable period will be determined on the basis of the rates at which
deposits in United States dollars are offered by the Reference Banks at
approximately 11:00 a.m., London time, on such date to prime banks in the London
interbank market for a one-month period (each a “Reference Bank Rate”).  Lender
shall request the principal London office of each of the Reference Banks to
provide a quotation of its Reference Bank Rate.  If at least two such quotations
are provided, LIBOR for such period will be the arithmetic mean of such
quotations.  If fewer than two quotations are provided, LIBOR for such period
will be the arithmetic mean of the rates quoted by major banks in New York City,
selected by Lender, at approximately 11:00 a.m., New York City time, on such
date for loans in United States dollars to leading European banks for a
one-month period.

 

(iii)          If, on any Interest Determination Date, Lender is required but
unable to determine LIBOR in the manner provided in paragraphs (i) and
(ii) above, LIBOR for the applicable period shall be LIBOR as determined on the
previous Interest Determination Date.

 

All percentages resulting from any calculations or determinations referred to in
this definition will be rounded upwards to the nearest multiple of 1/100 of 1%
and all U.S. dollar amounts used in or resulting from such calculations will be
rounded to the nearest cent (with one-half cent or more being rounded upwards).

 

“LIBOR Strike Rate” means (1) with respect to the Initial Interest Rate Cap
Agreement, 5.25%; and (2) with respect to any Extension Interest Rate Cap
Agreement, the lesser of (x) 6% and (y) the interest rate that would result in a
DSCR of 1.0x as of the first day of the Extension Term.

 

“Lien” means any mortgage, lien (statutory or other), pledge, hypothecation,
assignment, preference, priority, security interest, or any other encumbrance or
charge on or affecting any Collateral or any portion thereof, or any Encumbered
Property, or any interest

 

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therein (including any conditional sale or other title retention agreement, any
sale-leaseback, any financing lease or similar transaction having substantially
the same economic effect as any of the foregoing, the filing of any financing
statement or similar instrument under the Uniform Commercial Code or comparable
law of any other jurisdiction, domestic or foreign, and mechanics’,
materialmen’s and other similar liens and encumbrances, as well as any option to
purchase, right of first refusal, right of first offer or similar right).

 

“Loan” has the meaning set forth in Section 1.1.

 

“Loan Amount” means  $99,329,673.13.

 

“Loan Documents” means this Agreement, each of the Notes, the Assignment of
Interest Rate Cap Agreement, each of the Environmental Indemnities, each of the
Subordination of Property Management Agreements, the Cash Management Agreement,
the Pledge Agreement,  any Blocked Account Agreement, the Cooperation Agreement,
the Guaranty, any Letter of Credit and all other agreements, instruments,
certificates and documents necessary to effectuate the granting to Lender of
first-priority Liens on the Collateral or otherwise in satisfaction of the
requirements of this Agreement or the other documents listed above, as all of
the aforesaid may be modified or replaced from time to time in accordance
herewith.

 

“Loan Multiplier” means (i) for the period beginning on the Closing Date and
ending on the Effective Date, 1/6 (16.67%) and (ii) from and after the Effective
Date, 16.57%.

 

“Loss Proceeds” means amounts, awards or payments payable to Borrower or its
Affiliates, Senior Mezzanine Borrower, any Property Owner, Mortgage Lender or
Lender in respect of all or any portion of any of the Properties in connection
with a Casualty or Condemnation thereof (after the deduction therefrom and
payment to Borrower or its Affiliates, Senior Mezzanine Borrower, any Property
Owner, Mortgage Lender and Lender, respectively, of any and all reasonable
expenses incurred by Borrower or its Affiliates and Lender in the recovery
thereof, including all attorneys’ fees and disbursements, the fees of insurance
experts and adjusters and the costs incurred in any litigation or arbitration
with respect to such Casualty or Condemnation).

 

“Major Lease” means the Lease covering the Dana Portfolio on the date hereof, as
amended or modified in accordance herewith, and any Lease which (i) when
aggregated with all other Leases at the applicable Property with the same Tenant
(or affiliated Tenants), and assuming the exercise of all expansion rights and
all preferential rights to lease additional space contained in each such Lease,
is expected to contribute more than 7.5% of Net Operating Income during any
12-month period (after adjustment to eliminate the effect of free rent periods),
(ii) is with an Affiliate of Borrower, Senior Mezzanine Borrower or a Property
Owner as Tenant, or (iii) is entered into during the continuance of an Event of
Default.

 

“Material Adverse Effect” means a material adverse effect upon (i) the ability
of Borrower or any Property Owner to perform, or of Lender or Mortgage Lender to
enforce, any material provision of any Loan Document or any Encumbered Debt
Document, as the case may be, (ii) the enforceability of any material provision
of any Loan Document, or (iii) the value, Net Operating Income, use or enjoyment
of any of the Properties or the operation thereof.

 

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“Material Agreements” means (x) each contract and agreement (other than the
Leases, the Ground Leases, the Approved Management Agreement, the Encumbered
Property Debt Documents, brokerage and leasing agreements negotiated at arm’s
length and the Loan Documents) relating to a Property, or otherwise imposing
obligations on Borrower, Senior Mezzanine Borrower or any Property Owner, under
which Borrower, Senior Mezzanine Borrower, or any Property Owner would have the
obligation to pay more than $1,000,000 per annum and which cannot be terminated
by Borrower, Senior Mezzanine Borrower or any Property Owner without cause upon
90 days’ notice or less without payment of a termination fee or, in any case,
with respect to any covenant contained herein (but not with respect to any
representation), imposing obligations on Borrower, Senior Mezzanine Borrower or
any Property Owner under which it would have the obligation to pay more than
$5,000,000 per annum, regardless of Borrower’s, Senior Mezzanine Borrower’s or
any Property Owner’s right to terminate same, or which is with an Affiliate of
Borrower, Senior Mezzanine Borrower or any Property Owner, and (y) to the extent
the existence, breach or termination of same might have a Portfolio Material
Adverse Effect, any reciprocal easement agreement, declaration of covenants,
material parking agreement, condominium documents, or other material Permitted
Encumbrance.

 

“Material Alteration” means any Alteration to be performed by or on behalf of
Borrower, Senior Mezzanine Borrower or any Property Owner at any of the
Properties which (a) is reasonably likely to have a Material Adverse Effect with
respect to the applicable Property, (b) when aggregated with all contemporaneous
Alterations at the Properties is reasonably expected to cost in excess of
$20,000,000, or (c) is reasonably expected to permit (or is reasonably likely to
induce) any Tenant under a material Lease to terminate its Lease or abate rent.

 

“Maturity Date” means the maturity date of the Loan as set forth in Section 1.2.

 

“Merger” means the transactions contemplated by the Merger Agreement.

 

“Merger Agreement” means that certain Agreement and Plan of Merger, dated as of
November 2, 2007, among Sponsor, GKK Capital LP, AFRT Owner, and the other
parties thereto, with only such modifications thereto as have been agreed in
writing by Lender.

 

“Minimum Balance” has the meaning set forth in Section 3.2(a).

 

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

 

“Mortgage” means, with respect to each Mortgage Loan Collateral Property, that
certain mortgage, deed of trust or deed to secure debt, as the case may be,
encumbering such Mortgage Loan Property, executed by Mortgage Loan Property
Owner as of the Closing Date, as the same may from time to time be modified or
replaced in accordance herewith.

 

“Mortgage Borrower” means, as the context may require, one or more “Borrowers”
under and as defined in the Mortgage Loan Agreement.

 

“Mortgage Guarantor” means GKK Stars Junior Mezz 1 LLC.

 

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“Mortgage Lender” means, collectively, Goldman Sachs Mortgage Company (as
successor in interest to Goldman Sachs Commercial Mortgage Capital, L.P.),
Citicorp North America, Inc. and SL Green Realty Corp. and their respective
successors and assigns.

 

“Mortgage Loan” means that certain Loan in the original principal amount of
$250,000,000 from Mortgage Lender to Mortgage Loan Property Owner.

 

“Mortgage Loan Agreement” means that certain Loan Agreement, dated as of the
date hereof, between Mortgage Lender and the Mortgage Loan Property Owners, as
same may be amended or modified from time to time with the consent of Lender.

 

“Mortgage Loan Cash Management Account” means the “Cash Management Account” as
defined in the Mortgage Loan Agreement.

 

“Mortgage Loan Collateral Properties” means the real property described on
Schedule A-1, together with all buildings and other improvements thereon, as
modified from time to time to reflect any Transfer permitted pursuant to
Section 2.2.

 

“Mortgage Loan Documents” means the “Loan Documents”, as defined in the Mortgage
Loan Agreement.

 

“Mortgage Loan Event of Default” means an “Event of Default” under and as
defined in the Mortgage Loan Agreement.

 

“Mortgage Loan Principal Indebtedness” means, from time to time, the outstanding
principal balance of the Mortgage Loan.

 

“Mortgage Loan Property Owner” means each borrower under the Mortgage Loan.

 

“Mortgage Loan Property Owner Equity” means 100% of the direct equity interests
in each Mortgage Loan Property Owner as set forth in the Pledge Agreement, as
modified from time to time to reflect any Transfer permitted pursuant hereto.

 

“Mortgage Loan Property Owner Pledgor” means, individually or collectively, as
the context may require, each owner of Mortgage Loan Property Owner Equity, as
set forth on Schedule I, as modified from time to time to reflect any Transfer
permitted pursuant hereto.

 

“Net Lease” means each of the Leases listed on Schedule N.

 

“Net Operating Income” means, with respect to any Test Period, the excess of
(i) Operating Income for such Test Period, minus (ii) Operating Expenses for
such Test Period.

 

“Net Proceeds” means, in connection with the sale or disposition to an
unaffiliated third party in an arms’-length transaction, 100% of the proceeds of
such sale or disposition, net of any repayment of any Encumbered Property Debt
(including any prepayment or release premiums) that is required to be and
actually is repaid in connection therewith, and ordinary and customary closing
costs payable to unaffiliated third parties, limited in the case of

 

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Joint Venture Properties and any joint venture entered into in connection with
the Transfer of any portion of the Value Add Pool Equity pursuant to Section 2.3
to the portion of such net proceeds payable to Borrower or its Affiliates
pursuant to the applicable Qualified Joint Venture Agreement in effect on the
date hereof or as hereafter amended with Lender’s reasonable consent (Borrower
agreeing that it shall be reasonable for Lender to withhold its consent in
connection with any amendment that would result in a reduction of Borrower’s
percentage interest in (except in connection with a Transfer permitted
hereunder), or control rights over, any Joint Venture Property or otherwise
result in a Material Adverse Effect).

 

 “New Borrower Entity” means a Single Purpose Entity 100% of the equity
interests in which are directly or indirectly owned by Sponsor and 100% of the
direct equity interests in which are pledged to Lender in a manner reasonably
satisfactory to Lender (including the delivery, at Borrower’s expense, of UCC
insurance with respect to such pledge), which Single Purpose Entity: (i) shall
have executed and delivered to Lender an assumption agreement, in form and
substance reasonably acceptable to Lender, evidencing its agreement to abide and
be bound by the terms of the Loan Documents and containing representations
substantially equivalent to those contained in Article IV, and such other
representations (and evidence of the accuracy of such representations) as the
Lender shall reasonably request; (ii) shall have delivered such Uniform
Commercial Code financing statements as may be reasonably requested by Lender;
(iii) if requested by Lender, shall have delivered to Lender legal opinions of
counsel reasonably acceptable to Lender which are equivalent to the opinions
delivered to Lender on the Closing Date, including new enforceability,
authorization and nonconsolidation opinions which are reasonably satisfactory to
Lender and satisfactory to each of the Rating Agencies; and (iv) shall have
delivered to Lender all documents reasonably requested by it relating to the
existence of such New Borrower Entity and the due authorization of such New
Borrower Entity to assume the Loan and to execute and deliver any related
documents, each in form and substance reasonably satisfactory to Lender.

 

“Nonconsolidation Opinion” means, the opinion letter dated the Closing Date,
delivered by Borrower’s counsel to Lender and addressing issues relating to
substantive consolidation in bankruptcy.

 

“Normalized Capital Expenditures” means anticipated annual Capital Expenditures
at the Properties, as reasonably determined by Lender, based on historical
Capital Expenditures at the Properties during the initial term of the Loan
(taking into account any amounts actually reimbursed in respect of Capital
Expenditures under Leases).

 

“Note” means, collectively, the promissory notes from time to time issued
hereunder, as such notes may be consolidated, replaced by multiple Notes or
divided into multiple Note Components in accordance with Section 1.3(c) and as
otherwise modified, assigned (in whole or in part) and/or replaced from time to
time in accordance herewith.

 

“Note Component” has the meaning set forth in Section 1.3(c).

 

“OFAC List” means the list of specially designated nationals and blocked persons
subject to financial sanctions that is maintained by the U.S. Treasury
Department, Office of Foreign Assets Control and any other similar list
maintained by the U.S. Treasury Department,

 

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Office of Foreign Assets Control pursuant to any applicable governmental
statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and
injunctions of Governmental Authorities, including, without limitation, trade
embargo, economic sanctions, or other prohibitions imposed by Executive Order of
the President of the United States.  The OFAC List currently is accessible
through the internet website at www.treas.gov/ofac/t11sdn.pdf.

 

“Officer’s Certificate” means a certificate delivered to Lender which is signed
by an authorized officer of Borrower and certifies the information therein to
such officer’s knowledge.

 

“Operating Expenses” means, for any period, all operating, renting,
administrative, management, legal and other ordinary expenses of Borrower and,
without duplication, Senior Mezzanine Borrower and Property Owners, during such
period (other than those relating to the Disposition Assets and each other
Property whose Release Price is zero), determined in accordance with GAAP;
provided, however, that such expenses shall not include (i) depreciation,
amortization or other noncash items (other than expenses that are due and
payable but not yet paid), (ii) interest, principal or any other sums due and
owing with respect to the Loan, (iii) income taxes or other taxes in the nature
of income taxes, (iv) Capital Expenditures, or (v) equity distributions.

 

“Operating Income” means, for any period, all operating income of Borrower and,
without duplication, Senior Mezzanine Borrower and Property Owners, from each of
the Properties (other than the Disposition Assets and each other Property whose
Release Price or Aggregate Allocated Loan Amount is zero) during such period,
determined in accordance with GAAP (but without straight-lining of rents), other
than (i) Loss Proceeds (but Operating Income will include rental loss insurance
proceeds to the extent allocable to such period), (ii) any revenue attributable
to a Lease to the extent it is paid more than 30 days prior to the due date,
(iii) any interest income from any source, (iv) any repayments received from any
third party of principal loaned or advanced to such third party by Borrower,
(v) any proceeds resulting from the Transfer of all or any portion of such
Property, (vi) sales, use and occupancy or other taxes on receipts required to
be accounted for by Borrower or Senior Mezzanine Borrower to any government or
governmental agency, (vii) termination fees, and (viii) any other extraordinary
or non-recurring items.

 

“Operating Partnership” means First States Group, L.P., a Delaware limited
partnership .

 

“Other Ground Lease Collateral” means the equity interests in the Persons listed
on Schedule M in the percentages set forth thereon, as modified from time to
time to reflect any Transfer permitted hereunder.

 

“Other Equity Pledgor” means, individually or collectively, as the context may
require, each owner of Other Ground Lease Collateral as set forth on Schedule M.

 

“Other Properties” means, collectively, each Property that is not a Mortgage
Loan Collateral Property.

 

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“Par Prepayment Date” means the first Payment Date following the 6-month
anniversary of the Closing Date.

 

“Parcel Release Price” has the meaning set forth in Exhibit I.

 

“Participation” has the meaning set forth in Section 9.7(b).

 

“Payment Date” means the 9th day of each month (or, if such 9th day is not a
Business Day, the first preceding Business Day); provided, that, prior to a
Securitization, Lender shall have the right to change the Payment Date so long
as a corresponding change to the Interest Accrual Period is also made and same
has no adverse effect on Borrower in more than a de minimis extent. 
Notwithstanding the foregoing, the Maturity Date shall be the second to last
Business Day of the Interest Accrual Period in which the Maturity Date falls.

 

“Permits” means all licenses, permits, variances and certificates used in
connection with the ownership, operation, use or occupancy of each of the
Properties (including certificates of occupancy, business licenses, state health
department licenses, licenses to conduct business and all such other permits,
licenses and rights, obtained from any Governmental Authority or private Person
concerning ownership, operation, use or occupancy of such Property).

 

“Permitted Affiliate Sale” means the sale of a Property to an Affiliate of
Borrower or Senior Mezzanine Borrower that is not itself a Senior Mezzanine
Borrower, which Affiliate’s immediate intention is to materially redevelop such
Property as evidenced by an Officer’s Certificate submitted to Lender describing
such redevelopment in reasonable detail; provided, however, no such sale shall
be a “Permitted Affiliate Sale” if, after giving effect thereto, the sum of the
Allocated Loan Amounts of all Properties subject to Permitted Affiliate Sales
from and after the Closing Date would exceed $25,000,000.

 

“Permitted Debt” means:

 

(a)           with respect to the Senior Mezzanine Borrower, the “Permitted
Debt” as defined in the Senior Mezzanine Loan Agreement in effect as of the
Closing Date, and

 

(b)           with respect to Borrower,

 

(i)            the Indebtedness;

 

(ii)           amounts, not represented by a note, customarily paid by Borrower
within 60 days of incurrence and in fact not more than 60 days outstanding,
payable by or on behalf of Borrower for or in respect of its customary corporate
administration, loan administration, financial reporting and overhead, and which
are incurred by Borrower in the ordinary course of Borrower’s ownership of
Senior Mezzanine Borrower; provided, that the amount outstanding under this
clause (b)(ii) shall in no event exceed $100,000 at any time.

 

(iii)          the Encumbered Property Debt, to the extent that there is no
increase in the principal amount thereof from the principal balance as of the
date hereof (after giving

 

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effect to any prepayments made on the date hereof) or any material amendment to
any Encumbered Property Debt Document without Lender’s prior written consent;

 

(iv)          refinancings of Encumbered Property Debt on terms not materially
more onerous (including as to interest rate, transfer restrictions,
amortization, prepayment provisions and cash trap provisions) as the Encumbered
Property Debt being refinanced, provided that, in the case of each such
refinancing, (x) the applicable Encumbered Property Lender enter into an
intercreditor agreement with Lender in form and substance reasonably
satisfactory to Lender (the Form of Intercreditor Agreement attached hereto as
Exhibit F is hereby deemed to be reasonably satisfactory to Lender), (y) Senior
Mezzanine Lender is granted a perfected first-priority pledge of 100% of the
equity interests in the entity owning the Encumbered Property securing the
Encumbered Property Debt being so refinanced, and (z) if any such refinancing is
in a principal amount greater than the Encumbered Property Debt being
refinanced, then an amount equal to the product of the Loan Multiplier times
100% of the increase (without reduction for transaction, prepayment, defeasance
or other expenses) is applied toward prepayment of the Loan in accordance with
Section 2.1 hereof;

 

(v)           the Mortgage Loan; and

 

(vi)          the Senior Mezzanine Loan.

 

“Permitted Encumbrances” means, collectively, the Senior Mezzanine Loan
Permitted Encumbrances and the Junior Mezzanine Loan Permitted Encumbrances.

 

“Permitted Investments” means the following, subject to the qualifications
hereinafter set forth:

 

(i)            obligations of, or obligations guaranteed as to principal and
interest by, the U.S. government or any agency or instrumentality thereof, when
such obligations are backed by the full faith and credit of the United States of
America;

 

(ii)           federal funds, unsecured certificates of deposit, time deposits,
banker’s acceptances, and repurchase agreements having maturities of not more
than 365 days of any bank, the short-term debt obligations of which are rated
A-1+ (or the equivalent) by each of the Rating Agencies and, if it has a term in
excess of three months, the long-term debt obligations of which are rated AAA
(or the equivalent) by each of the Rating Agencies;

 

 (iii)         deposits that are fully insured by the Federal Deposit Insurance
Corp. (FDIC);

 

(iv)          debt obligations that are rated AAA or higher (or the equivalent)
by each of the Rating Agencies;

 

(v)           commercial paper rated A–1+ (or the equivalent) by each of the
Rating Agencies;

 

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(vi)          investment in money market funds rated AAAm or AAAm–G (or the
equivalent) by each of the Rating Agencies; and

 

(vii)         such other investments as to which Lender shall have received
Rating Confirmation.

 

Notwithstanding the foregoing, “Permitted Investments” (i) shall exclude any
security with the Standard & Poor’s “r” symbol (or any other Rating Agency’s
corresponding symbol) attached to the rating (indicating high volatility or
dramatic fluctuations in their expected returns because of market risk), as well
as any mortgage-backed securities and any security of the type commonly known as
“strips”; (ii) shall not have maturities in excess of one year; (iii) shall be
limited to those instruments that have a predetermined fixed dollar of principal
due at maturity that cannot vary or change; and (iv) shall exclude any
investment where the right to receive principal and interest derived from the
underlying investment provides a yield to maturity in excess of 120% of the
yield to maturity at par of such underlying investment.  Interest may either be
fixed or variable, and any variable interest must be tied to a single interest
rate index plus a single fixed spread (if any), and move proportionately with
that index.  No investment shall be made which requires a payment above par for
an obligation if the obligation may be prepaid at the option of the issuer
thereof prior to its maturity.  All investments shall mature or be redeemable
upon the option of the holder thereof on or prior to the earlier of (x) three
months from the date of their purchase or (y) the Business Day preceding the day
before the date such amounts are required to be applied hereunder.

 

“Permitted TRS Contribution Agreement” means a contribution agreement
substantially in the form of the contribution agreement attached as Exhibit H.

 

“Permitted TRS Entity” means a Person that becomes a Mortgage Borrower under the
Mortgage Loan , fulfills the requirements of a “New Borrower Entity” under and
as defined in the Mortgage Loan Agreement and is formed solely for the purpose
of entering into one or more Permitted TRS Contribution Agreements and matters
directly relating thereto.

 

“Person” means any individual, corporation, limited liability company,
partnership, joint venture, estate, trust, unincorporated association or
Governmental Authority and any fiduciary acting in such capacity on behalf of
any of the foregoing.

 

“Plan” means any employee benefit plan (as defined in Section 3(3) of ERISA)
subject to Title IV or Section 302 of ERISA or Section 412 of the Code.

 

“Plan Assets” means assets of any (i) employee benefit plan (as defined in
Section 3(3) of ERISA) subject to Title I of ERISA or (ii) plan (as defined in
Section 4975(e)(1) of the Code) subject to Section 4975 of the Code.

 

“Pledge Agreement” means that certain Pledge and Security Agreement, dated as of
the date hereof, by Borrower for the benefit of Lender.

 

“Policies” has the meaning set forth in Section 5.15(b).

 

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“Portfolio Material Adverse Effect” means a material adverse effect upon (i) the
ability of Borrower to perform, or of Lender to enforce, any material provision
of any Loan Document, (ii) the enforceability of any material provision of any
Loan Document, or (iii) the value, Net Operating Income, use or enjoyment of the
Properties or the operation thereof, in each case, taken as a whole.

 

“Prepayment Fee” shall mean, with respect to any prepayment received by Lender
prior to the Par Prepayment Date (other than with respect to a prepayment
pursuant to Section 2.1(c)(i), (ii) and (iii)), any prepayment associated with
the release of a Disposition Asset or any release in connection with a Casualty
or Condemnation pursuant to Section 5.16(d)), an amount equal to 1.0% of the
principal amount prepaid.

 

“Prime Rate” means the “prime rate” published in the “Money Rates” section of
The Wall Street Journal.  If The Wall Street Journal ceases to publish the
“prime rate,” then Lender shall select an equivalent publication that publishes
such “prime rate,” and if such “prime rate” is no longer generally published or
is limited, regulated or administered by a governmental or quasi-governmental
body, then Lender shall reasonably select a comparable interest rate index.

 

“Principal Indebtedness” means the principal balance of the Loan outstanding
from time to time.

 

“Properties” means, collectively, all real property from time to time owned or
leased directly or indirectly by AFRT, including without limitation the
Encumbered Properties and the Mortgage Loan Collateral Properties, together with
all buildings and improvements thereon.  As used herein, “Property” means any of
the individual Properties.  Any reference herein to a Transfer of a Property
shall mean a Transfer of such Property or of the direct or indirect equity
interests therein (other than a Transfer of a direct or indirect equity interest
in Sponsor).

 

“Property Owner” means, individually or collectively, as the context may
require, each owner from time to time of a Property.  The current Property
Owners are listed on Schedule I.

 

“Qualified Joint Venture Agreement” means a (x) joint venture agreement entered
into prior to the date hereof and described in Schedule K, (y) any joint venture
agreement relating to a Value Add Pool Property entered into pursuant to
Section 2.3, and (z) a joint venture agreement hereafter entered into pursuant
to Section 6.3(b) that (i) provides Senior Mezzanine Lender with the right to
force a sale or similar liquidation of the assets of the joint venture following
a foreclosure or transfer-in-lieu of foreclosure on the equity interests pledged
to Senior Mezzanine Lender subject to customary rights of first offer or
appraisal sale or other similar rights reasonably acceptable to Senior Mezzanine
Lender, (ii) provides to Borrower or its Affiliate (and, after a foreclosure or
transfer-in-lieu of foreclosure on the equity interests pledged to Senior
Mezzanine Lender subject to customary rights of first offer, appraisal sale or
other similar rights reasonably acceptable to Senior Mezzanine Lender, provides
to Senior Mezzanine Lender) the right to control the joint venture, subject to
customary major decisions, (iii) provides that distributions of operating
revenues, capital proceeds and all other income of the applicable

 

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Properties, to the extent available for distribution, shall be made to the
equityholders in proportion to their respective equity interests, and (iv) is
otherwise acceptable to Lender in its reasonable discretion.

 

“Qualified Survey” means, with respect to each of the Mortgage Loan Properties,
current title surveys of such Mortgage Loan Property, certified to Borrower, the
title company issuing the Qualified Title Insurance Policy and Lender and their
respective successors and assigns, in form and substance reasonably satisfactory
to Lender.

 

 “Qualified Title Insurance Policy” means (i) with respect to each of the
Properties, (x) if applicable, an ALTA extended coverage mortgagee’s title
insurance policy in form and substance reasonably satisfactory to Lender,
together with such endorsements as Lender shall reasonably request, and (y) an
owner’s title insurance policy in favor of the applicable Mortgage Loan Property
Owner (except that Borrower shall not be required to purchase new or updated
owners’ policies) with a “Mezzanine Lender’s Financing Endorsement,” naming
Lender as an additional insured, in form and substance reasonably acceptable to
Lender (or in the alternative, a letter executed by the title company providing
substantially the same benefit to Lender), and (ii) with respect to the equity
pledged to Lender pursuant to the Loan Documents, a UCC insurance policy
insuring Lender’s first-priority security interest in 100% of the equity pledged
to Lender pursuant to the Loan Documents, and otherwise in form and substance
reasonably acceptable to Lender.

 

“Rating Agency” shall mean, prior to the final Securitization of the Loan, each
of S&P, Moody’s and Fitch, or any other nationally-recognized statistical rating
agency which has been designated by Lender and, after the final Securitization
of the Loan, shall mean any of the foregoing that have rated and continue to
rate any of the Certificates.

 

“Rating Confirmation” means, with respect to any proposed action, confirmation
in writing from each of the Rating Agencies that such action shall not result,
in and of itself, in a downgrade, withdrawal or qualification of any rating then
assigned to any outstanding Certificates; except that if any portion of the Loan
shall not have been securitized pursuant to a Securitization rated by the Rating
Agencies, then “Rating Confirmation” shall instead mean that the matter in
question is subject to the prior written approval of both (x) the applicable
Rating Agencies (if and to the extent that any portion of the Loan has been
securitized pursuant to a Securitization or series of Securitizations rated by
such Rating Agencies), and (y) Lender in its reasonable discretion (and Borrower
agrees that it shall be reasonable for Lender to withhold such approval, if such
proposed action does not satisfy Rating Agency criteria).  No Rating
Confirmation shall be regarded as having been received unless and until any
conditions imposed on its effectiveness by any Rating Agency shall have been
satisfied.

 

“Reference Banks”  means four major banks in the London interbank market
selected by Lender.

 

“Regulatory Change” means any change after the Closing Date in federal, state or
foreign laws or regulations or the adoption or the making, after such date, of
any interpretations, directives or requests applying to a class of banks or
companies controlling banks, including Lender, of or under any federal, state or
foreign laws or regulations (whether or not having the

 

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force of law) by any court or governmental or monetary authority charged with
the interpretation or administration thereof.

