Exhibit 10.4


 


One Financial Place


440 South LaSalle Street

Chicago, Illinois 60605




 





 


ONE FINANCIAL PLACE PROPERTY
LLC,

as Borrower


 


to


 


WACHOVIA BANK, NATIONAL
ASSOCIATION,

as Lender


 


MORTGAGE, SECURITY AGREEMENT, 

ASSIGNMENT OF RENTS AND FIXTURE FILING


 






 


Dated:  July 13, 2006


 


PREPARED BY
AND UPON RECORDATION RETURN TO:


 


Proskauer Rose
LLP


1585 Broadway


New York, New
York  10036


 


Attention:  David J. Weinberger, Esq.


 

















 


THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT
OF RENTS AND FIXTURE FILING (this “Security Instrument”) is made as of
the 13th day of July, 2006, by ONE FINANCIAL PLACE PROPERTY LLC, a Delaware
limited liability company (“Borrower”), having its chief executive
office c/o Beacon Capital Partners, LLC, One Federal Street, 26th
Floor, Boston, Massachusetts 02110, Attention: General Counsel, to WACHOVIA
BANK, NATIONAL ASSOCIATION, having an address at Wachovia Bank, National
Association, Commercial Real Estate Services, 8739 Research Drive URP 4, NC
1075, Charlotte, North Carolina  28262 (hereinafter referred to as “Lender”).


 


W I T N E S S E T H:


 


WHEREAS, Lender has authorized a loan
(hereinafter referred to as the “Loan”) to Borrower in the maximum
principal sum of ONE HUNDRED EIGHTY-EIGHT MILLION SIX HUNDRED THOUSAND AND
NO/100 DOLLARS ($188,600,000.00) (hereinafter referred to as the “Loan
Amount”), which Loan is evidenced by that certain promissory note, dated
the date hereof given by Borrower, as maker, to Lender, as payee (together with
any supplements, amendments, modifications or extensions thereof, hereinafter
referred to as the “Note”);


 


WHEREAS, in consideration of the Loan,
Borrower has agreed to make payments in amounts sufficient to pay and redeem,
and provide for the payment and redemption of the principal of, premium, if
any, and interest on the Note when due;


 


WHEREAS, Borrower desires by this Security
Instrument to provide for, among other things, the creation of a security
interest in favor of, Lender, as security for Borrower’s obligations to Lender
from time to time pursuant to the Note and the other Loan Documents;


 


WHEREAS, Borrower and Lender intend these
recitals to be a material part of this Security Instrument; and


 


WHEREAS, all things necessary to make this
Security Instrument the valid and legally binding obligation of Borrower in
accordance with its terms, for the uses and purposes herein set forth, have
been done and performed.


 


NOW THEREFORE, to secure the payment of the
principal of, prepayment premium (if any) and interest on the Note and all
other obligations, liabilities or sums due or to become due under this Security
Instrument, the Note or any other Loan Document, including, without limitation,
interest on said obligations, liabilities or sums (said principal, premium,
interest and other sums being hereinafter referred to as the “Debt”),
and the performance of all other covenants, obligations and liabilities of
Borrower pursuant to the Loan Documents, Borrower has executed and delivered
this Security Instrument; and Borrower has irrevocably granted, and by these
presents and by the execution and delivery hereof does hereby irrevocably
grant, bargain, sell, alien, demise, release, convey, assign, transfer, deed,
hypothecate, pledge, set over, warrant, mortgage and confirm to Lender, all
right, title and interest of Borrower in and to all of the following property,
rights, interests and estates:


 


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(a)           the
plot(s), piece(s) or parcel(s) of real property described in Exhibit A attached hereto and made a part
hereof (individually and collectively, hereinafter referred to as the “Premises”);


 


(b)           (i)
all buildings, foundations, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements and improvements of every kind
or nature now or hereafter located on the Premises (hereinafter collectively
referred to as the “Improvements”); and (ii) to the extent
permitted by law, the name or names, if any, as may now or hereafter be used
for any of the Improvements, and the goodwill associated therewith;


 


(c)           all
easements, servitudes, rights-of-way, strips and gores of land, streets, ways,
alleys, passages, sewer rights, water, water courses, water rights and powers,
ditches, ditch rights, reservoirs and reservoir rights, air rights and
development rights, lateral support, drainage, gas, oil and mineral rights,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
belonging, relating or pertaining to the Premises or the Improvements and the
reversion and reversions, remainder and remainders, whether existing or
hereafter acquired, and all land lying in the bed of any street, road or
avenue, opened or proposed, in front of or adjoining the Premises to the center
line thereof and any and all sidewalks, drives, curbs, passageways, streets,
spaces and alleys adjacent to or used in connection with the Premises and/or
Improvements and all the estates, rights, titles, interests, property,
possession, claim and demand whatsoever, both in law and in equity, of Borrower
of, in and to the Premises and Improvements and every part and parcel thereof,
with the appurtenances thereto;


 


(d)           all
machinery, equipment, systems, fittings, apparatus, appliances, furniture,
furnishings, tools, fixtures, Inventory (as hereinafter defined) and articles
of personal property and accessions thereof and renewals, replacements thereof
and substitutions therefor (including, but not limited to, all plumbing,
lighting and elevator fixtures, office furniture, beds, bureaus, chiffonniers,
chests, chairs, desks, lamps, mirrors, bookcases, tables, rugs, carpeting,
drapes, draperies, curtains, shades, venetian blinds, wall coverings, screens,
paintings, hangings, pictures, divans, couches, luggage carts, luggage racks,
stools, sofas, chinaware, flatware, linens, pillows, blankets, glassware,
foodcarts, cookware, dry cleaning facilities, dining room wagons, keys or other
entry systems, bars, bar fixtures, liquor and other drink dispensers,
icemakers, radios, television sets, intercom and paging equipment, electric and
electronic equipment, dictating equipment, telephone systems, computerized
accounting systems, engineering equipment, vehicles, medical equipment, potted
plants, heating, lighting and plumbing fixtures, fire prevention and
extinguishing apparatus, theft prevention equipment, cooling and
air-conditioning systems, elevators, escalators, fittings, plants, apparatus,
stoves, ranges, refrigerators, laundry machines, tools, machinery, engines,
dynamos, motors, boilers, incinerators, switchboards, conduits, compressors,
vacuum cleaning systems, floor cleaning, waxing and polishing equipment, call
systems, brackets, signs, bulbs, bells, ash and fuel, conveyors, cabinets,
lockers, shelving, spotlighting equipment, dishwashers, garbage disposals,
washers and dryers), other customary hotel equipment, inventory and other
property of every kind and nature whatsoever owned by Borrower, or


 


2

















 


in which Borrower has or shall have an interest, now or hereafter
located upon, or in, or used in connection with the Premises or the
Improvements, or appurtenant thereto, and all building equipment, materials and
supplies of any nature whatsoever owned by Borrower, or in which Borrower has
or shall have an interest, now or hereafter located upon, or in, or used in
connection with the Premises or the Improvements or appurtenant thereto,
(hereinafter, all of the foregoing items described in this paragraph (d) are
collectively called the “Equipment”), all of which, and any replacements,
modifications, alterations and additions thereto, to the extent permitted by
applicable law, shall be deemed to constitute fixtures (the “Fixtures”),
and are part of the real estate and security for the payment of the Debt and
the performance of Borrower’s obligations. To the extent any portion of the
Equipment is not real property or fixtures under applicable law, it shall be
deemed to be personal property, and this Security Instrument shall constitute a
security agreement creating a security interest therein in favor of Lender
under the UCC;


 


(e)           all
awards or payments, including interest thereon, which may hereafter be made
with respect to the Premises, the Improvements, the Fixtures, or the Equipment,
whether from the exercise of the right of eminent domain (including but not
limited to any transfer made in lieu of or in anticipation of the exercise of
said right), or for a change of grade, or for any other injury to or decrease
in the value of the Premises, the Improvements or the Equipment or refunds with
respect to the payment of property taxes and assessments, and all other
proceeds of the conversion, voluntary or involuntary, of the Premises,
Improvements, Equipment, Fixtures or any other Property or part thereof into
cash or liquidated claims;


 


(f)            all
leases, tenancies, licenses and other agreements affecting the use, enjoyment
or occupancy of the Premises, the Improvements, the Fixtures, or the Equipment
or any portion thereof now or hereafter entered into, whether before or after
the filing by or against Borrower of any petition for relief under the
Bankruptcy Code, including, without limitation the existing Operating Lease
(hereinafter collectively referred to as the “Leases”), together with
all cash or security deposits, lease termination payments, advance rentals and
payments of similar nature and guarantees or other security held by, or issued
in favor of, Borrower in connection therewith to the extent of Borrower’s right
or interest therein and all remainders, reversions and other rights and estates
appurtenant thereto, and all base, fixed, percentage or additional rents, and
other rents, oil and gas or other mineral royalties, and bonuses, issues,
profits and rebates and refunds or other payments made by any Governmental
Authority from or relating to the Premises, the Improvements, the Fixtures or
the Equipment plus all rents, common area charges and other payments now
existing or hereafter arising, whether paid or accruing before or after the
filing by or against Borrower of any petition for relief under the Bankruptcy
Code (the “Rents”) and all proceeds from the sale or other disposition
of the Leases and the right to receive and apply the Rents to the payment of
the Debt;


 


(g)           all
proceeds of and any unearned premiums on any insurance policies covering the
Premises, the Improvements, the Fixtures, the Rents or the Equipment,
including, without limitation, the right, subject to the terms and provisions
hereof, to receive and apply the proceeds of any insurance, judgments, or
settlements made in lieu


 


3

















 


thereof, for damage to the Premises, the Improvements, the Fixtures or
the Equipment and all refunds or rebates of Impositions, and interest paid or
payable with respect thereto;


 


(h)           all
deposit accounts, securities accounts, funds or other accounts maintained or
deposited with or for the benefit of Lender, or its assigns, in connection
herewith, including, without limitation, the Escrow Accounts, the Central
Account, the Rent Account, and the Sub-Accounts and all monies and investments
deposited or to be deposited in such accounts;


 


(i)            all
accounts receivable, contract rights, franchises, interests, estate or other
claims, both at law and in equity, now existing or hereafter arising, and
relating to the Premises, the Improvements, the Fixtures or the Equipment, not
included in Rents;


 


(j)            all
now existing or hereafter arising claims against any Person with respect to any
damage to the Premises, the Improvements, the Fixtures or the Equipment, including,
without limitation, damage arising from any defect in or with respect to the
design or construction of the Improvements, the Fixtures or the Equipment and
any damage resulting therefrom;


 


(k)           all
deposits or other security or advance payments, including rental payments now
or hereafter made by or on behalf of Borrower to others, with respect to (i)
insurance policies, (ii) utility services, (iii) cleaning, maintenance, repair
or similar services, (iv) refuse removal or sewer service, (v) parking or similar
services or rights and (vi) rental of Equipment, if any, relating to or
otherwise used in the operation of the Premises, the Improvements, the Fixtures
or the Equipment;


 


(l)            all
intangible property now or hereafter relating to the Premises, the Improvements,
the Fixtures or the Equipment or its operation, including, without limitation,
software, letter of credit rights, trade names, trademarks (including, without
limitation, any licenses of or agreements to license trade names or trademarks
now or hereafter entered into by Borrower), logos, building names and goodwill;


 


(m)          all
now existing or hereafter arising advertising material, guaranties, warranties,
building permits, other permits, licenses, plans and specifications, shop and
working drawings, soil tests, appraisals and other documents, materials and/or
personal property of any kind now or hereafter existing in or relating to the
Premises, the Improvements, the Fixtures, and the Equipment;


 


(n)           all
now existing or hereafter arising drawings, designs, plans and specifications
prepared by architects, engineers, interior designers, landscape designers and
any other consultants or professionals for the design, development,
construction, repair and/or improvement of the Premises, the Improvements, the Fixtures
or the Equipment, as amended from time to time;


 


(o)           the
right, in the name of and on behalf of Borrower, to appear in and defend any
now existing or hereafter arising action or proceeding brought with respect to


 


4

















 


the Premises, the Improvements, the Fixtures or the Equipment and to
commence any action or proceeding to protect the interest of Lender in the
Premises, the Improvements, the Fixtures or the Equipment; and


 


(p)           all
proceeds, products, substitutions and accessions (including claims and demands
therefor) of each of the foregoing.


 


All of the foregoing items (a) through (p),
together with all of the right, title and interest of Borrower therein, are
collectively referred to as the “Property”.


 


TO HAVE AND TO HOLD the above granted and
described Property unto Lender, and the successors and assigns of Lender in fee
simple, forever.


 


PROVIDED, ALWAYS, and these presents are upon
this express condition, if Borrower shall well and truly pay and discharge the
Debt and perform and observe the terms, covenants and conditions set forth in
the Loan Documents, then these presents and the estate hereby granted shall
cease and be void.


 


AND Borrower covenants with and warrants to
Lender that:


 


ARTICLE I: 
DEFINITIONS


 


Section 1.01.          Certain
Definitions.


 


For all purposes of this Security Instrument,
except as otherwise expressly provided or unless the context clearly indicates
a contrary intent:


 


(i)            the
capitalized terms defined in this Section have the meanings assigned to them in
this Section, and include the plural as well as the singular;


 


(ii)           all
accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with GAAP; and


 


(iii)          the
words “herein”, “hereof”, and “hereunder” and other words of similar import
refer to this Security Instrument as a whole and not to any particular Section
or other subdivision.


 


“Adjusted Net Cash Flow” shall mean Pro-Forma Net Operating Income
projected for the twelve (12)-month period subsequent to the date of
calculation less (a) $1,000,000, and (b) extraordinary capital improvements
projected by Lender, in its reasonable discretion, for the subsequent twelve
(12) month period for which sums were not deposited into the Recurring
Replacement Reserve Escrow Account.


 


“Affiliate” of any specified Person
shall mean any other Person directly or indirectly Controlling or Controlled
by, or under direct or indirect common Control with, such specified Person.


 


5

















 


“Annual Budget” shall mean an annual
budget submitted by Borrower to Lender in accordance with the terms of Section
2.09 hereof.


 


“Appraisal” shall mean the appraisal
of the Property and all supplemental reports or updates thereto previously delivered
to Lender in connection with the Loan.


 


“Appraiser” shall mean the Person who
prepared the Appraisal.


 


“Approved Manager Standard” shall mean
the standard of business operations, practices and procedures customarily
employed by experienced property managers or owners for properties similar in
size and type to the Property, acting in a commercially reasonable manner.


 


“Architect” shall have the meaning set
forth in Section 3.04(b)(i) hereof.


 


“Assignment” shall mean the Assignment
of Leases and Rents and Security Deposits of even date herewith relating to the
Property given by Borrower to Lender, as the same may be modified, amended or
supplemented from time to time.


 


“Bank” shall mean the bank, trust
company, savings and loan association or savings bank designated by Lender, in
its sole and absolute discretion, in which the Central Account shall be
located.


 


“Bankruptcy Code” shall mean 11 U.S.C.
§101 et seq., as amended from time to time.


 


“Basic Carrying Costs” shall mean the
sum of the following costs associated with the Property: (a) Real Estate Taxes
and (b) insurance premiums.


 


“Basic Carrying Costs Escrow Account”
shall mean the Escrow Account maintained pursuant to Section 5.06 hereof.


 


“Basic Carrying Costs Monthly Installment”
shall mean Lender’s good faith estimate of one-twelfth (1/12th) of the annual
amount for Basic Carrying Costs. “Basic Carrying Costs Monthly Installment”
shall also include, if required by Lender, a sum of money which, together with
such monthly installments, will be sufficient to make the payment of each such
Basic Carrying Cost at least thirty (30) days prior to the date initially due.
Should such Basic Carrying Costs not be ascertainable at the time any monthly
deposit is required to be made, the Basic Carrying Costs Monthly Installment
shall be determined by Lender in its reasonable discretion on the basis of the
aggregate Basic Carrying Costs for the prior Fiscal Year or month or the prior
payment period for such cost. As soon as the Basic Carrying Costs are fixed for
the then current Fiscal Year, month or period, the next ensuing Basic Carrying
Costs Monthly Installment shall be adjusted to reflect any deficiency or
surplus in prior monthly payments. If at any time during the term of the Loan
Lender determines that there will be insufficient funds in the Basic Carrying
Costs Escrow Account to make payments when they become due and payable, Lender
shall have the right to adjust the Basic Carrying Costs Monthly Installment
such that there will be sufficient funds to make such payments. Notwithstanding
the foregoing, provided that (a) no Event of Default exists and (b) Borrower
delivers proof reasonably satisfactory to Lender that 100% of the annual
insurance premiums has been paid for the subsequent year not less than five (5)
days prior


 


6

















 


to the
expiration date of each insurance policy required hereunder and that all Real
Estate Taxes have been paid not less than five (5) days prior to the date due
and payable, the Basic Carrying Costs Monthly Installment shall be $0.