 

“Release” with respect to any Hazardous Substance means any release, deposit,
discharge, emission, leaking, leaching, spilling, seeping, migrating, injecting,
pumping, pouring, emptying, escaping, dumping, disposing or other movement of
Hazardous Substances into the indoor or outdoor environment (including the
movement of Hazardous Substances through ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata) in violation of Environmental
Law.

 

“Release Parcel” has the meaning set forth Section 2.4.

 

“Release Price” has the meaning set forth in Exhibit I.

 

“Release Price Deficit” means has the meaning specified in Section 2.2(c).

 

“Rent Roll” has the meaning set forth in Section 4.14(a).

 

“Required Equity” means the equity pledged to Senior Mezzanine Lender by
Required Equity Pledgors (or, in the case of First States Group, L.P. and its
general partner, the equity that is subject to the negative covenants contained
herein) pursuant to the Senior Mezzanine Loan Documents.

 

“Required Equity Pledgor” means, individually or collectively, as the context
may require, AFRT Owner, each Value Add Pool Pledgor, each Encumbered Property
Pledgor, each Other Equity Pledgor and each Mortgage Loan Property Owner
Pledgor.

 

“Restricted Cash” means amounts released from collateral accounts maintained
pursuant and subject to Encumbered Debt Documents, except for reserves for
monthly expenses such as tax, insurance, capital expenditure reserves funded
monthly, but including reserves in the nature of deferred maintenance, interest
reserves, reserves for the purpose of credit enhancement and excess cash
reserves; provided that the foregoing shall not be required to be remitted to
Senior Mezzanine Lender pursuant to the terms of the Senior Mezzanine Loan
Documents at the time of a refinancing of Encumbered Property Debt if, in
connection with such refinancing, the same shall be required to be maintained in
a collateral account pursuant to the amended or replacement Encumbered Debt
Documents entered into in accordance with the terms hereof.

 

“Revenues” means (i) to the extent attributable to any Property, all rents, rent
equivalents, moneys payable as damages pursuant to a Lease or in lieu of rent or
rent equivalents, royalties (including all oil and gas or other mineral
royalties and bonuses), income, receivables, receipts, revenues, deposits
(including security, utility and other deposits), accounts, cash, issues,
profits, charges for services rendered and other consideration of whatever form
or nature received by or paid to or for the account of or benefit of Borrower or
any Senior Mezzanine Borrower from any and all sources including any 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
property or rendering of services by Borrower and proceeds, if any, from
business interruption or other loss of income insurance; provided, however, that
with respect to any Encumbered Property, the foregoing shall not constitute

 

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“Revenues” to the extent that it is subject to the Lien of an Encumbered
Property Loan or is required to be applied to an Encumbered Property pursuant to
Encumbered Property Debt Documents, and (ii) all amounts released from
collateral accounts held by or on behalf of any Encumbered Property Lender in
connection with Encumbered Property Debt, to the extent such amounts are not
required to be applied to an Encumbered Property pursuant to Encumbered Property
Debt Documents.  “Revenues” shall not include Loss Proceeds applied in
accordance with Section 5.16 (other than the proceeds of rental interruption
insurance), interest income (other than interest on amounts contained in the
Collateral Accounts), equity contributions or other amounts to be funded by a
member pursuant to Borrower’s or any Senior Mezzanine Borrower’s operating
agreement and amounts which are received from the Collateral Accounts in
accordance herewith (or from the “Collateral Accounts” as defined in the Senior
Mezzanine Loan Agreement in accordance therewith) or are otherwise free of the
Liens of the Loan Documents pursuant to the terms hereof.

 

“S&P” means Standard & Poor’s Ratings Services, a division of the McGraw-Hill
Companies, Inc., and its successors.

 

“Scaled Allocated Loan Amount” means, with respect to each Property constituting
Senior Collateral, (i) the Aggregate Allocated Loan Amount of each such
Property, times (ii) the Scaling Factor of such Property, minus, after such
multiplication has been made, (iii) the portion of the applicable Encumbered
Property Debt allocated to such Property pursuant to the applicable Encumbered
Property Debt Documents.

 

“Scaling Factor” means, with respect to each Property constituting Senior
Collateral, the percentage indicated in Schedule A-3.

 

“Securitization” means, with respect to the Loan, the Senior Mezzanine Loan
and/or the Mortgage Loan, as the case may be, a transaction in which all or any
portion of the Loan, the Senior Mezzanine Loan and/or the Mortgage Loan is
deposited into one or more trusts which issue Certificates to investors, or a
similar transaction.

 

“Senior Collateral” means all Collateral secured by a Mortgage or a
first-priority perfected pledge of equity that, in either case, would not be
subordinate (structurally or otherwise) to the Lien of a hypothetical secured
lender (such as a DIP lender) in a hypothetical bankruptcy of AFRT, Operating
Partnership or their respective subsidiaries, other than the Lien of the
Encumbered Property Debt as listed on Schedule O.

 

“Senior Collateral Value” means, with respect to each Property not constituting
Senior Collateral, zero; and with respect to each Property constituting Senior
Collateral, the product of (i) the Scaled Allocated Loan Amount of such
Property, times (ii) the applicable percentage of the equity interest therein
that is pledged pursuant to that certain Senior Mezzanine Lower Tier Pledge, as
indicated in Schedule I thereto (but in no event shall the Senior Collateral
Value of any Property be less than zero).

 

“Senior Mezzanine Borrower” means individually or collectively, as the context
may require, the Persons listed as “Borrower” on the signature pages to the
Senior Mezzanine Loan Agreement.

 

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“Senior Mezzanine Cash Management Account” means the “Cash Management Account”
as defined in the Senior Mezzanine Loan Agreement.

 

“Senior Mezzanine Loan Collateral” means the “Collateral” as defined in the
Senior Mezzanine Loan Agreement.

 

“Senior Mezzanine Loan Collateral Accounts” means the “Collateral Accounts” as
defined in the Senior Mezzanine Loan Agreement.

 

“Senior Mezzanine Lower Tier Pledge” means that certain Pledge and Security
Agreement (Lower Tier), dated as of April 1, 2008, by Senior Mezzanine Borrower
for the benefit of Senior Mezzanine Lender.

 

“Senior Mezzanine Lender” means the holders from time to time of the Senior
Mezzanine Loan, and their respective successors and/or assigns.

 

“Senior Mezzanine Loan” means that certain mezzanine loan made by Senior
Mezzanine Lender to Senior Mezzanine Borrower as evidenced by the Senior
Mezzanine Loan Documents.   If the Senior Mezzanine Loan is hereafter bifurcated
into multiple loans, then all references to the Senior Mezzanine Loan herein
shall be deemed to refer to all such loans in the aggregate.

 

“Senior Mezzanine Loan Agreement” means that certain Amended and Restated Senior
Mezzanine Loan Agreement, dated as of the Closing Date, by and among Senior
Mezzanine Borrower and Senior Mezzanine Lender.

 

“Senior Mezzanine Loan Amount” means $500,000,000.

 

“Senior Mezzanine Loan Documents” means the “Loan Documents”, as defined in the
Senior Mezzanine Loan Agreement.

 

“Senior Mezzanine Loan Event of Default” means the occurrence of any one or more
events that would constitute an “Event of Default” under and as defined in any
of the Senior Mezzanine Loan Documents, with respect to which Lender shall have
received written notice from Borrower or the Senior Mezzanine Lender.

 

“Senior Mezzanine Loan Permitted Encumbrances” means:

 

(i)            the Liens created by the Loan Documents and the Encumbered
Property Debt Documents;

 

(ii)           all Liens and other matters specifically disclosed on Schedule B
of the Qualified Title Insurance Policy;

 

(iii)          Liens, if any, for Taxes not yet delinquent;

 

(iv)          mechanics’, materialmen’s or similar Liens, if any, and Liens for
delinquent taxes or impositions, in each case only if being contested in good
faith and by

 

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appropriate proceedings, provided that no such Lien is in imminent danger of
foreclosure and provided further that either (a) each such Lien is released or
discharged of record or fully insured over by the title insurance company
issuing the Qualified Title Insurance Policy within 60 days of its creation, or
(b) Borrower deposits with Lender, by the expiration of such 60-day period, an
amount equal to 115% of the dollar amount of such Lien or a bond in the
aforementioned amount from such surety, and upon such terms and conditions, as
is reasonably satisfactory to Lender, as security for the payment or release of
such Lien (such 60-day period shall be extended to 90 days with respect to any
such Lien that is caused by a Tenant, provided Borrower exercises commercially
reasonable efforts during such 90-day period to cause such Tenant to remove such
Lien or provide the bond described above);

 

(v)           rights of existing Tenants under Leases heretofore disclosed to
Lender, and the rights of future Tenants and subtenants as tenants only pursuant
to written Leases entered into in conformity with the provisions of this
Agreement; and

 

(vi)          easements and other customary encumbrances customarily encumbering
like properties and entered into in the ordinary course of business, to the
extent such easements or encumbrances do not result in a Material Adverse
Effect.

 

“Senior Mezzanine Loan Principal Indebtedness” means the “Principal
Indebtedness” as defined in the Senior Mezzanine Loan Agreement.

 

“Service” means the Internal Revenue Service or any successor agency thereto.

 

“Servicer” means the entity or entities appointed by Lender from time to time to
serve as servicer and/or special servicer of the Loan.  If at any time no entity
is so appointed, the term “Servicer” shall be deemed to refer to Lender.

 

“Single Member LLC” means a limited liability company which either (x) has only
one member, or (y) has multiple members, none of which is a Single-Purpose
Equityholder.

 

“Single-Purpose Entity” means a Person which (a) was formed solely for the
purpose of acquiring and holding (i) in the case of a Property Owner, an
ownership interest in its Property, (ii) in the case of a Required Equity
Pledgor, an ownership interest in its Required Equity (iii) in the case of the
Borrower, an ownership interest in the Senior Mezzanine Borrower or (iv) in the
case of a Single-Purpose Equityholder, an ownership interest in the Borrower,
(b) does not engage in any business unrelated to (i) in the case of a Property
Owner, such Property, (ii) in the case of a Required Equity Pledgor, such
Required Equity, (iii) in the case of the Borrower, its ownership interest in
Senior Mezzanine Borrower or (iv) in the case of a Single-Purpose Equityholder,
its ownership interest in the Borrower, (c) does not have any assets other than
those related to (i) in the case of a Property Owner, such Property, (ii) in the
case of a Required Equity Pledgor, such Required Equity (iii) in the case of the
Borrower, its ownership interest in Senior Mezzanine Borrower or (iv) in the
case of a Single-Purpose Equityholder, its ownership interest in the Borrower,
(d) does not have any Debt other than, in the case of Borrower, Permitted Debt,
(e) maintains books, accounts, records, financial statements, stationery,
invoices and checks which are separate and apart from those of any other Person

 

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(except that such Person’s financial position, assets, results of operations and
cash flows may be included in the consolidated financial statements of an
Affiliate of such Person in accordance with GAAP, provided that any such
consolidated financial statements shall contain a note indicating that such
Person and its Affiliates are separate legal entities and maintain records,
books of account separate and apart from any other Person), (f) is subject to
and complies with all of the limitations on powers and separateness requirements
set forth in the organizational documentation of such Person as of the Closing
Date, (g)  holds itself out as being a Person separate and apart from each other
Person and not as a division or part of another Person, (h) conducts its
business in its own name (except for services rendered under a management
agreement with an Affiliate, so long as the manager, or equivalent thereof,
under such management agreement holds itself out as an agent of such Person),
(i) exercises reasonable efforts to correct any known misunderstanding actually
known to it regarding its separate identity, and maintains an arm’s-length
relationship with its Affiliates, (j) pays its own liabilities out of its own
funds (including the salaries of its own employees, if any) and reasonably
allocates any overhead that is shared with an Affiliate, including paying for
shared office space and services performed by any officer or employee of an
Affiliate, (k) maintains a sufficient number of employees in light of its
contemplated business operations, (l) conducts its business so that the
assumptions made with respect to it which are contained in the Nonconsolidation
Opinion shall at all times be true and correct in all material respects,
(m) except as contemplated by the Loan Documents, maintains 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, (n) observes all
applicable corporate entity-level formalities in all material respects,
(o) except as contemplated by the Loan Documents, does not commingle its assets
with those of any other Person and holds such assets in its own name, (p) except
as contemplated by the Loan Documents, except as set forth in the Encumbered
Property Debt Documents and the Loan Documents, does not assume, guarantee or
become obligated for the debts of any other Person, and does not hold out its
credit as being available to satisfy the obligations or securities of others,
(q) does not acquire obligations or securities of its shareholders, members or
partners, (r) except as contemplated by the Loan Documents, except in connection
with the Loan, does not pledge its assets for the benefit of any other Person
and does not make any loans or advances to any Person, (s) intends to maintain
adequate capital in light of its contemplated business operations, (t) has two
Independent Directors, or, in the case of a limited partnership, has a
Single-Purpose Equityholder with two Independent Directors, (u) has by-laws or
an operating agreement, or, in the case of a limited partnership, has a
Single-Purpose Equityholder with by-laws or an operating agreement, which
provides that, for so long as the Loan is outstanding, such Person shall not
take or consent to any of the following actions except to the extent expressly
permitted in this Agreement and the other Loan Documents:

 

(i)            to the fullest extent permitted by law, the dissolution,
liquidation, consolidation, merger or sale of all or substantially all of its
assets (and, in the case of a Single-Purpose Equityholder, the assets of the
Borrower or Senior Mezzanine Borrower, as the case may be);

 

(ii)           the engagement by such Person (and, in the case of a
Single-Purpose Equityholder, the engagement by the Borrower or Senior Mezzanine
Borrower, as the case may be) in, (a) in the case of any Property Owner, any
business other than the acquisition, development, management, leasing,
ownership, maintenance and operation

 

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of its Property, and activities incidental thereto, (b) in the case of any
Required Equity Pledgor, any business other than the acquisition and ownership
of its Required Equity, (c) in the case of Borrower, any business other than the
acquisition and ownership of the equity interests in Senior Mezzanine Borrower
and (d) in the case of a Single-Purpose Equityholder, activities incidental to
the acquisition and ownership of its interest in the Borrower or the Senior
Mezzanine Borrower;

 

(iii)          the filing, or consent to the filing, of a bankruptcy or
insolvency petition, any general assignment for the benefit of creditors or the
institution of any other insolvency proceeding, or the seeking or consenting to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator,
custodian or any similar official in respect of such Person without the
affirmative vote of all of its Independent Directors (and, in the case of a
Single-Purpose Equityholder, in respect of the Borrower without the affirmative
vote of both of such Single-Purpose Equityholder’s Independent Directors); and

 

(iv)          any amendment or modification of any provision of its (and, in the
case of a Single-Purpose Equityholder, the Borrower’s) organizational documents
relating to qualification as a “Single-Purpose Entity”,

 

and (v) if such entity is a Single Member LLC that does not have an independent
non-equity member, has organizational documents which provide that upon the
occurrence of any event (other than a permitted equity transfer) that causes its
sole member to cease to be a member while the Loan is outstanding, at least one
of its Independent Directors shall automatically be admitted as the sole member
of the Single Member LLC and shall preserve and continue the existence of the
Single Member LLC without dissolution.

 

“Single-Purpose Equityholder” means a Single-Purpose Entity that (x) is a
limited liability company or corporation formed under the laws of the State of
Delaware, (y) owns at least a 0.5% direct equity interest in Borrower, and
(z) serves as the general partner or managing member of Borrower.

 

“SNDA” has the meaning set forth in Section 5.7(f).

 

“Sponsor” means Gramercy Capital Corp., or any successors and assigns thereof by
merger, consolidation, amalgamation, reorganization, acquisition of all or
substantially all of the shares or other ownership interests in Sponsor, by
transfer of all or substantially all of Sponsor’s assets in a single
transaction, or through a similar transaction.

 

“Spread” means:

 

(i)            initially, 6.00%; and

 

(ii)           following the bifurcation of the Note into multiple Note
Components pursuant to Section 1.3(c), the weighted average of the Component
Spreads at the time of determination, weighted on the basis of the corresponding
Component Balances.

 

“Subordination of Property Management Agreement” means that certain consent and
agreement of manager and subordination of management agreement executed by
Borrower

 

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and the Approved Property Manager as of the Closing Date, as the same may from
time to time be modified or replaced in accordance herewith.

 

“Taxes” means all real estate and personal property taxes, assessments, fees,
taxes on rents or rentals, water rates or sewer rents, facilities and other
governmental, municipal and utility district charges or other similar taxes or
assessments now or hereafter levied or assessed or imposed against the
Properties or Borrower with respect to the Properties or rents therefrom or
which may become Liens upon any of the Properties, without deduction for any
amounts reimbursable to Borrower by third parties.

 

“Tenant” means any Person liable by contract or otherwise to pay monies
(including a percentage of gross income, revenue or profits) pursuant to a
Lease.

 

“Tenant Improvements” means, collectively, (i) tenant improvements to be
undertaken for any Tenant which are required to be completed by or on behalf of
Borrower, Senior Mezzanine Borrower or any Property Owner pursuant to the terms
of such Tenant’s Lease, (ii) tenant improvements paid or reimbursed through
allowances to a Tenant pursuant to such Tenant’s Lease, and (iii) other similar
tenant inducements.

 

“Tenant Notice” has the meaning set forth in Section 3.1(b).

 

“Test Period” means each 12-month period ending on the last day of a Fiscal
Quarter; provided, however, “Test Period” shall mean the most recently completed
calendar quarter, annualized, for calculation of the “LIBOR Strike Rate”.

 

“Transaction” means, collectively, the Merger and other transactions
contemplated and/or financed by the Loan Documents.

 

“Transfer” means (i) with respect to a Property, the pledge, sale or other whole
or partial conveyance of all or any portion of any of the Properties or any
direct or indirect interest therein, or any direct or indirect equity interest
in the owner thereof, including granting of any purchase options, rights of
first refusal, rights of first offer or similar rights in respect of any portion
of such Property or the subjecting of any portion of such Property to
restrictions on transfer; except that the conveyance of a space lease at such
Property in accordance herewith shall not constitute a Transfer and (ii) with
respect to the Collateral, the Senior Mezzanine Loan Collateral and/or the
Required Equity, unless expressly permitted hereunder, the pledge, sale or other
whole or partial conveyance of all or any portion thereof or any direct or
indirect equity interest therein.

 

“TRS Owner” means American Financial TRS, Inc.

 

“TRS Property” means any Property directly or indirectly owned by TRS Owner.

 

“Unaffiliated Release Price” has the meaning set forth in Exhibit I.

 

“Underfunding” means with respect to any Plan, the excess, if any, of the
“projected benefit obligations” (within the meaning of Statement of Financial
Accounting Standards 87) under such Plan (determined using the actuarial
assumption used for financial

 

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statement disclosure in the most recent financial statements of the Plan
sponsor) over the fair market value of the assets held under the Plan.

 

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

 

“U.S. Person” means a United States person within the meaning of
Section 7701(a)(30) of the Code.

 

“U.S. Tax” means any present or future tax, assessment or other charge or levy
imposed by or on behalf of the United States of America or any taxing authority
thereof.

 

“Value Add Pool Equity” means, collectively, 100% of the direct equity interests
in the owner of each Value Add Pool Owner.

 

“Value Add Pool Equity Release Price” has the meaning set forth in Exhibit I.

 

“Value Add Pool Owner” means, collectively or individually, as the context may
require, each Person that owns a Value Add Pool Property as listed on Schedule
J.

 

“Value Add Pool Pledgor” means each owner of a Value Add Pool Owner, as set
forth on Schedule J.

 

“Value Add Pool Property” means, collectively or individually, as the context
may require, each of the Properties listed on Schedule J.

 

“Waste” means any material abuse or destructive use (whether by action or
inaction) of the Properties.

 

“Zoning Report” means a zoning report or reports with respect to each of the
Properties approved by Lender and delivered to Lender in connection with the
Loan, and any amendments or supplements thereto delivered to Lender.

 

 (b)          Rules of Construction.  All references to sections, schedules and
exhibits are to sections, schedules and exhibits in or to this Agreement unless
otherwise specified.  Unless otherwise specified: (i) all meanings attributed to
defined terms in this Agreement shall be equally applicable to both the singular
and plural forms of the terms so defined, (ii) “including” means “including, but
not limited to”, (iii) references to Payment Dates that fall in specified months
ignore the preceding Business Day convention, and (iv) “mortgage” means a
mortgage, deed of trust, deed to secure debt or similar instrument, as
applicable, and “mortgagee” means the secured party under a mortgage, deed of
trust, deed to secure debt or similar instrument.  All accounting terms not
specifically defined in this Agreement shall be construed in accordance with
GAAP, as same may be modified in this Agreement.  Notwithstanding anything to
the contrary set forth herein or in the other Loan Documents, wherever the Loan
Documents provide that Senior Mezzanine Borrower, any Property Owner or any
Joint Venture Owner shall take or refrain from taking an action, and all
references to Borrower taking an action with respect to a Property (e.g.,
requirements that Borrower maintain the Property, perform obligations under

 

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Leases, etc.), such provision shall be construed to mean that Borrower shall
cause the Senior Mezzanine Borrower to cause the applicable Property Owner or
Joint Venture Owner (to the fullest extent permitted under the applicable
Qualified Joint Venture Agreements with respect to the Joint Venture Properties)
to take or refrain from taking such action, as applicable; and all references to
the creation or release of a Lien of Lender on an Encumbered Property shall mean
the creation or release of Senior Mezzanine Lender’s Lien on the Collateral
specifically related to such Property.  The Schedules attached hereto reflect
the state of affairs as of the Closing Date but do not reflect subsequent
changes that may have occurred pursuant to and in accordance with this
Agreement.  The terms and provisions in the Original Loan Agreement relating to
the “Indenture”, as defined therein, the obligations issued thereunder and the
representations relating thereto, shall apply with respect to the period from
the Closing Date through and including the day immediately following the Closing
Date.

 

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ARTICLE I

 

GENERAL TERMS

 

1.1.         The Loan.  On the Closing Date, subject to the terms and conditions
of this Agreement, Lender shall make a loan to Borrower (the “Loan”) in an
amount equal to the Loan Amount.  The Loan shall initially be represented by a
single Note which shall bear interest as described in this Agreement at a per
annum rate as provided in Section 1.3(a).  The Loan shall be secured by the
Collateral.

 

1.2.         The Term.

 

(a)           The Maturity Date of the Loan shall initially be the Payment Date
in March 2010, or such earlier date as may result from acceleration.

 

(b)          Borrower shall have a single option to extend the scheduled
Maturity Date of the Loan to the Payment Date in the month containing the
one-year anniversary of the Maturity Date (the period of such extension, the
“Extension Term”), provided that (i) Borrower shall deliver to Lender written
notice of such extension at least 30 and not more than 60 days prior to the
Maturity Date; (ii) no monetary or other material Default shall be continuing on
either the date of such notice or the Maturity Date as theretofore in effect;
(iii) Borrower shall have obtained an Extension Interest Rate Cap Agreement for
the Extension Term and collaterally assigned such Extension Interest Rate Cap
Agreement to Lender pursuant to an Assignment of Interest Rate Cap Agreement;
(iv) the term of the Senior Mezzanine Loan shall have been extended in
accordance with the provisions of Section 1.2(b) of the Senior Mezzanine Loan
Agreement and Senior Mezzanine Borrower shall have obtained and collaterally
assigned to Senior Mezzanine Lender an “Extension Interest Rate Cap Agreement”
(as defined in the Senior Mezzanine Loan Agreement) for the applicable Extension
Term; and (v) Borrower shall have paid to Lender an extension fee in an amount
equal to 0.75% of the Principal Indebtedness and all reasonable out-of-pocket
expenses incurred by Lender in connection with such extension. If Borrower fails
to exercise the extension option in accordance with the provisions of this
Agreement, the extension option, and any subsequent extension option hereunder,
will automatically cease and terminate.

 

1.3.         Interest and Principal.

 

(a)           On each Payment Date, Borrower shall pay interest on the Principal
Indebtedness for the Interest Accrual Period in which such Payment Date falls at
a rate per annum equal to the sum of LIBOR, determined as of the Interest
Determination Date immediately preceding such Interest Accrual Period, plus the
Spread (except that interest shall be payable on the Indebtedness, including due
but unpaid interest, at the Default Rate with respect to any portion of such
Interest Accrual Period falling during the continuance of an Event of Default). 
Interest accruing for the first Interest Accrual Period shall be prepaid on the
Closing Date from the Loan proceeds otherwise to be disbursed to Borrower at
Closing.  Interest payable hereunder shall be computed on the basis of a 360-day
year and the actual number of days elapsed.

 

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(b)          No prepayments of the Loan shall be permitted except as provided in
Sections 2.1 and 5.16(d).  The entire outstanding Principal Indebtedness,
together with all interest thereon through the end of the Interest Accrual
Period in which the Maturity Date falls (calculated as if such Principal
Indebtedness were outstanding for the entire Interest Accrual Period) and all
other amounts then due under the Loan Documents shall be due and payable by
Borrower to Lender on the Maturity Date, as such date may be extended pursuant
to Section 1.2(b).

 

(c)           Upon written notice from Lender to Borrower (the “Componentization
Notice”), the Note will be deemed to have been subdivided (retroactively as of
the Closing) into multiple components (“Note Components”).  Each Note Component
shall have such notional balance (a “Component Balance”) as Lender shall specify
in the Componentization Notice and an interest rate equal to the sum of LIBOR
plus such amount as Lender shall specify in the Componentization Notice (each
such amount, a “Component Spread”); provided that (i) the sum of the Component
Balances of all Note Components shall equal the then-applicable Principal
Indebtedness, and (ii) except following a prepayment as the result of an Event
of Default or as a result of the application of Loss Proceeds in connection with
a Casualty or Condemnation(x) all payments of interest and principal hereunder
shall be applied to the Note Components on a pro rata basis and (y) the weighted
average of the Component Spreads, weighted on the basis of their respective
Component Balances, shall equal the percentage set forth in clause (i) of the
definition of “Spread”.  If requested by Lender, each Note Component shall be
represented by a separate physical Note (and subject to any intercreditor
agreement among Lender, Junior Mezzanine Lender and/or any Encumbered Property
Lender, and/or any co-lender agreement among the Lenders hereunder, all payments
of interest and principal hereunder shall be applied to the Notes on a pro rata
basis).  Borrower shall execute and return to Lender each such Note within a
reasonable period of time, but in any event not in excess of four Business Days
after Borrower’s receipt of an execution copy thereof.

 

(d)          Any payments of interest and principal not paid when due hereunder
shall bear interest at the applicable Default Rate and, when paid, shall be
accompanied by a late fee in an amount equal to 4% times the amount of such late
payment 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.  Borrowers shall have no obligation hereunder to
pay Default Rate interest or a late charge if such failure to timely make a
payment is due to Lender not complying with its obligations under Article 3
hereof and the Cash Management Agreement and no Default or Event of Default
shall result under the Loan Documents by reason thereof.

 

1.4.         Interest Rate Cap Agreements.

 

(a)           On or prior to the Closing Date, Borrower shall obtain, and
thereafter maintain in effect, an Initial Interest Rate Cap Agreement, which
shall be coterminous with the initial term of the Loan and have a notional
amount equal to the Loan Amount.   Any Initial Interest Rate Cap Agreement shall
have a LIBOR strike rate equal to or less than the LIBOR Strike Rate.

 

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(b)          If Borrower exercises its option to extend the term of the Loan
pursuant to Section 1.2(b), then on or prior to the commencement of the
Extension Term Borrower shall obtain, and thereafter maintain in effect, an
Extension Interest Rate Cap Agreement having (x) a term coterminous with the
Extension Term, (y) a notional amount at least equal to the Principal
Indebtedness as of the first day of the Extension Term, and (z) a LIBOR strike
rate equal to or less than the LIBOR Strike Rate.

 

(c)           Borrower shall collaterally assign to Lender pursuant to an
Assignment of Interest Rate Cap Agreement all of its right, title and interest
in any and all payments under each Interest Rate Cap Agreement and shall deliver
to Lender an executed counterpart of such Interest Rate Cap Agreement and obtain
the consent of the Acceptable Counterparty to such collateral assignment (as
evidenced by the Acceptable Counterparty’s execution of such Collateral
Assignment of Interest Rate Cap Agreement).

 

(d)          Borrower shall comply with all of its obligations under the terms
and provisions of each Interest Rate Cap Agreement.  All amounts paid under an
Interest Rate Cap Agreement shall be deposited directly into the Cash Management
Account.  Borrower shall take all actions reasonably requested by Lender to
enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a
default by the counterparty thereunder and shall not waive, amend or otherwise
modify any of its rights thereunder.