 


“Basic Carrying Costs Sub-Account”
shall mean the Sub-Account of the Central Account established pursuant to
Section 5.02 into which the Basic Carrying Costs Monthly Installments shall be
deposited.


 


“Borrower” shall mean Borrower named
herein and any successor to the obligations of Borrower.


 


“Borrower Account” shall mean an
Eligible Account maintained in the name of Borrower.


 


“Business Day” shall mean any day
other than (a) a Saturday or Sunday, or (b) a day on which banking and savings
and loan institutions in the State of New York or the State of North Carolina
are authorized or obligated by law or executive order to be closed, or at any
time during which the Loan is an asset of a Securitization, the cities, states
and/or commonwealths used in the comparable definition of “Business Day” in the
Securitization documents.


 


“Capital Expenditures” shall mean for
any period, the amount expended for items capitalized under GAAP including
expenditures for building improvements or major repairs, leasing commissions,
tenant improvements and other leasing expenses.


 


“Central Account” shall mean an
Eligible Account, maintained at the Bank, in the name of Lender or its
successors or assigns (as secured party) as may be designated by Lender.


 


“Closing Date” shall mean the date of
the Note.


 


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


 


“Condemnation Proceeds” shall mean all
of the proceeds in respect of any Taking or purchase in lieu thereof.


 


“Contractual Obligation” shall mean,
as to any Person, any provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is a party or by
which it or any of the property owned by it is bound.


 


“Control” means, when used with
respect to any specific Person, the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person whether through ownership of voting securities, beneficial interests, by
contract or otherwise. The definition is to be construed to apply equally to
variations of the word “Control” including “Controlled,” “Controlling” or “Controlled
by.”


 


“Debt” shall have the meaning set
forth in the Recitals hereto.


 


7

















 


“Debt Service” shall mean the amount
of interest and/or principal payments due and payable in accordance with the
Note during an applicable period.


 


“Debt Service Coverage” shall mean the
quotient obtained by dividing Adjusted Net Cash Flow by the sum of the (a)
aggregate regularly scheduled payments of interest and principal due for such
specified period under the Note (determined as of the date the calculation of
Debt Service Coverage is required or requested hereunder) and (b) aggregate
regularly scheduled payments of interest and principal due for such specified
period pursuant to the terms of subordinate or mezzanine financing, if any,
then affecting or related to the Property, or then proposed, if Debt Service
Coverage is being calculated in connection with a request for consent to any
subordinate or mezzanine financing.


 


“Debt Service Payment Sub-Account”
shall mean the Sub-Account of the Central Account established pursuant to
Section 5.02 hereof into which the Required Debt Service Payment shall be
deposited.


 


“Default” shall mean any Event of
Default or event which would constitute an Event of Default if all requirements
in connection therewith for the giving of notice, the lapse of time, and the
happening of any further condition, event or act, had been satisfied.


 


“Default Rate” shall mean the lesser
of (a) the highest rate allowable at law and (b) five percent (5%) above the
interest rate set forth in the Note.


 


“Default Rate Interest” shall mean, to
the extent the Default Rate becomes applicable, interest in excess of the
interest which would have accrued on (a) the Principal Amount and (b) any
accrued but unpaid interest, if the Default Rate was not applicable.


 


“Designated Lease” shall mean each of
the existing Space Leases set forth on Exhibit
G attached hereto and made a part hereof.


 


“Designated Lease Reserve Escrow Account”
shall mean the Escrow Account maintained pursuant to Section 5.15 hereof.


 


“Development Laws” shall mean all
applicable subdivision, zoning, environmental protection, wetlands protection,
or land use laws or ordinances, and any and all applicable rules and
regulations of any Governmental Authority promulgated thereunder or related
thereto.


 


“Disclosure Document” shall mean a
prospectus, prospectus supplement, private placement memorandum, or similar
offering memorandum or offering circular, in each case in preliminary or final
form, used to offer securities in connection with a Securitization.


 


“Dollar” and the sign “$” shall mean
lawful money of the United States of America.


 


“Eligible Account” shall mean a
segregated account which is either (a) an account or accounts maintained with a
federal or state chartered depository institution or trust company the long
term unsecured debt obligations of which are rated by each of the Rating
Agencies (or, if not rated by Fitch, Inc. (“Fitch”), otherwise acceptable
to Fitch, as confirmed in writing that such


 


8

















 


account would
not, in and of itself, result in a downgrade, qualification or withdrawal of
the then current ratings assigned to any certificates issued in connection with
a Securitization) in its highest rating category at all times (or, in the case
of the Basic Carrying Costs Escrow Account, the long term unsecured debt
obligations of which are rated at least “AA” (or its equivalent)) by each of
the Rating Agencies (or, if not rated by Fitch, otherwise acceptable to Fitch,
as confirmed in writing that such account would not, in and of itself, result
in a downgrade, qualification or withdrawal of the then current ratings
assigned to any certificates issued in connection with a Securitization) or, if
the funds in such account are to be held in such account for less than thirty
(30) days, the short term obligations of which are rated by each of the Rating
Agencies (or, if not rated by Fitch, otherwise acceptable to Fitch, as
confirmed in writing that such account would not, in and of itself, result in a
downgrade, qualification or withdrawal of the then current ratings assigned to
any certificates issued in connection with a Securitization) in its highest rating
category at all times or (b) a segregated trust account or accounts maintained
with a federal or state chartered depository institution or trust company
acting in its fiduciary capacity which, in the case of a state chartered
depository institution is subject to regulations substantially similar to 12
C.F.R. § 9.10(b), having in either case a combined capital and surplus of at
least $100,000,000 and subject to supervision or examination by federal and
state authority, or otherwise acceptable (as evidenced by a written
confirmation from each Rating Agency that such account would not, in and of
itself, cause a downgrade, qualification or withdrawal of the then current
ratings assigned to any certificates issued in connection with a
Securitization) to each Rating Agency, which may be an account maintained by
Lender or its agents. The title of each Eligible Account shall indicate that
the funds held therein are held in trust for the uses and purposes set forth
herein.


 


“Engineer” shall have the meaning set forth
in Section 3.04(b)(i) hereof.


 


“Engineering Escrow Account” shall, if
there is an Initial Engineering Deposit, mean an Escrow Account established and
maintained pursuant to Section 5.12 hereof relating to payments for any
Required Engineering Work.


 


“Environmental Problem” shall mean any
of the following:


 


(a)           the
presence of any Hazardous Material on, in, under, or above all or any portion
of the Property other than heating oil, cleaning fluids, pesticides and other
substances customarily used in the operation of properties that are being used
for the same purposes as the Property is presently being used, provided such
use and/or storage for use is in compliance with the requirements hereof and
the other Loan Documents and does not give rise to liability under applicable
Legal Requirements or Environmental Statutes or be the basis for a lien against
the Property or any part thereof;


 


(b)           the
release of any Hazardous Material from or onto the Property;


 


(c)           the
violation of any Environmental Statute with respect to the Property; or


 


(d)           the
failure to obtain or to abide by the terms or conditions of any permit or
approval required under any Environmental Statute with respect to the Property.


 


9

















 


A condition
described above shall be an Environmental Problem regardless of whether or not
any Governmental Authority has taken any action in connection with the
condition and regardless of whether that condition was in existence on or
before the date hereof.


 


“Environmental Report” shall mean that
certain report entitled “Report on ASTM Phase I Environmental Site Assessment,
Drinking Water Sampling, Asbestos Survey, and IAQ Assessment, 440 South LaSalle
Street, Chicago, Illinois” dated May 26, 2006 with respect to the Premises and
prepared by Haley & Aldrich, Inc., the reports attached thereto and/or
referred to therein and any supplements or updates thereto, previously
delivered to Lender in connection with the Loan.


 


“Environmental Statute” shall mean any
federal, state or local statute, ordinance, rule or regulation, any judicial or
administrative order (whether or not on consent) or judgment applicable to
Borrower or the Property, including, without limitation, any judgment or
settlement based on common law theories, and any provisions or condition of any
permit, license or other authorization binding on Borrower, relating to (a) the
protection of the environment, the safety and health of persons (including
employees) or the public welfare from actual or potential exposure (or effects
of exposure) to any actual or potential release, discharge, disposal or
emission (whether past or present) of any Hazardous Materials or (b) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of any Hazardous Materials, including, but not limited
to, the Comprehensive Environmental Response, Compensation and Liability Act of
1980 (“CERCLA”), as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. §9601 et  seq., the Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of
1976, as amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C.
§6901 et  seq., the Federal Water Pollution Control Act, as
amended by the Clean Water Act of 1977, 33 U.S.C. §1251 et  seq.,
the Toxic Substances Control Act of 1976, 15 U.S.C. §2601 et  seq.,
the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §1101
et  seq., the Clean Air Act of 1966, as amended, 42 U.S.C. §7401 et
seq., the National Environmental Policy Act of 1975, 42 U.S.C. §4321,
and the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. §300(f) et
seq., and all rules, regulations and guidance documents promulgated or
published thereunder.


 


“Equipment” shall have the meaning set
forth in granting clause (d) of this Security Instrument.


 


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


 


“ERISA Affiliate” shall mean any
corporation or trade or business that is a member of any group of organizations
(a) described in Section 414(b) or (c) of the Code of which Borrower or
Guarantor is a member and (b) solely for purposes of potential liability under
Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien
created under Section 302(f)


 


10

















 


of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of
which Borrower or Guarantor is a member.


 


“Escrow Account” shall mean each of
the Engineering Escrow Account, Basic Carrying Costs Escrow Account, the
Recurring Replacement Reserve Escrow Account, the Reletting Reserve Escrow
Account, the Designated Lease Reserve Escrow Account and the Underwritten Rent
Escrow Account, each of which shall be an Eligible Account or book entry
sub-account of an Eligible Account.


 


“Event of Default” shall have the
meaning set forth in Section 13.01 hereof.


 


“First Payment Date” shall mean, if
the Closing Date is prior to the Payment Date of the month in which the Closing
Date occurs, the Payment Date in the month in which the Closing Date occurs,
or, if the Closing Date is on or subsequent to the Payment Date in the month in
which the Closing Date occurs, the Payment Date in the month following the
month in which the Loan is initially funded.


 


“Fiscal Year” shall mean the twelve
(12) month period commencing on January 1 and ending on December 31 during each
year of the term of this Security Instrument, or such other fiscal year of
Borrower as Borrower may select from time to time with the prior written
consent of Lender.


 


“Fixtures” shall have the meaning set
forth in granting clause (d) of this Security Instrument.


 


“Force Majeure” shall mean strikes,
lockouts, labor disputes, acts of God, governmental restrictions, regulations
or controls, enemy or hostile governmental actions, terrorist acts, civil
commotion, insurrection, revolution, sabotage or fire or other casualty or
other events beyond the reasonable control of Borrower and/or its Affiliates,
but Borrower’s and/or its Affiliates’ lack of funds in and of itself shall not
be deemed a cause beyond the control of Borrower and/or its Affiliates.


 


“Franchise Agreement” shall mean any
franchise or license agreement relating to the branding or operation of the
hotel portion of the Premises or any other agreement pursuant to which a
franchise system, reservation system or brand affiliation is made available to
the hotel operator of the Premises, together with all renewals and replacements
thereof. Lender acknowledges that certain management agreements dated July 1,
2004, for the hotel portion of the Premises between Operating Tenant as
successor in interest to One Financial Place, L.P., and Kemper Sports
Management, Inc. are not Franchise Agreements.


 


“GAAP” shall mean generally accepted
accounting principles in the United States of America, as of the date of the
applicable financial report, consistently applied.


 


“General Partner” shall mean, if
Borrower is a partnership, each general partner of Borrower and, if Borrower is
a limited liability company, each managing member of Borrower and in each case,
if applicable, each general partner or managing member of such general partner


 


11

















 


or managing member.
In the event that Borrower or any General Partner is a single member limited
liability company, the term “General Partner” shall include such single member.


 


“Governmental Authority” shall mean,
with respect to any Person, any federal or State government or other political
subdivision thereof and any entity, including any regulatory or administrative
authority or court, exercising executive, legislative, judicial, regulatory or
administrative or quasi-administrative functions of or pertaining to government,
and any arbitration board or tribunal, in each case having jurisdiction over
such applicable Person or such Person’s property and any stock exchange on
which shares of capital stock of such Person are listed or admitted for
trading.


 


“Government Tenants” shall mean
tenants under those certain Space Leases, the obligations of which are backed
by the full faith and credit of the United States of America.


 


“Guarantor” shall mean Beacon Capital
Strategic Partners IV, L.P., a Delaware limited partnership.


 


“Hazardous Material” shall mean any
flammable, explosive or radioactive materials, hazardous materials or wastes,
hazardous or toxic substances, pollutants or related materials, asbestos or any
material containing asbestos, which may pose a risk to human health or the
environment or any other substance or material as defined in or regulated by
any Environmental Statutes.


 


“Impositions” shall mean all taxes
(including, without limitation, all real estate, ad valorem, sales (including
those imposed on lease rentals), use, single business, gross receipts, value
added, intangible, transaction, privilege or license or similar taxes),
assessments (including, without limitation, all assessments for public
improvements or benefits, whether or not commenced or completed prior to the
date hereof and whether or not commenced or completed within the term of this
Security Instrument), ground rents, water, sewer or other rents and charges,
excises, levies, fees (including, without limitation, license, permit,
inspection, authorization and similar fees), and all other governmental
charges, in each case whether general or special, ordinary or extraordinary, or
foreseen or unforeseen, of every character in respect of the Property and/or
any Rent (including all interest and penalties thereon), which at any time
prior to, during or in respect of the term hereof may be assessed or imposed on
or in respect of or be a lien upon (a) Borrower (including, without limitation,
all franchise, single business or other taxes imposed on Borrower for the
privilege of doing business in the jurisdiction in which the Property or any
other collateral delivered or pledged to Lender in connection with the Loan is
located) or Lender (other than Lender’s income or franchise taxes or taxes of a
similar nature), (b) the Property or any part thereof or any Rents therefrom or
any estate, right, title or interest therein, or (c) any occupancy, operation,
use or possession of, or sales from, or activity conducted on, or in connection
with the Property, or any part thereof, or the leasing or use of the Property,
or any part thereof, or the acquisition or financing of the acquisition of the
Property, or any part thereof, by Borrower, other than taxes which are solely
the obligation of tenants under Space Leases.


 


12

















 


“Improvements” shall have the meaning
set forth in granting clause (b) of this Security Instrument.


 


“Indemnified Parties” shall have the
meaning set forth in Section 12.01 hereof.


 


“Independent” shall mean, when used
with respect to any Person, a Person who (a) is in fact independent, (b) does
not have any direct financial interest or any material indirect financial
interest in Borrower, or in any Affiliate of Borrower or any constituent
partner, shareholder, member or beneficiary of Borrower, (c) is not connected
with Borrower or any Affiliate of Borrower or any constituent partner,
shareholder, member or beneficiary of Borrower as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions and (d) is not a member of the immediate family of a Person defined
in (b) or (c) above.


 


“Initial Engineering Deposit” shall
equal the amount, if any, set forth on Exhibit
B attached hereto and made a part hereof.


 


“Institutional Lender” shall mean any
of the following Persons: (a) any bank, savings and loan association,
savings institution, trust company or national banking association, acting for
its own account or in a fiduciary capacity, (b) any charitable foundation,
(c) any insurance company or pension and/or annuity company, (d) any
fraternal benefit society, (e) any pension, retirement or profit sharing
trust or fund within the meaning of Title I of ERISA or for which any
bank, trust company, national banking association or investment adviser
registered under the Investment Advisers Act of 1940, as amended, is acting as
trustee or agent, (f) any investment company or business development
company, as defined in the Investment Company Act of 1940, as amended, (g) any
small business investment company licensed under the Small Business Investment
Act of 1958, as amended, (h) any broker or dealer registered under the
Securities Exchange Act of 1934, as amended, or any investment adviser
registered under the Investment Adviser Act of 1940, as amended, (i) any
government, any public employees’ pension or retirement system, or any other
government agency supervising the investment of public funds, or (j) any
other entity all of the equity owners of which are Institutional Lenders;
provided that each of said Persons shall have net assets in excess of
$1,000,000,000 and a net worth in excess of $500,000,000, be in the business of
making commercial mortgage loans, secured by properties of like type, size and
value as the Property and have a long term credit rating which is not less than
“BBB-” (or its equivalent) from each Rating Agency.


 


“Insurance Proceeds” shall mean all of
the proceeds received under the insurance policies required to be maintained by
Borrower pursuant to Article III hereof.


 


“Insurance Requirements” shall mean
all terms of any insurance policy required by this Security Instrument, all
requirements of the issuer of any such policy, and all regulations and then
current standards applicable to or affecting the Property or any use or
condition thereof which may, at any time, be required by the Board of Fire
Underwriters, if any, having jurisdiction over the Property, or such other
Person exercising similar functions.


 


13

















 


“Interest Accrual Period” shall mean
the period commencing on the Closing Date through and including the tenth
(10th) day of August, 2006 and, thereafter, each one (1) month period, which
shall commence on the eleventh (11th) day of each calendar month and end on and
include the tenth (10th) day of the next occurring calendar month.


 


“Interest Rate” shall have the meaning
set forth in the Note.


 


“Interest Shortfall” shall mean any
shortfall in the amount of interest required to be paid with respect to the
Principal Amount on any Payment Date.


 


“Inventory” shall have the meaning as
such term is defined in the Uniform Commercial Code applicable in the State in
which the Property is located, including, without limitation, provisions in
storerooms, refrigerators, pantries and kitchens, beverages in wine cellars and
bars, other merchandise for sale, fuel, mechanical supplies, stationery and
other expenses, supplies and similar items.


 


“Late Charge” shall have the meaning
set forth in Section 13.09 hereof.


 


“Leases” shall have the meaning set
forth in granting clause (f) of this Security Instrument.


 


“Legal Requirement” shall mean as to
any Person, any law, statute, order, ordinance, judgment, decree, injunction,
treaty, rule or regulation (including, without limitation, Environmental
Statutes, Development Laws and Use Requirements) or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person
or any of its property is subject.


 


“Lender” shall mean the Lender named
herein and its successors or assigns.


 


“Lender Exposure” shall mean any one or more of the following:
(a) the Loan is in violation of applicable law, or (b) the Property or any other
collateral for the Loan or any portion thereof is subject to forfeiture or to
being frozen, seized, sequestered or otherwise impaired by a Government
Authority, or (c) the Loan or any payments made or to be made in respect
thereof (including principal and interest) is subject to forfeiture or to being
frozen, seized, sequestered or otherwise impaired by a Governmental Authority,
or (d) Lender may be subject to criminal or civil liability or penalty.


 


“Loan” shall have the meaning set forth in the Recitals hereto.


 


“Loan Amount” shall have the meaning set forth in the Recitals
hereto.


 


“Loan Documents” shall mean this
Security Instrument, the Note, the Assignment, and any and all other
agreements, instruments, certificates or documents executed and delivered by
Borrower or any Affiliate of Borrower in connection with the Loan, together
with any supplements, amendments, modifications or extensions thereof.


 


14

















 


“Loan Year” shall mean each 365 day
period (or 366 day period if the month of February in a leap year is included)
commencing on the first day of the month following the Closing Date (provided,
however, that the first Loan Year shall also include the period from the
Closing Date to the end of the month in which the Closing Date occurs).


 


“Loss Proceeds” shall mean,
collectively, all Insurance Proceeds and all Condemnation Proceeds.


 


“Major Space Lease” shall mean (a) any
Operating Lease and (b) any Space Lease of a tenant or Affiliate of such tenant
where such tenant or such Affiliate leases, in the aggregate, 30,000 rentable
square feet or more of the Property.


 


“Management Agreement” shall have the
meaning set forth in Section 7.02 hereof.


 


“Manager” shall mean the Person, other
than Borrower, which manages the Property on behalf of Borrower pursuant to an
agreement with Borrower.


 


“Material Adverse Effect” shall mean
any event or condition that has a material adverse effect on (a) the Property,
(b) the business, prospects, profits, management, operations or condition
(financial or otherwise) of Borrower, (c) the enforceability, validity,
perfection or priority of the lien of any Loan Document or (d) the ability of
Borrower to perform any obligations under any Loan Document.


 


“Maturity”, when used with respect to
the Note, shall mean the Maturity Date set forth in the Note or such other date
pursuant to the Note on which the final payment of principal, and premium, if
any, on the Note becomes due and payable as therein or herein provided, whether
at Stated Maturity or by declaration of acceleration, or otherwise.


 


“Maturity Date” shall mean the
Maturity Date set forth in the Note.


 


“Merrill Tenant” shall mean the tenant
(and its successors and assigns) under the first Space Lease described on Exhibit G attached hereto.


 


“Mez Loan” shall mean one or more
certain mezzanine loan(s) in a maximum aggregate principal amount which would,
together with the Loan, provide an aggregate Debt Service Coverage of 1.20:1.0
or greater and a ratio of the unpaid principal amount of the Debt plus the
proposed principal balance of the proposed mezzanine loan(s) to the value of
the Property, as determined by Lender in its reasonable discretion utilizing
its then current underwriting standards of 80% or lower, which is evidenced or
to be evidenced by one or more certain promissory note(s), each of which shall
be secured by, among other things, a pledge of the direct or indirect ownership
and/or management interest in Borrower and which matures no earlier than the
Maturity Date. In the event that a Mez Loan does not close as of the Closing
Date, any such loan must be consented to in writing by Lender, which consent
shall not be unreasonably withheld, conditioned or delayed and may be
conditioned upon, among other things, receipt by Lender of an executed
intercreditor agreement, in form and substance reasonably acceptable to Lender
between the holder of the proposed Mez Loan and Lender and, if a Securitization
has occurred, receipt of written confirmation from each Rating Agency that any
rating issued by the


 


15

















 


Rating Agency
in connection with a Securitization will not, as a result of the proposed Mez
Loan be downgraded from the then current ratings thereof, qualified or
withdrawn.


 


“Multiemployer Plan” shall mean a
multiemployer plan defined as such in Section 3(37) of ERISA to which
contributions have been, or were required to have been, made by Borrower,
Guarantor or any ERISA Affiliate and which is covered by Title IV of ERISA.


 


“Net Proceeds” shall mean the excess
of (a)(i) the purchase price (at foreclosure or otherwise) actually received by
Lender with respect to the Property as a result of the exercise by Lender of
its rights, powers, privileges and other remedies after the occurrence of an
Event of Default, or (ii) in the event that Lender (or Lender’s nominee) is the
purchaser at foreclosure by credit bid, then the amount of such credit bid, in
either case, over (b) all costs and expenses, including, without limitation,
all reasonable attorneys’ fees and disbursements and any brokerage fees, if
applicable, incurred by Lender in connection with the exercise of such
remedies, including the sale of such Property after a foreclosure against the
Property.


 


“Note” shall have the meaning set
forth in the Recitals hereto.


 


“OFAC List” shall mean the list of
specially designated nationals and blocked persons subject to financial
sanctions that is maintained by the U.S. Treasury Department, Office of Foreign
Assets Control and accessible through the internet website www.treas.gov/ofac/t11sdn.pdf.


 


“Officer’s Certificate” shall mean a
certificate delivered to Lender by Borrower which is signed on behalf of
Borrower by an authorized representative of Borrower which states that the
items set forth in such certificate are true, accurate and complete in all
material respects and which may be to the “actual” or “best” knowledge if
permitted hereunder.


 


“Operating Expenses” shall mean, in
each Fiscal Year or portion thereof during the term hereof, all expenses
directly attributable to the operation, repair and/or maintenance of the
Property including, without limitation, (a) Impositions, (b) insurance
premiums, (c) management fees, whether or not actually paid, equal to the
greater of the actual management fees and three percent (3%) of annual “base”
or “fixed” Rent due under the Leases and (d) costs attributable to the
operation, repair and maintenance of the systems for heating, ventilating and
air conditioning the Improvements. Operating Expenses shall not include
interest, principal and premium, if any, due under the Note or otherwise in
connection with the Debt, income taxes, extraordinary non-recurring costs,
Capital Expenditures, any non-cash charge or expense such as depreciation or
amortization, or any item of expense otherwise includable in Operating Expenses
which is paid directly by any tenant except real estate taxes paid directly to
any taxing authority by any tenant.


 


“Operating Income” shall mean, in each
Fiscal Year or portion thereof during the term hereof, all revenue derived by
Borrower arising from the Property including, without limitation, room
revenues, vending machines revenues, beverage revenues, food revenues, and
packaging revenues, rental revenues (whether denominated as basic rent,
additional rent, escalation payments, electrical payments or otherwise) and
other fees and charges payable pursuant to Leases or otherwise in connection
with the Property, and business interruption, rent or other


 


16

















 


similar
insurance proceeds. Operating Income shall not include (a) Insurance
Proceeds (other than proceeds of rent, business interruption or other similar
insurance allocable to the applicable period) and Condemnation Proceeds (other
than Condemnation Proceeds arising from a temporary taking or the use and
occupancy of all or part of the Property allocable to the applicable period),
or interest accrued on such Condemnation Proceeds, (b) proceeds of any
financing, (c) proceeds of any sale, exchange or transfer of the Property or
any part thereof or interest therein, (d) capital contributions or loans to
Borrower or an Affiliate of Borrower, (e) any item of income otherwise
includable in Operating Income but paid directly by any tenant to a Person
other than Borrower except for real estate taxes paid directly to any taxing
authority by any tenant, (f) any other extraordinary, non-recurring revenues,
(g) Rent paid by or on behalf of any lessee under an Operating Lease or Space
Lease which is the subject of any proceeding or action relating to its
bankruptcy, reorganization or other arrangement pursuant to the Bankruptcy Code
or any similar federal or state law or which has been adjudicated a bankrupt or
insolvent unless such Operating Lease or Space Lease, as applicable, has been
affirmed by the trustee in such proceeding or action, (h) Rent paid by or on
behalf of any lessee under a Lease in whole or partial consideration for the
termination of any Space Lease, or (i) sales tax rebates from any Governmental
Authority.


 


“Operating Lease” shall mean any Lease
of the Property to Operating Tenant, as the same may be amended from time to
time.


 


“Operating Tenant” shall mean any
Affiliate of Borrower.


 


“Payment Date” shall mean, with
respect to each month, the eleventh (11th) calendar day in such month, or if
such day is not a Business Day, the next following Business Day.


 


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


 


“Permitted Encumbrances” shall have
the meaning set forth in Section 2.05(a) hereof.


 


“Permitted Investments” shall mean any
one or more of the following obligations or securities acquired at a purchase
price of not greater than par, including, without limitation, those issued by
Lender, the trustee or servicer under any Securitization or any of their
respective Affiliates, payable on demand or having a scheduled maturity on or
before the Business Day preceding the date upon which funds are required to be
drawn, and having at all times the required ratings, if any, provided for in
this definition:


 


(a)           obligations
of, or obligations fully guaranteed as to payment of principal and interest by,
the United States of America or any agency or instrumentality thereof provided
such obligations are backed by the full faith and credit of the United States
of America including, without limitation, obligations of: the U.S. Treasury
(all direct or fully guaranteed obligations), the General Services
Administration (participation certificates) and the Small Business
Administration (guaranteed participation certificates and guaranteed pool
certificates); provided, however, that the investments described
in this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by Standard & Poor’s,


 


17

















 


must not have
an “r” highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;


 


(b)           Federal
Housing Administration debentures;


 


(c)           obligations
of the following United States of America government sponsored agencies:
Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit System
(consolidated systemwide bonds and notes), the Federal Home Loan Banks
(consolidated debt obligations), the Federal National Mortgage Association
(debt obligations), the Student Loan Marketing Association (debt obligations),
the Financing Corp. (debt obligations), and the Resolution Funding Corp. (debt
obligations); provided, however, that the investments described
in this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by Standard & Poor’s,
must not have an “r” highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be tied
to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject
to liquidation prior to their maturity;


 


(d)           federal
funds, unsecured certificates of deposit, time deposits, bankers’ acceptances
and repurchase agreements with maturities of not more than 365 days of any
bank, the short term obligations of which at all times are rated in the highest
short term rating category by each Rating Agency (or, if not rated by all
Rating Agencies, rated by at least one Rating Agency in the highest short term
rating category and otherwise acceptable to each other Rating Agency, as
confirmed in writing that such investment would not in and of itself, result in
a downgrade, qualification or withdrawal of the then current ratings assigned
to any certificates issued in connection with a Securitization); provided,
however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by Standard & Poor’s, must not have an “r” highlighter
affixed to their rating, (C) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest rate index plus
a fixed spread (if any) and must move proportionately with that index, and (D)
such investments must not be subject to liquidation prior to their maturity;


 


(e)           fully
Federal Deposit Insurance Corporation-insured demand and time deposits in, or
certificates of deposit of, or bankers’ acceptances issued by, any bank or
trust company, savings and loan association or savings bank, the short term
obligations of which at all times are rated in the highest short term rating
category by each Rating Agency (or, if not rated by all Rating Agencies, rated
by at least one Rating Agency in the highest short term rating category and
otherwise acceptable to each other Rating Agency, as confirmed in writing that
such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned to any
certificates issued in connection with a Securitization); provided, however,
that the investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by Standard & Poor’s, must not have an “r” highlighter affixed to
their rating, (C) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed


 


18

















 


spread (if
any) and must move proportionately with that index, and (D) such investments
must not be subject to liquidation prior to their maturity;


 


(f)            debt
obligations with maturities of not more than 365 days and at all times rated by
each Rating Agency (or, if not rated by all Rating Agencies, rated by at least
one Rating Agency and otherwise acceptable to each other Rating Agency, as
confirmed in writing that such investment would not, in and of itself, result
in a downgrade, qualification or withdrawal of the then current ratings
assigned to any certificates issued in connection with a Securitization) in its
highest long-term unsecured rating category; provided, however,
that the investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by Standard & Poor’s, must not have an “r” highlighter affixed to
their rating, (C) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index, and (D) such
investments must not be subject to liquidation prior to their maturity;


 


(g)           commercial
paper (including both non-interest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more than one year
after the date of issuance thereof) with maturities of not more than 365 days
and that at all times is rated by each Rating Agency (or, if not rated by all
Rating Agencies, rated by at least one Rating Agency and otherwise acceptable
to each other Rating Agency, as confirmed in writing that such investment would
not, in and of itself, result in a downgrade, qualification or withdrawal of
the then current ratings assigned to any certificates issued in connection with
a Securitization) in its highest short-term unsecured debt rating; provided,
however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by Standard & Poor’s, must not have an “r” highlighter
affixed to their rating, (C) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest rate index plus
a fixed spread (if any) and must move proportionately with that index, and (D)
such investments must not be subject to liquidation prior to their maturity


 


(h)           units
of taxable money market funds, which funds are regulated investment companies,
seek to maintain a constant net asset value per share and invest solely in
obligations backed by the full faith and credit of the United States, which
funds have the highest rating available from each Rating Agency (or, if not
rated by all Rating Agencies, rated by at least one Rating Agency and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade, qualification or
withdrawal of the then current ratings assigned to any certificates issued in
connection with a Securitization) for money market funds;


 


(i)            money
market funds so long as the money market funds are rated “AAA” (or its
equivalent) by each Rating Agency (or, if not rated by all of the Rating
Agencies, rated by at least one Rating Agency in one of the foregoing rating
categories and otherwise acceptable to each other Rating Agency, as confirmed
in writing that such investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the then current ratings assigned to
any certificates issued in connection with a Securitization); and


 


19
















 


(j)            any other security, obligation or
investment which has been approved as a Permitted Investment in writing by (a)
Lender prior to Securitization and (b) after Securitization, each Rating
Agency, as evidenced by a written confirmation that the designation of such
security, obligation or investment as a Permitted Investment will not, in and
of itself, result in a downgrade, qualification or withdrawal of the then
current ratings assigned to any certificates issued in connection with a
Securitization by such Rating Agency, provided, further, that Borrower has
determined in writing that such security obligation or investment qualifies as
a good so-called seventy-five percent (75%) asset as described in Code Section
856(c)(4)(A);


 


provided,
however, that, in the reasonable judgment of Lender, such instrument
continues to qualify as a “cash flow investment” pursuant to Section 860G(a)(6)
of the Code earning a passive return in the nature of interest and that no
obligation or security shall be a Permitted Investment if (i) such
obligation or security evidences a right to receive only interest payments, or
(ii) the right to receive principal and interest payments on such obligation or
security are derived from an underlying investment that provides a yield to
maturity in excess of 120% of the yield to maturity at par of such underlying
investment.