 

(e)           If, at any time during the term of the Loan, the counterparty to
the Interest Rate Cap Agreement then in effect ceases to be an Acceptable
Counterparty and thereafter fails to abide by the requirements set forth in such
Interest Rate Cap Agreement with respect to ratings downgrades, then Borrower
shall promptly obtain a replacement Interest Rate Cap Agreement satisfying the
requirements set forth in paragraph (a) or (b) above, as applicable, with a
counterparty that is an Acceptable Counterparty.

 

(f)           As of the Closing Date, and at any time that Borrower obtains a
replacement Interest Rate Cap Agreement pursuant to this Section 1.4, Borrower
shall deliver to Lender a legal opinion or opinions from counsel to the
applicable Acceptable Counterparty (which counsel may be internal counsel) in
substantially the form of Exhibit B.

 

1.5.         Method and Place of Payment.  Except as otherwise specifically
provided in this Agreement, all payments and prepayments under this Agreement
and the Notes (including any deposit into the Cash Management Account pursuant
to Section 3.2(c)) shall be made to Lender not later than 1:00 p.m., New York
City time, on the date when due and shall be made in lawful money of the United
States of America by wire transfer in federal or other immediately available
funds to the account specified from time to time by Lender.  Any funds received
by Lender after such time shall be deemed to have been paid on the next
succeeding Business Day.  Lender shall notify Borrower in writing of any changes
in the account to which payments are to be made.  If the amount received from
Borrower (or from the Cash Management Account pursuant to Section 3.2(b)) is
less than the sum of all amounts then due and payable hereunder, such amount
shall be applied, at Lender’s sole discretion, either toward the components of
the Indebtedness (e.g., interest, principal and other amounts payable hereunder)
and the Note Components in such sequence as Lender shall elect in its sole
discretion, or toward the payment of Property expenses.

 

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1.6.         Regulatory Change.  If, as a result of any Regulatory Change, any
reserve, special deposit or similar requirements relating to any extensions of
credit or other assets of, or any deposits with, any Lender is imposed, modified
or deemed applicable and the result is to increase the cost to such Lender of
making LIBOR-based loans, or to reduce the amount receivable by Lender hereunder
in respect of any portion of the Loan with respect to LIBOR-based loans by an
amount deemed by such Lender to be material (such increases in cost and
reductions in amounts receivable, “Increased Costs”), then Borrower agrees that
it will pay to Lender upon Lender’s request such additional amount or amounts
(based upon a reasonable allocation thereof by such Lender to the LIBOR-based
loans made by such Lender) as will compensate such Lender for such Increased
Costs to the extent that such Increased Costs are reasonably allocable to the
Loan.  Lender will notify Borrower in writing of any event occurring after the
Closing Date which will entitle Lender to compensation pursuant to this
Section 1.6 as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation and will designate a different lending
office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender.  If such Lender shall fail to notify
Borrower of any such event within 90 days following the end of the month during
which such event occurred, then Borrower’s liability for any amounts described
in this Section incurred by such Lender as a result of such event shall be
limited to those attributable to the period occurring subsequent to the 90th day
prior to the date upon which such Lender actually notified Borrower of the
occurrence of such event.  Notwithstanding the foregoing, in no event shall
Borrower be required to compensate any Lender for any portion of the income or
franchise taxes of Lender, whether or not attributable to payments made by
Borrower.  If a Lender requests compensation under this Section 1.6, Borrower
may, by notice to Lender, require that such Lender furnish to Borrower a
statement setting forth in reasonable detail the basis for requesting such
compensation and the method for determining the amount thereof.

 

1.7.         Taxes.

 

(a)           Borrower agrees to indemnify Lender against any present or future
stamp, documentary or other similar or related taxes or other similar or related
charges now or hereafter imposed, levied, collected, withheld or assessed by any
United States Governmental Authority by reason of the execution and delivery of
the Loan Documents and any consents, waivers, amendments and enforcement of
rights under the Loan Documents.

 

(b)          If Borrower is required by law to withhold or deduct any amount
from any payment hereunder in respect of any U.S. Tax, Borrower shall withhold
or deduct the appropriate amount, remit such amount to the appropriate
Governmental Authority and pay to each Person to whom there has been an
Assignment or Participation of a Loan and who is not a U.S. Person such
additional amounts as are necessary in order that the net payment of any amount
due to such non-U.S. Person hereunder after deduction for or withholding in
respect of any U.S. Tax imposed with respect to such payment (or in lieu
thereof, payment of such U.S. Tax by such non-U.S. Person), will not be less
than the amount stated in this Agreement to be then due and payable; except that
the foregoing obligation to pay such additional amounts shall not apply (i) to
any assignee that has not complied with the obligations contained in
Section 9.7(c), (ii) to any U.S. Taxes withheld or deducted from, or imposed on,
any payment hereunder or under the Note or any Note Components by reason of any
present or former connection between any non-U.S.

 

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Person and the United States of America (other than solely on account of the
execution and performance of, the enforcement of any right under or the receipt
of any payment under, this Agreement or a Note), (iii) to any U.S. Taxes
withheld or deducted from, or imposed on, any payment hereunder or under the
Note or any Note Components at the time of any Assignment or Participation of a
Loan or the Note or any Note Components to any non-U.S. Person, (iv) to any U.S.
Taxes imposed solely by reason of the failure by such Person (or, if such Person
is not the beneficial owner of the relevant Loan, such beneficial owner) to
comply with applicable certification, information, documentation or other
reporting requirements concerning the nationality, residence, identity or
connections with the United States of America of such Person (or beneficial
owner, as the case may be) if such compliance is required by statute or
regulation of the United States of America as a precondition to relief or
exemption from such U.S. Taxes; or (v) with respect to any Person who is a
fiduciary or partnership or other than the sole beneficial owner of such
payment, to any U.S. Tax imposed with respect to payments made under any Note to
a fiduciary or partnership to the extent that the beneficial owner or member of
the partnership would not have been entitled to the additional amounts if such
beneficial owner or member of the partnership had been the holder of the Note.

 

(c)           Within 30 days after paying any amount from which it is required
by law to make any deduction or withholding, and within 30 days after it is
required by law to remit such deduction or withholding to any relevant taxing or
other authority, Borrower shall deliver to such non-U.S. Person satisfactory
evidence of such deduction, withholding or payment (as the case may be).

 

1.8.         Release.  Upon payment of the Indebtedness in full when permitted
or required hereunder, Lender shall execute instruments prepared by Borrower and
reasonably satisfactory to Lender, which, at Borrower’s election: (a) release
and discharge all Liens on all Collateral securing payment of the Indebtedness
(subject to Borrower’s obligation to pay any associated fees and expenses),
including all balances in the Collateral Accounts, terminate the Loan Documents
(other than those provisions thereof that expressly survive repayment of the
Indebtedness in full) and provide notice to third parties, including the Cash
Management Bank and Tenants; or (b) assign such Liens (and the applicable Loan
Documents) to a new lender designated by Borrower.

 

ARTICLE II

 

PREPAYMENT

 

2.1.         Voluntary and Mandatory Prepayment.

 

(a)           Borrower shall have the right, at its option, upon ten Business
Days’ prior written notice to Lender (which notice may be revocable at any time
by Borrower, provided that Borrower shall reimburse Lender for all of its
reasonable out-of-pocket costs and expenses incurred as a result of any such
revocation), to prepay the Loan in whole or in part at any time, provided that
if such prepayment is made prior to the Par Prepayment Date then Borrower shall
pay to Lender simultaneously with such prepayment the applicable Prepayment Fee;
provided, however, that no Prepayment Fee shall be payable with respect to (i) a
prepayment of the Loan in connection with the release of one or more Value Add
Pool Properties or the release of one or

 

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more of the Properties within the Dana Portfolio, except, in each case, to the
extent that aggregate prepayments of the Loan shall exceed 30% of the Loan
Amount, (ii) a prepayment of the Loan in connection with the sale of a
Disposition Asset or (iii) any prepayment of the Loan pursuant to
Section 5.16(d).  Each such prepayment shall be accompanied by the amount of
interest theretofore accrued but unpaid in respect of the principal amount so
prepaid, plus the amount of interest that would have accrued on the principal
amount so prepaid had it remained outstanding through the end of the Interest
Accrual Period in which such prepayment is made and, if such prepayment is made
during the last two Business Days in any Interest Accrual Period, the amount of
additional interest that would have accrued on the principal amount so prepaid
had it remained outstanding through the end of the following Interest Accrual
Period.  Following any such prepayment, Borrower may release or transfer, free
and clear of the Lien of the Loan Documents, a portion of the notional amount of
the Interest Rate Cap Agreement equal to the amount of such prepayment.  Any
partial prepayment shall be applied to the last payments of principal due under
the Loan.

 

(b)          Borrower shall not be permitted to make a voluntary prepayment of
the Principal Indebtedness (excluding any payment of any Affiliated Release
Price, Unaffiliated Release Price or Dana Release Price or any application of
Loss Proceeds) unless simultaneously therewith a prepayment of the Mortgage Loan
and the Senior Mezzanine Loan shall also be made in the amount necessary so that
the Principal Indebtedness, the Senior Mezzanine Loan Principal Indebtedness and
the Principal Indebtedness immediately after such prepayment are in the same
proportion as they were immediately prior to such prepayments (but Borrower
shall be permitted, and is required, to make the mandatory prepayments set forth
in Section 2.1(c)).  If the Note has been bifurcated into multiple Note
Components pursuant to Section 1.3(c), all prepayments of the Loan, except those
made during the continuance of an Event of Default or pursuant to Section 5.16,
shall be applied to the Note Components on a pro rata basis.  All prepayments of
the Loan made during the continuance of an Event of Default or pursuant to
Section 5.16 shall be applied to the Note Components in ascending order of
interest rate (i.e., first to the Note Component with the lowest Component
Spread until its outstanding principal balance has been reduced to zero, then to
the Note Component with the second lowest Component Spread until its outstanding
principal balance has been reduced to zero, and so on) or in such other order as
Lender shall determine.

 

(c)           Borrower shall make the following mandatory prepayments of the
Loan:

 

(i)            on the first Payment Date following the date on which any
Restricted Cash is no longer required to be maintained as collateral for the
benefit of the applicable Encumbered Property Lender pursuant to the applicable
Encumbered Property Debt Documents, Borrower shall prepay the Loan in accordance
with Section 2.1 in an amount equal to the product of (x) the amount of any such
Restricted Cash, times (y) the Loan Multiplier, provided that Borrower shall not
be required to pay any Prepayment Fee or other similar amount in connection
therewith;

 

(ii)           on any Payment Date on which Dana Excess Cash Flow is contained
in the Cash Management Account, Borrower shall prepay the Loan in an amount
equal to the product of (x) the amount of such Dana Excess Cash Flow times
(y) the Loan Multiplier, provided that (i) Borrower shall not be required to pay
any Prepayment Fee or

 

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other similar amount in connection therewith and (ii) the aggregate amount of
prepayments of the Loan and the Senior Mezzanine Loan made pursuant to this
Section 2.1(c)(ii) shall not be required to exceed $10,000,000 in the aggregate
in any calendar year (which amount shall be reduced on a proportionate basis to
reflect any reduction in Borrower’s interest in the Dana Portfolio in the event
Senior Mezzanine Borrower enters into a Qualified Joint Venture Agreement with
respect to the Dana Portfolio in accordance herewith, and any release of a
Property in the Dana Portfolio in accordance herewith, in each case provided the
Release Price required to be paid in accordance therewith has been paid);

 

(iii)          simultaneously with, and as a condition to, any sale and/or
financing of any Disposition Asset (including subsequent sales and/or financings
to the extent any initial sale or financing is with or to an Affiliate of
Borrower or Senior Mezzanine Borrower) that shall cause the aggregate gross
proceeds theretofore realized from the sale and/or financing of Disposition
Assets to exceed $184,000,000 (which gross proceeds shall include the assumption
of Debt without reduction for repayment of Debt, but shall be net of customary
transaction costs, including legal fees, actually paid to third parties, in each
case with respect to any such sale or financing of a Disposition Asset) subject
to the last sentence of Section 3.1(b) below, Borrower shall prepay the Loan in
accordance with Section 2.1 in an amount equal to the product of (x) the amount
of any such excess, times (y) the Loan Multiplier, provided that Borrower shall
not be required to pay any Prepayment Fee or other similar amount in connection
therewith (by way of example only: if the Disposition Assets are encumbered by
$100,000,000 and are purchased for $100,000,000 subject to existing Debt, or are
purchased for $200,000,000 and existing Debt is repaid, then in either case the
Loan shall be reduced or repaid, as applicable, in the amount of $16,000,000
(net of customary third party transaction costs paid to unaffiliated third
parties) times the Loan Multiplier); and

 

(iv)         simultaneously with any voluntary prepayment of all or any portion
of the Mortgage Loan Principal Indebtedness and/or the Senior Mezzanine Loan
Principal Indebtedness, Borrower shall make a prepayment hereunder in the amount
necessary so that the Principal Indebtedness, the Mortgage Loan Principal
Indebtedness and the Senior Mezzanine Loan Principal Indebtedness immediately
after such prepayments are in the same proportion as they were immediately prior
to such prepayments.

 

2.2.         Property Releases.

 

(a)           So long as no Event of Default is then continuing and all amounts
then due and owing to Lender have been paid in full, Senior Mezzanine Borrower
may from time to time obtain the release of one or more of the Properties or
direct or indirect equity interests therein from the Liens of the Senior
Mezzanine Loan Documents in connection with a sale to an unaffiliated
third-party in an arms’-length transaction or a Permitted Affiliate Sale, or
pursuant to Section 5.24, , provided that: (1) at the time of such release (but
provided that no Event of Default has occurred and is continuing, not in
connection with the transfer of any Disposition Asset), Borrower shall prepay
the Loan in accordance with Section 2.1 in an amount equal to the applicable
Release Price, plus any additional amount required to be prepaid in accordance
with Section 2.2(c) in order to reduce the Release Price Deficit, which
aggregate prepayment shall be

 

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accompanied by the other amounts specified in Section 2.1, including the
applicable Prepayment Fee if such prepayment is made prior to the Par Prepayment
Date (for the avoidance of doubt, provided no Event of Default is continuing,
Borrower shall not be required to deposit into the Cash Management Account the
proceeds from the permitted sale of any Disposition Assets, except if and to the
extent that Borrower is required hereunder to pay to Lender a Release Price or
other amount in connection therewith), (2) except with respect to the sale of
the Dana Portfolio to an unaffiliated third party, DSCR for the Test Period most
recently ended, recalculated to include only income and expense attributable to
Senior Mezzanine Borrower’s interest in the Properties remaining after the
contemplated release and to exclude the interest expense and principal payments
on the aggregate amount to be prepaid, shall be equal to or greater than DSCR
immediately prior to such release (as reasonably determined by Lender) (for
these purposes, in the case of the sale of a Mortgage Loan Collateral Property,
DSCR shall be adjusted to ignore the effect of so-called “rate creep” resulting
from the fact that the prepayment of the Loan and the Mortgage Loan will not
result in a pro-rata reduction of their respective principal amounts), (3) after
giving effect to such release, the aggregate Senior Collateral Value shall not
be less than 120% of the sum of the Principal Indebtedness and the Senior
Mezzanine Loan Principal Indebtedness and (4) Borrower shall reimburse Lender
for any actual reasonable out-of-pocket costs and expenses incurred by Lender in
connection with this Section 2.2 (including the reasonable fees and expenses of
legal counsel and the Servicer).  Notwithstanding anything to the contrary in
this Section 2.2(a) (x) the release price for a Disposition Asset shall be zero,
subject to the requirement specified in Section 2.1(c)(iii), and the foregoing
requirements set forth in clauses (1) through (4) inclusive shall not apply,
(y) with respect to the release of any Joint Venture Property, the Release Price
applicable to such Property shall be adjusted to reflect the Joint Venture
Owner’s percentage interest in the Joint Venture Property as of the date of any
such release and (z) the release price for any asset acquired by a Senior
Mezzanine Borrower from and after the date hereof (to the extent Senior
Mezzanine Borrower is permitted to acquire any such asset pursuant to the Senior
Mezzanine Loan Agreement) shall be zero, and the foregoing requirements set
forth in clauses (1) through (4) inclusive shall not apply.

 

(b)          Upon satisfaction of the requirements set forth in Sections 2.1 and
2.2, Lender will execute and deliver to Borrower such instruments, prepared by
Borrower and approved by Lender, as shall be necessary to release the applicable
Property or Properties from the Liens of the Loan Documents or to assign the
applicable portion of such Liens to a third party to the extent necessary to
avoid the incurrence of mortgage recording taxes.

 

(c)           Notwithstanding anything herein to the contrary, in the case of a
sale of a Property to an unaffiliated third party in an arms’-length
transaction, if the Net Proceeds are less than the amount specified in clause
(B)(x) of the definition of “Unaffiliated Release Price”, then the amount of
principal payable by Borrower under Section 2.2(a)(1) in connection with the
release of such Property shall be the Loan Multiplier times 100% of such Net
Proceeds, subject to the following:

 

(i)            the Release Price Deficit (as defined below) may not at any time
exceed $30,000,000 times the Loan Multiplier; and

 

(ii)           if and to the extent the Release Price Deficit is greater than
zero, an amount equal to the product of the Excess Transfer Proceeds times the
Loan Multiplier

 

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shall be applied toward prepayment of the Loan in accordance with Section 2.1
(and shall be accompanied by any applicable Prepayment Fee) until the Release
Price Deficit is reduced to zero.

 

“Release Price Deficit” means, from time to time, the excess, if any, of (x) the
sum of all Release Prices of all Properties theretofore released, minus (y) the
sum of all amounts theretofore applied toward the prepayment of the Loan in
connection with Transfers of Properties pursuant to Section 2.2(a)(1).

 

2.3.         Value Add Pool Equity Releases.  So long as no Event of Default is
then continuing and all amounts then due and owing to Lender have been paid in
full, Senior Mezzanine Borrower may obtain the release of up to and including
80% of the Value Add Pool Equity in the aggregate from the Liens of the Senior
Mezzanine Loan Documents in connection with the sale of such equity interests to
an unaffiliated third party, provided that (1) at the time of each such release,
Borrower shall prepay the Loan, in accordance with Section 2.1, in an amount
equal to the applicable Value Add Pool Equity Release Price, which prepayment
shall be accompanied by the other amounts specified in Section 2.1, (2) DSCR for
the Test Period most recently ended, recalculated to include only Senior
Mezzanine Borrower’s share of income and expense attributable to the Properties
remaining after the contemplated sale and to exclude the interest expense and
principal payments on the aggregate amount to be prepaid, shall be equal to or
greater than DSCR immediately prior to such sale (as reasonably determined by
Lender), (3) after giving effect to such release, the aggregate Senior
Collateral Value shall not be less than 120% of the sum of the Principal
Indebtedness and the Senior Mezzanine Loan Principal Indebtedness (as reasonably
determined by Lender), (4) Borrower shall reimburse Lender for any actual
reasonable out-of-pocket costs and expenses incurred by Lender in connection
with this Section 2.2 (including the reasonable fees and expenses of legal
counsel and the Servicer), (5) Senior Mezzanine Lender shall retain a
first-priority perfected pledge of the remaining Value Pool Property Equity,
which shall not be less than 20% of the initial Value Add Pool Equity,
(6) Lender shall have reasonably approved the joint venture or other applicable
agreement between Senior Mezzanine Borrower and the purchaser(s) of Value Add
Pool Equity and any subsequent amendments and modifications thereof, and such
joint venture or other applicable agreement shall provide that (x) if Senior
Mezzanine Lender forecloses on the Value Add Pool Equity pledged to Senior
Mezzanine Lender under the Senior Mezzanine Loan Documents, then unless 80% of
the Value Add Pool Equity has been released in accordance with this Section 2.3
(which 80% threshold may be reduced to 66.67% in Lender’s reasonable
discretion), Senior Mezzanine Lender shall have the right to require that the
Value Add Pool Properties be liquidated, subject to customary rights of first
offer or appraisal sale or other similar rights reasonably acceptable to Lender,
and (y) distributions of operating revenues, capital proceeds and all other
income of the Value Add Pool Properties, to the extent available for
distribution, shall be made to the equityholders in proportion to their
respective equity interests and (7) in the event that 80% of the Value Add Pool
Equity has been released in accordance with the provisions of this Section 2.3,
any subsequent sale of a Value Add Pool Property or of Senior Mezzanine
Borrower’s entire remaining 20% equity interest referenced in the preceding
clause (5) shall be subject to the requirements of foregoing clauses (1) through
(6), provided, however, that the applicable Unaffiliated Release Price shall be
paid in lieu of the Value Add Pool Equity Release Price, except that, for
purposes of this subsection (7) only, the Release Price payable in connection
therewith shall be the Unaffiliated Release Price (taking into account 100% of
the Aggregate

 

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Allocated Loan Amounts of the respective Properties, without reduction for prior
equity sales) reduced by multiplying the amount specified in clause (x) of the
definition of Unaffiliated Release Price by 20%, and the percentage specified in
clause (y) of the definition of Unaffiliated Release Price shall be replaced
with “100%”.

 

2.4  Release of Vacant Land.  So long as no Event of Default is then continuing,
Senior Mezzanine Borrower may obtain the release of one or more vacant
non-income producing parcels of land (each such parcel, a “Release Parcel”) from
the restrictions and Liens of the Senior Mezzanine Loan Documents in connection
with the Transfer of such Release Parcel to an unaffiliated third party in a
bona fide arms-length transaction upon satisfaction of the following conditions:

 

(i)            Borrower shall deliver to Lender notice of its intent to release
one or more Release Parcels, which notice must be given at least 10 Business
Days and not more than 60 days prior to the Business Day upon which the release
is to be made and shall specify the Release Parcel(s) that Borrower intends to
release.  Borrower shall promptly reimburse Lender for any actual out-of-pocket
costs and expenses (including the reasonable fees and expenses of legal counsel
and the Servicer) incurred by Lender in connection with a release pursuant to
this Section 2.4.

 

(ii)           At the time of such release, Borrower shall prepay a portion of
the Loan, in accordance with Section 2.1, in an amount equal to the applicable
Parcel Release Price.

 

(iii)          Lender shall have received evidence reasonably satisfactory to it
that (x) the Mortgage Borrower shall have satisfied all of the conditions to the
proposed release set forth in the applicable Encumbered Debt Documents any
(y) Senior Mezzanine Borrower shall have satisfied all of the conditions to the
proposed release set forth in the Senior Mezzanine Loan Documents.

 

(iv)         Borrower shall have delivered to Lender satisfactory evidence that
(1) the applicable Release Parcel has been legally subdivided from the remaining
Property, a separate tax identification number shall have been issued for such
Release Parcel and all necessary variances, if any, shall have been obtained
(with the result that, upon the transfer and release of such Release Parcel, no
part of the remaining Property shall be part of a tax lot which includes any
portion of such Release Parcel); (2) after giving effect to such transfer, each
of the Release Parcel and the remaining Property conforms to and is in
compliance in all material respects with applicable Legal Requirements
(including, without limitation, all zoning and subdivision laws, setback
requirements, sideline requirements, parking ratio requirements, use
requirements, building and fire code requirements, environmental requirements
and wetlands requirements) and constitutes a separate tax lot, (3) the Release
Parcel is not necessary for the remaining Property to comply with any zoning,
building, land use or parking or other Legal Requirements applicable to it or
for the then current use of the remaining Property, including without limitation
for access, driveways, parking, utilities or drainage or, to the extent that the
Release Parcel is necessary for any such purpose, a reciprocal easement
agreement or other agreement has been executed and recorded that would allow the
owner of the remaining Property to continue to use the release Parcel (at no
cost or expense to

 

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Borrower or Senior Mezzanine Borrower) to the extent necessary for such purpose,
and (4) the lots have been demised to Lender’s satisfaction in its reasonable
discretion;

 

(v)          In the case of a Mortgage Loan Collateral Property, Senior
Mezzanine Borrower shall deliver to Mortgage Lender an endorsement to the
Qualified Title Insurance Policy insuring the applicable Mortgage (1) extending
the effective date of the policy to the effective date of the release;
(2) confirming no change in the priority of the Mortgage on the remaining
Property (exclusive of the Release Parcel) or in the amount of the insurance or
the coverage of the Property (exclusive of the Release Parcel) under the policy;
and (3) insuring the rights and benefits under any new or amended reciprocal
easement agreement or such other agreement required pursuant to clause (v)(3) of
this Section that has been executed and recorded, if any;

 

(vi)         Borrower and Senior Mezzanine Borrower shall have complied with any
requirements applicable to the release in the Leases, reciprocal easement
agreements, operating agreements, parking agreements or other similar agreements
affecting the remaining Property and the release does not violate any of the
provisions of such documents in any respect that would result in a termination
(or give any other party thereto the right to terminate), extinguishment or
other loss of material rights of Borrower and/or Senior Mezzanine Borrower or in
a material increase in Borrower’s or Senior Mezzanine Borrower’s obligations
under such documents and, to the extent necessary to comply with such documents,
the transferee of the Release Parcel has assumed Borrower’s and Senior Mezzanine
Borrower’s obligations, if any, relating to the Release Parcel under such
documents;

 

(vii)        ingress to and egress from all portions of the remaining Property
shall be over (i) physically open and fully dedicated public roads or
(ii) vehicle and pedestrian easements which (1) provide vehicular and pedestrian
access to a physically open and fully dedicated public road, (2) are recorded in
the chain of title to both the property which is encumbered thereby and the
remaining Property, (3) are irrevocable and non-terminable without the consent
of the owner of the remaining Property; and provided further that, if lawfully
obtainable, in the case of a Mortgage Loan Collateral Property, Senior Mezzanine
Borrower delivers to Mortgage Lender an endorsement to the Qualified Title
Insurance Policy, which endorsement shall insure that (A) the benefit of each
such easement inures and runs to the benefit of the owner of the remaining
Property, (B) the Lien of the Mortgage is a first Lien on Mortgage Borrower’s
beneficial interest in such easement, subject to no exceptions other than
Permitted Encumbrances and those approved by Lender in its reasonable discretion
and (C) no then-existing mortgages, Liens, security interests or other
encumbrances (other than Permitted Encumbrances) on the Release Parcel burdened
by such easement are superior to, or under any circumstances could terminate,
impair or limit the terms of such easement;

 

(viii)       Borrower shall have delivered an Officer’s Certificate to the
effect that the conditions in this Section 2.4 have occurred or shall occur
concurrently with the transfer and release of the applicable Release Parcel; and

 

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(ix)          Borrower shall execute such documents and instruments and obtain
such opinions of counsel as are typical for similar transactions.

 

ARTICLE III

 

ACCOUNTS

 

3.1.         Cash Management Account.

 

(a)           On or prior to the Closing Date Borrower shall establish and
thereafter maintain with the Cash Management Bank a cash management account into
which distributions from the Senior Mezzanine Cash Management Account will be
deposited (the “Cash Management Account”), subject to and in accordance with the
terms hereof.  As a condition precedent to the closing of the Loan, Borrower
shall cause the Cash Management Bank to execute and deliver an agreement (as
modified or replaced in accordance herewith, a “Cash Management Agreement”)
which provides, inter alia, that no party other than Lender and Servicer shall
have the right to withdraw funds from the Cash Management Account.  The fees and
expenses of the Cash Management Bank shall be paid by Borrower.  From and after
the Closing Date, Borrower shall cause Senior Mezzanine Borrower to maintain the
Senior Mezzanine Loan Cash Management Account and the Senior Mezzanine Loan
Collateral Accounts, in each case, in accordance with the Senior Mezzanine Loan
Documents, notwithstanding any waiver or future amendment of the Senior
Mezzanine Loan Documents.  Provided that no Senior Mezzanine Loan Event of
Default or Mortgage Loan Event of Default shall have occurred and be continuing,
on each Business Day, all amounts on deposit in the Senior Mezzanine Cash
Management Account in excess of the “Minimum Balance”, as defined in the Senior
Mezzanine Loan Agreement, shall be remitted to the Cash Management Account.