 


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


 


“Plan” shall mean an employee benefit
or other plan established or maintained by Borrower, Guarantor or any ERISA
Affiliate during the five-year period ended prior to the date of this Security
Instrument or to which Borrower, Guarantor or any ERISA Affiliate makes, is
obligated to make or has, within the five year period ended prior to the date
of this Security Instrument, been required to make contributions (whether or
not covered by Title IV of ERISA or Section 302 of ERISA or Section 401(a) or
412 of the Code), other than a Multiemployer Plan.


 


“Premises” shall have the meaning set
forth in granting clause (a) of this Security Instrument.


 


“Principal Amount” shall mean the Loan
Amount as such amount may be reduced from time to time pursuant to the terms of
this Security Instrument, the Note or the other Loan Documents.


 


“Principal Payments” shall mean all payments
of principal made pursuant to the terms of the Note.


 


“Pro-Forma Net Operating Income” shall
mean Pro-Forma Operating Income less Pro-Forma Operating Expenses.


 


“Pro-Forma Operating Expenses” shall
mean projected annualized Operating
Expenses based on a trailing twelve (12)-month period as reasonably
adjusted by Lender to take into account, among other things, reasonably
anticipated increases or decreases in Operating Expenses.


 


20

















 


“Pro-Forma Operating Income” shall mean projected annualized
Operating Income (which for the purposes hereof shall include Rent due under
Space Leases having a term of five (5) years or greater with respect to which
the rent commencement date will occur within six (6) months of the date as of
which the calculation of Pro Forma Operating Income is made) based on the most
recent rent roll and such other information as is required to be delivered by
Borrower pursuant to Section 2.09 hereof, as reasonably adjusted by Lender to
take into account a vacancy factor equal to the greater of (a) anticipated
vacancies over the course of the subsequent twelve (12) month period for which
such calculation is made or (b) five percent (5%), and excluding rental income
of tenants under Space Leases (other than Government Tenants which are not
contesting “base” or “fixed” rent and which have not sent any notice of default
or notice regarding termination of such Space Lease to Borrower) whose base
rent is more than ninety (90) days overdue.


 


“Prohibited Person” shall mean any
Person identified on the OFAC List or any other Person or foreign country or
agency thereof with whom a U.S. Person may not conduct business or transactions
by prohibition of Federal law or Executive Order of the President of the United
States of America.


 


“Property” shall have the meaning set
forth in the granting clauses of this Security Instrument.


 


“Property Agreements” shall mean all
grants of easements and/or rights-of-way, reciprocal easement agreements,
permits, declarations of covenants, conditions and restrictions, disposition
and development agreements, planned unit development agreements, parking
agreements, party wall agreements or other material instruments affecting the
Property, but not including any brokerage agreements, management agreements,
service contracts, Space Leases or the Loan Documents.


 


“Rating Agency” shall mean each of
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Company,
Inc. (“Standard & Poor’s”), Fitch and Moody’s Investors Service,
Inc. (“Moody’s”), and any successor to any of them; provided, however,
that at any time after a Securitization, “Rating Agency” shall mean those of
the foregoing rating agencies that from time to time rate the securities issued
in connection with such Securitization.


 


“Real Estate Taxes” shall mean all
real estate taxes and assessments (including, without limitation, all
assessments for public improvements or benefits, whether or not commenced or
completed prior to the date hereof and whether or not commenced or completed
within the term of this Security Instrument), in each case whether general or
special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the Property (including all interest and penalties thereon),
which at any time prior to, during or in respect of the term hereof may be
assessed or imposed on or in respect of or be a lien upon the Property or any
part thereof or any estate, right, title or interest therein.


 


“Realty” shall have the meaning set
forth in Section 2.05(b) hereof.


 


21

















 


“Recurring Replacement Expenditures”
shall mean expenditures related to capital repairs, replacements and
improvements performed at the Property from time to time.


 


“Recurring Replacement Reserve Monthly
Installment” shall mean the amount per month set forth on Exhibit B attached hereto and made a part
hereof; provided, however, so long as no Event of Default has occurred and is
continuing, the Recurring Replacement Reserve Monthly Installment shall be $0.


 


“Recurring Replacement Reserve Escrow
Account” shall mean the Escrow Account maintained pursuant to Section 5.08
hereof relating to the payment of Recurring Replacement Expenditures.


 


“Recurring Replacement Reserve Sub-Account”
shall mean the Sub-Account of the Central Account established pursuant to
Section 5.02 hereof into which the Recurring Replacement Reserve Monthly
Installment shall be deposited.


 


“Regulation AB” shall mean Regulation
AB under the Securities Act and the Securities Exchange Act of 1934 (as
amended).


 


“Reletting Expenditures” shall mean
the actual out-of-pocket expenditures payable by Borrower to tenants or other
bona-fide third parties relating to the reletting of space at the Property
(including, without limitation, Special Reletting Expenditures).


 


“Reletting Reserve Escrow Account”
shall mean the Escrow Account maintained pursuant to Section 5.07 hereof
relating to the payment of Reletting Expenditures.


 


“Rent Account” shall mean one or more
Eligible Accounts maintained at a bank reasonably acceptable to Lender in the
name of Lender or its successors or assigns (as secured party) as may be
designated by Lender, and Borrower.


 


“Rents” shall have the meaning set
forth in granting clause (f) of this Security Instrument.


 


“Rent Roll” shall have the meaning set
forth in Section 2.05(o) hereof.


 


“Required Debt Service Coverage” shall
mean a Debt Service Coverage of not less than the lesser of (a) 1.2:1.0 and (b)
the Debt Service Coverage immediately prior to the casualty or Taking, as
applicable.


 


“Required Debt Service Payment” shall
mean, as of any Payment Date, the amount of interest and principal then due and
payable pursuant to the Note, together with any other sums due thereunder,
including, without limitation, any prepayments required to be made or for which
notice has been given under this Security Instrument, Default Rate Interest and
premium, if any, paid in accordance therewith.


 


“Required Engineering Work” shall mean
the immediate engineering and/or environmental remediation work set forth on Exhibit D attached hereto and made a part
hereof.


 


22

















 


“Retention Amount” shall have the
meaning set forth in Section 3.04(b)(vii) hereof.


 


“Securities Act” shall mean the
Securities Act of 1933, as the same shall be amended from time to time.


 


“Securitization” shall mean a public
or private offering of securities by Lender or any of its Affiliates or their
respective successors and assigns which are collateralized, in whole or in
part, by this Security Instrument.


 


“Security Instrument” shall mean this
Security Instrument as originally executed or as it may hereafter from time to
time be supplemented, amended, modified or extended by one or more indentures
supplemental hereto.


 


“Significant Obligor” shall have the
meaning set forth in Item 1101(k) of Regulation AB.


 


“Single Purpose Entity” shall mean a
corporation, partnership, joint venture, limited liability company, trust or
unincorporated association, which is formed or organized solely for the purpose
of holding, directly, an ownership interest in the Property or, with respect to
General Partner, holding an ownership interest in and managing a Person which
holds an ownership interest in the Property, does not engage in any business
unrelated to, with respect to Borrower, the Property and, with respect to
General Partner, its interest in Borrower, does not have any assets other than
those related to, with respect to Borrower, its interest in the Property and, with
respect to General Partner, its interest in Borrower, or any indebtedness other
than as permitted by this Security Instrument or the other Loan Documents, has
its own separate books and records and has its own accounts, in each case which
are separate and apart from the books and records and accounts of any other
Person, holds itself out as being a Person separate and apart from any other
Person and which otherwise satisfies the criteria of the Rating Agency, as in
effect on the Closing Date, for a special-purpose bankruptcy-remote entity.


 


“Solvent” shall mean, as to any
Person, that (a) the sum of the assets of such Person, at a fair valuation,
exceeds its liabilities, including contingent liabilities, (b) such Person has
sufficient capital with which to conduct its business as presently conducted
and as proposed to be conducted and (c) such Person has not incurred debts, and
does not intend to incur debts, beyond its ability to pay such debts as they
mature. For purposes of this definition, “debt” means any liability on a
claim, and “claim” means (a) a right to payment, whether or not such
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured, or (b) a right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured, or unsecured. With respect to any such contingent
liabilities, such liabilities shall be computed in accordance with GAAP at the
amount which, in light of all the facts and circumstances existing at the time,
represents the amount which can reasonably be expected to become an actual or
matured liability.


 


23

















 


“Space Leases” shall mean any Lease
(including, without limitation, any Major Space Lease) or any other agreement
providing for the use and occupancy of a portion of the Property, as the same
may be amended, renewed or supplemented.


 


“Special Reletting Expenditures” shall
mean allowances provided by Borrower to tenants or other bona-fide third
parties in connection with the reletting of space at the Property that,
pursuant to the terms of a particular new Space Lease or amendment, renewal or
extension of an existing Space Lease entered into in accordance herewith, are
applied by the tenant under such new Space Lease or amendment, extension or
renewal as a rent credit. Any Special Reletting Expenditures shall be deemed
incurred on a monthly basis as the credit is actually applied by the applicable
tenant to Rent due under the related Space Lease or amendment, extension or
renewal thereof; provided, however, that in each case, the rent allowance under
such new Space Lease is comparable to then existing local market rates.


 


“State” shall mean any of the states
which are members of the United States of America.


 


“Stated Maturity”, when used with
respect to the Note or any installment of interest and/or principal payment
thereunder, shall mean the date specified in the Note as the fixed date on
which a payment of all or any portion of principal and/or interest is due and
payable.


 


“Sub-Accounts” shall have the meaning
set forth in Section 5.02 hereof.


 


“Substantial Casualty” shall have the
meaning set forth in Section 3.04 hereof.


 


“Taking” shall mean a condemnation or
taking pursuant to the lawful exercise of the power of eminent domain.


 


“Transfer” shall mean the conveyance,
assignment, sale, mortgaging, encumbrance, pledging, hypothecation, granting of
a security interest in, granting of options with respect to, or other
disposition of (directly or indirectly, voluntarily or involuntarily, by
operation of law or otherwise, and whether or not for consideration or of
record) all or any portion of any legal or beneficial interest (a) in all or
any portion of the Property; (b) if Borrower or, if Borrower is a partnership,
any General Partner, is a corporation, in the stock of Borrower or any General
Partner; (c) in Borrower (or any trust of which Borrower is a trustee); or (d)
if Borrower is a limited or general partnership, joint venture, limited
liability company, trust, nominee trust, tenancy in common or other
unincorporated form of business association or form of ownership interest, in
any Person having a legal or beneficial ownership in Borrower, excluding any
legal or beneficial interest in any constituent limited partner, if Borrower is
a limited partnership, or in any non-managing member, if Borrower is a limited
liability company, unless such interest would, or together with all other
direct or indirect interests in Borrower which were previously transferred,
aggregate 49% or more of the partnership or membership, as applicable, interest
in Borrower or would result in any Person who, as of the Closing Date, did not
own, directly or indirectly, 49% or more of the partnership or membership, as
applicable, interest in Borrower, owning, directly or indirectly, 49% or more
of the partnership or membership, as applicable, interest in Borrower and
excluding any legal or beneficial interest in any General Partner unless such
interest would, or together with all other direct or indirect interest in the
General Partner


 


24

















 


which were
previously transferred, aggregate 49% or more of the partnership or membership,
as applicable, interest in the General Partner (or result in a change in
control of the management of the General Partner from the individuals
exercising such control immediately prior to the conveyance or other
disposition of such legal or beneficial interest) and shall also include,
without limitation to the foregoing, the following:  an installment sales agreement wherein
Borrower agrees to sell the Property or any part thereof or any interest
therein for a price to be paid in installments; an agreement by Borrower
leasing all or substantially all of the Property to one or more Persons
pursuant to a single or related transactions for other than actual use or
occupancy, or a sale, assignment or other transfer of, or the grant of a
security interest in, Borrower’s right, title and interest in and to any Leases
or any Rent; any instrument subjecting the Property to a condominium regime or
transferring ownership to a cooperative corporation; and the dissolution or
termination of Borrower or the merger or consolidation of Borrower with any
other Person. Notwithstanding the foregoing or anything to the contrary
contained elsewhere herein or in any other Loan Document, “Transfer” shall not
include any sale, transfer, conveyance or assignment of any direct or indirect
legal or beneficial ownership interest in Borrower or any non-member manager of
Borrower (including, without limitation, creation of direct or indirect owners
of Borrower or any non-member manager of Borrower), or any mortgaging,
encumbrance, pledging, hypothecation or granting of a security interest in any
indirect ownership interest in Borrower or any non-member manager of Borrower
(but not of Beacon Capital Strategic Partners IV, L.P.), provided, in each case, that Beacon
Capital Strategic Partners IV, L.P. continues to own directly or indirectly not
less than thirty-five percent (35%) of the ownership interests in and directly
or indirectly Control Borrower, and provided that, in the event that any Person
(a “Principal Transferee”) who does not, as of the Closing Date, own or
Control, directly or indirectly, 49% or more of the stock, partnership interest
or membership interest, as applicable, in Borrower acquires, directly or
indirectly, 49% or more of the stock, partnership interest or membership
interest, as applicable, in Borrower as a result of such transfer, conveyance,
assignment, sale, mortgaging, encumbrance, pledging, hypothecation or granting
of a security interest, Lender shall be furnished an opinion, in form and
substance and from counsel reasonably satisfactory to Lender, substantially
similar to the Insolvency Opinion which discusses the substantive
non-consolidation of Borrower with the Principal Transferee in the event of a
bankruptcy, insolvency or similar proceeding relating to the Principal
Transferee.


 


“Treasury Constant Maturity Yield Index”
shall mean the average yield for “This Week” as reported by the Federal Reserve
Board in Federal Reserve Statistical Release H.15 (519).


 


“UCC” shall mean the Uniform
Commercial Code as in effect on the date hereof in the State in which the
Realty is located; provided, however, that if by reason of mandatory provisions
of law, the perfection or the effect of perfection or non-perfection or
priority of the security interest in any item or portion of the collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State in which the Realty is located (“Other UCC State”), “UCC”
means the Uniform Commercial Code as in effect in such Other UCC State for
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection or priority.


 


“Underwritten Rent Escrow Account”
shall mean an Escrow Account maintained pursuant to Section 5.14 hereof.


 


25

















 


“Unscheduled Payments” shall mean (a)
all Loss Proceeds that Borrower has elected or is required to apply to the
repayment of the Debt pursuant to this Security Instrument, the Note or any
other Loan Documents, (b) any funds representing a voluntary or involuntary
principal prepayment and (c) any Net Proceeds.


 


“Use Requirements” shall mean any and
all building codes, permits, certificates of occupancy or compliance, laws,
regulations, or ordinances (including, without limitation, health, pollution,
fire protection, medical and day-care facilities, waste product and sewage
disposal regulations), restrictions of record, easements, reciprocal easements,
declarations or other agreements of record affecting the use of the Property or
any part thereof.


 


“Welfare Plan” shall mean an employee
welfare benefit plan as defined in Section 3(1) of ERISA established or
maintained by Borrower, Guarantor or any ERISA Affiliate or that covers any
current or former employee of Borrower, Guarantor or any ERISA Affiliate.


 


“Work” shall have the meaning set
forth in Section 3.04(a)(i) hereof.


 


“Yield Maintenance Premium” shall mean
a premium equal to the greater of (a) one percent (1%) of the principal amount
of the Note being prepaid and (b) the product of (i) a fraction, the numerator
of which is the positive excess, if any, of (A) the present value of all future
payments of principal and interest on the Note, including the principal amount
due at Maturity, to be made on the Note as of the prepayment date in question
and through and including the Payment Date that is six (6) months prior to the
Maturity Date, discounted at an interest rate per annum equal to the sum of (x)
the Treasury Constant Maturity Yield Index published during the second full
week preceding the date on which such premium is payable for instruments having
a maturity coterminous with the remaining term of the Note and (y) twenty-five
(25) basis points, over (B) the principal amount of the Note immediately before
such prepayment, and the denominator of which is the principal amount of the
Note immediately prior to the prepayment, and (ii) the principal amount being
prepaid; provided, however, that if there is no Treasury Constant Maturity
Yield Index for instruments having a maturity coterminous with the remaining
term of the Note, then the index referred to in (A) above shall be equal to the
weighted average yield to maturity of the Treasury Constant Maturity Yield
Indices with maturities next longer and shorter than such remaining average
life to maturity, calculated by interpolating the yields of the relevant
Treasury Constant Maturity Yield Indices (rounded, if necessary, to the nearest
1/100 of 1%).


 


ARTICLE II:  REPRESENTATIONS,
WARRANTIES 

AND COVENANTS OF BORROWER


 


Section 2.01. Payment of Debt. Borrower
will pay the Debt at the time and in the manner provided in the Note and the
other Loan Documents, all in lawful money of the United States of America in
immediately available funds.


 


Section 2.02. Representations, Warranties
and Covenants of Borrower. Borrower represents and warrants to and
covenants with Lender:


 


26

















 


(a)           Organization and Authority. Borrower
(i) is a limited liability company, general partnership, limited partnership or
corporation, as the case may be, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation, (ii) has all
requisite power and authority and all necessary licenses and permits to own and
operate the Property and to carry on its business as now conducted and as
presently proposed to be conducted and (iii) is duly qualified, authorized to
do business and in good standing in the jurisdiction where the Property is
located and in each other jurisdiction where the conduct of its business or the
nature of its activities makes such qualification necessary. If Borrower is a
limited liability company, limited partnership or general partnership, each
general partner or managing member, as applicable, of Borrower which is a
corporation is duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation.


 


(b)           Power. Borrower and, if applicable,
each General Partner has full power and authority to execute, deliver and
perform, as applicable, the Loan Documents to which it is a party, to make the
borrowings thereunder, to execute and deliver the Note and to grant to Lender a
first, prior, perfected and continuing lien on and security interest in the
Property, subject only to the Permitted Encumbrances.


 


(c)           Authorization of Borrowing. The
execution, delivery and performance of the Loan Documents to which Borrower is
a party, the making of the borrowings thereunder, the execution and delivery of
the Note, the grant of the liens on the Property pursuant to the Loan Documents
to which Borrower is a party and the consummation of the Loan are within the
powers of Borrower and have been duly authorized by Borrower and, if
applicable, each General Partner by all requisite action (and Borrower hereby
represents that no approval or action of any member, limited partner or
shareholder, as applicable, of Borrower not already obtained is required to
authorize any of the Loan Documents to which Borrower is a party) and will
constitute the legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with their terms, except as enforcement may be
stayed or limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity
(whether considered in proceedings at law or in equity) and will not (i)
violate any provision of its partnership agreement or partnership certificate
or certificate of incorporation or by-laws, or operating agreement, certificate
of formation or articles of organization, as applicable, or, to its knowledge,
any law, judgment, order, rule or regulation of any court, arbitration panel or
other Governmental Authority, domestic or foreign, or other Person affecting or
binding upon Borrower or the Property, or (ii) violate any provision of any
indenture, agreement, mortgage, deed of trust, contract or other instrument to
which Borrower or, if applicable, any General Partner is a party or by which
any of their respective property, assets or revenues are bound, or be in
conflict with, or result in an acceleration of any obligation or a breach of or
constitute (with notice or lapse of time or both) a default or require any
payment or prepayment under, any such indenture, agreement, mortgage, deed of
trust, contract or other instrument, or (iii) result in the creation or
imposition of any lien, except those in favor of Lender as provided in the Loan
Documents to which it is a party.


 


(d)           Consent. Neither Borrower nor, if
applicable, any General Partner, is required to obtain any consent, approval or
authorization from, or to file any declaration or statement with, any
Governmental Authority or other agency in connection with or as a condition


 


27

















 


to the execution, delivery or performance of
this Security Instrument, the Note or the other Loan Documents which has not
been so obtained or filed.


 


(e)           Interest Rate. The rate of interest
paid under the Note and the method and manner of the calculation thereof do not
violate any usury or other law or applicable Legal Requirement.


 


(f)            Other Agreements. Borrower is not a
party to nor is otherwise bound by any agreements or instruments the terms and
provisions of which, individually or in the aggregate, are reasonably likely to
have a Material Adverse Effect. Neither Borrower nor, if applicable, any
General Partner, is in violation of its organizational documents or other
restriction or any agreement or instrument by which it is bound, or any
judgment, decree, writ, injunction, order or award of any arbitrator, court or
Governmental Authority, or any Legal Requirement, in each case, applicable to Borrower
or the Property, except for such violations that would not, individually or in
the aggregate, have a Material Adverse Effect.


 


(g)           Maintenance of Existence. (i)  Borrower and, if applicable, each General
Partner at all times since their formation have been duly formed and existing
and shall preserve and keep in full force and effect their existence as a
Single Purpose Entity.


 


(ii)           Borrower and, if applicable, each General
Partner, at all times since their organization have complied, and will continue
to comply, with the provisions of its certificate and agreement of partnership
or certificate of incorporation and by-laws or articles of organization,
certificate of formation and operating agreement, as applicable, and the laws
of its jurisdiction of organization relating to partnerships, corporations or
limited liability companies, as applicable.


 


(iii)          Borrower and, if applicable, each General Partner
have done or caused to be done and will do all things necessary to observe
organizational formalities and preserve their existence and Borrower and, if
applicable, each General Partner will not, without the prior written consent of
Lender, amend, modify or otherwise change the certificate and agreement of
partnership or certificate of incorporation and by-laws or articles of
organization, certificate of formation and operating agreement, as applicable,
or other organizational documents of Borrower and, if applicable, each General
Partner, in any manner that (x) violates the single purpose covenants set forth
in this Section 2.02(g), (y) amends or modifies any provision of such documents
that by its terms cannot be modified at any time when the Loan is outstanding,
or (z) is reasonably likely to have a Material Adverse Effect.


 


(iv)          Borrower and, if applicable, each General
Partner, have at all times accurately maintained, and will continue to
accurately maintain, their respective financial statements, accounting records
and other partnership, company or corporate documents separate from those of
any other Person; provided, however, that Borrower’s or, if applicable, General
Partner’s assets may be included in a consolidated financial statement of its
Affiliates if (x) inclusion in such a consolidated financial statement is
required to comply with the requirements of GAAP, (y) such consolidated
financial statements


 


28

















 


contain a footnote to the effect that
Borrower’s assets are owned by Borrower or, if applicable, General Partner’s
assets are owned by General Partner, and (z) its assets and liabilities are
listed on Borrower’s or, if applicable, General Partner’s own balance sheet;
and, except as permitted above, Borrower or, if applicable, General Partner
shall not permit its assets to be listed as assets on the financial statements
of any other Person, provided, however, that such restriction shall not
preclude any Person from listing its ownership interest in Borrower or, if
applicable, General Partner as an asset on its financial statements. Borrower
will file its own tax returns unless Borrower is a disregarded entity for
income tax reporting purposes, in which event the income and deductions of
Borrower will be included on the income tax returns of its first owner that
files income tax returns. Borrower and, if applicable, each General Partner
have not at any time since their formation commingled, and will not commingle,
their respective assets with those of any other Person and will maintain their
assets in such a manner such that it will not be costly or difficult to
segregate, ascertain or identify their individual assets from those of any
other Person. Borrower and, if applicable, each General Partner will not permit
any Affiliate independent access to their bank accounts. Borrower and, if
applicable, each General Partner have at all times since their formation
accurately maintained and utilized, and will continue to accurately maintain
and utilize, their own separate bank accounts, payroll and separate books of
account, stationery, invoices and checks.


 


(v)           Borrower and, if applicable, each General
Partner, have at all times paid, and will continue to pay, their own
liabilities from their own separate assets and shall each allocate and charge
fairly and reasonably any overhead which Borrower and, if applicable, any
General Partner, shares with any other Person, including, without limitation,
for office space and services performed by any employee of another Person.


 


(vi)          Borrower and, if applicable, each General
Partner, have at all times identified themselves, and will continue to identify
themselves, in all dealings with the public, under their own names and as
separate and distinct entities and shall correct any known misunderstanding
regarding their status as separate and distinct entities. Borrower and, if
applicable, each General Partner, have not at any time identified themselves,
and will not identify themselves, as being a division of any other Person.


 


(vii)         Borrower and, if applicable, each General
Partner, have been at all times, and will continue to be, adequately
capitalized in light of the nature of their respective businesses.


 


(viii)        Borrower and, if applicable, each General
Partner, (A) have not owned, do not own and will not own any assets or property
other than, with respect to Borrower, the Property and any incidental personal
property necessary for the ownership, management or operation of the Property
and, with respect to General Partner, if applicable, its interest in Borrower,
(B) have not engaged and will not engage in any business other than the
ownership, management and operation of the Property or, with respect to General
Partner, if applicable, its interest in Borrower, (C) have not incurred and
will not incur any debt, secured or unsecured, direct or contingent (including
guaranteeing any


 


29

















 


obligation), other than (X) the Loan and (Y)
unsecured trade and operational debt and equipment leases which (1) is not
evidenced by a note, (2) is incurred in the ordinary course of the operation of
the Property, (3) does not exceed in the aggregate (I) two percent (2%) of the
Loan Amount plus (II) any Reletting Expenditures incurred pursuant to Space
Leases entered into in accordance with the terms of this Security Instrument,
and (4) is, unless being contested in accordance with the terms of this
Security Instrument, paid prior to the earlier to occur of the forty-fifth
(45th) day after the date incurred and the date when due,  (D) have not pledged and will not pledge
their assets for the benefit of any other Person, and (E) have not made and
will not make any loans or advances to any Person (including any Affiliate).


 


(ix)           Neither Borrower nor, if applicable, any General
Partner will change its name or principal place of business without giving Lender
at least thirty (30) days prior written notice thereof.


 


(x)            Neither Borrower nor, if applicable, any General
Partner has, and neither of such Persons will have, any subsidiaries (other
than, with respect to General Partner, Borrower).


 


(xi)           Borrower will preserve and maintain its existence
as a Delaware limited liability company and all material rights, privileges,
tradenames and franchises.


 


(xii)          Neither Borrower, nor, if applicable, any General
Partner, will merge or consolidate with, or liquidate, wind up or dissolve
itself (or suffer any liquidation, winding up or dissolution) or, except as set
forth in Section 9.04 hereof, sell all or substantially all of its respective
assets to any Person. Neither Borrower, nor, if applicable, any General Partner
will acquire any business or assets from, or capital stock or other ownership
interest of, or be a party to any acquisition of, any Person.


 


(xiii)         Borrower and, if applicable, each General
Partner, have not at any time since their formation assumed, guaranteed or held
themselves out to be responsible for, and will not assume, guarantee or hold
themselves out to be responsible for the liabilities or the decisions or
actions respecting the daily business affairs of their partners, shareholders
or members or any predecessor company, corporation or partnership, each as
applicable, any Affiliates, or any other Persons. Borrower and, if applicable,
each General Partner have not at any time since their formation acquired, and
will not acquire, obligations or securities of its partners or shareholders,
members or any predecessor company, corporation or partnership, each as
applicable, or any Affiliates. Borrower and, if applicable, each General
Partner, have not at any time since their formation made, and will not make,
loans to its partners, members or shareholders or any predecessor company,
corporation or partnership, each as applicable, or any Affiliates of any of
such Persons. Borrower and, if applicable, each General Partner, have no known
contingent liabilities nor do they have any material outstanding financial
liabilities under any indenture, mortgage, deed of trust, loan agreement or
other similar agreement or instrument to which such Person is a party or by
which it is otherwise bound other than under the Loan Documents.


 


30

















 


(xiv)        Borrower and, if applicable, each General
Partner, have not at any time since their formation entered into and was not a
party to, and, will not enter into or be a party to, any transaction with its
Affiliates, members, partners or shareholders, as applicable, or any Affiliates
thereof except in the ordinary course of business of Borrower on terms which
are no less favorable to Borrower than would be obtained in a comparable arm’s
length transaction with an unrelated third party.


 


(xv)         If Borrower is a limited partnership or a limited
liability company, the General Partner shall be a corporation or limited
liability company whose sole asset is its interest in Borrower and the General
Partner will at all times comply, and will cause Borrower to comply, with each
of the representations, warranties, and covenants contained in this Section
2.02(g) as if such representation, warranty or covenant was made directly by
such General Partner.


 


(xvi)        Borrower shall at all times cause there to be at
least two duly appointed members or managers of Borrower or of the board of
directors or board of managers or other governing board or body, as applicable
(each, an “Independent Director”), of, if Borrower is a corporation,
Borrower, and, if Borrower is a limited partnership or limited liability
company, of the General Partner, reasonably satisfactory to Lender who shall
not have been at the time of such individual’s appointment, and may not be or
have been at any time (A) a shareholder, officer, director, attorney, counsel,
partner, member or employee of Borrower or any of the foregoing Persons or
Affiliates thereof, (B) a customer or creditor of, or supplier or service
provider to, Borrower or any of its shareholders, partners, members or their
Affiliates, (C) a member of the immediate family of any Person referred to in
(A) or (B) above or (D) a Person Controlling, Controlled by or under common
Control with any Person referred to in (A) through (C) above. A natural person
who otherwise satisfies the foregoing definition except for being the
Independent Director of a Single Purpose Entity Affiliated with Borrower or
General Partner shall not be disqualified from serving as an Independent
Director if such individual is at the time of initial appointment, or at any
time while serving as the Independent Director, an Independent Director of a
Single Purpose Entity Affiliated with Borrower or General Partner if such
individual is an independent director provided by a nationally-recognized
company that provides professional independent directors.


 


(xvii)       Borrower and, if applicable, each General
Partner, shall not take any action which, under the terms of its certificate of
incorporation, by-laws or articles of organization, requires the consent of the
Independent Directors of Borrower, or, if applicable, the General Partner,
unless the consent of such Independent Directors is obtained.


 


(xviii)      Borrower and, if applicable, each General Partner
has paid and shall pay the salaries of their own employees and has maintained
and shall maintain a sufficient number of employees in light of their
contemplated business operations.


 


(xix)         Borrower shall, and shall cause its Affiliates
to, conduct its business so that the assumptions made with respect to Borrower
and, if applicable, each General


 


31

















 


Partner, in that certain opinion letter
relating to substantive non-consolidation dated the date hereof (the “Insolvency
Opinion”) delivered in connection with the Loan shall be true and correct
in all material respects.


 


Notwithstanding
anything to the contrary contained in this Section 2.02(g), provided Borrower
is a Delaware single member limited liability company with two (2) Independent
Directors which satisfies the single purpose bankruptcy remote entity
requirements of each Rating Agency as of the Closing Date for a single member
limited liability company, the foregoing provisions of this Section 2.02(g)
shall not apply to the General Partner. Lender acknowledges that Borrower
satisfies such criteria as of the Closing Date.


 


(h)           No Defaults. No Default or Event of
Default has occurred and is continuing or would occur as a result of the
consummation of the transactions contemplated by the Loan Documents. Borrower
is not in material default in the payment or performance of any of its
Contractual Obligations in any respect.