 

(b)          Subject to the requirements of the Encumbered Property Debt
Documents, within five Business Days following the Original Closing Date,
Borrower shall cause Senior Mezzanine Borrower to deliver to each Tenant in the
Properties (except for Tenants at Other Properties) a written notice (a “Tenant
Notice”) in the form of Exhibit D instructing that (i) all payments under the
Leases shall thereafter be transmitted by them directly to, and deposited
directly into, the Senior Mezzanine Cash Management Account or a Blocked Account
and (ii) such instruction may not be rescinded unless and until such Tenant
receives from Borrower or Lender a copy of Lender’s written consent to such
rescission or Lender’s written notice that the Loan has been repaid in full. 
Borrower shall send a copy of each such written notice to Lender and shall cause
such notices to be redelivered to each Tenant until such time as such Tenant
complies therewith.  Subject to the Encumbered Property Debt Documents and any
Qualified Joint Venture Agreement, Borrower shall cause (i) all cash Revenues
relating to the Properties (other than the Encumbered Properties and the TRS
Properties) and all other money received by Borrower or the Approved Property
Manager (other than tenant security deposits required to be held in escrow
accounts) with respect to the Properties (other than the Encumbered Properties
and the TRS Properties) to be deposited in the Senior Mezzanine Cash Management
Account or a Blocked Account by the end of the first Business Day following
Senior Mezzanine Borrower’s or the Approved Property Manager’s receipt thereof
and (ii) all Distributions to be deposited in the Senior Mezzanine Cash
Management Account or a Blocked Account by the end of the second Business Day
following Borrower’s receipt thereof.  “Blocked Account” means an

 

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Eligible Account maintained with a financial institution reasonably satisfactory
to Lender that enters into a blocked account agreement or similar irrevocable
direction instruction (as modified or replaced in accordance herewith, the
“Blocked Account Agreement”) reasonably satisfactory to Senior Mezzanine Lender
pursuant to which such financial institution will remit, at the end of each
Business Day, all amounts contained therein to an account specified by Senior
Mezzanine Lender.  For the avoidance of doubt, notwithstanding anything to the
contrary in this Agreement, no amounts shall be deposited into the Senior
Mezzanine Cash Management Account with respect to any Encumbered Property or TRS
Property, except for Distributions pursuant to Section 5.23.  Notwithstanding
the foregoing, provided no Event of Default is continuing, Borrower shall not be
required to cause Senior Mezzanine Borrower to deposit into the Senior Mezzanine
Cash Management Account the proceeds from the permitted sale of any Disposition
Assets, except to the extent that Borrower is required hereunder to pay to
Lender a Release Price or other amount in connection therewith.

 

(c)           Lender shall have the right at any time, upon not less than 30
days’ prior written notice to Borrower, to replace the Cash Management Bank with
any Eligible Institution at which Eligible Accounts may be maintained that will
promptly execute and deliver to Lender a Cash Management Agreement substantially
identical to the Cash Management Agreement executed at Closing.

 

(d)          Borrower and Lender agree that the flow of funds with respect to
the Senior Mezzanine Cash Management Account and the Blocked Account as depicted
in the diagrams attached hereto as Schedule C is in compliance with this
Section 3.1.

 

3.2.         Distributions from Cash Management Account.

 

(a)           The Cash Management Agreement shall provide that the Cash
Management Bank shall remit to an account specified by Borrower, at the end of
each Business Day (or, at Borrower’s election, on a less frequent basis), the
amount, if any, by which amounts then contained in the Cash Management Account
(other than Dana Excess Cash Flow and Restricted Cash) exceed the aggregate
amount required to be paid to or reserved with Lender, or prepaid pursuant to
Section 2.1(c)(i), on the next Payment Date pursuant to Section 3.2(b) (the
“Minimum Balance”); provided, however, that Lender shall terminate such
remittances during the continuance of an Event of Default or Mortgage Loan Event
of Default upon notice to the Cash Management Bank.  Lender may notify the Cash
Management Bank at any time of any change in the Minimum Balance.  Lender shall
deliver a copy of any notice of a change in the Minimum Balance to Borrower, for
information only (but any failure by Lender to do so shall not in any way limit
Borrower’s obligations or liabilities hereunder).  Any payment received by any
Borrower pursuant to this Section 3.2 shall be received free of the Lien of the
Loan Documents.

 

(b)          On each Payment Date, provided no Event of Default has occurred and
is continuing, Lender shall transfer amounts from the Cash Management Account,
to the extent available therein, to make the following payments in the following
order of priority:

 

(i)            to Lender, the amount of all scheduled or delinquent interest on
the Loan and all other amounts then due and payable under the Loan Documents;

 

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(ii)          to Lender, any Restricted Cash required to be used to prepay the
Loan pursuant to Section 2.1(c)(i);

 

(iii)         to Lender, all Dana Excess Cash Flow pursuant to
Section 2.1(c)(ii); and

 

(iv)         all remaining amounts to such accounts as Borrower shall direct
from time to time, unless a Mortgage Loan Event of Default shall have occurred
and be continuing, in which case, all remaining amounts to the Mortgage Loan
Cash Management Account.

 

(c)           If on any Payment Date the amount in the Cash Management Account
shall be insufficient to make the transfer described in Section 3.2(b)(i)-(iii),
Borrower shall deposit into the Cash Management Account on such Payment Date the
amount of such deficiency.  If Borrower shall fail to make such deposit, the
same shall constitute an Event of Default and, in addition to all other rights
and remedies provided for under the Loan Documents, Lender may disburse and
apply the amounts in the Collateral Accounts in accordance with Section 3.5(c).

 

3.3.         Senior Mezzanine Loan Covenants; Replacement of Senior Mezzanine
Loan Collateral Accounts.

 

(a)           Borrower hereby covenants that it shall cause Senior Mezzanine
Borrower to fully comply in all material respects with each of the covenants of
Senior Mezzanine Borrower set forth in Article III of the Senior Mezzanine Loan
Agreement, notwithstanding any waiver or future amendment of such covenants by
Senior Mezzanine Lender and Senior Mezzanine Borrower.

 

(b)          Notwithstanding anything to the contrary contained in this
Agreement, if at any time and for any reason, Senior Mezzanine Borrower is no
longer required to maintain any of the Senior Mezzanine Loan Collateral Accounts
in accordance with the terms of the Senior Mezzanine Loan Documents (including,
for these purposes, any Letter of Credit delivered in lieu of cash),
(i) Borrower shall be required to immediately establish and maintain with
banking institutions selected by Lender and reasonably approved by Borrower and
for the benefit of Lender, reserves in replacement and substitution thereof,
which substitute reserves shall be subject to all of the same terms and
conditions applicable under the Senior Mezzanine Loan Documents with respect to
the Senior Mezzanine Loan Collateral Account(s) being replaced, it being the
intent of Lender and Borrower that such substitute reserves replicate in purpose
and function the Senior Mezzanine Loan Collateral Account(s) no longer held by
the Senior Mezzanine Lender; and (ii) Borrower shall remit, or cause Senior
Mezzanine Borrower to remit, to such approved banking institution for the
benefit of Lender any funds from the Senior Mezzanine Loan Collateral Accounts
that were remaining in such reserves at the time of the termination of such
reserves for the purpose of funding the equivalent substitute reserves. 
Borrower hereby pledges, assigns and grants a security interest to Lender, as
security for payment of all sums due under the Loan and the performance of all
other terms, conditions and provisions of the Loan Documents and this Agreement
on Borrower’s part to be paid and performed, of all Borrower’s right, title and
interest in and to such substitute reserves and the accounts in which the same
may be held and agrees that Borrower shall not, without obtaining the prior
written consent of Lender (which consent shall be given or withheld in Lender’s
sole

 

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discretion), further pledge, assign or grant any security interest in any such
replacement reserves or account in which the same may be held, or permit any
lien or encumbrance to attach thereto, or any levy to be made thereon, or any
Uniform Commercial Code 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
Uniform Commercial Code in effect in New York and each other jurisdiction in
which any accounts may be located.

 

(c)           Simultaneously with the repayment of the Senior Mezzanine Loan in
full, unless the Loan is also being repaid in full, Borrower and Lender shall
have established, in a manner reasonably satisfactory to Lender, new collateral
accounts (corresponding to each Senior Mezzanine Loan Collateral Account)
pledged to and under the control of Lender in which shall be reserved the same
amounts that would have been reserved in the corresponding Senior Mezzanine Loan
Collateral Accounts if the Senior Mezzanine Loan Documents were still in effect
and no prepayments had been made thereunder.  In full or partial satisfaction of
the foregoing obligations (as the case may be), Borrower may (i) cause to be
delivered to Lender any Letter of Credit which would have been required to be
delivered to Senior Mezzanine Lender had the Senior Mezzanine Loan not been
fully repaid and (ii) cause Senior Mezzanine Borrower to cause Senior Mezzanine
Lender to assign to Lender, at Borrower’s sole cost, any Letter of Credit in
Senior Mezzanine Lender’s possession as of the date of the repayment of the
Senior Mezzanine Loan.

 

(d)          Borrower shall, and shall cause Sponsor and Senior Mezzanine
Borrower to, execute any and all documents reasonably necessary for the
implementation or furtherance of the actions contemplated in this Section 3.3.

 

3.4          Account Collateral.

 

(a)           Borrower hereby grants a perfected first-priority security
interest in favor of Lender in and to the Account Collateral as security for the
Indebtedness, together with all rights of a secured party with respect thereto. 
Each Collateral Account shall be an Eligible Account under the sole dominion and
control of Lender and shall be in the name of Borrower, as pledgor, and Lender,
as pledgee.  Borrower shall have no right to make withdrawals from any of the
Collateral Accounts.  Funds in the Collateral Accounts shall not be commingled
with any other monies at any time.  Borrower shall execute any additional
documents that Lender in its reasonable discretion may require and shall provide
all other evidence reasonably requested by Lender to evidence or perfect its
first-priority security interest in the Account Collateral.  Funds in the
Collateral Account shall be invested in Permitted Investments selected by
Lender.  Unless otherwise required by applicable law, provided no Event of
Default is continuing, all income and gains from the investment of funds in the
Collateral Accounts shall be for the account of Borrower and shall be paid to
Borrower upon written request therefor (but in any event, not more often than
monthly). After the Loan and all other Indebtedness have been paid in full, the
Collateral Accounts shall be closed and the balances therein, if any, shall be
paid to Borrower.

 

(b)          The insufficiency of amounts contained in the Collateral Accounts
shall not relieve Borrower from its obligation to fulfill all covenants
contained in the Loan Documents.

 

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(c)           During the continuance of an Event of Default, Lender may, in its
sole discretion, apply funds in the Collateral Accounts, and funds resulting
from the liquidation of Permitted Investments contained in the Collateral
Accounts, either toward the components of the Indebtedness (e.g., interest,
principal and other amounts payable hereunder), the Loan and the Note Components
in such sequence as Lender shall elect in its sole discretion, and/or toward the
payment of Property expenses.

 

3.5.         Bankruptcy.  Borrower and Lender acknowledge and agree that upon
the filing of a bankruptcy petition by or against Borrower under the Bankruptcy
Code, the Account Collateral and the Revenues (whether then already in the
Collateral Accounts, or then due or becoming due thereafter) shall be deemed not
to be property of Borrower’s bankruptcy estate within the meaning of Section 541
of the Bankruptcy Code.  If, however, a court of competent jurisdiction
determines that, notwithstanding the foregoing characterization of the Account
Collateral and the Revenues by Borrower and Lender, the Account Collateral
and/or the Revenues do constitute property of Borrower’s bankruptcy estate, then
Borrower and Lender further acknowledge and agree that all such Revenues,
whether due and payable before or after the filing of the petition, are and
shall be cash collateral of Lender.  Borrower acknowledges that Lender does not
consent to Borrower’s use of such cash collateral and that, in the event Lender
elects (in its sole discretion) to give such consent, such consent shall only be
effective if given in writing signed by Lender.  Except as provided in the
immediately preceding sentence, Borrower shall not have the right to use or
apply or require the use or application of such cash collateral (i) unless
Borrower shall have received a court order authorizing the use of the same, and
(ii) Borrower shall have provided such adequate protection to Lender as shall be
required by the bankruptcy court in accordance with the Bankruptcy Code.

 

ARTICLE IV

 

REPRESENTATIONS

 

Borrower represents to Lender that, as of the Closing Date (solely with respect
to the formation, existence, organization and good standing of the Borrower, and
its ownership of the Collateral) and as of the Original Closing Date (with
respect to all other matters contained in the following representations), except
as set forth in the Exception Report:

 

4.1.         Organization.

 

(a)           Borrower and each Senior Mezzanine Borrower is duly formed,
validly existing and in good standing under the laws of the state of its
formation, and is in good standing in each other jurisdiction where ownership of
its properties or the conduct of its business requires it to be so, and Borrower
and each Senior Mezzanine Borrower has all power and authority under such laws
and its organizational documents and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.

 

(b)          Each Property Owner is duly formed, validly existing and in good
standing under the laws of the state of its formation, and is in good standing
in each other jurisdiction where ownership of its properties or the conduct of
its business requires it to be so, and each Property Owner has all power and
authority under such laws and its organizational

 

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documents and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.

 

(c)           No Senior Mezzanine Borrower has any subsidiaries and no Senior
Mezzanine Borrower owns any equity interest in any other Person except as shown
on the organizational chart contained in Exhibit A, which organizational chart
is true and correct as of the date hereof.

 

(d)          Borrower has no subsidiaries and Borrower owns no equity interest
in any other Person except as shown on the organizational chart contained in
Exhibit A, which organizational chart is true and correct as of the date hereof.

 

4.2.         Authorization.  Borrower has the power and authority to enter into
this Agreement and the other Loan Documents, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated by the
Loan Documents and has by proper action duly authorized the execution and
delivery of the Loan Documents.  Each Senior Mezzanine Borrower has the power
and authority to enter into the Senior Mezzanine Loan Agreement and the other
Senior Mezzanine Loan Documents, to perform its obligations thereunder and to
consummate the transactions contemplated by the Senior Mezzanine Loan Documents
and has by proper action duly authorized the execution and delivery of the
Senior Mezzanine Loan Documents.

 

4.3.         No Conflicts.  Neither the execution and delivery of the Loan
Documents or the Senior Mezzanine Loan Documents, nor the consummation of the
transactions contemplated therein, nor performance of and compliance with the
terms and provisions thereof will (i) violate or conflict with any provision of
its formation and governance documents, (ii) violate any law, regulation
(including Regulation U, Regulation X or Regulation T), order, writ, judgment,
injunction, decree or permit applicable to Borrower or Senior Mezzanine
Borrower, (iii) violate or conflict with contractual provisions of, or cause an
event of default under, any indenture, loan agreement, mortgage or contract to
which Borrower, any Senior Mezzanine Borrower, any Property Owner or Sponsor is
a party or by which Borrower, any Senior Mezzanine Borrower, any Property Owner
or Sponsor may be bound which violation, conflict or event of default is
reasonably likely to result in a Portfolio Material Adverse Effect, or
(iv) result in or require the creation of any Lien or other charge or
encumbrance upon or with respect to the Collateral or the Senior Mezzanine Loan
Collateral in favor of any party other than Lender, in the case of the
Collateral, and the Senior Mezzanine Lender, in the case of the Senior Mezzanine
Loan Collateral.

 

4.4.         Consents.  No consent, approval, authorization or order of, or
qualification with, any court or Governmental Authority is required in
connection with the execution, delivery or performance by Borrower of this
Agreement or the other Loan Documents, Senior Mezzanine Borrower of the Senior
Mezzanine Loan Documents, or by any Required Equity Pledgor of the Senior
Mezzanine Loan Documents to which it is a party, the failure to obtain which is
reasonably likely to result in a Portfolio Material Adverse Effect, except for
any of the foregoing which have already been obtained.

 

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4.5.         Enforceable Obligations.  This Agreement, the other Loan Documents
and the Senior Mezzanine Loan Documents have been duly executed and delivered by
Borrower and Senior Mezzanine Borrower, as the case may be, and constitute
Borrower’s and each Senior Mezzanine Borrower’s legal, valid and binding
obligations, enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency and similar laws of general applicability relating to or
affecting creditors’ rights and to general equity principles.  The Loan
Documents and the Senior Mezzanine Loan Documents are not subject to any right
of rescission, set-off, counterclaim or defense by Borrower or any Senior
Mezzanine Borrower, as the case may be, including the defense of usury.

 

4.6.         No Default.  No Default, Event of Default or Senior Mezzanine Loan
Event of Default will exist immediately following the making of the Loan.

 

4.7.         Payment of Taxes.  Borrower, each Senior Mezzanine Borrower and
each Property Owner has filed, or caused to be filed, all tax returns (federal,
state, local and foreign) required to be filed and paid all amounts of taxes due
(including interest and penalties) except for taxes which are not yet delinquent
and has paid all or made provision with the title company for the payment of all
other taxes, fees, assessments and other governmental charges (including
mortgage recording taxes, documentary stamp taxes and intangible taxes) owing by
it necessary to preserve the Liens in favor of Lender and the Lien of the Senior
Mezzanine Loan Documents in favor of Senior Mezzanine Lender (or in the case of
an Encumbered Property, to preserve the Liens under the Encumbered Property Debt
Documents).

 

4.8.         Compliance with Law.  Except as disclosed in the Zoning Reports,
Borrower each Senior Mezzanine Borrower, each Property and the uses thereof
comply with all applicable Insurance Requirements and Legal Requirements,
including building and zoning ordinances and codes, except to the extent that
failure to comply therewith would not result in a Portfolio Material Adverse
Effect.  Except as disclosed in the Zoning Reports, each Mortgage Loan
Collateral Property, and to Borrower’s knowledge, each Other Property conforms
in all material respects to current zoning requirements (including requirements
relating to parking) and is not an illegal nonconforming use.  Neither Borrower
nor any Senior Mezzanine Borrower is in default or violation of any order, writ,
injunction, decree or demand of any Governmental Authority the violation of
which is reasonably likely to result in a Material Adverse Effect.  There has
not been committed by or on behalf of Borrower, any Senior Mezzanine Borrower or
to Borrower’s knowledge any other person in occupancy of or involved with the
operation or use of any Mortgage Loan Collateral Property, or to Borrower’s
knowledge, any other person in occupancy of or involved with the operation or
use of any Other Property, any act or omission affording any federal
Governmental Authority or any state or local Governmental Authority the right of
forfeiture as against any Property or any portion thereof or any monies paid in
performance of its obligations under any of the Loan Documents.  None of
Borrower Senior Mezzanine Borrower, Property Owner or Sponsor has purchased any
portion of the Properties or interests therein with proceeds of any illegal
activity.

 

4.9.         ERISA.  None of Borrower, Senior Mezzanine Borrower or any ERISA
Affiliate of Borrower or Senior Mezzanine Borrower has incurred or could be
subjected to any liability under Title IV or Section 302 of ERISA or Section 412
of the Code or maintains or contributes to, or is required to maintain or
contribute to, any Plan.  The consummation of the

 

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transactions contemplated by this Agreement and the Senior Mezzanine Loan
Documents will not constitute or result in any non-exempt prohibited transaction
under Section 406 of ERISA, Section 4975 of the Code or substantially similar
provisions under federal, state or local laws, rules or regulations; provided
that the foregoing representation is subject to the assets used by the Lender
not being or being treated under ERISA as Plan Assets.

 

4.10.       Investment Company Act.  None of Borrower or any Senior Mezzanine
Borrower is an “investment company”, or a company “controlled” by an “investment
company”, registered or required to be registered under the Investment Company
Act of 1940, as amended.

 

4.11.       No Bankruptcy Filing.  None of Borrower or any Senior Mezzanine
Borrower is contemplating either the filing of a petition by it under any state
or federal bankruptcy or insolvency laws or the liquidation of all or a major
portion of its assets or property.  None of Borrower or any Senior Mezzanine
Borrower has any knowledge of any Person contemplating the filing of any such
petition against it.

 

4.12.       Other Debt.  Neither Borrower nor Senior Mezzanine Borrower has any
outstanding Debt other than Permitted Debt.  None of Borrower or any Senior
Mezzanine Borrower has any obligations under the Encumbered Property Debt
Documents except, in the case of AFRT and the Operating Partnership, certain
customary non-recourse carveouts.  As of June 30, 2008, (x) the aggregate
principal amount of outstanding Encumbered Property Debt equals approximately
$1,912,796,638 and (y) the aggregate principal amount of outstanding Encumbered
Property Debt excluding amounts attributable to Disposition Assets equals
approximately $1,841,044,035.  Schedule X hereto is true and correct in all
material respects and accurately reflects the outstanding principal balances
attributable to the Encumbered Property Debt as of June 30, 2008.  For the
avoidance of doubt, for purposes of this representation, the stated amounts of
Encumbered Property Debt in (x) and (y) above and as set forth on Schedule X
hereto (i) exclude any portion of actually outstanding Encumbered Property Debt
that is secured by defeasance collateral, (ii) exclude the pro rata portion of
the Encumbered Property Debt secured by the Property located at 801 Market
Street, Philadelphia, Pennsylvania, that is attributable to the 11% equitable
ownership interest held by Borrower’s joint venture partner at such Property,
(iii) allocate the amortized aggregate principal amounts of Encumbered Property
Debt on a pro rata basis among the Properties based on the original allocated
loan amounts for the Properties under their respective Encumbered Property Debt
Documents, and (iv) may be less than the respective amounts Borrower or Senior
Mezzanine Borrower would be required to pay to release the Properties from the
Encumbered Property Debt on an individual Property basis.

 

4.13.       Litigation.  There are no actions, suits, proceedings, arbitrations
or governmental investigations by or before any Governmental Authority or other
court or agency now pending, and there are no such actions, suits, proceedings,
arbitrations or governmental investigations threatened, against or affecting
Borrower, any Senior Mezzanine Borrower, any Property Owner or any Property,
which individually or collectively would have a Portfolio Material Adverse
Effect if determined against Borrower, any Senior Mezzanine Borrower, any
Property Owner or any Property.

 

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4.14.       Leases; Material Agreements.

 

(a)           Borrower has delivered to Lender true and complete copies of all
Leases requested by Lender.  No person has any possessory interest in any of the
Properties or right to occupy the same except under and pursuant to the
provisions of the Leases.  The certified rent roll delivered to Lender as of the
Closing Date (the “Rent Roll”) is true and correct in all material respects as
of February 29, 2008, and as of the Original Closing Date, there were no changes
to the Rent Roll that would have had a Portfolio Material Adverse Effect, no new
Major Leases had been entered into and no Major Lease had been terminated.  As
of the Original Closing Date, Borrower held approximately $2,150,000 in respect
of Tenant security deposits and held no security deposits with respect to Major
Leases, no fixed rent had been paid more than 30 days in advance of its due date
and no payments of rent were more than 30 days delinquent.  Except as set forth
on Schedule S, no Tenant under any of the Leases referenced in Schedule S had
any remaining termination or contraction options as of the Original Closing
Date.  Except as set forth in the Leases, no Tenant has any extension or renewal
options.  Except as set forth in the Qualified Title Policies, with respect to
the Mortgage Loan Collateral Properties, or the Leases, with respect to the
Other Properties, no Tenant or other party has any option, right of first
refusal or similar preferential right to purchase or lease all or any portion of
any Property.

 

(b)          Except as set forth on the Exception Report, to Borrower’s
knowledge (x) all material work to be performed by the landlord under Major
Leases has been substantially performed, all material contributions to be made
by the landlord to the Tenants thereunder have been made and all other material
conditions to each Tenant’s obligations thereunder have been satisfied, in each
case, in all material respects, and (y) no Tenant under a Major Lease has the
right to require Borrower or any Senior Mezzanine Borrower to perform or finance
any material Tenant Improvements or Material Alterations and no material Leasing
Commissions are owed or would be owed upon the exercise of any such Tenant’s
existing renewal or expansion options.  Without limiting the foregoing, Wachovia
is required to pay for 100% of the cost of the “Demising Work” referenced in the
Wachovia estoppel letter delivered to Senior Mezzanine Lender as of the Original
Closing Date.

 

(c)           To Borrower’s knowledge, there are no Material Agreements except
as described in Schedule D and no Encumbered Property Debt Documents except as
described in Schedule U.  To Borrower’s knowledge, Borrower has made available
to Lender true and complete copies of all Material Agreements and all Encumbered
Property Debt Documents.  To Borrower’s knowledge, each Material Agreement has
been entered into at arm’s length in the ordinary course of business by or on
behalf of Borrower.

 

(d)          The Leases and the Material Agreements are in full force and effect
and, except as set forth on the Rent Roll, there are no defaults thereunder by
any Borrower or any other party thereto which is reasonably likely to result in
a Portfolio Material Adverse Effect.  None of Borrower or any Senior Mezzanine
Borrower is in default 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
any of the Properties are bound which default is reasonably likely to result in
a Portfolio Material Adverse Effect.

 

4.15.       Full and Accurate Disclosure.  To Borrower’s knowledge, no statement
of fact heretofore delivered by Borrower, Sponsor or Senior Mezzanine Borrower
to Lender or

 

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Senior Mezzanine Lender in writing in respect of the Properties, Borrower or any
Senior Mezzanine Borrower contains any untrue statement of a material fact or
omits to state any material fact necessary to make statements contained therein
not misleading unless subsequently corrected.  There is no fact presently
actually known to Borrower which has not been disclosed to Lender which is
reasonably likely to result in a Portfolio Material Adverse Effect.

 

4.16.       Financial Condition.  To Borrower’s knowledge, except as otherwise
disclosed in writing to Lender, all financial data concerning Borrower, Senior
Mezzanine Borrower and the Properties heretofore provided to Lender fairly
presents in accordance with GAAP the financial position of Borrower and/or
Senior Mezzanine Borrower in all material respects, as of the date on which it
was made, and does not omit to state any material fact necessary to make
statements contained herein or therein not misleading.  Since the delivery of
such data, except as otherwise disclosed in writing to Lender there have
occurred no changes or circumstances which have had or are reasonably likely to
result in a Portfolio Material Adverse Effect.

 

4.17.       Single-Purpose Requirements.  Borrower, each Senior Mezzanine
Borrower, each Property Owner and their respective Single-Purpose Equityholders,
except as disclosed on Exhibit A, is now a Single-Purpose Entity, and has always
been a Single-Purpose Entity to the extent relevant to the Nonconsolidation
Opinion.  All statements of fact contained in the Nonconsolidation Opinion and
in the certificates referenced therein and attached thereto are true and correct
in all material respects.

 

4.18.       [Intentionally Omitted].

 

4.19.       Not Foreign Person.  None of Borrower or any Senior Mezzanine
Borrower is a “foreign person” within the meaning of Section 1445(f)(3) of the
Code.

 

4.20.       Labor Matters.  Except as listed on the Exception Report, None of
Borrower or any Senior Mezzanine Borrower is a party to any collective
bargaining agreements.

 

4.21.       Title.  Borrower has good title to the Collateral free and clear of
all Liens except the Junior Mezzanine Loan Permitted Encumbrances.  Mortgage
Loan Property Owners own good, marketable and insurable title to the Mortgage
Loan Collateral Properties and good and marketable title to the related personal
property, to the Senior Mezzanine Collateral Accounts and to any other Senior
Mezzanine Collateral, in each case free and clear of all Liens whatsoever except
the Permitted Encumbrances.  Owners of Other Properties own good, marketable and
insurable title to the Other Properties and good and marketable title to the
related personal property free and clear of all Liens whatsoever except the
Encumbered Property Debt and the encumbrances permitted under, or created by,
the Encumbered Property Loan Documents.  Each Required Equity Pledgor has good
title to its Required Equity, in each case free and clear of all Liens except
the Permitted Encumbrances.  The Mortgages, when properly recorded in the
appropriate records, together with any Uniform Commercial Code financing
statements required to be filed in connection therewith, will create (i) valid,
perfected first priority Liens on the Mortgage Loan Collateral Properties and
the rents therefrom, enforceable as such against creditors of and purchasers
from Borrower and subject only to Permitted Encumbrances, and (ii) perfected
Liens (pursuant to the Uniform Commercial Code of the State

 

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of Delaware) in and to all personalty, all in accordance with the terms thereof,
in each case subject only to any applicable Permitted Encumbrances.  The Senior
Mezzanine Loan Documents creating a security interest in the Required Equity and
the Loan Documents creating a security interest in the Collateral, in each case,
upon the filing of a UCC financing statement in the appropriate jurisdiction
and/or delivery of the certificates evidencing the securities included in the
Collateral or the Senior Mezzanine Loan Collateral, as the case may be, create
and constitute a valid and perfected first priority Lien on the Collateral or
Required Equity, as the case may be, free and clear of all Liens other than the
Permitted Encumbrances. The Permitted Encumbrances do not and will not
materially and adversely affect or interfere with (i) the value, or current use
or operation, of the Mortgage Loan Collateral Properties, (ii) the
security intended to be provided by the Mortgages, (iii) the security intended
to be provided by the Senior Mezzanine Loan Documents creating a security
interest in the Required Equity or the Loan Documents creating a security
interest in the Collateral or (iv) Borrower’s ability to repay the Indebtedness
in accordance with the terms of the Loan Documents.  Except as insured over by a
Qualified Title Insurance Policy, there are no claims for payment for work,
labor or materials affecting the Mortgage Loan Collateral Properties which are
or may become a Lien prior to, or of equal priority with, the Liens created by
the Loan Documents or the Senior Mezzanine Loan Documents.  No creditor of
Borrower or any Senior Mezzanine Borrower other than Lender or Senior Mezzanine
Lender, as the case may be, has in its possession any goods that constitute or
evidence the Collateral or the Senior Mezzanine Loan Collateral.

 

4.22.       No Encroachments.  Except as shown on the applicable Qualified
Survey, all of the improvements on each Mortgage Loan Collateral Property lie
wholly within the boundaries and building restriction lines of the such Mortgage
Loan Collateral Property, and no improvements on adjoining property encroach
upon any Mortgage Loan Collateral Property, and no easements or other
encumbrances upon any Mortgage Loan Collateral Property encroach upon any of the
improvements, so as, in either case, to adversely affect the value or
marketability of the applicable Mortgage Loan Collateral Property, except those
which are insured against by a Qualified Title Insurance Policy.  All of the
improvements on each of the Other Properties lie wholly within the boundaries
and building restriction lines of the such Other Properties, except to the
extent that failure of any improvements to lie wholly within such boundaries and
building restriction lines does not cause a Portfolio Material Adverse Effect;
and no improvements on adjoining property encroach upon any of the Other
Properties, and no easements or other encumbrances upon any of the Other
Properties encroach upon any of the improvements, so as, in either case, to
cause a Portfolio Material Adverse Effect.

 

4.23.       Physical Condition.

 

(a)           Based solely on the Engineering Reports, each Mortgage Loan
Collateral Property (including sidewalks, storm drainage system, roof, plumbing
system, HVAC system, fire protection system, electrical system, equipment,
elevators, exterior sidings and doors, irrigation system and all structural
components) is in good condition, order and repair in all respects material to
its use, operation or value.  Each Other Property (including sidewalks, storm
drainage system, roof, plumbing system, HVAC system, fire protection system,
electrical system, equipment, elevators, exterior sidings and doors, irrigation
system and all structural components) is in good condition, order and repair in
all respects material to its use, operation or

 

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value, except to the extent that the failure of such Other Property to be in
good condition, order and repair does not result in a Portfolio Material Adverse
Effect.

 

(b)          Based solely on the Engineering Reports, Borrower is not aware of
any material structural or other material defect or damages in any of the
Mortgage Loan Collateral Properties, whether latent or otherwise.  Borrower is
not aware of any material structural or other material defect or damages in any
of the Other Properties, whether latent or otherwise, that would have a
Portfolio Material Adverse Effect.

 

(c)           Borrower has received or is aware of any other party’s receipt of
written notice from any insurance company or bonding company of any defects or
inadequacies in any of the Properties which would, alone or in the aggregate,
adversely affect in any material respect the insurability of the same or cause
the imposition of extraordinary premiums or charges thereon or of any
termination or threatened termination of any policy of insurance or bond.

 

4.24.       Fraudulent Conveyance.  None of Borrower or any Senior Mezzanine
Borrower has entered into the Transaction, any of the Loan Documents or any of
the Senior Mezzanine Loan Documents, as the case may be, with the actual intent
to hinder, delay or defraud any creditor.  Borrower has received reasonably
equivalent value in exchange for its obligations under the Loan Documents and
Senior Mezzanine Borrower has received reasonably equivalent value in exchange
for its obligations under the Senior Mezzanine Loan Documents. On the Original
Closing Date and immediately following the making of the Senior Mezzanine Loan,
and the use and disbursement of the proceeds thereof, the fair salable value of
each Senior Mezzanine Borrower’s aggregate assets were greater than its probable
aggregate liabilities (including subordinated, unliquidated, disputed and
Contingent Obligations).  Each Senior Mezzanine Borrower’s aggregate assets,
immediately following the making of the Senior Mezzanine Loan and the use and
disbursement of the proceeds thereof, did not constitute unreasonably small
capital to carry out its business as conducted or as proposed to be conducted. 
None of Borrower or any Senior Mezzanine Borrower intends to, and does not
believe that it will, incur debts and liabilities (including Contingent
Obligations 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 or such Senior Mezzanine Borrower).  As of
the Original Closing Date (i) the fair salable value of Borrower’s aggregate
assets are greater than its probable aggregate liabilities (including
subordinated, unliquidated, disputed and Contingent Obligations) and
(ii) Borrower’s aggregate assets do not constitute unreasonably small capital to
carry out its business as conducted or as proposed to be conducted.

 

4.25.       Management.  Except for any Approved Management Agreement, no
property management agreements are in effect with respect to the Properties,
other than sub-management agreements entered into in accordance with the terms
of the Approved Management Agreements.

 

4.26.       Condemnation.  Except as listed on the Exception Report, no
Condemnation has been commenced or is contemplated with respect to all or any
material portion of any of the Mortgage Loan Collateral Properties or for the
relocation of roadways providing access to any of the Mortgage Loan Collateral
Properties or, to Borrower’s knowledge,

 

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is contemplated with respect to all or any material portion of any of the Other
Properties or for the relocation of roadways providing access to any of the
Other Properties.

 

4.27.       Utilities and Public Access.  Each Property has adequate rights of
access to dedicated public ways (and makes no material use of any means of
access or egress that is not pursuant to such dedicated public ways or recorded,
irrevocable rights-of-way or easements) and is adequately served by all public
utilities necessary to the continued use and enjoyment of such Property as
presently used and enjoyed.

 

4.28.       Environmental Matters.  Except as disclosed in the Environmental
Reports and except as disclosed on the Exception Report:

 

(i)            To Borrower’s knowledge, each Property is in compliance in all
material respects with all Environmental Laws applicable to such Property (which
compliance includes, but is not limited to, the possession of, and compliance
with, all environmental, health and safety permits, approvals, licenses,
registrations and other governmental authorizations required in connection with
the ownership and operation of such Property under all Environmental Laws).

 

(ii)           No Environmental Claim is pending with respect to any of the
Properties, nor, to Borrower’s knowledge, is any threatened, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to Borrower, any Senior Mezzanine Borrower or any
of the Properties.

 

(iii)          Without limiting the generality of the foregoing, to Borrower’s
knowledge, there is not present at, on, in or under any Property, any Hazardous
Substances, PCB-containing equipment, asbestos or asbestos containing materials,
underground storage tanks or surface impoundments for any Hazardous Substance,
lead in drinking water (except in concentrations that comply with all
Environmental Laws), or lead-based paint, in each case in violation of
Environmental Law.

 

(iv)         To Borrower’s knowledge, there have not been and are no past,
present or threatened Releases of any Hazardous Substance from or at any of the
Properties that are reasonably likely to form the basis of any Environmental
Claim, and, to Borrower’s knowledge, there is no threat of any Release of any
Hazardous Substance migrating to any of the Properties.

 

(v)          To Borrower’s knowledge, no Liens are presently recorded with the
appropriate land records under or pursuant to any Environmental Law with respect
to any of the Properties and, to Borrower’s knowledge, no Governmental Authority
has been taking any action to subject any of the Properties to Liens under any
Environmental Law.

 

(vi)         To Borrower’s knowledge, there have been no material environmental
investigations, studies, audits, reviews or other analyses conducted by or that
are in the possession of Borrower in relation to any of the Properties which
have not been made available to Lender.

 

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4.29.       Assessments.  There are no pending or, to Borrower’s knowledge,
proposed special or other assessments for public improvements or otherwise
affecting any of the Properties, nor are there any contemplated improvements to
any of the Properties that may result in such special or other assessments.  No
extension of time for assessment or payment by Borrower of any federal, state or
local tax is in effect.

 

4.30.       No Joint Assessment.  None of Borrower or any Senior Mezzanine
Borrower has suffered, permitted or initiated the joint assessment of any of the
Properties (i) with any other real property constituting a separate tax lot, or
(ii) with any personal property, or any other procedure whereby the Lien of any
Taxes which may be levied against such other real property or personal property
shall be assessed or levied or charged to any of the Properties as a single
Lien.

 

4.31.       Separate Lots.  No portion of any of the Properties is part of a tax
lot that also includes any real property that is not Collateral.

 

4.32.       Permits; Certificate of Occupancy.  Senior Mezzanine Borrower has
obtained all material Permits necessary for the present and contemplated use and
operation of each Property and that Senior Mezzanine Borrower is obligated to
obtain under Legal Requirements.  The permitted uses set forth in the Leases are
in conformity in all material respects with the certificate of occupancy and/or
material Permits for such Property and any other restrictions, covenants or
conditions affecting such Property and, to Borrower’s knowledge, the actual uses
being made of each Property are in conformity in all material respects with the
certificate of occupancy and/or Permits for such Property and any other
restrictions, covenants or conditions affecting such Property, in each case
where non-conformity would not have a Material Adverse Effect.

 

4.33.       Flood Zone.  None of the Improvements on any of the Properties is
located in an area identified by the Federal Emergency Management Agency or the
Federal Insurance Administration as a “100 year flood plain” or as having
special flood hazards (including Zones A, B, C, V and X and Shaded X areas), or,
to the extent that any portion of any of the Properties is located in such an
area, such Property is covered by flood insurance meeting the requirements set
forth in Section 5.15(a)(ii).

 

4.34.       Security Deposits.  Borrower and each Senior Mezzanine Borrower is
in compliance in all material respects with all Legal Requirements relating to
security deposits.

 

4.35.       Acquisition Documents.  Borrower has made available to Lender true
and complete copies of all material agreements and instruments under which
Senior Mezzanine Borrower or any of its Affiliates or the seller of any of the
Properties have remaining material rights or material obligations in respect of
Borrower’s acquisition of the Properties.

 

4.36.       Insurance.  Except with respect to the Properties subject to a Net
Lease, Senior Mezzanine Borrower has obtained insurance policies reflecting the
insurance coverages, amounts and other requirements set forth in this
Agreement.  All premiums on such insurance policies required to be paid as of
the Closing Date have been paid for the current policy period. 

 

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Borrower has not done, and to Borrower’s knowledge, no other Person has done, by
act or omission, anything which would impair the coverage of any such policy.

 

4.37.       Ground Leased Parcels.  With respect to each Ground Leased Parcel,
each of the following is true with respect to the related Ground Lease (taking
into account the terms of any applicable estoppel letter):

 

(i)            true and complete copies of the Ground Leases have been delivered
to Lender, and except as set forth in the Exception Report the Ground Leases or
memoranda thereof have been duly recorded;

 

(ii)           to Borrower’s knowledge, the Ground Leases are in full force and
effect and no material default beyond applicable grace, cure or notice periods
has occurred thereunder nor, to Borrower’s knowledge, is there any existing
condition which, but for the passage of time or the giving of notice or both,
would result in a material default under the terms of any of the Ground Leases;

 

(iii)          except as set forth in the Exception Report, the Ground Leases
have original terms which extend not less than 30 years beyond the Maturity Date
(assuming the exercise of all extension options hereunder), taking into account
any extension options that are freely exercisable by the lessee under the Ground
Lease, and all such extension options have either been previously exercised or
are first exercisable not less than five years after the Maturity Date;

 

(iv)         except as set forth in the Exception Report, the Ground Leases do
not restrict the use of any portion of the Properties by the lessee, its
successors or its assigns in a manner that would cause a Material Adverse
Effect;

 

(v)          except as set forth in the Exception Report, the Ground Leases
permit the interest of the lessee thereunder to be encumbered by leasehold
mortgages and contains no restrictions on the identity of a leasehold mortgagee;

 

(vi)         except as set forth in the Exception Report, the Ground Leases may
not be amended, modified, cancelled or terminated without the prior written
consent of a leasehold mortgagee;

 

(vii)        with respect to the Mortgage Loan Collateral Properties, to
Borrower’s knowledge, other than Permitted Encumbrances, the Ground Leases are
not subject to any Liens or encumbrances superior to, or of equal priority with,
the Mortgage (other than the ground lessor’s fee interest);

 

(viii)       with respect to the Mortgage Loan Collateral Properties, to
Borrower’s knowledge, other than Permitted Encumbrances, there are no Liens
encumbering the ground lessor’s fee interests, and, except as permitted herein,
Borrower shall not permit or cause any Lien to become superior to the Ground
Lease upon the related fee interest that may hereafter be granted;

 

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(ix)          except as set forth in the Exception Report, the Ground Leases are
assignable by a holder of a leasehold mortgage upon a foreclosure of such
mortgage without the consent of the lessor thereunder;

 

 (x)          except as set forth in the Exception Report, the Ground Leases
require the lessor thereunder to give notice of any default by the lessee to a
holder of a leasehold mortgage; and the Ground Leases further provide that no
notice given thereunder is effective against such holder, unless a copy has been
given to such holder in the manner described in such Ground Lease;

 

(xi)          except as set forth in the Exception Report, a holder of a
leasehold mortgage is permitted at least 30 days in addition to Borrower’s
applicable cure period to cure any default under each of the Ground Leases which
is curable after the receipt of notice of any such default before the lessor
thereunder may terminate such Ground Lease (and, where necessary, is permitted
the opportunity to gain possession of the interest of the lessee under such
Ground Lease through legal proceedings or to take other action so long as such
holder is proceeding diligently);

 

(xii)         except as set forth in the Exception Report, in the case of any
default which is not curable by a holder of a leasehold mortgage, or in the
event of the bankruptcy or insolvency of the lessee under one of the Ground
Leases, such holder has the right, following termination of such existing Ground
Lease or rejection thereof by a bankruptcy trustee or similar party, to enter
into a new ground lease with the lessor on the same terms as such existing
Ground Lease, and all rights of the lessee under such Ground Lease may be
exercised by or on behalf of such holder; and

 

(xiii)        except as set forth in the Exception Report, the Ground Leases do
not impose any restrictions on subletting.

 

4.38.       Intentionally Omitted.

 

4.39.       Estoppel Certificates.  Borrower has delivered to Lender true and
complete copies of (a) the form(s) of estoppel certificate heretofore sent by
Senior Mezzanine Borrower or an Affiliate to Tenants and lessors under Ground
Leases, and (b) each estoppel certificate received back from any such Tenant or
lessor prior to the Closing Date.

 

4.40        Embargoed Person.  (a) None of the funds or other assets of any of
Borrower, any Senior Mezzanine Borrower, any Single-Purpose Equityholder or
Sponsor constitute property of, or, to Borrower’s knowledge, are beneficially
owned, directly or indirectly, by any person, entity or government subject to
trade restrictions under federal law, including, without limitation, the
International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The
Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any executive orders
or regulations promulgated thereunder, with the result that (i) the investment
in Borrower, any Senior Mezzanine Borrower, any Single-Purpose Equityholder or
Sponsor, as applicable (whether directly or indirectly), is prohibited by law or
(ii) the Loan is in violation of law (any such person, entity or government, an
“Embargoed Person”); (b) to Borrower’s knowledge, no Embargoed Person has any
interest of any nature whatsoever in Borrower, any Senior Mezzanine

 

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Borrower, any Single-Purpose Equityholder or Sponsor, as applicable (whether
directly or indirectly), with the result that (i) the investment in Borrower,
any Senior Mezzanine Borrower, any Single-Purpose Equityholder or Sponsor, as
applicable (whether directly or indirectly) is prohibited by law or (ii) the
Loan is in violation of law and (c) to Borrower’s knowledge, none of the funds
of Borrower, any Senior Mezzanine Borrower, any Single-Purpose Equityholder or
Sponsor, as applicable, have been derived from any unlawful activity with the
result that (i) the investment in Borrower, any Senior Mezzanine Borrower, any
Single-Purpose Equityholder or Sponsor, as applicable (whether directly or
indirectly) is prohibited by law or (ii) the Loan is in violation of law. 
Notwithstanding Section 4.42 to the contrary, the representations and warranties
contained in this Section 4.40 shall survive in perpetuity.

 

4.41        Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money
Laundering Laws.  Borrower and each Senior Mezzanine Borrower, and to Borrower’s
knowledge, (a) each Person owning an interest in Borrower, any Senior Mezzanine
Borrower, any Single-Purpose Equityholder or Sponsor, (b) each Single-Purpose
Equityholder, if any, (c) Sponsor, and (d) each property manager (including each
Approved Property Manager): (i) is not currently identified on the OFAC List and
(ii) is not a Person with whom a citizen of the United States is prohibited to
engage in transactions by any trade embargo, economic sanction, or other
prohibition of any Legal Requirement.  Borrower has implemented procedures, and
will consistently apply those procedures throughout the term of the Loan, to
ensure the foregoing representations and warranties remain true and correct
during the term of the Loan.

 

4.42.       Tax Basis.  After giving effect to the Transaction and certain other
actions related thereto that will be completed on or prior to the Closing Date,
the U.S. Federal Income tax basis of the Stepped-Up Properties (as defined
below) will be increased in an aggregate amount equal to the portion of the
acquisition cost under the Merger Agreement allocable to such Stepped-Up
Properties on a pro rata basis, which allocation shall be based on the ratio of
the fair market value of such Stepped-Up Properties to the fair market value of
the total acquisition cost.  For purposes of this Section 4.42, the term
“Stepped-Up Properties” means properties other than those held through
partnerships or other similar joint ventures with third parties not related to
AFRT.

 

4.43.       Survival.  Borrower agrees that all of the representations of
Borrower set forth in this Agreement and in the other Loan Documents shall
survive for so long as any portion of the Indebtedness is outstanding.  All
representations, covenants and agreements made by Borrower in this Agreement or
in the other Loan Documents shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.  On the date of any Securitization, on not less than 10 Business
Days’ prior written notice, Borrower shall deliver to Lender a certification
(x) confirming that all of the representations contained in this Agreement are
true and correct in all material respects as of the date of such Securitization,
or (y) otherwise specifying any changes in or qualifications to such
representations as of such date as may be necessary to make such representations
consistent in all material respects with the facts as they exist on such date. 
Except as expressly required by this Agreement and the other Loan Documents,
Borrower shall have no further obligation to update any representation or
warranty nor shall any representation or warranty be deemed to have been made on
any date other than the Closing Date or as of the date of any Securitization.

 

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ARTICLE V

 

AFFIRMATIVE COVENANTS

 

5.1.         Existence.  Borrower, each Senior Mezzanine Borrower, each Property
Owner and, if applicable, each Single-Purpose Equityholder shall do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its existence and all rights, licenses, Permits, franchises and other
agreements necessary for the continued use and operation of its business. 
Borrower, each Senior Mezzanine Borrower and, if applicable, each Single-Purpose
Equityholder shall deliver to Lender a copy of each amendment or other
modification to any of its organizational documents promptly after the execution
thereof.

 

5.2.         Maintenance of Properties.

 

(a)           Borrower or its designee will keep or cause each Property to be
kept in good working order and repair, reasonable wear and tear excepted. 
Subject to Section 6.13, the rights and obligations of Tenants under Leases and
with respect to any Encumbered Property, the provisions of any Encumbered
Property Debt Documents, Borrower shall from time to time make, or cause to be
made, all reasonably necessary and desirable repairs, renewals, replacements,
betterments and improvements thereto.

 

(b)          Subject to the terms of any applicable Leases, if and to the extent
reasonably required by Lender, Borrower shall cause Senior Mezzanine Borrower to
remediate the Deferred Maintenance Conditions reasonably promptly following the
Closing Date, subject to Force Majeure, and upon request from Lender after the
expiration of such period shall deliver to Lender an Officer’s Certificate
confirming that such remediation has been substantially completed and that all
associated expenses then due and payable have been paid; provided that Borrower
shall be deemed to have satisfied its obligations hereunder with respect to any
matter that is the obligation of a Tenant under a Lease if Borrower shall be
using commercially reasonable efforts to cause Senior Mezzanine Borrower to
cause such Tenant to complete such matter pursuant to the terms of such Lease.

 

5.3.         Compliance with Legal Requirements.  Borrower shall, and shall
cause Senior Mezzanine Borrower to, comply with, and shall cause each Property
to comply with and be operated, maintained, repaired and improved in compliance
in all material respects with, all Legal Requirements, Insurance Requirements
and all material contractual obligations by which Borrower or any Senior
Mezzanine Borrower is legally bound.

 

5.4.         Impositions and Other Claims.  Borrower shall, and shall cause each
Senior Mezzanine Borrower to, pay and discharge, or cause to be paid and
discharged, all taxes, assessments and governmental charges levied upon it, its
income and its assets and the Properties prior to delinquency, as well as all
lawful claims for labor, materials and supplies or otherwise, subject to any
rights to contest contained in the definition of Permitted Encumbrances. 
Borrower shall, and shall cause each Senior Mezzanine Borrower to, file or cause
to be filed all federal, state and local tax returns and other reports that it
or its subsidiaries are required by law to file.  If any law or regulation
applicable to Lender, any Note, any of the Mortgage Loan Collateral Properties,
the Collateral, the Pledge or any of the Mortgages is enacted that deducts from
the

 

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value of property for the purpose of taxation any Lien thereon, or imposes upon
Lender the payment of the whole or any portion of the taxes or assessments or
charges or Liens required by this Agreement to be paid by Borrower, or changes
in any way the laws or regulations relating to the taxation of mortgages or
security agreements or debts secured by mortgages or security agreements or the
interest of the mortgagee or secured party in the property covered thereby, or
the manner of collection of such taxes, so as to affect any of the Mortgages,
the Pledge Agreement, the Collateral, the Indebtedness or Lender, then Borrower,
upon demand by Lender, shall pay, or cause to be paid, such taxes, assessments,
charges or Liens, or reimburse Lender for any amounts paid by Lender.  If in the
opinion of Lender’s counsel it might be unlawful to require Borrower to make
such payment or the making of such payment might result in the imposition of
interest beyond the maximum amount permitted by applicable Law, Lender may elect
to declare all of the Indebtedness to be due and payable 90 days from the giving
of written notice by Lender to Borrower.

 

5.5.         Access to Properties.  Subject to the rights of Tenants under
Leases, Borrower shall permit or cause Senior Mezzanine Borrower and/or Property
Owners to permit agents, representatives and employees of Lender and the
Servicer to inspect the Properties or any portion thereof, and/or the books and
records of Borrower, at such reasonable times as may be requested by Lender upon
reasonable advance notice.

 

5.6.         Cooperate in Legal Proceedings.  Except with respect to any claim
by Borrower against Lender, Borrower shall, and shall cause Senior Mezzanine
Borrower to, cooperate fully with Lender with respect to any proceedings before
any Governmental Authority which may in any way affect the rights of Lender
hereunder or under any of the Loan Documents and, in connection therewith,
Lender may, at its election, participate or designate a representative to
participate in any such proceedings.

 

5.7.         Leases.

 

(a)           Upon Lender’s request, Borrower shall, or shall cause Senior
Mezzanine Borrower to, furnish Lender with executed copies of all Leases,
together with a detailed breakdown of income and cost associated therewith to
the extent the same has been prepared by Borrower or Senior Mezzanine Borrower. 
All new Leases and renewals or amendments of Leases must be entered into on an
arms-length basis with Tenants whose identity and creditworthiness, in
Borrower’s good faith judgment, is appropriate for tenancy in property of
comparable quality, must provide for rental rates and other economic terms
which, in Borrower’s good faith judgment, taken as a whole, are at least
equivalent to then-existing market rates, based on the applicable market, and
must contain terms and conditions that are commercially reasonable (in each
case, unless Lender consents to such Lease in its sole discretion).  Subject to
the terms of the Encumbered Property Debt Documents, all new Leases must provide
that they are subject and subordinate to any current or future mortgage
financing on the applicable Property and that the Tenant agrees to attorn to any
foreclosing mortgagee at such mortgagee’s request, provided such mortgagee
agrees to not disturb such Tenant’s tenancy except in accordance with its Lease.

 

(b)          All new Leases which are Major Leases, and all terminations,
renewals and material amendments of Major Leases,

 

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and any surrender of rights under any Major Lease, shall be subject to the prior
written consent of Lender, which consent shall not be unreasonably withheld,
conditioned or delayed.  To facilitate Borrower’s leasing process, Borrower
shall have the right to present prospective leasing transactions to Lender for
its approval prior to the negotiation of a final Lease.  Such presentation shall
include a summary term sheet of all material terms of the proposed Lease or a
draft of the proposed Lease together with any additional information concerning
such proposed Lease and the proposed Tenant thereunder as may be reasonably
requested by Lender (the “Lease Term Sheet”).  Each request for approval of a
Lease or a Lease Term Sheet shall be submitted to Lender in an envelope marked
“URGENT – LENDER’S ATTENTION REQUIRED WITHIN 7 BUSINESS DAYS”, together with
(i) a copy of the proposed Lease or the Lease Term Sheet, (ii) a summary of the
economic terms thereof and any termination options contained therein together
with a detailed breakdown of income and costs associated with the proposed
Lease, and (iii) copies of all written materials obtained by Borrower or the
applicable Senior Mezzanine Borrower in connection with its evaluation of the
creditworthiness of the proposed Tenant, and shall be deemed approved if Lender
shall not have notified Borrower in writing of its disapproval thereof and the
reasons for such disapproval within three Business Days after Borrower shall
have given Lender written notice confirming that at least seven Business Days
have elapsed since such submission, which written notice shall be submitted to
Lender in an envelope marked “URGENT – SECOND AND FINAL NOTICE – LENDER’S
ATTENTION REQUIRED BY [DATE]”.  If Lender approves or is deemed to have approved
the Lease Term Sheet, Lender’s approval of the final Lease shall be limited to
Lender’s reasonable confirmation that the final Lease does not (i) deviate in
any material adverse respect from the terms set forth on the Lease Term Sheet or
contain any material adverse terms not set forth in the Lease Term Sheet, or
(ii) deviate in any material respect from the approved Lease form (and otherwise
such final Lease shall be subject to Lender’s reasonable written approval). 
Borrower shall deliver to Lender a copy of any Lease executed pursuant to a
Lease Term Sheet together with an Officer’s Certificate indicating any material
deviations from such Lease Term Sheet.

 

(c)           Borrower shall, and shall cause Senior Mezzanine Borrower to
(i) observe and perform all the material obligations imposed upon the lessor
under the Leases; (ii) enforce, to the extent commercially reasonable, all of
the material terms, covenants and conditions contained in the Leases on the part
of the lessee thereunder to be observed or performed, short of termination
thereof, except that Senior Mezzanine Borrower may terminate any Lease following
a material default thereunder by the respective Tenant; (iii) not collect any of
the rents thereunder more than one month in advance; (iv) not execute any
assignment of lessor’s interest in the Leases or associated rents other than the
assignments of rents and leases under the Mortgages and the Encumbered Debt
Documents; and (v) not cancel or terminate any guarantee of any of the Major
Leases without the prior written consent of Lender.  Borrower shall cause Senior
Mezzanine Borrower to deliver to each new Tenant at a Mortgage Loan Collateral
Property a Tenant Notice upon execution of such Tenant’s Lease or include same
in such Tenant’s Lease or invoices, and promptly thereafter deliver to Lender a
copy thereof and evidence of such Tenant’s receipt thereof.

 

(d)          To the extent required by applicable law, security deposits of
Tenants under all Leases, whether held in cash or any other form, shall not be
commingled with any other funds of Borrower or Senior Mezzanine Borrower and, if
cash, shall be deposited by Senior Mezzanine Borrower in an Eligible Account or
such other account at such commercial or savings

 

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bank as may be reasonably satisfactory to Senior Mezzanine Lender (or Lender, if
Senior Mezzanine Loan is no longer outstanding or Senior Mezzanine Lender is
otherwise not requiring Senior Mezzanine Borrower to be in compliance with
Section 5.7(d) of the Senior Mezzanine Loan Agreement), which account shall be
pledged to Senior Mezzanine Lender (or Lender, if Senior Mezzanine Loan is no
longer outstanding or Senior Mezzanine Lender is otherwise not requiring Senior
Mezzanine Borrower to be in compliance with Section 5.7(d) of the Senior
Mezzanine Loan Agreement).  Borrower shall, upon Lender’s request, provide
Lender with evidence reasonably satisfactory to Lender of Borrower’s or Senior
Mezzanine Borrower’s , as the case may be, compliance with the foregoing. 
During the continuance of any Event of Default, subject to the Encumbered
Property Debt Documents and the rights of Senior Mezzanine Lender under the
Senior Mezzanine Loan Documents, Borrower shall, upon Lender’s request, deposit
with Lender in an Eligible Account pledged to Lender an amount equal to the
aggregate security deposits of the Tenants (and any interest theretofore earned
on such security deposits and actually received by Borrower) which Borrower,
Senior Mezzanine Borrower or their respective Affiliates had not returned to the
applicable Tenants or applied in accordance with the terms of the applicable
Lease.