 


(i)            Consents and Approvals. Borrower
and, if applicable, each General Partner, have obtained or made all necessary
(i) consents, approvals and authorizations from, and registrations and filings
of or with, all Governmental Authorities and (ii) consents, approvals,
waivers and notifications of partners, stockholders, members, creditors,
lessors and other nongovernmental Persons, in each case, which are required to
be obtained or made by Borrower or, if applicable, the General Partner, in
connection with the execution and delivery of, and the performance by Borrower
of its obligations under, the Loan Documents.


 


(j)            Investment Company Act Status, etc. Borrower
is not (i) an “investment company,” or a company “controlled” by an “investment
company,” as such terms are defined in the Investment Company Act of 1940, as
amended, (ii) a “holding company” or a “subsidiary company” of a “holding
company” or an “affiliate” of either a “holding company” or a “subsidiary
company” within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or (iii) subject to any other federal or state law or regulation
which purports to restrict or regulate its ability to borrow money.


 


(k)           Compliance with Law. Borrower is in
compliance in all material respects with all Legal Requirements to which it or
the Property is subject, including, without limitation, all Environmental
Statutes, the Occupational Safety and Health Act of 1970, the Americans with
Disabilities Act and ERISA. No portion of the Property has been or will be
purchased, improved, fixtured, equipped or furnished with proceeds of any
illegal activity and, to the best of Borrower’s knowledge, no illegal
activities are being conducted at or from the Property.


 


(l)            Financial Information. All financial
data that has been delivered by Borrower to Lender (i) is true, complete and
correct in all material respects, (ii) accurately represents in all material
respects the financial condition and results of operations of the Persons
covered thereby as of the date of such data, and (iii) with respect to audited
financial statements, has been prepared in accordance with GAAP (or such other
accounting basis as is reasonably acceptable to Lender) throughout the periods
covered thereby; provided, however, that the foregoing representations (i) –
(iii) are to the best knowledge of Borrower with respect to any financial data


 


32

















 


prepared by or
on behalf of a prior owner of the Property. As of the date hereof, neither
Borrower nor, if applicable, any General Partner, has any material contingent
liability, liability for taxes or other unusual or forward commitment not
reflected in such financial statements delivered to Lender. Since the date of
the last financial statements delivered by Borrower to Lender, except as
otherwise disclosed in such financial statements or notes thereto, there has
been no change in the assets, liabilities or financial position of Borrower
nor, if applicable, any General Partner, or in the results of operations of
Borrower which would have a Material Adverse Effect. Neither Borrower nor, if
applicable, any General Partner, has incurred any obligation or liability,
contingent or otherwise, not reflected in such financial statements which would
have a Material Adverse Effect.


 


(m)          Transaction Brokerage Fees. Other than
Holliday Fenoglio Fowler, L.P., Borrower has not dealt with any financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Security Instrument. All
brokerage fees, commissions and other expenses payable in connection with the
transactions contemplated by the Loan Documents have been paid in full by
Borrower contemporaneously with the execution of the Loan Documents and the
funding of the Loan. Borrower hereby agrees to indemnify and hold Lender
harmless for, from and against any and all claims, liabilities, costs and
expenses of any kind in any way relating to or arising from (i) a claim by any
Person that such Person acted on behalf of Borrower in connection with the
transactions contemplated herein or (ii) any breach of the foregoing
representation. The provisions of this subsection (m) shall survive the
repayment of the Debt.


 


(n)           Federal Reserve Regulations. No part
of the proceeds of the Loan will be used for the purpose of “purchasing” or “carrying”
any “margin stock” within the meaning of Regulations T, U or X of the Board of
Governors of the Federal Reserve System or for any other purpose which would be
inconsistent with such Regulations T, U or X or any other Regulations of such
Board of Governors, or for any purposes prohibited by Legal Requirements or by
the terms and conditions of the Loan Documents.


 


(o)           Pending Litigation. There are no
actions, suits or proceedings pending or, to the best knowledge of Borrower,
threatened against or affecting Borrower or the Property in any court or before
any Governmental Authority which if adversely determined either individually or
collectively has or is reasonably likely to have a Material Adverse Effect.


 


(p)           Solvency; No Bankruptcy. Each of
Borrower and, if applicable, the General Partner, (i) is and has at all times
been Solvent and will remain Solvent immediately upon the consummation of the
transactions contemplated by the Loan Documents and (ii) is free from
bankruptcy, reorganization or arrangement proceedings or a general assignment
for the benefit of creditors and is not contemplating the filing of a petition
under any state or federal bankruptcy or insolvency laws or the liquidation of
all or a major portion of such Person’s assets or property and Borrower has no
knowledge of any Person contemplating the filing of any such petition against
it or, if applicable, the General Partner. None of the transactions
contemplated hereby will be or have been made with an intent to hinder, delay
or defraud any present or future creditors of Borrower and Borrower has
received reasonably equivalent value in exchange for its obligations under the
Loan Documents. Borrower’s assets do not, and immediately upon


 


33

















 


consummation
of the transaction contemplated in the Loan Documents will not, constitute
unreasonably small capital to carry out its business as presently conducted or
as proposed to be conducted. Borrower does not intend to, nor believe that it
will, incur debts and liabilities beyond its ability to pay such debts as they
may mature.


 


(q)           Use of Proceeds. The proceeds of the
Loan shall be applied by Borrower to, inter  alia, (i) acquire the
Property and (ii) pay certain transaction costs incurred by Borrower in
connection with the Loan. No portion of the proceeds of the Loan will be used
for family, personal, agricultural or household use.


 


(r)            Tax Filings. Borrower and, if
applicable, each General Partner, have filed all federal, state and local tax
returns required to be filed and have paid or made adequate provision for the
payment of all federal, state and local taxes, charges and assessments payable
by Borrower and, if applicable, each General Partner. Borrower and, if
applicable, each General Partner, believe that their respective tax returns
properly reflect the income and taxes of Borrower and said General Partner, if
any, for the periods covered thereby, subject only to reasonable adjustments
required by the Internal Revenue Service or other applicable tax authority upon
audit.


 


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


 


(t)            ERISA. (i) The
assets of Borrower and Guarantor are not and will not become treated as “plan
assets”, whether by operation of law or under regulations promulgated under
ERISA. If any Person is a direct owner of a legal or beneficial interest in
Borrower and in such capacity is using (or is deemed under ERISA to be using) “plan
assets”, Borrower, at all times that the Loan is outstanding, will either qualify
as a “real estate operating company” within the meaning of 29 C.F.R.
§2510.3-101(e) or there is applicable a prohibited transaction exemption under
ERISA such that the assets of Borrower will not be treated as “plan assets.”  Each Plan and Welfare Plan, and, to the
knowledge of Borrower, each Multiemployer Plan, is in compliance in all
material respects with, and has been administered in all material respects in
compliance with, its terms and the applicable provisions of ERISA, the Code and
any other applicable Legal Requirement, and no event or condition has occurred
and is continuing as to which Borrower would be under an obligation to furnish
a report to Lender under clause (ii)(A) of this Section. Other than an
application for a favorable determination letter with respect to a Plan, there
are no pending issues or claims before the Internal Revenue Service, the United
States Department of Labor or any court of competent jurisdiction related to
any Plan or Welfare Plan under which Borrower, Guarantor or any ERISA
Affiliate, directly or indirectly (through an indemnification agreement or
otherwise), could be subject to any material risk of liability under Section
409 or 502(i) of ERISA or Section 4975 of the Code. No Welfare Plan provides or
will provide benefits, including, without limitation, death or medical benefits
(whether or not insured) with respect to any current or former employee of
Borrower, Guarantor or any ERISA Affiliate beyond his or her retirement or
other termination of service other than (A) coverage mandated by applicable
law, (B) death or disability benefits that have been fully provided for by
fully paid up insurance or (C) severance benefits.


 


34

















 


(ii)           Borrower will furnish to Lender as soon as
possible, and in any event within ten (10) days after Borrower knows or has
reason to believe that any of the events or conditions specified below with
respect to any Plan, Welfare Plan or Multiemployer Plan has occurred or exists,
an Officer’s Certificate setting forth details respecting such event or
condition and the action, if any, that Borrower or its ERISA Affiliate proposes
to take with respect thereto (and a copy of any report or notice required to be
filed with or given to PBGC (or any other relevant Governmental Authority) by
Borrower or an ERISA Affiliate with respect to such event or condition, if such
report or notice is required to be filed with the PBGC or any other relevant
Governmental Authority):


 


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


 


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


 


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


 


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


 


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


 


(F)           the adoption of an
amendment to any Plan that, pursuant to Section 401(a)(29) of the Code or Section
307 of ERISA, would result in the loss of tax-exempt status of the trust of
which such Plan is a part if Borrower or an ERISA


 


35

















 


Affiliate
fails to timely provide security to the Plan in accordance with the provisions
of said Sections; or


 


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


 


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


 


(u)           Labor Matters. No organized work
stoppage or labor strike is pending or, to Borrower’s knowledge, threatened by
employees or other laborers at the Property and neither Borrower nor Manager
(i) is involved in or, to Borrower’s knowledge, threatened with any labor
dispute, grievance or litigation relating to labor matters involving any
employees and other laborers at the Property, including, without limitation,
violation of any federal, state or local labor, safety or employment laws
(domestic or foreign) and/or charges of unfair labor practices or
discrimination complaints; (ii) has engaged in any unfair labor practices
within the meaning of the National Labor Relations Act or the Railway Labor
Act; or (iii) except as previously disclosed to Lender in writing, is a party
to, or bound by, any collective bargaining agreement or union contract with
respect to employees and other laborers at the Property and no such agreement or
contract is currently being negotiated by Borrower, Manager or any of their
Affiliates.


 


(v)           Borrower’s Legal Status. Borrower’s
exact legal name that is indicated on the signature page hereto, organizational
identification number and place of business or, if more than one, its chief
executive office, as well as Borrower’s mailing address, if different, which
were identified by Borrower to Lender and contained in this Security
Instrument, are true, accurate and complete. Borrower (i) will not change its
name, its place of business or, if more than one place of business, its chief
executive office, or its mailing address or organizational identification
number if it has one without giving Lender at least thirty (30) days prior
written notice of such change, (ii) if Borrower does not have an organizational
identification number and later obtains


 


36

















 


one, Borrower
shall promptly notify Lender of such organizational identification number and
(iii) Borrower will not change its type of organization, jurisdiction of
organization or other legal structure.


 


(w)          Compliance with Anti-Terrorism, Embargo
and Anti-Money Laundering Laws. (i) None of Borrower, General Partner,
Guarantor, or any Person who owns any equity interest in or Controls Borrower,
General Partner or Guarantor currently is identified on the OFAC List or
otherwise qualifies as a Prohibited Person, and Borrower has implemented
procedures, approved by General Partner, to ensure that no Person who now or hereafter
owns an equity interest in Borrower or General Partner is a Prohibited Person
or Controlled by a Prohibited Person, (ii) no proceeds of the Loan will be used
to fund any operations in, finance any investments or activities in or make any
payments to, Prohibited Persons, and (iii) none of Borrower, General Partner,
or Guarantor is in violation of any Legal Requirements relating to anti-money
laundering or anti-terrorism, including, without limitation, Legal Requirements
related to transacting business with Prohibited Persons or the requirements of
the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56, and
the related regulations issued thereunder, including temporary regulations, all
as amended from time to time. No tenant at the Property currently is identified
on the OFAC List or otherwise qualifies as a Prohibited Person, and, to the
best of Borrower’s knowledge, no tenant at the Property is owned or Controlled
by a Prohibited Person. Borrower has determined that Manager has implemented
procedures, approved by Borrower, to determine whether a tenant at the Property
is a Prohibited Person or owned or Controlled by a Prohibited Person. Notwithstanding
the foregoing, no representation is made hereunder with respect to owners of
stock or other interests in publicly traded companies or members of any pension
plans unless the failure to so apply such representations to such Persons could
create any Lender Exposure.


 


Section 2.03. Further Acts, etc. Borrower
will, at the cost of Borrower, and without expense to Lender, do, execute,
acknowledge and deliver all and every such further acts, deeds, conveyances,
mortgages or deeds of trust, as applicable, assignments, notices of
assignments, transfers and assurances as Lender shall, from time to time,
reasonably require for the better assuring, conveying, assigning, transferring,
and confirming unto Lender the property and rights hereby mortgaged, given,
granted, bargained, sold, alienated, enfeoffed, conveyed, confirmed, pledged,
assigned and hypothecated, or which Borrower may be or may hereafter become
bound to convey or assign to Lender, or for carrying out or facilitating the
performance of the terms of this Security Instrument or for filing, registering
or recording this Security Instrument and, on demand, will execute and deliver
and hereby authorizes Lender to execute in the name of Borrower or without the
signature of Borrower to the extent Lender may lawfully do so, one or more
financing statements, chattel mortgages or comparable security instruments to
evidence more effectively the lien hereof upon the Property. Borrower grants to
Lender an irrevocable power of attorney coupled with an interest for the
purpose of protecting, perfecting, preserving and realizing upon the interests
granted pursuant to this Security Instrument and to effect the intent hereof,
all as fully and effectually as Borrower might or could do; and Borrower hereby
ratifies all that Lender shall lawfully do or cause to be done by virtue hereof.
Upon (a) receipt of an affidavit of an officer of Lender as to the loss, theft,
destruction or mutilation of the Note or any other Loan Document which is not
of public record, (b) receipt of an indemnity from Lender related to losses
resulting solely from the issuance of a replacement note or other applicable


 


37

















 


Loan Document and (c) in the case of any such
mutilation, upon surrender and cancellation of such Note or other applicable
Loan Document, Borrower will issue, in lieu thereof, a replacement Note or
other applicable Loan Document, dated the date of such lost, stolen, destroyed
or mutilated Note or other Loan Document in the same principal amount thereof
and otherwise of like tenor.


 


Section 2.04. Recording of Security
Instrument, etc. Borrower forthwith upon the execution and delivery of this
Security Instrument and thereafter, from time to time, will cause this Security
Instrument, and any security instrument creating a lien or security interest or
evidencing the lien hereof upon the Property and each instrument of further
assurance to be filed, registered or recorded in such manner and in such places
as may be required by any present or future law in order to publish notice of
and fully protect the lien or security interest hereof upon, and the interest
of Lender in, the Property. Borrower will pay all filing, registration or
recording fees, and all reasonable expenses incident to the preparation, execution
and acknowledgment of this Security Instrument, any mortgage or deed of trust,
as applicable, supplemental hereto, any security instrument with respect to the
Property and any instrument of further assurance, and all federal, state,
county and municipal, taxes, duties, imposts, assessments and charges arising
out of or in connection with the execution and delivery of this Security
Instrument, any mortgage or deed of trust, as applicable, supplemental hereto,
any security instrument with respect to the Property or any instrument of
further assurance, except where prohibited by law to do so, in which event
Lender, upon at least ninety (90) days prior written notice to Borrower, may
declare the Debt to be immediately due and payable without any prepayment fee
or charge of any kind. Borrower shall hold harmless and indemnify Lender and
its successors and assigns, against any liability incurred as a result of the
imposition of any tax on the making and recording of this Security Instrument.


 


Section 2.05. Representations, Warranties
and Covenants Relating to the Property. Borrower represents and warrants to
and covenants with Lender with respect to the Property as follows:


 


(a)           Lien Priority. This Security
Instrument is a valid and enforceable first lien on the Property, free and
clear of all encumbrances and liens having priority over the lien of this
Security Instrument, except for the items set forth as exceptions to or
subordinate matters in the title insurance policy insuring the lien of this
Security Instrument, none of which, individually or in the aggregate,
materially interfere with the benefits of the security intended to be provided
by this Security Instrument, materially affect the value or marketability of
the Property, impair the use or operation of the Property for the use currently
being made thereof or impair Borrower’s ability to pay its obligations in a
timely manner (such items being the “Permitted Encumbrances”).