 

(e)           Whenever a Lease at a Mortgage Loan Collateral Property is
terminated, whether by buy-out, cancellation, default or otherwise, and Senior
Mezzanine Borrower is entitled to any payment, fee or penalty in respect of such
termination, Borrower shall promptly cause such payment, fee or penalty to be
deposited into an Eligible Account pledged to Mortgage Lender in accordance with
the Mortgage Loan Agreement.  Subject to the terms of the Encumbered Property
Debt Documents, whenever a Lease at an Other Property is terminated, whether by
buy-out, cancellation, default or otherwise, and Senior Mezzanine Borrower or a
Property Owner is entitled to any payment, fee or penalty in respect of such
termination (a “Termination Fee”), Borrower shall promptly cause such
Termination Fee to be deposited into an Eligible Account pledged to Senior
Mezzanine Lender (or Lender, if Senior Mezzanine Loan is no longer outstanding
or Senior Mezzanine Lender is otherwise not requiring Senior Mezzanine Borrower
to be in compliance with Section 5.7(e) of the Senior Mezzanine Loan
Agreement).  At any time that such Eligible Account is pledged to Lender,
provided no Event of Default has occurred and is continuing, (i) Lender shall
disburse such Termination Fee to Borrower at the written request of Borrower in
respect of Leasing Commissions and Tenant Improvement costs incurred by Borrower
or Senior Mezzanine Borrower in connection with replacement Leases at any
Properties other than Value Add Pool Properties, Disposition Asset Properties or
any Property with an Aggregate Allocated Loan Amount of zero, in each case
provided such Lease is entered into in accordance with the terms of this
Agreement.

 

(f)           Within ten Business Days after receipt of written request
therefor, provided Lender has received a copy of the executed corresponding
Lease, Lender shall execute and deliver to Borrower a subordination,
non-disturbance and attornment agreement (an “SNDA”).  If the form of the SNDA
shall be prescribed by the Lease in question, and Lender shall have approved (or
been deemed, in accordance with Section 5.7(b) hereof, to have approved) such
Lease (and the form of SNDA was attached to the draft Lease that was delivered
to Lender as part of Borrower’s request for approval), Lender shall execute and
deliver the SNDA in the form prescribed by such approved Lease.  Notwithstanding
the foregoing, in the case of any Lease as to which Lender’s approval is not
required pursuant to this Section 5.7 where such tenant thereunder requests an
SNDA, the SNDA to be executed and delivered by

 

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Lender shall be in substantially the form attached hereto as Exhibit G, and such
form shall also be attached to Senior Mezzanine Borrower’s standard form of
Lease as approved by Lender.  Lender agrees to reasonably negotiate the terms of
the SNDA with any Tenant under any Lease, but shall not be required to execute
an SNDA that differs in any material respect from the form attached hereto as
Exhibit G.  All reasonable out-of-pocket attorneys’ fees and disbursements
incurred by Lender in connection with such SNDA shall be payable by Borrower
within ten Business Days after Lender’s written request therefor, whether or not
the SNDA is ultimately executed and/or recorded.

 

5.8.         Plan Assets, etc.  Borrower will do, or cause to be done, all
things necessary to ensure that none of Borrower or any Senior Mezzanine
Borrower will be deemed to hold Plan Assets at any time.

 

5.9.         Further Assurances.  At Borrower’s sole cost and expense, from time
to time as reasonably requested by Lender, Borrower shall, and shall cause
Senior Mezzanine Borrower to, execute, acknowledge, record, register, file
and/or deliver to Lender such other instruments, agreements, certificates and
documents (including Uniform Commercial Code financing statements and amended or
replacement mortgages or pledges) as Lender may reasonably request to evidence,
confirm, perfect and maintain the Liens securing or intended to secure the
obligations of Borrower under the Loan Documents or to facilitate a replacement
of the Cash Management Bank pursuant to Section 3.1(c) or a bifurcation of the
Note pursuant to Sections 1.3(c) and/or 9.7(a), in each case if requested by
Lender, and do and execute all such further lawful and reasonable acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan Documents as Lender
shall reasonably request from time to time.  Borrower hereby authorizes and
appoints Lender as its attorney-in-fact to execute, acknowledge, record,
register and/or file such instruments, agreements, certificates and documents,
and to do and execute such acts, conveyances and assurances, should Borrower
fail to do so itself in violation of this Agreement within 5 Business Days
following written request from Lender, in each case without the signature of
Borrower.  The foregoing grant of authority is a power of attorney coupled with
an interest and such appointment shall be irrevocable for the term of this
Agreement.  Borrower hereby ratifies all actions that such attorney shall
lawfully take or cause to be taken in accordance with this Section 5.9.  Lender
shall provide Borrower with copies of any instruments executed by Lender in
accordance with this Section 5.9.

 

5.10.       Management of Properties and Senior Mezzanine Loan Collateral.

 

(a)           Subject to the terms of the Encumbered Property Debt Documents,
each Property, other than a Property that is entirely subject to a Lease under
which the Tenant is responsible for the management of the Property and liable
for all related costs thereunder, shall be managed at all times by an Approved
Property Manager pursuant to an Approved Management Agreement.  Pursuant to the
Subordination of Property Management Agreement or Agreements, each Approved
Property Manager shall agree that its Approved Management Agreement and all fees
thereunder (including any incentive fees) are subject and subordinate to the
Indebtedness.  Borrower may from time to time appoint, or cause to be appointed,
an Approved Property Manager to manage the applicable Property pursuant to an
Approved Management Agreement, and such successor manager shall execute for
Lender’s benefit a

 

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Subordination of Property Management Agreement in form and substance reasonably
satisfactory to Lender (and Lender hereby agrees that a Subordination of
Property Management Agreement in substantially the same form as the
Subordination of Property Management Agreement delivered to Lender by Borrower
as of the date hereof is deemed to be reasonably satisfactory to Lender).  The
per annum fees of the Approved Property Manager (including any incentive fees)
shall not, at any time, exceed 3.5% of the gross revenues of the relevant
Property for the then most recently concluded Test Period.

 

(b)          Borrower shall cause Senior Mezzanine Borrower to cause each
Approved Property Manager (including any successor Approved Property Manager) to
maintain at all times worker’s compensation insurance as required by
Governmental Authorities.

 

(c)           Borrower shall notify Lender in writing of any material default of
any Senior Mezzanine Borrower or an Approved Property Manager under any of the
Approved Management Agreements, after the expiration of any applicable cure
periods, of which Borrower has actual knowledge.  Subject to the rights of
Senior Mezzanine Lender, Lender shall have the right, after reasonable notice to
Borrower and in accordance with such Subordination of Management Agreement, to
cure defaults of Senior Mezzanine Borrower under such Approved Management
Agreement.  Any reasonable out-of-pocket expenses incurred by Lender to cure any
such default shall constitute a part of the Indebtedness and shall be due from
Borrower upon demand by Lender.

 

(d)          Subject in the case of Encumbered Properties to the Encumbered
Property Debt Documents, and in the case of the Joint Venture Properties to
their respective Qualified Joint Venture Agreements, upon the occurrence and
during the continuance of an Event of Default, or a material default by an
Approved Property Manager under an Approved Management Agreement after the
expiration of any applicable cure period, which default is reasonably likely to
result in a Material Adverse Effect, or upon the filing of a bankruptcy petition
or the occurrence of a similar event with respect to an Approved Property
Manager, Lender may, in its sole discretion, require Borrower to terminate, or
cause to be terminated, the Approved Management Agreement and engage, or cause
to be engaged, an Approved Property Manager selected by Lender to serve as
replacement Approved Property Manager pursuant to an Approved Management
Agreement.

 

5.11.       Notice of Material Event.  Borrower shall give Lender prompt notice
(containing reasonable detail) of (i) any material change in the financial or
physical condition of any of the Properties taken as a whole, as reasonably
determined by Borrower, including the termination or cancellation of any Major
Lease, the termination or cancellation of terrorism or other insurance required
by this Agreement, the exercise of shedding, contraction or termination rights
under any Lease which Lease covers in excess of 125,000 rentable square feet or
the accrual of such rights by any Tenant under any Lease which Lease covers in
excess of 125,000 rentable square feet, (ii) any litigation or governmental
proceedings pending or threatened in writing against Borrower or any Senior
Mezzanine Borrower which is reasonably likely to have a Portfolio Material
Adverse Effect, (iii) any notice by a lender asserting an event of default by an
Encumbered Property Owner or any of its Affiliates under any Encumbered Property
Debt Documents, (iv) any notice by Senior Mezzanine Lender of a Senior Mezzanine
Loan Event of

 

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Default and (v) any correspondence with Tenants under Major Leases with respect
to any alleged defaults by either party thereunder.

 

5.12.       Annual Financial Statements.  As soon as available, and in any event
within 120 days after the close of each Fiscal Year, beginning with the 2008
Fiscal Year Borrower shall furnish to Lender, in an Excel spreadsheet file in
electronic format (which may be via an intralinks site at Borrower’s sole cost
and expense), or, in the case of predominantly text documents, in Adobe .pdf
format, a balance sheet of Borrower and (except to the extent stock in Sponsor
is publicly traded on a major stock exchange) Sponsor as of the end of such
year, which statements with respect to Borrower shall be on a consolidated basis
with respect to the Properties as a whole, together with related consolidated
statements of income for such Fiscal Year, which statements shall include an
attached schedule of Net Operating Income, gross carrying value and accumulated
depreciation, each on an individual property basis, audited by an Approved
Accounting Firm whose opinion shall be to the effect that such financial
statements have been prepared in accordance with GAAP applied on a consistent
basis and shall not be qualified as to the scope of the audit or as to the
status of Borrower as a going concern.  Together with Borrower’s annual
financial statements, Borrower shall furnish to Lender in hard copy and
electronic format:

 

(i)           then current rent roll and occupancy reports of the Properties;

 

(ii)          to the extent not otherwise described in this Section 5.12, copies
of all financial statements and similar reports delivered to Encumbered Property
Lenders; and

 

(iii)         such other information as Lender shall reasonably request, to the
extent readily available to Borrower or Sponsor without material cost or
expense.

 

5.13.       Quarterly Financial Statements.  As soon as available, and in any
event within 60 days after the end of each Fiscal Quarter (including year-end),
Borrower shall furnish to Lender, in an Excel spreadsheet file in electronic
format (which may be via an intralinks site at Borrower’s sole cost and
expense), or, in the case of predominantly text documents, in Adobe .pdf format,
quarterly and year-to-date an unaudited balance sheet prepared for such Fiscal
Quarter with respect to Borrower and (except to the extent stock in Sponsor is
publicly traded on a major stock exchange) Sponsor, which statements with
respect to Borrower shall be on a consolidated basis with respect to the
Properties as a whole, together with related consolidated statements of income,
for such Fiscal Quarter and for the portion of the Fiscal Year ending with such
Fiscal Quarter, which statements shall include an attached schedule of Net
Operating Income, gross carrying value and accumulated depreciation, each on an
individual property basis, which statements shall be accompanied by an Officer’s
Certificate certifying that the same are true and correct and were prepared in
accordance with GAAP applied on a consistent basis, subject to changes resulting
from audit and normal year-end audit adjustments.  Each such quarterly report
shall be accompanied by the following, in hard copy and electronic format:

 

(i)           a statement which calculates Net Operating Income for each of the
Fiscal Quarters in the Test Period ending in such Fiscal Quarter, in the case of
each such Fiscal Quarter, ending at the end thereof;

 

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(ii)          copies of each of the Major Leases signed during such quarter and
each other Lease signed during such quarter that is requested by Lender, and a
summary of each material Lease (and, to the extent prepared by Borrower or
Approved Property Manager in the ordinary course of business, each other Lease)
signed during such quarter, which shall include the Tenant’s name, lease term,
base rent, Tenant Improvements, leasing commissions paid, free rent and other
material tenant concessions;

 

(iii)         then current rent roll and occupancy reports;

 

(iv)         to the extent not otherwise described in this Section 5.13, copies
of all financial statements and similar reports delivered to Encumbered Property
Lenders;

 

(v)          a copy of AFRT’s business plan, to the extent updated after the
date hereof; and

 

(vi)         such other information as Lender shall reasonably request, to the
extent readily available to Borrower or Sponsor without material cost or
expense.

 

5.14.       Monthly Financial Statements.  If requested by Lender or during an
Event of Default (or, in the case of item (iv) below, at all times), Borrower
shall furnish within 30 days after the end of each calendar month (other than
the calendar month immediately following the final calendar month of any Fiscal
Year or Fiscal Quarter, in which case Borrower shall furnish same within the
respective time period specified in Section 5.12 or 5.13, as applicable), in an
Excel spreadsheet file in electronic format (which may be via an intralinks site
at Borrower’s sole cost and expense) or, in the case of predominantly text
documents, in Adobe .pdf format, monthly and year-to-date unaudited financial
statements prepared for the applicable month with respect to Borrower and Senior
Mezzanine Borrower, including a balance sheet and operating statement as of the
end of such month, together with related statements of income, for such month
and for the portion of the Fiscal Year ending with such month, which statements
shall be accompanied by an Officer’s Certificate certifying that the same are
true and correct and were prepared in accordance with GAAP applied on a
consistent basis, subject to changes resulting from audit and normal year-end
audit adjustments.  Each such monthly report shall be accompanied by the
following:

 

(i)           beginning with the calendar month ending June 30, 2008, a summary
of material Leases (and, to the extent prepared by Borrower or Approved Property
Manager in the ordinary course of business, each other Lease) signed during such
month, which summary shall include the Tenant’s name, lease term, base rent,
escalations, Tenant Improvements, leasing commissions paid, free rent and other
concessions;

 

(ii)          then current rent roll and occupancy reports;

 

(iii)         to the extent not otherwise described in this Section 5.14, copies
of all financial statements and similar reports delivered to Encumbered Property
Lenders; and

 

(iv)         such other information as Lender shall reasonably request, to the
extent readily available to Borrower or Sponsor without material cost or
expense.

 

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5.15.       Insurance.  Borrower shall cause Senior Mezzanine Borrower to obtain
and maintain or cause to be obtained and maintained with respect to the
Properties the Policies of insurance required to be maintained pursuant to the
provisions of Section 5.15 of the Senior Mezzanine Loan Agreement.  Borrower
shall cause (or shall cause Property Owner to cause) Lender at all times to be
named as an additional insured (but not a “loss payee” unless and until the
Senior Mezzanine Loan is no longer outstanding) under the Policies and shall
deliver, or cause to be delivered, to Lender evidence, reasonably satisfactory
to Lender, of the insurance described in Section 5.15 hereof and of the Senior
Mezzanine Loan Agreement.

 

5.16.       Casualty and Condemnation.

 

(a)           Borrower shall give, or cause to be given, prompt notice to Lender
of any Casualty or Condemnation in excess of $250,000.  In the event any
Casualty or Condemnation, in respect of which Senior Mezzanine Lender applies
Loss Proceeds toward the prepayment of the Senior Mezzanine Loan, all excess
Loss Proceeds remaining after the Senior Mezzanine Loan has been paid in full
shall be applied toward the prepayment of the Loan and shall be accompanied by
interest through the end of the applicable Interest Accrual Period (calculated
as if the amount prepaid were outstanding for the entire Interest Accrual Period
during which the prepayment is applied).  If the Note has been bifurcated into
multiple Note Components pursuant to Section 1.3(c), all prepayments of the Loan
applied toward such Note shall be applied to the Note Components of such Note in
ascending order of interest rate (i.e., first to the Note Component with the
lowest Component Spread until its outstanding principal balance has been reduced
to zero, then to the Note Component with the second lowest Component Spread
until its outstanding principal balance has been reduced to zero, and so on).

 

(b)          Borrower shall provide, or cause Senior Mezzanine Borrower to
provide, to Lender copies of all insurance claims and settlement notices, and in
the case where the Loss Proceeds are applied towards restoration of the
applicable Property under the Senior Mezzanine Loan Agreement, copies of the
plans and specifications, architect’s certificates, waivers of lien,
contractor’s sworn statements, plans, bonds, plats of survey and such other
documents as Lender may reasonably request, to the extent delivered to Senior
Mezzanine Lender.

 

(c)           In the event the Senior Mezzanine Loan is paid in full, the
provisions of Section 5.16 of the Senior Mezzanine Loan Agreement as in effect
on the date hereof (subject to any amendments approved by Lender unless such
approval is not required hereunder) shall apply herein and Borrower and Lender
shall each have the same rights and obligations with respect to Loss Proceeds,
availability of funds, claims adjustments and the restoration of any Property,
as provided therein between Senior Mezzanine Borrower and Senior Mezzanine
Lender.

 

(d)          Notwithstanding anything in this Section 5.16 to the contrary, with
respect to Encumbered Properties, Loss Proceeds shall be applied in accordance
with the Encumbered Property Debt Documents , and after such application, any
excess Loss Proceeds shall be applied in accordance with this Section 5.16.

 

5.17.       Annual Budget.  At least 30 days prior to the commencement of each
Fiscal Year during the term of the Loan beginning with the 2008 Fiscal Year, and
at least 30 days after the commencement of any Event of Default, Borrower shall
deliver to Lender an

 

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Annual Budget for the Properties for the ensuing Fiscal Year and, promptly after
preparation thereof, any subsequent revisions to the Annual Budget.  During the
continuance of any Event of Default, such Annual Budget and any such revisions
shall be subject to Lender’s approval (the Annual Budget, as so approved, or if
no Event of Default exists, the Annual Budget, the “Approved Annual Budget”);
provided, however, that Borrower shall not amend any Annual Budget more than
once in any 60-day period.  If Borrower submits an Annual Budget for approval in
good faith and such Annual Budget is not approved within 30 days, then the prior
year’s Approved Annual Budget will remain in effect, subject to increases for
non-discretionary items such as insurance premiums and Taxes and increases in
the Consumer Price Index for the applicable calendar year over the previous
calendar year for discretionary items.

 

5.18.       General Indemnity.  (a)  Borrower shall indemnify, reimburse, defend
and hold harmless Lender and its officers, directors, employees and agents
(collectively, the “Indemnified Parties”) for, from and against any and all
Damages of any kind or nature whatsoever which may be imposed on, incurred by,
or asserted against the Indemnified Parties, in any way relating to or arising
out of the making or holding or enforcement of the Loan by Lender or the
administration of the Transaction to the extent resulting, directly or
indirectly, from any claim (including any Environmental Claim) made (whether or
not in connection with any legal action, suit, or proceeding) by or on behalf of
any Person; provided, however, that no Indemnified Party shall have the right to
be indemnified hereunder for its own fraud, bad faith, gross negligence or
willful misconduct.  The provisions of and undertakings and indemnification set
forth in this Section 5.18 shall survive the satisfaction and payment in full of
the Indebtedness and termination of this Agreement.

 

(b)          The applicable Indemnified Party shall promptly notify Borrower in
writing of any action, judgment, suit, claim or demand with respect to which
such Indemnified Party seeks the benefit of Section 5.18(a) and provide Borrower
the opportunity to defend same, and if such Indemnified Party fails to do so it
shall lose the benefit of Section 5.18(a) if and to the extent Borrower is
prejudiced thereby.  So long as Borrower is resisting and defending in a prudent
and commercially reasonable manner any action, judgment, suit, claim or demand
that gives rise to Damages (or same is being defended by Borrower’s insurer and
insurance is adequate for the reimbursement of such Damages), the Indemnified
Parties shall not be entitled to defend or settle same and claim the benefit of
Section 5.18(a) with respect thereto without the consent of Borrower. 
Notwithstanding the foregoing, if the conditions set forth in the preceding
sentence are not being satisfied and Lender has provided Borrower with 30 days’
prior written notice, or shorter period if mandated by the requirements of
applicable law, and opportunity to correct such determination, Lender may in
good faith settle such action, suit or proceeding and claim the benefit of this
Section 5.18 with respect thereto.

 

5.19.       Nonbinding Consultation.  Lender shall have the right to consult
with and advise Borrower regarding significant business activities and business
and financial developments of Borrower, provided that any such advice or
consultation or the result thereof shall be completely nonbinding on Borrower.

 

5.20        Compliance with Encumbrances.  Each Borrower covenants and agrees as
follows:

 

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(i)           Borrower shall, and shall cause Senior Mezzanine Borrower to,
comply with all material terms, conditions and covenants of each material
Permitted Encumbrance, including any material reciprocal easement agreement, any
declaration of covenants, conditions and restrictions, and any condominium
arrangements.

 

(ii)          Borrower shall, and shall cause Senior Mezzanine Borrower to,
promptly deliver to Lender a true and complete copy of each and every notice of
default received by Borrower or any Senior Mezzanine Borrower with respect to
any obligation of Borrower or such Senior Mezzanine Borrower under the
provisions of any such Permitted Encumbrance, in each case if the same would
reasonably be expected to have a Material Adverse Effect.

 

(iii)         Borrower shall deliver to Lender copies of any written notices of
event of default relating to any such Permitted Encumbrance served by Borrower
or any Senior Mezzanine Borrower, if the same would reasonably be expected to
have a Material Adverse Effect.

 

(iv)         After the occurrence of an Event of Default, so long as the Loan is
outstanding, Borrower shall not, and shall not permit Senior Mezzanine Borrower
to, grant or withhold any material consent, approval or waiver under any such
Permitted Encumbrance without the prior written consent of Lender.

 

(v)          Borrower shall deliver, or cause to be delivered, to each other
party to any such Permitted Encumbrance notice of the identity of Lender and
each assignee of Lender of which Borrower has been notified in writing if such
notice is required in order to protect Lender’s interest thereunder.

 

5.21        Encumbered Property Indebtedness.  Borrower shall cause Senior
Mezzanine Borrower to cause each Encumbered Property Owner to comply in all
material respects with all of their respective obligations and liabilities under
the Encumbered Property Debt Documents to which each is a party, in each case
except to the extent that any failure to so comply would not have a Material
Adverse Effect on the value of any of the Encumbered Properties or the
Collateral.  Borrower shall cause Senior Mezzanine Borrower to cause each
Encumbered Property Owner, promptly upon receipt of any notice of breach or
default under any Encumbered Property Debt Documents, to deliver a copy of the
same to Lender and to grant access to, and otherwise cooperate with, Lender to
permit Lender, subject to the Encumbered Property Debt Documents and the rights
of Senior Mezzanine Lender under the Senior Mezzanine Loan Documents, to cure
such default to the same extent as the right granted to Lender under
Section 7.2(c) to cure an Event of Default with respect to any Mortgage Loan
Collateral Property.  The actual costs and expenses incurred by Lender in
exercising rights under this paragraph (including reasonable attorneys’ fees),
with interest at the Default Rate for the period after notice from Lender that
such costs or expenses were incurred to the date of payment to Lender, shall
constitute a portion of the Indebtedness, shall be secured by the Loan Documents
and shall be due and payable to Lender within 5 Business Days of demand
therefor.  Within 30 days of the Closing Date, Borrower shall take all steps
necessary to cause Junior Mezzanine Lender to be a notice party under the
Encumbered Property Debt Documents.

 

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5.22        Disposition Assets.  Upon the sale or other transfer or disposition
of any Disposition Asset, Borrower shall promptly deliver to Lender written
notice thereof in the form of an Officer’s Certificate identifying the relevant
Disposition Asset, the price for which it was sold and the transferee thereof
and certifying that the transferee thereof is unaffiliated with Borrower or any
Senior Mezzanine Borrower.

 

5.23        Distributions.  Borrower shall cause Senior Mezzanine Borrower to
cause each Property Owner and each Joint Venture Owner to promptly make
Distributions of all available cash flow, after payment of Operating Expenses at
the applicable Property and other sums then required to be paid to the
Encumbered Property Lenders or otherwise required to be paid, in each case, to
the extent expressly set forth in the Encumbered Party Debt Documents or the
Joint Venture Documents, directly into the Cash Management Account or the
Blocked Account on the earliest date practicable in the maximum amount not
prohibited by the Encumbered Property Documents or the Qualified Joint Venture
Agreements.  Borrower shall cause Senior Mezzanine Borrower to cause TRS Owner
to promptly make Distributions of all available cash flow, after payment of
Operating Expenses at the applicable TRS Property and other sums then required
or otherwise advisable to be paid by TRS Owner in order to ensure that TRS Owner
maintains its status as a taxable REIT subsidiary under applicable Legal
Requirements, directly into the Cash Management Account or the Blocked Account
on the earliest date practicable in the maximum amount then permissible

 

5.24        Encumbered Property Defaults.  Upon the occurrence of an event of
default under any one or more Encumbered Property Loans due to a claim that the
Transaction was prohibited thereunder, (x) AFRT shall repay or defease, or cause
to be repaid or defeased, such Encumbered Property Loan, as applicable, prior to
the earlier of (1) the date that is 10 days after the declaration of the event
of default under the applicable Encumbered Property Debt Documents and (2) the
acceleration of such Encumbered Property Loan; or (y) AFRT shall cause the
release of the Encumbered Property or Encumbered Properties securing such
Encumbered Property Loan from the Lien of the Loan Documents in accordance with
Section 2.2(a) prior to the earlier of (1) the date that is 10 days after the
declaration of the event of default under the applicable Encumbered Property
Loan and (2) the acceleration of such Encumbered Property Loan; provided,
however, that (i) in connection with any such release, notwithstanding anything
to the contrary contained in this Agreement, such Encumbered Property may be
Transferred to an Affiliate, and (ii) if the Transfer related to the release of
such Encumbered Property would result in a further default under the applicable
Encumbered Property Debt Documents, then Borrower shall be required to pay the
applicable Release Price for such Encumbered Property, but shall not be required
to Transfer such Property to actually effectuate such release.  The foregoing
10-day period may be extended to up to 60 days, provided (x) prior to the
expiration of such 10-day period, AFRT shall deliver to Senior Mezzanine Lender
(or to Lender, if the Senior Mezzanine Loan shall no longer be outstanding or if
the Senior Mezzanine Lender has otherwise waived the requirements of
Section 5.24 of the Senior Mezzanine Loan Agreement) a Letter of Credit in the
amount, if any, by which the aggregate cost to repay or defease such Encumbered
Property Loan (e.g., transaction costs, defeasance costs and prepayment fees)
exceeds the outstanding principal balance thereof, (y) the aggregate outstanding
principal amount of Encumbered Property Loans for which an event of default
thereunder is continuing does not exceed $350,000,000 at such time, and (z) AFRT
shall deliver to Lender an Officer’s Certificate of Sponsor certifying that such
event of default under such Encumbered Property Loan does not

 

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trigger an event of default under any other Debt of Sponsor, any Permitted Debt
of Borrower or any Debt of any of their respective Affiliates.

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

6.1.         Liens on the Properties and Collateral.  None of Borrower, any
Senior Mezzanine Borrower, any Property Owner, and, if applicable, any
Single-Purpose Equityholder shall permit or suffer the existence of any Lien on
any of its assets, other than Permitted Encumbrances.

 

6.2.         Ownership.  Borrower shall not own any assets other than its equity
interests in Senior Mezzanine Borrower and assets related thereto.  No Senior
Mezzanine Borrower shall own any assets other than its Properties and related
personal property and fixtures located therein or used in connection therewith
or its Required Equity, as applicable.  Except to the extent required under the
Encumbered Property Debt Documents, Borrower shall not permit any Property Owner
to own any assets other than its Encumbered Property and related personal
property and fixtures located therein or used in connection therewith.  Except
as otherwise shown on Exhibit A, neither AFRT nor AFRT Owner has any direct or
indirect subsidiary that is not Borrower, a Senior Mezzanine Borrower or a
Property Owner, and no new direct or indirect subsidiary shall be formed, unless
such subsidiary shall be a New Borrower Entity that becomes a “Borrower”
hereunder or under the Senior Mezzanine Loan or a Permitted TRS Entity under the
Senior Mezzanine Loan (unless Lender shall otherwise consent thereto) and, if it
is a Borrower hereunder or a “Borrower” under the Senior Mezzanine Loan, pledge
all of its assets to Lender or Senior Mezzanine Lender, as the case may be, in
each case pursuant to documentation reasonably acceptable to Lender.

 

6.3.         Transfer.

 

(a)           Borrower shall not (i) Transfer any Collateral, (ii) permit any
Senior Mezzanine Borrower to transfer any Senior Mezzanine Collateral or
(iii) permit any Property Owner to Transfer any Property, other than in
compliance with Article II hereof and Article II of the Senior Mezzanine Loan
Agreement, as applicable, and other than the replacement or other disposition of
obsolete or non-useful personal property and fixtures in the ordinary course of
business, and Borrower shall not, and shall not permit Senior Mezzanine Borrower
or any Property Owner to, hereafter file a declaration of condominium with
respect to any of the Properties.

 

(b)          Notwithstanding the foregoing:

 

(i)            Borrower may permit one or more Senior Mezzanine Borrowers, at
their sole cost and expense, to Transfer all or a portion of the Required Equity
to another Borrower or a New Borrower Entity and/or enter into a Permitted TRS
Contribution Agreement, provided that the nature, extent and value of Lender’s
collateral is not thereby impaired and (1) after giving effect to any such
Transfer or Permitted TRS Contribution Agreement, no Change of Control shall
have occurred, (2) Lender shall

 

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have received ten days’ advance written notice of any such Transfer or Permitted
TRS Contribution Agreement together with a revised organizational chart
reflecting such Transfer, (3) such Required Equity shall remain or become (as
the case may be) subject to a first priority perfected Lien in favor of Senior
Mezzanine Lender, as evidenced by a legal opinion and updated UCC title
insurance policy, in each case reasonably satisfactory to Lender and consistent
with Rating Agency requirements, (4) if reasonably requested by Lender, Borrower
shall deliver to Lender an updated nonconsolidation opinion satisfactory to
Lender and such other updated legal opinions, certifications and evidence of
compliance with this Agreement as Lender shall reasonably require, (5) such
Transfer shall have no adverse effect on Lender, (6) with respect to a Permitted
TRS Contribution Agreement, to the extent not already covered by the Senior
Mezzanine Loan Documents, Borrower shall have caused the rights of both parties
under such agreement to be pledged to Senior Mezzanine Lender as additional
collateral for the Senior Mezzanine Loan in a manner reasonably satisfactory to
Lender and (7) Borrower shall pay all reasonable costs and expenses of Lender in
connection with the foregoing;

 

(ii)           so long as no Event of Default is then continuing, Borrower may
cause Senior Mezzanine Borrower to obtain the release of up to and including 80%
of the indirect equity interests in any Property Owner in the aggregate from the
Liens of the Senior Mezzanine Loan Documents in connection with the sale of such
equity interests to an unaffiliated third party that enters into a Qualified
Joint Venture Agreement with Senior Mezzanine Borrower, provided that (1) at the
time of each such release, Borrower shall prepay the Loan, in accordance with
Section 2.1, in an amount equal to the applicable Unaffiliated Release Price for
such Joint Venture Property, provided that, solely for these purposes, (i) the
amount specified in clause (x) of the definition of “Unaffiliated Release Price”
shall be multiplied by the percentage of the joint venture interest being
Transferred, and (ii) the percentage specified in clause (y) of the definition
of Unaffiliated Release Price shall be replaced with “100%”, which prepayment
shall be accompanied by the other amounts specified in Section 2.1, (2) DSCR for
the Test Period most recently ended, recalculated to include only Senior
Mezzanine Borrower’s share of income and expense attributable to the Properties
remaining after the contemplated sale and to exclude the interest expense and
principal payments on the aggregate amount to be prepaid, shall be equal to or
greater than DSCR immediately prior to such sale (as reasonably determined by
Lender), (3) after giving effect to such release, the aggregate Senior
Collateral Value shall not be less than 120% of the sum of the Principal
Indebtedness and the Senior Mezzanine Loan Principal Indebtedness (as reasonably
determined by Lender), (4) Borrower shall reimburse Lender for any actual
reasonable out-of-pocket costs and expenses incurred by Lender in connection
with this Section (including the reasonable fees and expenses of legal counsel
and the Servicer), (5) Senior Mezzanine Lender shall retain a first-priority
perfected pledge of the remaining equity interests in such Property Owner, which
shall not be less than 20% of the equity therein; and (6) any subsequent sale of
a Joint Venture Property shall be subject to the requirements of Section 2.2,
except that, for purposes of this subsection (6) only, the Release Price payable
in connection therewith shall be the Unaffiliated Release Price (taking into
account 100% of the Aggregate Allocated Loan Amounts of the respective
Properties, without reduction for prior equity sales) reduced by multiplying the
amount

 

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specified in clause (x) of the definition of Unaffiliated Release Price by the
percentage of the applicable joint venture not theretofore released;

 

(iii)          Borrower may cause one or more Encumbered Property Owners to
transfer one or more Encumbered Properties to one or more newly formed
Single-Purpose Entities Controlled by Sponsor, in connection with the incurrence
of Permitted Debt pursuant to clause (iv) of the definition of “Permitted Debt”;

 

(iv)         Borrower shall be permitted to cause Senior Mezzanine Borrower to
Transfer Value Add Pool Equity pursuant to Section 2.3; and

 

(v)          a transfer of the direct and indirect equity interests in Senior
Mezzanine Borrower to the Lender in connection with a foreclosure (or similar
“in lieu” transaction) of the Loan shall be permitted, subject to the
intercreditor agreement between Lender and Senior Mezzanine Lender.

 

6.4.         Debt.  None of Borrower, any Senior Mezzanine Borrower or any
Property Owner shall have any Debt, other than Permitted Debt.  No direct or
indirect equityholder of Borrower, any Senior Mezzanine Borrower or any Property
Owner, other than Sponsor and any direct or indirect equityholder of Sponsor,
shall have any debt, other than Permitted Debt.  Notwithstanding the foregoing,
the Mortgage Guarantor shall be permitted to guaranty 100% of the Mortgage Loan.

 

6.5.         Dissolution; Merger or Consolidation.  None of Borrower, any Senior
Mezzanine Borrower, any Property Owner that owns any assets or, if applicable,
any Single-Purpose Equityholder shall dissolve, terminate, liquidate, merge with
or consolidate into another Person.

 

6.6.         Change in Business.  No Borrower nor any Property Owner shall 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.

 

6.7.         Debt Cancellation.  None of Borrower, any Senior Mezzanine Borrower
or any Property Owner shall cancel or otherwise forgive or release any material
claim or Debt owed to it by any Person, except for adequate consideration or in
the ordinary course of its business.

 

6.8.         Affiliate Transactions.  None of Borrower, any Senior Mezzanine
Borrower or any Property Owner shall enter into, or be a party to, any
transaction with any Affiliate of Borrower or Senior Mezzanine Borrower, except
on terms which are no less favorable to Borrower, such Senior Mezzanine Borrower
or such Property Owner than would be obtained in a comparable arm’s length
transaction with an unrelated third party.

 

6.9.         Misapplication of Funds.  None of Borrower or any Senior Mezzanine
Borrower shall (a) distribute any Revenue or Loss Proceeds in violation of the
provisions of this Agreement (and shall promptly cause the reversal of any such
distributions made in error of which Borrower becomes aware), (b) fail to remit
or cause to be remitted amounts to the Cash

 

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Management Account as required by Section 3.1 (including, without limitation,
all Distributions), or (c) misappropriate any security deposit or portion
thereof.

 

6.10.       Jurisdiction of Formation.  None of Borrower, any Senior Mezzanine
Borrower or any Property Owner shall change its jurisdiction of formation
without receiving Lender’s prior written consent and promptly providing Lender
such information and replacement Uniform Commercial Code financing statements
and legal opinions as Lender may reasonably request in connection therewith.

 

6.11.       Modifications and Waivers.  Unless otherwise consented to in writing
by Lender:

 

(i)            None of Borrower, Senior Mezzanine Borrower or Property Owner
shall amend, modify, terminate, renew, or surrender any rights or remedies under
any Major Lease, or enter into any Major Lease, except in compliance with
Section 5.7;

 

(ii)           Except for changing its registered agent and principal place of
business (in each case, upon advance written notice to Lender), none of
Borrower, Senior Mezzanine Borrower, Property Owner or, if applicable, any
Single-Purpose Equityholder shall terminate, amend or modify its organizational
documents (including, without limitation, any operating agreement, limited
partnership agreement, by-laws, certificate of formation, certificate of limited
partnership or certificate of incorporation) in a manner which (x) could
reasonably be expected to affect its qualification as a Single-Purpose Entity,
with respect to entities required to be Single-Purpose entities hereunder or
(y) could reasonably be expected to result in a Material Adverse Effect; and

 

(iii)          None of Borrower, Senior Mezzanine Borrower or Property Owner
shall terminate, materially amend or materially modify the Approved Management
Agreement without the consent of Lender not to be unreasonably withheld,
conditioned or delayed.

 

6.12.       ERISA.

 

(a)           None of Borrower or any Senior Mezzanine Borrower shall maintain
or contribute to, or agree to maintain or contribute to, or permit any ERISA
Affiliate of Borrower or Senior Mezzanine Borrower (except for Sponsor and any
ERISA Affiliate that is an equityholder in Sponsor) to maintain or contribute to
or agree to maintain or contribute to, any employee benefit plan (as defined in
Section 3(3) of ERISA) subject to Title IV or Section 302 of ERISA or
Section 412 of the Code.

 

(b)          None of Borrower or any Senior Mezzanine Borrower shall engage in a
non-exempt prohibited transaction under Section 406 of ERISA, Section 4975 of
the Code, or substantially similar provisions under federal, state or local
laws, rules or regulations or in any transaction that 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, the Mortgages, the Pledge Agreement
or any other Loan Document or Senior Mezzanine Loan Document) to be a non-exempt
prohibited transaction under such provisions.

 

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6.13.       Alterations and Expansions.  During the continuance of any Event of
Default, none of Borrower, Senior Mezzanine Borrower or Property Owner shall
perform or contract to perform any Capital Expenditures that are not consistent
with the Approved Annual Budget.  None of Borrower, Senior Mezzanine Borrower or
Property Owner shall perform or contract to perform any Material Alteration
without the prior written consent of Lender, which consent (in the absence of an
Event of Default) shall not be unreasonably withheld, conditioned or delayed. 
If Lender’s consent is requested hereunder with respect to a Material
Alteration, Lender may retain a construction consultant to review such request
and, if such request is granted, Lender may retain a construction consultant to
inspect the work from time to time.  Borrower shall, within 30 days of demand by
Lender, reimburse Lender for the reasonable fees and disbursements of such
consultant.

 

6.14.       Advances and Investments.  None of Borrower, Senior Mezzanine
Borrower or Property Owner shall lend money or make advances to any Person, or
purchase or acquire any stock, obligations or securities of, or any other
interest in, any Person, except for Permitted Investments, or issue any
additional equity interests.   None of Borrower, Senior Mezzanine Borrower or
Property Owner shall make any capital contribution to any Person other than
Borrower, a Senior Mezzanine Borrower or a Property Owner .

 

6.15.       Single-Purpose Entity.  None of Borrower or any Senior Mezzanine
Borrower shall cease to be a Single-Purpose Entity.

 

6.16.       Zoning and Uses.   None of Borrower, Senior Mezzanine Borrower or
Property Owner shall do any of the following with respect to any of the
Properties without the prior written consent of Lender (such consent not to be
unreasonably withheld, delayed or conditioned), except, as to clause (ii) below,
to the extent the same is commercially reasonable and not reasonably expected to
have a Material Adverse Effect:

 

(i)            initiate or support any limiting change in the permitted uses of
any of the Properties (or to the extent applicable, zoning reclassification of
any of the Properties) or any portion thereof, seek any material variance under
existing land use restrictions, laws, rules or regulations (or, to the extent
applicable, zoning ordinances) applicable to a Property, or use or permit the
use of a Property in a manner that would result in the use of such Property
becoming a nonconforming use (other than a legal nonconforming use) in any
material respect under applicable land-use restrictions or zoning ordinances or
that would violate the terms of any Lease, Material Agreement or Legal
Requirement in any material respect;

 

(ii)           consent to any modification, amendment or supplement to any of
the terms of, or materially default in its obligations under, any Permitted
Encumbrance, to the extent the same would result in a Material Adverse Effect;

 

(iii)          impose or consent to the imposition of any restrictive covenants,
easements or encumbrances upon a Property in any manner that adversely affects
in any material respect its value, utility or transferability;

 

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(iv)         execute or file any subdivision plat affecting any of the
Properties, or institute, or permit the institution of, proceedings to alter any
tax lot comprising any of the Properties;

 

(v)          amend, modify, surrender, terminate or waive any material rights or
remedies under, or enter into, or default (beyond applicable grace, cure or
notice periods) in its material obligations under, any Material Agreement in any
manner that might diminish (x) the value of the applicable Property or
Properties or (y) the rights of Borrower, any Senior Mezzanine Borrower,
Property Owner or Lender thereunder;

 

(vi)         amend, modify, surrender, terminate or waive any material rights or
remedies under, or enter into, or default (beyond applicable grace, cure or
notice periods) in its material obligations under, any Ground Lease in any
manner that might diminish (x) the value of the applicable Property or
Properties or (y) the rights of Borrower, any Senior Mezzanine Borrower, any
Property Owner or Lender thereunder; or

 

(vii)        permit or consent to any of the Properties being used by the public
or any Person in such manner as might make possible a claim of adverse usage or
possession or of any implied dedication or easement.

 

6.17.  Waste.  None of Borrower, Senior Mezzanine Borrower or Property Owner
shall commit or permit any Waste on any of the Properties, nor take any actions
that might invalidate any insurance carried on any of the Properties (and
Borrower shall cause Senior Mezzanine Borrower or Property Owner to promptly
correct any such actions of which Borrower becomes aware).

 

ARTICLE VII

 

DEFAULTS

 

7.1.         Event of Default.  The occurrence of any one or more of the
following events shall be, and shall constitute the commencement of, an “Event
of Default” hereunder:

 

(a)           Payment.

 

(i)            Borrower shall default in the payment when due of any principal
or interest owing hereunder or under the Notes (including any mandatory
prepayment required hereunder); or

 

(ii)           Borrower shall default, and such default shall continue for at
least five Business Days after written notice to Borrower that such amounts are
owing, in the payment when due of fees, expenses or other amounts owing
hereunder, under the Notes or under any of the other Loan Documents (other than
principal and interest owing hereunder or under the Note).

 

(b)          Representations.  Any representation made by Borrower or Sponsor in
any of the Loan Documents, or in any report, certificate, financial statement or
other instrument, agreement or document furnished to Lender shall have been
false or misleading in any material

 

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respect (or, with respect to any representation which itself contains a
materiality qualifier, in any respect) as of the date such representation was
made, which failure, if capable of being cured or remedied, has not been cured
or remedied within 15 days after written notice to Borrower of such failure.

 

(c)           Other Loan Documents.  Any Loan Document shall fail to be in full
force and effect or to convey the material Liens, rights, powers and privileges
purported to be created thereby; or a default shall occur under any of the other
Loan Documents, any of the Ground Leases (to the extent such default would
entitle the lessor thereunder to terminate the Ground Lease) or under any
Qualified Joint Venture Agreement, in each case beyond the expiration of any
applicable cure period (provided that if a default occurs under a Loan Document
and no cure period is provided therein, and such Loan Document does not
characterize such default as an “Event of Default”, then clause (k) hereof shall
apply).

 

(d)          Bankruptcy, etc.

 

(i)            Borrower, any Senior Mezzanine Borrower, any Property Owner, any
Joint Venture Owner or, if applicable, any Single-Purpose Equityholder shall
commence a voluntary case concerning itself under Title 11 of the United States
Code (as amended, modified, succeeded or replaced, from time to time, the
“Bankruptcy Code”);

 

(ii)           Borrower, any Senior Mezzanine Borrower, any Property Owner, any
Joint Venture Owner or, if applicable, any Single-Purpose Equityholder shall
commence any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of creditors, dissolution, insolvency or similar law of any
jurisdiction whether now or hereafter in effect relating to Borrower, such
Senior Mezzanine Borrower, Property Owner, Joint Venture Owner or Single-Purpose
Equityholder, or shall dissolve or otherwise cease to exist;

 

(iii)          there is commenced against Borrower, any Senior Mezzanine
Borrower, any Property Owner, any Joint Venture Owner or, if applicable, any
Single-Purpose Equityholder an involuntary case under the Bankruptcy Code, or
any such other proceeding, which remains undismissed for a period of 60 days
after commencement;

 

(iv)         Borrower, any Senior Mezzanine Borrower, any Property Owner, any
Joint Venture Owner or, if applicable, any Single-Purpose Equityholder is
adjudicated insolvent or bankrupt;

 

(v)          Borrower, any Senior Mezzanine Borrower, any Property Owner, any
Joint Venture Owner or, if applicable, any Single-Purpose Equityholder suffers
appointment of any custodian or the like for it or for any substantial portion
of its property and such appointment continues unchanged or unstayed for a
period of 60 days after commencement of such appointment;

 

(vi)         Borrower, any Senior Mezzanine Borrower, any Property Owner, any
Joint Venture Owner or, if applicable, any Single-Purpose Equityholder makes a
general assignment for the benefit of creditors; or

 

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(vii)                           any action is taken by Borrower, any Senior
Mezzanine Borrower, Property Owner, Joint Venture Owner or, if applicable, any
Single-Purpose Equityholder for the purpose of effecting any of the foregoing.

 

(e)                                  Change of Control.

 

(i)                                     A Change of Control shall occur; or

 

(ii)                                  except as expressly permitted hereunder,
any party shall acquire any direct or indirect equity interest in Borrower, any
Senior Mezzanine Borrower, Property Owner or Single-Purpose Equityholder (even
if not constituting a Change of Control), other than a direct or indirect equity
interest in Sponsor; or

 

(iii)                               any party shall acquire more than 49% of the
direct or indirect equity interest in Borrower, any Senior Mezzanine Borrower or
a Single-Purpose Equityholder (even if not constituting a Change of Control),
other than a direct or indirect equity interest in Sponsor, and Borrower shall
fail to deliver to Lender with respect to such new equityholder a new
non-consolidation opinion satisfactory to (A) prior to the occurrence of any
Securitization of the Loan, Lender in its reasonable discretion, and (B) at any
time following any Securitization or series of Securitizations of the Loan, each
of the Rating Agencies rating such Securitization or Securitizations.

 

(f)                                    Equity Pledge; Preferred Equity.  Any
direct or indirect equity interest in or right to distributions from Borrower,
any Senior Mezzanine Borrower, Property Owner or Joint Venture Owner shall be
subject to a Lien in favor of any Person, or any such party or any holder of a
direct or indirect interest in any such party shall issue preferred equity (or
debt granting the holder thereof rights substantially similar to those generally
associated with preferred equity); except that the following shall be permitted:

 

(i)                                     any pledge of direct and indirect equity
interests in and rights to distributions from Sponsor;

 

(ii)                                  the issuance of preferred equity interests
in Sponsor;

 

(iii)                               the pledges in favor of Lender created by
the Loan Documents; and

 

(iv)                              the pledges in favor of Senior Mezzanine
Lender created by the Senior Mezzanine Loan Documents.

 

(g)                                 Insurance.  Borrower shall fail to maintain
in full force and effect or cause to be maintained in full force and effect all
Policies required hereunder.

 

(h)                                 ERISA; Negative Covenants.  A default shall
occur in the due performance or observance by Borrower of any term, covenant or
agreement contained in Section 5.8 or in Article VI; provided that if such
default is susceptible of being cured, such default shall not constitute an
Event of Default unless and until it shall remain uncured for 10 days after
Borrower receives written notice thereof, for a default which can be cured by
the payment of money, or for 30 days after Borrower receives written notice
thereof, for a default

 

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which cannot be cured by the payment of money; or any ERISA Event with respect
to a Plan shall have occurred and the same shall have a Material Adverse Effect.

 

(i)                                     Cross-Default.

 

(i)                                     A Senior Mezzanine Loan Event of Default
shall be continuing; or

 

(ii)                                  an event of default shall occur and be
continuing under any one or more Encumbered Property Loans, provided that
(a) such event of default shall not constitute an Event of Default unless the
aggregate outstanding principal amount of the applicable Encumbered Property
Loans exceeds $30 million at the time such event of default is declared and such
default is a monetary or material non-monetary event of default; and (b) if an
event of default is declared under any Encumbered Property Loan solely due to a
claim that the Transaction was prohibited thereunder, then same shall not
constitute an Event of Default if (x) Borrower complies with Section 5.24 within
the time periods specified therein and (y) Senior Mezzanine Borrower complies
with Section 5.24 of the Senior Mezzanine Loan Agreement within the time periods
specified therein.

 

(j)                                     Certificates of Required Equity.  If at
any time the equity interests pledged by Borrower pursuant to the Pledge
Agreement shall be evidenced by new, replacement or additional certificates and
Borrower shall fail to deliver such certificates to Lender, together with an
executed stock, membership or partnership power, as applicable, in blank.

 

(k)                              Other Covenants.  A default shall occur in the
due performance or observance by Borrower of any term, covenant or agreement
(other than those referred to in subsections (a) through (j), inclusive, of this
Section 7.1) contained in this Agreement or in any of the other Loan Documents,
except that if such default referred to in this subsection (k) is susceptible of
being cured, such default shall not constitute an Event of Default unless and
until it shall remain uncured for 10 days after Borrower receives written notice
thereof, for a default which can be cured by the payment of money, or for 30
days after Borrower receives written notice thereof, for a default which cannot
be cured by the payment of money; and if a default cannot be cured by the
payment of money but is susceptible of being cured and cannot reasonably be
cured within such 30-day period, and Borrower commences to cure such default
within such 30-day period and thereafter diligently and expeditiously proceeds
to cure the same, Borrower shall have such additional time as is reasonably
necessary to effect such cure, but in no event in excess of 120 days from the
original notice.

 

7.2.                          Remedies.

 

(a)                              During the continuance of an Event of Default,
Lender may by written notice to Borrower, in addition to any other rights or
remedies available pursuant to this Agreement, the Notes, and the other Loan
Documents, at law or in equity, declare by written notice to Borrower all or any
portion of the Indebtedness to be immediately due and payable, whereupon all or
such portion of the Indebtedness shall so become due and payable, and Lender may
enforce or avail itself of any or all rights or remedies provided in the Loan
Documents against Borrower and the Collateral (including all rights or remedies
available at law or in equity); provided, however, that, notwithstanding the
foregoing, if an Event of Default specified

 

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in paragraph 7.1(d) shall occur, then the Indebtedness shall immediately become
due and payable without the giving of any notice or other action by Lender.  Any
actions taken by Lender shall be cumulative and concurrent and may be pursued
independently, singly, successively, together or otherwise, at such time and in
such order as Lender may determine in its sole discretion, to the fullest extent
permitted by law, without impairing or otherwise affecting the other rights and
remedies of Lender permitted by law, equity or contract or as set forth in this
Agreement or in the other Loan Documents.

 

(b)                                 If Lender forecloses on any of the
Collateral, Lender shall apply all net proceeds of such foreclosure to repay the
Indebtedness, the Indebtedness shall be reduced to the extent of such net
proceeds and the remaining portion of the Indebtedness shall remain outstanding
and secured by the Collateral and the other Loan Documents, it being understood
and agreed by Borrower that Borrower is liable for the repayment of all the
Indebtedness; provided, however, that at the election of Lender, the Notes shall
be deemed to have been accelerated only to the extent of the net proceeds
actually received by Lender with respect to the Collateral and applied in
reduction of the Indebtedness.

 

(c)                                  During the continuance of any Event of
Default (including an Event of Default resulting from a failure to satisfy the
insurance requirements specified herein), Lender may, subject to the terms of
the Encumbered Property Debt Documents and the rights of the Senior Mezzanine
Lender, but without any obligation to do so and without notice to or demand on
Borrower and without releasing Borrower from any obligation hereunder, take any
action to cure such Event of Default.  Subject to the Encumbered Property Debt
Documents and the rights of Senior Mezzanine Lender, Lender may enter upon any
or all of the Properties upon reasonable notice to Borrower for such purposes or
appear in, defend, or bring any action or proceeding to protect its interest in
the Collateral or to foreclose on the Collateral or collect the Indebtedness. 
The costs and expenses incurred by Lender in exercising rights under this
paragraph (including reasonable attorneys’ fees), with interest at the Default
Rate for the period after notice from Lender that such costs or expenses were
incurred to the date of payment to Lender, shall constitute a portion of the
Indebtedness, shall be secured by the Loan Documents and shall be due and
payable to Lender upon demand therefor.

 

(d)                             Interest shall accrue on any judgment obtained
by Lender in connection with its enforcement of the Loan at a rate of interest
equal to the Default Rate.

 

7.3.                          No Waiver.  No delay or omission to exercise any
remedy, right or power accruing upon an Event of Default shall impair any such
remedy, right or power or shall be construed as a waiver thereof, but any such
remedy, right or power may be exercised from time to time and as often as may be
deemed by Lender to be expedient.  A waiver of any Default or Event of Default
shall not be construed to be a waiver of any subsequent Default or Event of
Default or to impair any remedy, right or power consequent thereon.

 

7.4.                              Application of Payments after an Event of
Default. Notwithstanding anything to the contrary contained herein, during the
continuance of an Event of Default, all amounts received by Lender in respect of
the Loan shall be applied at Lender’s sole discretion either toward the
components of the Indebtedness (e.g., Lender’s expenses in enforcing the Loan,

 

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interest, principal and other amounts payable hereunder), and the Note
Components in such sequence as Lender shall elect in its sole discretion, or
toward the payment of Property expenses.

 

ARTICLE VIII

 

CONDITIONS PRECEDENT

 

8.1.                              Conditions Precedent to Closing.  This
Agreement shall become effective on the date that all of the following
conditions shall have been satisfied (or waived by Lender), it being agreed that
Lender’s funding of the Loan shall constitute Lender’s agreement that such
conditions have been satisfied or waived unless the parties shall otherwise have
agreed in writing:

 

(a)                                  Loan Documents.  Lender shall have received
a duly executed copy of each Loan Document.  Each Loan Document which is to be
recorded in the public records shall be in form suitable for recording.

 

(b)                                 Collateral Accounts.  Each of the Collateral
Accounts shall have been established with the Cash Management Bank and funded to
the extent required under Article III.

 

(c)                                  Opinions of Counsel. Lender shall have
received legal opinions reasonably satisfactory to Lender.

 

(d)                                 Organizational Documents.  Lender shall have
received all documents reasonably requested by Lender relating to the existence
of each Borrower, the validity of the Loan Documents and other matters relating
thereto, in form and substance satisfactory to Lender, including:

 

(i)                                     Authorizing Resolutions.  A certified
copy of the resolutions approving and adopting the Loan Documents to be executed
by Borrower and authorizing the execution and delivery thereof.

 

(ii)                                  Organizational Documents.  Certified
copies of the organizational documents of Borrower and, if applicable, any
Single-Purpose Equityholder (including any certificate of formation, certificate
of limited partnership, certificate of incorporation, operating agreement,
limited partnership agreement or by-laws), in each case together with all
amendments thereto.

 

(iii)                               Certificates of Good Standing or Existence. 
Certificates of good standing or existence for Borrower and, if applicable, any
Single-Purpose Equityholder issued as of a recent date by its state of
organization and by each state in which one of the Properties is located.

 

(iv)                              Certificates.  Original limited liability
company or partnership interest certificates, as the case may be, executed in
blank for Senior Mezzanine Borrower.

 

(e)                                  Lease; Material Agreements.  Lender shall
have received, with respect to each Property (i) true and complete copies of all
Material Agreements, Leases, Ground Leases,

 

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recorded reciprocal easement agreements (and similar documents) and (ii) all
rent rolls and material contracts to the extent available to Borrower without
material cost or expense.

 

(f)                                    Lien Search Reports.  Lender shall have
received satisfactory reports of Uniform Commercial Code, tax lien, bankruptcy
and judgment searches conducted by a search firm acceptable to Lender with
respect to the Properties and each Borrower (including each Borrower’s immediate
predecessor, if any, and to the extent reasonably required, subsidiaries of each
Borrower), such searches to be conducted in such locations as Lender shall have
requested.

 

(g)                                 Material Litigation.  Lender shall have
received a schedule of all material outstanding litigation that is not fully
covered by insurance.

 

(h)                                 No Default or Event of Default.  No Default
or Event of Default shall have occurred and be continuing on such date either
before or after the execution and delivery of this Agreement.

 

(i)                                     No Injunction.  No Legal Requirement
shall exist, and no litigation shall be pending or threatened, which in the good
faith judgment of Lender would enjoin, prohibit or restrain, or impose or result
in the imposition of any material adverse condition upon, the making or
repayment of the Loan or the consummation of the Transaction.