 


(b)           Title. Borrower has, subject only to
the Permitted Encumbrances, good, insurable and marketable fee simple title to
the Premises, Improvements and Fixtures (collectively, the “Realty”) and
to all easements and rights benefiting the Realty and has the right, power and
authority to mortgage, encumber, give, grant, bargain, sell, alien, enfeoff,
convey, confirm, pledge, assign, and hypothecate the Property. Borrower will
preserve its interest in and title to the Property and will forever warrant and
defend the same to Lender against any and all claims


 


38

















 


made by,
through or under Borrower and will forever warrant and defend the validity and
priority of the lien and security interest created herein against the claims of
all Persons whomsoever claiming by, through or under Borrower. The foregoing
warranty of title shall survive the foreclosure of this Security Instrument and
shall inure to the benefit of and be enforceable by Lender in the event Lender
acquires title to the Property pursuant to any foreclosure. In addition, there
are no outstanding options or, except as set forth on the title insurance
policy delivered to Lender in connection with the origination of the Loan,
rights of first refusal to purchase the Property or Borrower’s ownership
thereof.


 


(c)           Taxes and Impositions. All taxes and
other Impositions and governmental assessments due and owing in respect of, and
affecting, the Property have been paid. Borrower has paid all Impositions which
constitute special governmental assessments in full, except for those
assessments which are permitted by applicable Legal Requirements to be paid in
installments, in which case all installments which are due and payable have
been paid in full. There are no pending, or to Borrower’s best knowledge,
proposed special or other assessments for public improvements or otherwise
affecting the Property, nor are there any contemplated improvements to the
Property that may result in such special or other assessments.


 


(d)           Casualty; Flood Zone. Except as
disclosed in the engineering report for the Property previously delivered to
Lender in connection with the origination of the Loan, the Realty is in good
repair and free and clear of any damage, destruction or casualty (whether or
not covered by insurance) which remains unrepaired that would materially and
adversely affect the value of the Realty or the use for which the Realty was
intended, there exists no structural or other material defects or damages in or
to the Property and Borrower has not received any written notice from any
insurance company or bonding company of any material defect or inadequacies in
the Property, or any part thereof, in either case which would materially and
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond. No portion of the Premises is
located in an “area of special flood hazard,” as that term is defined in the
regulations of the Federal Insurance Administration, Department of Housing and
Urban Development, under the National Flood Insurance Act of 1968, as amended
(24 CFR § 1909.1) or Borrower has obtained the flood insurance required by
Section 3.01(a)(vi) hereof. The Premises either does not lie in a 100 year
flood plain that has been identified by the Secretary of Housing and Urban
Development or any other Governmental Authority or, if it does, Borrower has
obtained the flood insurance required by Section 3.01(a)(vi) hereof.


 


(e)           Completion; Encroachment. All
Improvements necessary for the efficient use and operation of the Premises have
been completed and, except as set forth in the title insurance policy insuring
the lien of this Security Instrument, none of said Improvements lie outside the
boundaries and building restriction lines of the Premises. Except as set forth
in the title insurance policy insuring the lien of this Security Instrument, no
improvements on adjoining properties encroach upon the Premises.


 


(f)            Separate Lot. The Premises are taxed
separately without regard to any other real estate and constitute a legally
subdivided lot under all applicable Legal Requirements (or, if not subdivided,
no subdivision or platting of the Premises is required under applicable Legal


 


39

















 


Requirements),
and for all purposes may be mortgaged, encumbered, conveyed or otherwise dealt
with as an independent parcel. The Property does not benefit from any tax
abatement or exemption, provided, however, the foregoing shall not preclude
Borrower from bringing any tax certiorari proceeding.


 


(g)           Use. The existence of all
Improvements, the present use and operation thereof and the access of the
Premises and the Improvements to all of the utilities and other items referred
to in paragraph (k) below are in compliance in all material respects with all
Leases affecting the Property and all applicable Legal Requirements, including,
without limitation, Environmental Statutes, Development Laws and Use
Requirements. Borrower has not received any notice from any Governmental
Authority alleging any uncured violation relating to the Property of any
applicable Legal Requirements.


 


(h)           Licenses and Permits. Except as
previously disclosed to Lender in writing, Borrower currently holds and will
continue to hold all certificates of occupancy, licenses, registrations,
permits, consents, franchises and approvals of any Governmental Authority or
any other Person which are material for the lawful occupancy and operation of
the Realty or which are material to the ownership or operation of the Property
or the conduct of Borrower’s business. All such certificates of occupancy,
licenses, registrations, permits, consents, franchises and approvals are
current and in full force and effect.


 


(i)            Environmental
Matters. Borrower has received and reviewed the Environmental Report and
has no reason to believe that the Environmental Report contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the statements contained therein or herein, in light of the circumstances
under which such statements were made, not misleading.


 


(j)            Property Proceedings. There are no
actions, suits or proceedings pending or, to Borrower’s knowledge, threatened
in any court or before any Governmental Authority or arbitration board or
tribunal (i) relating to (A) the zoning of the Premises or any part
thereof, (B) any certificates of occupancy, licenses, registrations,
permits, consents or approvals issued with respect to the Property or any part
thereof, (C) the condemnation of the Property or any part thereof, or
(D) the condemnation or relocation of any roadways abutting the Premises
required for access or the denial or limitation of access to the Premises or
any part thereof from any point of access to the Premises, (ii) asserting
that (A) any such zoning, certificates of occupancy, licenses,
registrations, permits, consents and/or approvals do not permit the operation
of any material portion of the Realty as presently being conducted,
(B) any material improvements located on the Property or any part thereof
cannot be located thereon or operated for their intended use or (C) the
operation of the Property or any part thereof is in violation in any material
respect of any Environmental Statutes, Development Laws or other Legal
Requirements or any of the Space Leases or Property Agreements or (iii) which
might (A) affect the validity or priority of any Loan Document or (B) if
adversely determined, would have a Material Adverse Effect. Borrower is not
aware of any facts or circumstances which may give rise to any actions, suits
or proceedings described in the preceding sentence.


 


40
















 


(k)           Utilities. The Premises have all
necessary legal access to water, gas and electrical supply, storm and sanitary
sewerage facilities, other required public utilities (with respect to each of
the aforementioned items, by means of either a direct connection to the source
of such utilities or through connections available on publicly dedicated
roadways directly abutting the Premises or through permanent insurable
easements benefiting the Premises), parking, and means of direct access from
the Premises to public roadways over recognized curb cuts (or such access is
through private roadways which may be used for ingress and egress pursuant to
permanent insurable easements).


 


(l)            Mechanics’ Liens. The Property is
free and clear of any mechanics’ liens or liens in the nature thereof, and no
rights are outstanding that under law could give rise to any such liens, any of
which liens are or may be prior to, or equal with, the lien of this Security
Instrument, except those which are insured against by the title insurance
policy insuring the lien of this Security Instrument.


 


(m)          Intentionally Omitted.


 


(n)           Insurance. The Property is insured in
accordance with the requirements set forth in Article III hereof.


 


(o)           Space Leases.


 


(i)            Borrower has delivered
a true, correct and complete schedule of all Space Leases as of the date
hereof, which accurately and completely sets forth in all material respects,
for each such Space Lease, the following (collectively, the “Rent Roll”):  the name of the tenant; the lease expiration
date, the base rent and percentage rent, if any, payable; all escalation and
pass-through obligations; and the security deposit, if any, held thereunder.


 


(ii)           Each Space Lease constitutes the legal,
valid and binding obligation of Borrower and, to the knowledge of Borrower, is
enforceable against the tenant thereof. Except as previously disclosed to
Lender in any tenant estoppel letter delivered to Lender in connection with the
origination of the Loan or as previously disclosed to Lender in writing, no material
default exists, or with the passing of time or the giving of notice would
exist, (A) under any Major Space Lease or (B) under any other Space Leases
which would, in the aggregate, have a Material Adverse Effect.


 


(iii)          Except as previously disclosed to Lender in
any tenant estoppel letter delivered to Lender in connection with the
origination of the Loan or as previously disclosed to Lender in writing, no
tenant under any Space Lease has, as of the date hereof, paid Rent more than
thirty (30) days in advance, and the Rents under such Space Leases have not
been waived, released, or otherwise discharged or compromised.


 


(iv)          Except as previously disclosed to Lender in
any tenant estoppel letter delivered to Lender in connection with the
origination of the Loan or as previously disclosed to Lender in writing, all
work to be performed by Borrower under the Space Leases as of the date hereof
has been substantially performed, all contributions required


 


41

















 


to be made by Borrower to the tenants thereunder as of the date hereof
have been made except for any held-back amounts, and, to Borrower’s knowledge,
all other conditions precedent to each such tenant’s obligations thereunder
have been satisfied.


 


(v)           Except as set forth in
any Space Lease, there are no options to terminate any Space Lease.


 


(vi)          Except as previously disclosed to Lender in
any tenant estoppel letter delivered to Lender in connection with the
origination of the Loan or as previously disclosed to Lender in writing, each
tenant under a Major Space Lease has entered into occupancy of the demised
premises to the extent required under the terms of its Major Space Lease, and
each such tenant is open and conducting business in the demised premises. Except
as previously disclosed to Lender in any tenant estoppel letter delivered to
Lender in connection with the origination of the Loan or as previously
disclosed to Lender in writing, to the best knowledge of Borrower, each tenant
under a Lease other than a Major Space Lease has entered into occupancy of its
demised premises under its Lease to the extent required under the terms of its
Lease and each such tenant is open and conducting business in the demised
premises.


 


(vii)         Borrower has delivered to Lender true, correct
and complete copies of all Space Leases described in the Rent Roll.


 


(viii)        Each Space Lease is in full force and effect
and (except as disclosed on the Rent Roll) has not been assigned, modified,
supplemented or amended in any way, except as otherwise disclosed in writing to
Lender (which disclosure may be by delivery of any such assignment,
modification, supplement or amendment to Lender).


 


(ix)           Except as previously disclosed to Lender in
any tenant estoppel letter delivered to Lender in connection with the
origination of the Loan or as previously disclosed to Lender in writing, to
Borrower’s knowledge, each tenant under each Space Lease is free from
bankruptcy, reorganization or arrangement proceedings or a general assignment
for the benefit of creditors.


 


(x)            No Space Lease
provides any party with the right to obtain a lien or encumbrance (other than
rights of tenants as tenants only) upon the Property superior to the lien of
this Security Instrument.


 


(p)           Property Agreements.


 


(i)            Borrower has delivered
to Lender true, correct and complete copies of all material Property
Agreements.


 


(ii)           Except as set forth in the title insurance
policy insuring the lien of this Security Instrument, no Property Agreement
provides any party with the right to obtain a lien or encumbrance upon the
Property superior to the lien of this Security Instrument.


 


42

















 


(iii)          No default exists or with the passing of time
or the giving of notice or both would exist under any Property Agreement which
would, individually or in the aggregate, have a Material Adverse Effect.


 


(iv)          Borrower has not received or given any
written communication which alleges that a default exists or, with the giving
of notice or the lapse of time, or both, would exist under the provisions of
any Property Agreement.


 


(v)           No condition exists
whereby Borrower or any future owner of the Property may be required to
purchase any other parcel of land which is subject to any Property Agreement or
which gives any Person a right to purchase, or right of first refusal with
respect to, the Property.


 


(vi)          To the best knowledge of Borrower, no offset
or any right of offset exists respecting continued contributions to be made by
any party to any Property Agreement except as expressly set forth therein.
Except as previously disclosed to Lender in writing, no material exclusions or
restrictions on the utilization, leasing or improvement of the Property
(including non-compete agreements) exists in any Property Agreement.


 


(vii)         All work, if any, to be performed by Borrower
under each of the Property Agreements as of the date hereof has been
substantially performed, all contributions to be made by Borrower to any party
to such Property Agreements as of the date hereof have been made, and all other
conditions to such party’s obligations thereunder have been satisfied.


 


(q)           Personal Property. Borrower has
delivered to Lender a true, correct and complete schedule of all personal
property, if any, owned by Borrower and located upon the Property or used in
connection with the use or operation of the Realty having a replacement value
in excess of Five Thousand Dollars ($5,000) and Borrower represents that it has
good and marketable title to all such personal property, free and clear of any
liens, except for liens created under the Loan Documents, liens which describe
the equipment and other personal property owned by tenants and equipment
financings.


 


(r)            Leasing Brokerage and Management Fees.
Except as previously disclosed to Lender in writing, there are no brokerage
fees or commissions due and payable by Borrower with respect to the leasing of
space at the Property and there are no management fees due and payable by
Borrower with respect to the management of the Property.


 


(s)           Security Deposits. Borrower is in
material compliance with all Legal Requirements relating to security deposits
under Space Leases as to which failure to comply would, individually or in the
aggregate, have a Material Adverse Effect.


 


(t)            Intentionally Omitted.


 


(u)           Representations Generally. The
representations and warranties contained in this Security Instrument, and the
review and inquiry made on behalf of Borrower therefor, have all been made by
Persons having the requisite expertise and knowledge to provide such


 


43

















 


representations
and warranties. No representation, warranty or statement of fact made by or on
behalf of Borrower in this Security Instrument, or in any certificate, document
or schedule furnished to Lender pursuant hereto, contains any untrue statement
of a material fact or omits to state any material fact necessary to make
statements contained therein or herein not misleading (which may be to Borrower’s
best knowledge where so provided herein). There are no facts presently known to
Borrower which have not been disclosed to Lender which would, individually or
in the aggregate, have a Material Adverse Effect nor as far as Borrower can
foresee is reasonably likely to, individually or in the aggregate, have a
Material Adverse Effect.


 


(v)               Liquor License.
All licenses, permits, approvals and consents which Borrower or any Affiliate
is required to have obtained for the sale and service of alcoholic beverages on
the Premises have been obtained from the applicable Governmental Authorities,
and to Borrower’s knowledge, all licenses, permits, approvals and consents
which are required by other Persons for the sale and service of alcoholic
beverages on the Premises have been obtained from the applicable Governmental
Authorities.


 


Section 2.06. Removal of Lien. (a)
Borrower shall, at its expense, maintain this Security Instrument as a first
lien on the Property and shall keep the Property free and clear of all liens
and encumbrances of any kind and nature other than the Permitted Encumbrances
or other encumbrances hereafter approved by Lender in writing. Borrower shall,
within ten (10) days following the filing thereof, promptly discharge of
record, by bond or otherwise, any such liens and, promptly upon request by
Lender, shall deliver to Lender evidence reasonably satisfactory to Lender of
the discharge thereof.


 


(b)           Without limitation to the provisions of
Section 2.06(a) hereof, Borrower shall (i) subject to Section 2.06(c) below,
pay, from time to time when the same shall become due, all claims and demands
of mechanics, materialmen, laborers, and others which, if unpaid, might result
in, or permit the creation of, a lien on the Property or any part thereof, (ii)
cause to be removed of record (by payment or posting of bond or settlement or
otherwise) any mechanics’, materialmens’, laborers’ or other lien (other than
Permitted Encumbrances) on the Property, or any part thereof, or on the
revenues, rents, issues, income or profit arising therefrom, and (iii) in
general, do or cause to be done, without expense to Lender, everything
reasonably necessary to preserve in full the lien of this Security Instrument. If
Borrower fails to comply with the requirements of this Section 2.06(b), then,
upon ten (10) Business Days’ prior notice to Borrower, Lender may, but shall
not be obligated to, pay any such lien, and Borrower shall, within ten (10)
Business Days after Lender’s demand therefor, reimburse Lender for all sums so
expended, together with interest thereon at the Default Rate from the date
advanced until paid, all of which shall be deemed part of the Debt. Nothing
contained herein shall be deemed a consent or request of Lender, express or
implied, by inference or otherwise, to the performance of any alteration, repair
or other work by any contractor, subcontractor or laborer or the furnishing of
any materials by any materialmen in connection therewith.