 

(j)                                     Representations.  The representations in
this Agreement and in the other Loan Documents shall be true and correct in all
respects on and as of the Closing Date with the same effect as if made on such
date.

 

(k)                                  Estoppel Letters.  To the extent obtained
by Borrower through the exercise of reasonably diligent efforts, Borrower shall
have delivered to Lender estoppel certificates from each Tenant under a Lease
and each lessor under a Ground Lease, in each case, which has been identified by
Lender prior to the date hereof, each of which shall specify that Lender and its
successors and assigns may rely thereon and otherwise be in such form and
substance as shall be satisfactory to Lender.

 

(l)                                     Merger Agreement.  Lender shall have
received a complete copy of the executed Merger Agreement (including all
exhibits thereto) and each amendment thereto and all other related agreements.

 

(m)                               No Material Adverse Effect.  No event or
series of events shall have occurred which Lender reasonably believes has had or
is reasonably likely to have a Portfolio Material Adverse Effect.

 

(n)                                 Transaction Costs.  Borrower shall have paid
all transaction costs (or provided for the direct payment of such transaction
costs by Lender from the proceeds of the Loan).

 

(o)                                 Insurance.  Lender shall have received
certificates of insurance on ACORD Form 28, demonstrating insurance coverage in
respect of the Properties of types, in amounts, with insurers and otherwise in
compliance with the terms, provisions and conditions set

 

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forth in this Agreement.  Such certificates shall indicate that Lender and its
successors and assigns are named as additional insured on each liability policy,
and that each casualty policy and rental interruption policy contains a loss
payee and mortgagee endorsement in favor of Lender, its successors and assigns.

 

(p)                                 Title.  Lender shall have received a marked,
signed commitment to issue, or a pro-forma version of, a Qualified Title
Insurance Policy in respect of each Mortgage Loan Property, listing only usual
and customary permitted exceptions and such other exceptions reasonably approved
by Lender.

 

(q)                                 UCC Insurance.  Lender shall have received
one or more UCC “Eagle-9” title insurance policies insuring the equity pledges
of the Loan Documents, subject only to usual and customary permitted exceptions
and other exceptions reasonably approved by Lender, and a copy of the owner’s
title insurance policy for each non-mortgaged Property, with a mezzanine
endorsement or the equivalent in favor of Lender if available (except that
Borrower shall not be required to purchase new or updated owners’ policies).

 

(r)                                    Zoning.  Lender shall have received
zoning reports with respect to (x) each Mortgage Loan Property, and (y) each
other Property that Lender reasonably determines necessary in order to syndicate
the Loan, satisfy regulatory requirements, resolve any material issues arising
from Lender’s due diligence, and/or pledge the Loan in connection with a
repurchase or similar facility.

 

(s)                                  Permits; Certificate of Occupancy.  Lender
shall have received a copy of all Permits necessary for the use and operation of
each Property and the certificate(s) of occupancy, if required, for each
Property, all of which shall be in form and substance reasonably satisfactory to
Lender.

 

(t)                                    Engineering Report, Environmental Report
and Appraisals.  Lender shall have received existing appraisals, Environmental
Reports and engineering/seismic reports for each of the Properties, and shall
have received updates thereof with respect to (x) each Mortgage Loan Property,
and (y) each other Property that Lender reasonably determines necessary in order
to syndicate the Loan, satisfy regulatory requirements, resolve any material
issues arising from Lender’s due diligence, and/or pledge the Loan in connection
with a repurchase or similar facility.  Providers of such reports shall be
reasonably approved by Lender.  Each new appraisal shall conform to USPAP and
FIRREA guidelines.

 

(u)                                 Qualified Survey.  Lender shall have
received a Qualified Survey with respect to (x) each Mortgage Loan Property, and
(y) each other Property that Lender reasonably determines necessary in order to
syndicate the Loan, satisfy regulatory requirements, resolve any material issues
arising from Lender’s due diligence, and/or pledge the Loan in connection with a
repurchase or similar facility, which includes, without limitation, all such
items as may be reasonably required by Lender, together with a certification
from a surveyor and legal description for each Property reasonably acceptable to
Lender.

 

(v)                                 Consents, Licenses, Approvals, etc.  Lender
shall have received copies of all consents, licenses and approvals, if any,
required in connection with the execution, delivery

 

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and performance by Borrower, and the validity and enforceability, of the Loan
Documents, and such consents, licenses and approvals shall be in full force and
effect.

 

(w)                               Financial Information.  Lender shall have
received (i) financial information relating to the Sponsor, Borrower and the
Properties which is satisfactory to Lender, including current operating
statements and historical operating statements for the past three years, to the
extent available to Borrower without material cost or expense and (ii) a
certified closing date balance sheet for Borrower and Sponsor.

 

(x)                                   Annual Budget.  Lender shall have received
the 2008 Annual Budget with respect to the Properties.

 

(y)                                 Closing Statement.  Lender shall have
received a reasonably detailed closing statement indicating all sources and uses
of funds.

 

(z)                                   Additional Matters.  Lender shall have
received such other certificates, opinions, documents and instruments relating
to the Loan as may have been reasonably requested by Lender.  All corporate and
other proceedings, all other documents (including all documents referred to in
this Agreement and not appearing as exhibits to this Agreement) and all legal
matters in connection with the Loan shall be reasonably satisfactory in form and
substance to Lender.

 

ARTICLE IX

 

MISCELLANEOUS

 

9.1.                          Successors.  Except as otherwise provided in this
Agreement, whenever in this Agreement any of the parties to this Agreement is
referred to, such reference shall be deemed to include the successors and
permitted assigns of such party.  All covenants, promises and agreements in this
Agreement contained, by or on behalf of Borrower, shall inure to the benefit of
Lender and its successors and assigns.

 

9.2.                          GOVERNING LAW.

 

(A)                            THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

(B)                                ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST
LENDER, BORROWER OR THE SPONSOR ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS (OTHER THAN ANY ACTION IN RESPECT OF THE
CREATION, PERFECTION OR ENFORCEMENT OF A LIEN OR SECURITY INTEREST CREATED
PURSUANT TO ANY LOAN DOCUMENTS NOT GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK) MAY BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK. 
LENDER, BORROWER AND THE SPONSOR HEREBY (i) IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM

 

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THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM, (ii) IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND (iii) IRREVOCABLY CONSENT TO
SERVICE OF PROCESS BY MAIL, PERSONAL SERVICE OR IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW, AT THE ADDRESS SPECIFIED IN SECTION 9.4.

 

9.3.                          Modification, Waiver in Writing.  Neither this
Agreement nor any other Loan Document may be amended, changed, waived,
discharged or terminated, nor shall any consent or approval of Lender be granted
hereunder, unless such amendment, change, waiver, discharge, termination,
consent or approval is in writing signed by Lender.

 

9.4.              Notices.  All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing by expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of delivery or attempted delivery, addressed
as follows (or at such other address and person as shall be designated from time
to time by any party to this Agreement, as the case may be, in a written notice
to the other parties to this Agreement in the manner provided for in this
Section).  ANY NOTICE OF DEFAULT UNDER ARTICLE VII OR ANY SIMILAR PROVISION OF
ANY OF THE OTHER LOAN DOCUMENTS MUST PROVIDE, IN ORDER TO BE EFFECTIVE AS A
NOTICE THEREUNDER, THAT IT IS BEING GIVEN AS A NOTICE OF DEFAULT WHICH IF NOT
CURED WITHIN THE GRACE PERIOD CONTAINED IN THE LOAN DOCUMENTS WILL RESULT IN AN
EVENT OF DEFAULT.  A notice shall be deemed to have been given when delivered or
upon refusal to accept delivery.

 

If to Lender:

 

Goldman Sachs Mortgage Company
85 Broad Street, 11th Floor

New York, New York 10004
Attention:  Daniel Ottensoser and Rene Theriault

 

with copy to:

 

Goldman Sachs Commercial Mortgage Capital, L.P.
6011 Connection Drive, Suite 550
Irving, Texas 75039
Attention:  Michael Forbes

 

with copy to

 

Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, New York 10006
Attention: Michael Weinberger, Esq.

 

and

 

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Citicorp North America, Inc.
388 Greenwich Street
New York, New York 10013
Attention:  Mr. David Bouton

 

with copy to

 

Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York  10153
Attention:  Samuel M. Zylberberg, Esq. (EG)

 

If to Borrower:

 

c/o Gramercy Capital Corp.
420 Lexington Avenue, 19th Floor
New York, New York 10170
Attention:  Robert R. Foley, Chief Operating Officer

 

with copies to:

 

c/o Gramercy Capital Corp.
420 Lexington Avenue, 19th Floor
New York, New York  10170
Attention:  Office of the General Counsel

 

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, NY 10004-1980

Attention:  Jonathan L. Mechanic, Esq.

 

9.5.  TRIAL BY JURY.  LENDER, BORROWER AND THE SPONSOR, TO THE FULLEST EXTENT
THAT THEY MAY LAWFULLY DO SO, 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 LENDER, BORROWER AND THE SPONSOR AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE.  EACH OF LENDER, BORROWER AND SPONSOR IS HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER BY LENDER, BORROWER AND THE SPONSOR, AS THE CASE MAY BE.

 

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9.6.          Headings.  The Article and Section headings in this Agreement are
included in this Agreement for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.

 

9.7.          Assignment and Participation.

 

(a)           Except as explicitly set forth in Sections 2.1 and 2.2, Borrower
may not sell, assign or transfer any interest in the Loan Documents or any
portion thereof (including Borrower’s rights, title, interests, remedies, powers
and duties hereunder and thereunder).

 

(b)           Lender and each assignee of all or a portion of the Loan shall
have the right from time to time in its discretion to sell one or more of the
Notes or any interest therein (an “Assignment”) and/or sell a participation
interest in one or more of the Notes (a “Participation”).  Borrower agrees
reasonably to cooperate with Lender, at Lender’s request, in order to effectuate
any such Assignment or Participation.  In the case of an Assignment, (i) each
assignee shall have, to the extent of such Assignment, the rights, benefits and
obligations of the assigning Lender as a “Lender” hereunder and under the other
Loan Documents, (ii) the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to an Assignment,
relinquish its rights and be released from its obligations under this Agreement,
and (iii) one Lender shall at all times serve as agent for all Lenders and shall
be the sole Lender to whom notices, requests and other communications shall be
addressed and the sole party authorized to grant or withhold consents hereunder
on behalf of the Lenders (subject, in each case, to appointment of a Servicer,
pursuant to Section 9.22, to receive such notices, requests and other
communications and/or to grant or withhold consents or waivers or give notices,
as the case may be) and to be the sole Lender to designate the account to which
payments shall be made by Borrower to the Lenders hereunder (and Borrower may
fully rely thereon, notwithstanding any contrary notice from any other Lender),
and (iv) any assigning Lender that no longer holds any portion of the Loan shall
deliver any Collateral held by it as Lender to the other Lenders or their
custodian and, if reasonably requested by Borrower, shall deliver notices
(prepared by Borrower and reasonably satisfactory to such assigning Lender) to
Tenants and/or the Cash Management Bank confirming such assignment.  Goldman
Sachs Mortgage Company or, upon the appointment of a Servicer, such Servicer,
shall maintain, or cause to be maintained, as agent for Borrower, a register on
which it shall enter the name or names of the registered owner or owners from
time to time of the Notes.  Borrower agrees that upon effectiveness of any
Assignment of any Note in part, Borrower will promptly provide to the assignor
and the assignee separate promissory notes in the amount of their respective
interests (but, if applicable, with a notation thereon that it is given in
substitution for and replacement of an original Note or any replacement
thereof), and otherwise in the form of such Note (and with such other changes as
may be reasonably required to reflect that such Note evidences only a portion of
the Loan and the provisions of clause (iii) above), upon return of the Note then
being replaced. The assigning Lender shall notify in writing each of the other
Lenders of any Assignment.  Each potential or actual assignee, participant or
investor in a Securitization, and each Rating Agency, shall be entitled to
receive all information received by Lender under this Agreement.  After the
effectiveness of any Assignment, the party conveying the Assignment shall
provide notice to Borrower and each Lender of the identity and address of the
assignee and the amount so assigned.  Notwithstanding anything in this Agreement
to the contrary, after an Assignment, the assigning Lender (in addition to the
assignee) shall continue to have the benefits of any

 

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indemnifications contained in this Agreement which such assigning Lender had
prior to such assignment with respect to matters occurring prior to the date of
such assignment.

 

(c)           If, pursuant to this Section 9.7, any interest in this Agreement
or any Note is transferred to any transferee that is not a U.S. Person, the
transferor Lender shall cause such transferee, concurrently with the
effectiveness of such transfer, (i) to furnish to the transferor Lender either
Form W-8BEN or Form W-8ECI or any other form in order to establish an exemption
from, or reduction in the rate of, U.S. withholding tax on all interest payments
hereunder, and (ii) to agree (for the benefit of Lender and Borrower) to provide
the transferor Lender a new Form W-8BEN or Form W-8ECI or any forms reasonably
requested in order to establish an exemption from, or reduction in the rate of,
U.S. withholding tax upon the expiration or obsolescence of any previously
delivered form and comparable statements in accordance with applicable U.S. laws
and regulations and amendments duly executed and completed by such transferee,
and to comply from time to time with all applicable U.S. laws and regulations
with regard to such withholding tax exemption.

 

(d)           Borrower shall bear its own costs and expenses incurred in
connection with their compliance with any request by Lender under this
Section 9.7.

 

(e)           Each Lender hereunder shall be individually and severally (and not
jointly) liable for the satisfaction of its obligations hereunder and under the
other Loan Documents.

 

9.8.          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.

 

9.9.          Preferences.  Lender shall have no obligation to marshal any
assets in favor of Borrower or any other party or against or in payment of any
or all of the obligations of Borrower pursuant to this Agreement, the Notes or
any other Loan Document.  During the 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 obligations of Borrower
hereunder and under the Loan Documents.  To the extent Borrower makes a payment
or payments to Lender, which payment or proceeds or any portion thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
portion 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.

 

9.10.        Remedies of Borrower.  If a claim or adjudication is made that
Lender or its agents have unreasonably delayed acting or acted unreasonably in
any case where by law or under this Agreement, the Notes, or the other Loan
Documents, any of such Persons has an obligation to act promptly or reasonably,
Borrower agrees that no such Person shall be liable for any monetary damages,
and Borrower’s sole remedy shall be limited to commencing an action

 

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seeking specific performance, injunctive relief and/or declaratory judgment,
except in any instance in which it has been finally determined by a court of
competent jurisdiction that Lender’s action, delay or inaction has constituted
gross negligence, willful misconduct or an illegal act.

 

9.11.        Offsets, Counterclaims and Defenses.  All payments made by Borrower
hereunder or under the other Loan Documents shall be made irrespective of, and
without any deduction for, any setoffs or counterclaims.  Borrower waives the
right to assert a counterclaim, other than a mandatory or compulsory
counterclaim, in any action or proceeding brought against it by Lender arising
out of or in any way connected with the Notes, this Agreement, the other Loan
Documents or the Indebtedness.  Any assignee of Lender’s interest in the Loan
shall take the same free and clear of all offsets, counterclaims or defenses
which are unrelated to the Loan.

 

9.12.        No Joint Venture.  Nothing in this Agreement is intended to create
a joint venture, partnership, tenancy-in-common, or joint tenancy relationship
between Borrower and Lender, nor to grant Lender any interest in the Collateral;
other than that of pledgor or lender.

 

9.13.        Conflict; Construction of Documents.  In the event of any conflict
between the provisions of this Agreement and the provisions of the Notes, the
Pledge Agreement or any of the other Loan Documents, the provisions of this
Agreement shall prevail.

 

9.14.        Brokers and Financial Advisors.  Borrower represents that neither
Borrower nor Sponsor have dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the
transactions contemplated by this Agreement.  Borrower agrees to indemnify and
hold Lender harmless from and against any and all claims, liabilities, costs and
expenses of any kind in any way relating to or arising from a claim by any
Person that such Person acted on behalf of Borrower in connection with the
transactions contemplated in this Agreement.  The provisions of this
Section 9.14 shall survive the expiration and termination of this Agreement and
the repayment of the Indebtedness.

 

9.15.        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.

 

9.16.        Estoppel Certificates.  Borrower and Lender each agrees at any time
and from time to time, to execute, acknowledge and deliver to the other, within
five Business Days after receipt of Lender’s or Borrower’s, as the case may be,
written request therefor, a statement in writing setting forth (A) the Principal
Indebtedness, (B) the date on which installments of interest and/or principal
were last paid, (C) in the case of Borrower’s estoppel, any offsets or defenses
to the payment of the Indebtedness, (D) in the case of Borrower’s estoppel, that
the Notes, this Agreement, and the other Loan Documents are valid, legal and
binding obligations, (E) that the Loan Documents have not been modified or if
modified, giving particulars of such modification, (F) in the case of Borrower’s
estoppel, that to Borrower’s knowledge, Borrower is not in default under the
Loan Documents (or specifying any such default), and in the case of Lender’s
estoppel, that Lender has not delivered a written notice of default (or
describing any such notice), and (G) such other matters as Lender or Borrower
may reasonably request.  Any prospective purchaser of any interest in a Loan or
any actual or prospective purchaser or holder

 

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of any direct or indirect interest in the Borrowers (to the extent permitted
hereunder) shall be permitted to rely on such certificate.

 

9.17.        Payment of Expenses.  Borrower shall reimburse Lender upon receipt
of written notice from Lender for (i) all reasonable out-of-pocket costs and
expenses incurred by Lender (or any of its Affiliates) in connection with the
origination and any post-closing restructuring of the Loan, including legal fees
and disbursements, accounting fees, and the costs of the Appraisal, the
Engineering Report, the Qualified Title Insurance Policy, the Qualified Survey,
the Environmental Report and any other third-party diligence materials; (ii) all
reasonable out-of-pocket costs and expenses incurred by Lender (or any of its
Affiliates) in connection with (A) monitoring Borrower’s ongoing performance of
and compliance with Borrower’s agreements and covenants contained in this
Agreement and the other Loan Documents on its part to be performed or complied
with after the Closing Date, including confirming compliance with environmental
and insurance requirements, in each case if and to the extent Lender has
reasonable cause to suspect noncompliance, (B) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or
other modifications to this Agreement and the other Loan Documents and any other
documents or matters requested by Borrower or by Lender, (C) filing fees and
expenses and other similar expenses incurred in creating and perfecting the
Liens in favor of Lender pursuant to this Agreement and the other Loan
Documents, (D) enforcing or preserving any rights, in response to third party
claims or the prosecuting or defending of any action or proceeding or other
litigation, in each case against, under or affecting Borrower, this Agreement,
the other Loan Documents or any Collateral, and (E) obtaining any Rating
Confirmation required or requested by Borrower hereunder; and (iii) all actual
out-of-pocket costs and expenses (including, if the Loan has been securitized
and an Event of Default has occurred, customary special servicing fees resulting
therefrom) incurred by Lender (or any of its Affiliates) in connection with the
enforcement of any obligations of Borrower, or a Default by Borrower, under the
Loan Documents, including any actual or attempted foreclosure, deed-in-lieu of
foreclosure, refinancing, restructuring or workout and any insolvency or
bankruptcy proceedings (including any applicable transfer taxes).

 

9.18.        No Third-Party Beneficiaries.  This Agreement and the other Loan
Documents are solely for the benefit of Lender and Borrower, and nothing
contained in this Agreement or the other Loan Documents shall be deemed to
confer upon anyone other than Lender and Borrower any right to insist upon or to
enforce the performance or observance of any of the obligations contained herein
or therein.  All conditions to the obligations of Lender to make the Loan
hereunder are imposed solely and exclusively for the benefit of Lender, and no
other Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Lender will refuse to
make the Loan in the absence of strict compliance with any or all thereof, and
no other Person shall under any circumstances be deemed to be a beneficiary of
such conditions, any or all of which may be freely waived in whole or in part by
Lender if, in Lender’s sole discretion, Lender deems it advisable or desirable
to do so.

 

9.19.        Recourse.

 

(a)           The Loan shall be fully recourse to Borrower.  No recourse shall
be had for the Loan against any other Person, including any Affiliate of
Borrower or any officer,

 

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director, partner or equityholder of Borrower or any such Affiliate, except for
(i) claims against Sponsor under the Guaranty and (ii) claims against Borrower
and Sponsor under the Environmental Indemnity.

 

(b)           Borrower shall indemnify Lender and hold Lender harmless from and
against any and all Damages to Lender (plus the legal and other expenses of
enforcing the obligations of Borrower under this Section 9.19) resulting from or
arising out of any of the following (the “Indemnified Liabilities”), which
Indemnified Liabilities shall be guaranteed by Sponsor, jointly and severally,
pursuant to the Guaranty:

 

(i)            any intentional material physical Waste with respect to any
Property committed or permitted by Borrower, any Senior Mezzanine Borrower, the
Sponsor or any of their respective Affiliates;

 

(ii)           any fraud, willful misconduct or intentional material
misrepresentation committed by Borrower, any Senior Mezzanine Borrower, the
Sponsor or any of their respective Affiliates;

 

(iii)          the misappropriation by Borrower, any Senior Mezzanine Borrower,
the Sponsor or any of their respective Affiliates of any funds in violation of
the Loan Documents (including misappropriation of Revenues, Distributions,
security deposits and/or Loss Proceeds and the violation of the last sentence of
Section 5.7(d));

 

(iv)          any breach by Borrower, any Senior Mezzanine Borrower or the
Sponsor of any material representation or covenant regarding environmental
matters contained in this Agreement or in the Environmental Indemnity;

 

(v)           the failure of Borrower or any Senior Mezzanine Borrower, at any
time, to comply with Single-Purpose Entity requirements hereunder, in any
material respect;

 

(vi)          any failure to pay income tax liabilities of non pass-through
entities comprising Borrower any Senior Mezzanine Borrower or their respective
Affiliates;

 

(vii)         the failure of Borrower or any Senior Mezzanine Borrower to fully
discharge prior to the Closing Date any liabilities, contingent or otherwise,
associated with assets that were owned by Borrower, any Senior Mezzanine
Borrower or any of their respective Affiliates prior to the Closing Date
(including all employee liabilities), other than the Properties and direct or
indirect equity interests therein;

 

(viii)        failure to structure and consummate the Merger in a manner that
does not give rise to a shareholder lawsuit;

 

(ix)           any liability of AFRT or its subsidiaries under any recourse
carveout under any Encumbered Property Debt, guaranty or similar obligations, in
each case in respect of Borrower, any Senior Mezzanine Borrower, AFRT, Operating
Partnership or any holding company;

 

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(x)            any failure by Borrower or Senior Mezzanine Borrower to cause
each holder of Encumbered Property Debt to add Lender as a party to whom all
notices of default must be given under the Encumbered Debt Documents; and any
failure by Borrower to instruct each holder of Encumbered Property Debt to
accept any payment from or action taken by Lender during the continuance of a
default thereunder as if it were received from or performed by the applicable
Property Owner; and any failure by Borrower to remit, or cause to be remitted,
to any holder of Encumbered Property Debt any amount proffered by Lender in
order to cure a default thereunder pursuant to Section 5.21;

 

(xi)           any assumption fee, foreclosure fee or similar amount (and
related expense reimbursements) owed by Lender or Senior Mezzanine Lender to any
holder of Encumbered Property Debt or related loan servicer as a result of, or
in order to permit, a foreclosure or transfer in lieu of foreclosure of
Collateral; and

 

(xii)          any failure of the representation made in Section 9.14 to be true
and correct.

 

In addition to the foregoing (x) the Loan shall be fully recourse to Borrower
and Sponsor, jointly and severally, upon (i)  any Transfer of Collateral or any
Property, voluntary or collusive Lien on Collateral or any Property, or Change
of Control which is prohibited hereunder or (ii) the occurrence of any filing by
Borrower, any Senior Mezzanine Borrower or Property Owner under the Bankruptcy
Code or any joining or colluding by Borrower, any Senior Mezzanine Borrower or
any of their respective Affiliates (including Sponsor) in the filing of an
involuntary case in respect of Borrower, any Senior Mezzanine Borrower or
Property Owner under the Bankruptcy Code; and (y) in the event AFRT shall fail
to comply with Section 5.24, the Loan shall be recourse to AFRT and Sponsor,
jointly and severally, in an amount equal to the Release Price of the applicable
Property, plus all related enforcement costs and any Damages resulting from a
failure to release such Property pursuant hereto.

 

9.20.  Right of Set-Off.  In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default,
each Lender may from time to time, without presentment, demand, protest or other
notice of any kind (all of such rights being hereby expressly waived), set-off
and appropriate and apply any and all deposits (general or special) and any
other indebtedness at any time held or owing by any Lender (including branches,
agencies or Affiliates of Lender wherever located) to or for the credit or the
account of Borrower against the obligations and liabilities of Borrower to any
Lender hereunder, under the Notes, the other Loan Documents or otherwise,
irrespective of whether such Lender shall have made any demand hereunder and
although such obligations, liabilities or claims, or any of them, may be
contingent or unmatured, and any such set-off shall be deemed to have been made
immediately upon the occurrence of an Event of Default even though such charge
is made or entered on the books of Lender subsequent thereto.

 

9.21.  Exculpation of Lender.  Lender neither undertakes nor assumes any
responsibility or duty to Borrower or any other party to select, review,
inspect, examine, supervise, pass judgment upon or inform Borrower or any third
party of (a) the existence,

 

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quality, adequacy or suitability of Appraisals of the Properties, the Senior
Mezzanine Loan Collateral or the Collateral, (b) any environmental report, or
(c) any other matters or items, including engineering, soils and seismic reports
which are contemplated in the Loan Documents.  Any such selection, review,
inspection, examination and the like, and any other due diligence conducted by
Lender, is solely for the purpose of protecting Lender’s rights under the Loan
Documents, and shall not render Lender liable to Borrower or any third party for
the existence, sufficiency, accuracy, completeness or legality thereof.

 

9.22.        Servicer.  Lender may delegate any and all rights and obligations
of Lender hereunder and under the other Loan Documents to the Servicer upon
notice by Lender to Borrower, whereupon any notice or consent from the Servicer
to Borrower, and any action by Servicer on Lender’s behalf, shall have the same
force and effect as if Servicer were Lender.  Lender shall bear the cost of all
servicing fees, costs and expenses other than those to which Lender is expressly
entitled to reimbursement hereunder and under the other Loan Documents,
including without limitation, the Cooperation Agreement.

 

9.23  Prior Agreements.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS CONTAIN THE
ENTIRE AGREEMENT OF THE PARTIES HERETO AND THERETO IN RESPECT OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND ALL PRIOR AGREEMENTS AMONG OR
BETWEEN SUCH PARTIES, WHETHER ORAL OR WRITTEN, INCLUDING ANY TERM SHEETS,
CONFIDENTIALITY AGREEMENTS AND COMMITMENT LETTERS, ARE SUPERSEDED BY THE TERMS
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT THAT ANY ORIGINATION FEE
SPECIFIED IN ANY TERM SHEET, COMMITMENT LETTER OR FEE LETTER SHALL BE AN
OBLIGATION OF BORROWER AND SHALL BE PAID AT CLOSING, AND ANY INDEMNIFICATIONS,
FLEX PROVISION, EXIT FEES AND THE LIKE PROVIDED FOR THEREIN SHALL SURVIVE THE
CLOSING).

 

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Lender and Borrower are executing this Agreement as of the date first above
written.

 

 

 

 

LENDER:

BORROWER:

 

 

 

 

GOLDMAN SACHS MORTGAGE COMPANY,

GKK STARS JUNIOR MEZZ 2 LLC, a
Delaware limited liability company

 

a New York limited partnership

 

 

By:

Goldman Sachs Real Estate Funding

 

 

 

Corp., its general partner

By:

/s/ Edward J. Matey, Jr.

 

 

 

Name: Edward J. Matey, Jr.

 

By:

/s/ Mark Buono

 

Title: General Counsel and Vice President

 

 

Name: Mark Buono

 

 

 

Title: Vice President

 

 

 

 

 

 

 

CITICORP NORTH AMERICA, INC., a New
York corporation

 

 

 

 

By:

/s/ Angelica Sukiennik

 

 

 

Name: Angelica Sukiennik

 

 

 

 Title: Authorized Signatory

 

 

 

 

 

 

 

 

SL GREEN REALTY CORP., a Maryland
corporation

 

 

 

 

By:

/s/s Gregory F. Hughes

 

 

 

Name: Gregory F. Hughes

 

 

 

Title: Chief Operating Officer

 

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