 


(c)           Notwithstanding the foregoing, Borrower may
contest any lien (other than a lien relating to non-payment of Impositions, the
contest of which shall be governed by Section 4.04 hereof) of the type set
forth in subparagraph (b)(ii) of this Section 2.06 provided that, following
prior notice to Lender, (i) Borrower is contesting the validity of such lien
with due diligence and


 


44

















 


in good faith
and by appropriate proceedings, without cost or expense to Lender or any of its
agents, employees, officers, or directors, (ii) Borrower shall preclude the
collection of, or other realization upon, any contested amount from the
Property or any revenues from or interest in the Property, (iii) neither the
Property nor any part thereof nor interest therein shall be in any imminent
danger of being sold, forfeited or lost by reason of such contest by Borrower,
(iv) such contest by Borrower shall not affect the ownership, use or occupancy
of the Property, (v) such contest by Borrower shall not subject Lender or
Borrower to the risk of civil or criminal liability (other than the civil liability
of Borrower for the amount of the lien in question), (vi) such lien is
subordinate to the lien of this Security Instrument, (vii) Borrower has not
consented to such lien, (viii) Borrower has given Lender prompt notice of the
filing of such lien and, upon request by Lender from time to time, notice of
the status of such contest by Borrower and/or confirmation of the continuing
satisfaction of the conditions set forth in this Section 2.06(c), (ix) Borrower
shall promptly pay the obligation secured by such lien upon a final
determination of Borrower’s liability therefor, and (x) unless Borrower has
paid the contested amount, if reasonably requested by Lender, Borrower shall
deliver to Lender cash, a bond or other security acceptable to Lender equal to
125% of the contested amount pursuant to collateral arrangements reasonably
satisfactory to Lender.


 


Section 2.07. Cost of Defending and
Upholding this Security Instrument Lien. If any action or proceeding is
commenced to which Lender is made a party relating to the Loan Documents and/or
the Property or Lender’s interest therein or in which it becomes necessary to
defend or uphold the lien of this Security Instrument or any other Loan
Document, Borrower shall, on demand, reimburse Lender for all reasonable expenses
(including, without limitation, reasonable attorneys’ fees and disbursements)
incurred by Lender in connection therewith, and such sum, together with
interest thereon at the Default Rate from and after such demand until fully
paid, shall constitute a part of the Debt.


 


Section 2.08. Use of the Property. Borrower
will use, or cause to be used, the Property for such use as is permitted
pursuant to applicable Legal Requirements including, without limitation, under
any certificate of occupancy applicable to the Property. Borrower shall not
suffer or permit the Property or any portion thereof to be used by the public,
any tenant, or any Person not subject to a Lease, in a manner that is
reasonably likely to impair Borrower’s title to the Property, or in such manner
as may give rise to a claim or claims of adverse usage or adverse possession by
the public, or of implied dedication of the Property or any part thereof.


 


Section 2.09. Financial Reports. (a)  Borrower will
keep and maintain or will cause to be kept and maintained on a Fiscal Year
basis, in accordance with GAAP (or such other accounting basis reasonably
acceptable to Lender) consistently applied, proper and accurate books, tax
returns, records and accounts reflecting (i) all of the financial affairs
of Borrower and (ii) all items of income and expense in connection with the
operation of the Property or in connection with any services, equipment or
furnishings provided in connection with the operation thereof, whether such
income or expense may be realized by Borrower or by any other Person
whatsoever, excepting lessees unrelated to and unaffiliated with Borrower who
have leased from Borrower portions of the Property for the purpose of occupying
the same. Lender shall have the right from time to time at all times during
normal business hours upon reasonable notice to examine such books, tax
returns, records and accounts at the office of Borrower or other Person


 


45

















 


maintaining such books, tax returns, records
and accounts and to make such copies or extracts thereof as Lender shall desire.
While an Event of Default exists, Borrower shall pay any costs and expenses
incurred by Lender to examine Borrower’s accounting records with respect to the
Property, as Lender shall determine to be necessary or appropriate in the
protection of Lender’s interest.


 


(b)           Borrower will furnish Lender (i) annually,
within one hundred twenty (120) days following the end of each Fiscal Year of
Borrower and (ii) on a quarterly basis, within forty-five (45) days following
the end of each fiscal quarter of Borrower, with a complete copy of Borrower’s
financial statement consistently applied covering (x) all of the financial
affairs of Borrower and (y) the operation of the Property for such fiscal
quarter and containing a statement of revenues and expenses, a balance sheet
and a statement of Borrower’s equity. Together with the quarterly financial
statements required to be furnished pursuant to this Section 2.09(b), Borrower
shall furnish to Lender an Officer’s Certificate certifying as of the date
thereof (1) that the financial statements accurately represent the results of
operations and financial condition of Borrower and the Property all in
accordance with GAAP (or such other accounting basis reasonably acceptable to
Lender) consistently applied, and (2) whether, to Borrower’s best
knowledge, there exists a Default under the Note or any other Loan Document
executed and delivered by Borrower, and if such event or circumstance exists,
the nature thereof, the period of time it has existed and the action then being
taken to remedy such event or circumstance.


 


(c)           Intentionally omitted.


 


(d)           Intentionally omitted.


 


(e)           Borrower will furnish Lender annually,
within twenty (20) days following the end of each year and within twenty (20)
days following receipt of such request therefor, with a true, complete and
correct rent roll for the Property, including a list of which tenants are in
material default under their respective Leases, dated as of the date of the
Officer’s Certificate referred to below, identifying each tenant, the monthly
rent and additional rent, if any, payable by such tenant, the expiration date
of such tenant’s Lease, the security deposit, if any, held by Borrower under
the Lease, the space covered by the Lease, each tenant that has filed a
bankruptcy, insolvency, or reorganization proceeding since delivery of the last
such rent roll  and the arrearages
for such tenant, if any, and such rent roll shall be accompanied by an Officer’s
Certificate, dated as of the date of the delivery of such rent roll, certifying
that such rent roll is true, correct and complete in all material respects as
of its date.


 


(f)            Borrower shall furnish to Lender, within
thirty (30) days after Lender’s request therefor, with such further detailed
information with respect to the operation of the Property and the financial
affairs of Borrower as may be reasonably requested by Lender.


 


(g)           Borrower shall cause Manager to furnish to
Lender, within twenty (20) days following the request of Lender and, during the
continuance of an Event of Default, within twenty (20) days of the end of each
month, a schedule of tenant security deposits, together with a certification of
Borrower or Manager that such tenant security deposits are being held in
accordance with all Legal Requirements.


 


46

















 


(h)           Intentionally omitted.


 


(i)            If Borrower is not a disregarded entity for
tax purposes, Borrower shall furnish to Lender annually, within thirty (30)
days of filing its tax return, a copy of such tax return.


 


(j)            Borrower shall submit to Lender an Annual
Budget not later than thirty (30) days prior to the commencement of each Fiscal
Year (and October 31, 2006 with respect to the Annual Budget for the Fiscal
Year ending December 31, 2006) in form satisfactory to Lender setting forth in
reasonable detail budgeted monthly operating income and monthly operating,
capital and other expenses for the Property. Each Annual Budget shall contain,
among other things, management fees, third party service fees, and other
expenses as Borrower may reasonably determine.


 


Section 2.10. Litigation. Borrower
will give prompt written notice to Lender of any litigation or governmental
proceedings pending or threatened (in writing) against Borrower which, if
adversely determined, would have a Material Adverse Effect.


 


Section 2.11. Updates of Representations.
Borrower shall deliver to Lender within fifteen (15) Business Days of the
request of Lender an Officer’s Certificate updating all of the representations
and warranties contained in this Security Instrument and the other Loan
Documents and certifying that all of the representations and warranties
contained in this Security Instrument and the other Loan Documents, as updated
pursuant to such Officer’s Certificate, are true, accurate and complete as of
the date of such Officer’s Certificate or shall set forth the exceptions to
representations and/or warranties in reasonable detail, as applicable, and,
upon Lender’s request for further information with respect to such exceptions,
shall provide Lender such additional information as Lender may reasonably
request. Notwithstanding the foregoing, provided that no Event of Default has
occurred and is continuing, Borrower shall not be required to deliver the
foregoing Officer’s Certificate more than two (2) times during the term of the
Loan.


 


ARTICLE III:  INSURANCE AND
CASUALTY RESTORATION


 


Section 3.01. Insurance Coverage. Borrower
shall, at its expense, maintain the following insurance coverages with respect
to the Property during the term of this Security Instrument:


 


(a)           (i)            Insurance against loss
or damage by fire, casualty and other hazards included in an “all-risk”
coverage endorsement or its equivalent (which, in the case of insurance during
the time of any construction work being financed with the proceeds of the Loan
(“Construction”) shall be in “builder’s risk completed value
non-reporting form” together with rents, earnings and extra expense insurance
covering loss due to delay in completion of the Improvements), with such
endorsements as Lender may from time to time reasonably require and which are
customarily required by Institutional Lenders of similar properties similarly
situated, including, without limitation, if the Property constitutes a legal
non-conforming use, an ordinance of law coverage endorsement which contains “Demolition
Cost”, “Loss Due to Operation of Law” and “Increased Cost of Construction”
coverages, covering the Property in an amount not less


 


47

















 


than the greater of (A) 100% of the insurable replacement value of the
Property (exclusive of the Premises and footings and foundations) and (B) such
other amount as is necessary to prevent any reduction in such policy by reason
of Lender or any other insured thereunder being deemed to be a co-insurer. Not
less frequently than once every three (3) years, Borrower, at its option, shall
either (A) have the Appraisal updated or obtain a new appraisal of the
Property, (B) have a valuation of the Property made by or for its insurance
carrier conducted by an appraiser experienced in valuing properties of similar
type to that of the Property which are in the geographical area in which the
Property is located or (C) provide such other evidence as will, in Lender’s
reasonable judgment, enable Lender to determine whether there shall have been
an increase in the insurable value of the Property, and Borrower shall deliver
such updated Appraisal, new appraisal, insurance valuation or other evidence
acceptable to Lender, as the case may be, and, if such updated Appraisal, new
appraisal, insurance valuation, or other evidence acceptable to Lender reflects
an increase in the insurable value of the Property, the amount of insurance
required hereunder shall be increased accordingly and Borrower shall deliver
evidence satisfactory to Lender that such policy has been so increased.


 


(ii)           Commercial general liability insurance
against claims for personal and bodily injury and/or death to one or more
persons or property damage, occurring on, in or about the Property (including
the adjoining streets, sidewalks and passageways therein) in such amounts as
Lender may from time to time reasonably require (but in no event shall Lender’s
requirements be increased more frequently than once during each twelve (12)
month period) and which are customarily required by Institutional Lenders for
similar properties similarly situated, but not less than $1,000,000 per
occurrence and $2,000,000 general aggregate on a per location basis and, in
addition thereto, not less than $75,000,000 excess and/or umbrella liability
insurance shall be maintained for any and all claims.


 


(iii)          Business interruption, rent loss or other
similar insurance on an actual loss sustained basis (A) with loss payable to
Lender, (B) covering all risks required to be covered by the insurance provided
for in Section 3.01(a)(i) hereof and (C) in an amount not less than 100% of the
projected fixed or base rent plus percentage rent for the succeeding twelve
(12) month period based on an occupancy rate of 100%. Such insurance coverage
shall provide a six (6) month extended period of indemnification. The amount of
such insurance shall be determined upon the execution of this Security
Instrument, and not more frequently than once each calendar year thereafter
based on Borrower’s reasonable estimate of projected fixed or base rent plus
percentage rent, from the Property for the next succeeding twelve (12) months. In
the event the Property shall be damaged or destroyed, Borrower shall and hereby
does assign to Lender all payment of claims under the policies of such
insurance, and all amounts payable thereunder, and all net amounts, shall be
collected by Lender under such policies and shall be applied in accordance with
this Security Instrument; provided, however, that nothing herein contained
shall be deemed to relieve Borrower of its obligations to timely pay all
amounts due under the Loan Documents.


 


48

















 


(iv)          War risk insurance when such insurance is
obtainable from the United States of America or any agency or instrumentality
thereof at reasonable rates (for the maximum amount of insurance obtainable)
and if requested by Lender, and such insurance is then customarily required by
Institutional Lenders of similar properties similarly situated.


 


(v)           Insurance against loss
or damages from (A) leakage of sprinkler systems and (B) explosion of steam
boilers, air conditioning equipment, pressure vessels or similar apparatus now
or hereafter installed at the Property, in such amounts as Lender may from time
to time reasonably require and which are then customarily required by
Institutional Lenders of similar properties similarly situated.


 


(vi)          Flood insurance in an amount equal to the
full insurable value of the Property or the maximum amount available, whichever
is less, if the Improvements are located in an area designated by the Secretary
of Housing and Urban Development as being “an area of special flood hazard”
under the National Flood Insurance Program (i.e., having a one percent
or greater chance of flooding), and if flood insurance is available under the
National Flood Insurance Act.


 


(vii)         Worker’s compensation insurance or other
similar insurance which may be required by Governmental Authorities or Legal
Requirements.


 


(viii)        Insurance against loss resulting from mold,
spores or fungus on or about the Premises, to the extent available at a
commercially reasonable cost.


 


(ix)           At all times during Construction, contractor’s
liability insurance to a limit of not less than $25,000,000 on a per occurrence
basis covering each contractor’s construction operation at the Premises.


 


(x)            (A)          During
any period of the term of the Loan that the Terrorism Risk Insurance Act of
2002 (“TRIA”) is in effect, if “acts of terrorism” or other similar acts
or events are hereafter excluded from Borrower’s comprehensive all risk
insurance policy (including business interruption insurance coverage), Borrower
shall obtain an endorsement to such policy, or a separate policy, insuring
against all “certified acts of terrorism” as defined by TRIA and “fire
following”, each in an amount equal to one hundred percent (100%) of the “Full
Replacement Cost,” which for purposes of this Security Instrument shall mean
actual replacement value (exclusive of the Premises, footings and foundations)
with a waiver of depreciation; and


 


(B)           during
any period of the term of the Loan that TRIA is not in effect, if “acts of
terrorism” or other similar acts or events or “fire following” are hereafter
excluded from Borrower’s comprehensive all risk insurance policy or business
interruption insurance coverage, Borrower shall obtain an endorsement to such
policy, or a separate policy, insuring against all such excluded acts or
events, to the extent such policy or endorsement is available, in an amount
determined by Lender in its reasonable discretion (but in no event greater than
the


 


49

















 


total insurable
value plus required business interruption coverage, and in no event shall
Borrower be required to furnish insurance for losses resulting from “acts of
terrorism” and “fire following” for a cost in excess of 125% of the prior year’s
premium for the insurance required pursuant to Section 3.01(a)(i) and Section
3.01(a)(iii) less the component cost thereof which related to “acts of
terrorism”); provided, however, Borrower shall not be required to carry
insurance of the type set forth in this clause (x)(B) if Institutional Lenders
are not then customarily requiring such insurance for loans similar in size to
the Loan with respect to similar properties similarly situated which are
collateral for loans which are included in commercial mortgage securitizations,
as determined by Lender in its reasonable discretion.


 


(xi)           Such other insurance as may from time to
time be required by Lender and which is then customarily required by
Institutional Lenders for similar properties similarly situated, against other
insurable hazards, including, but not limited to, malicious mischief,
vandalism, sinkhole and mine subsidence, windstorm and/or earthquake, due
regard to be given to the size and type of the Premises, Improvements, Fixtures
and Equipment and their location, construction and use.


 


(xii)          If Borrower, any of its Affiliates or Manager
holds a liquor license for the Premises, liquor liability insurance in the
amount of no less than $10,000,000.


 


(xiii)         Automobile liability insurance covering owned,
hired and not owned vehicles in an amount of not less than $1,000,000 per
accident.


 


(b)           Borrower shall cause any Manager of the
Property to maintain fidelity insurance in an amount equal to or greater than
$1,000,000 or such lesser amount as Lender shall approve.


 


Section 3.02. Policy Terms. (a) All insurance required by this Article III shall be in
the form (other than with respect to Sections 3.01(a)(vi) and (vii) above when
insurance in those two sub-sections is placed with a governmental agency or
instrumentality on such agency’s forms) and amount and with deductibles as,
from time to time, shall be reasonably acceptable to Lender, under valid and
enforceable policies issued by financially responsible insurers authorized to
do business in the State where the Property is located, with a general
policyholder’s service rating of not less than A- and a financial rating of not
less than VIII as rated in the most currently available Best’s Insurance
Reports (or the equivalent, if such rating system shall hereafter be altered or
replaced) and shall have a claims paying ability rating and/or financial
strength rating, as applicable, of not less than “A” (or its equivalent), or
such lower claims paying ability rating and/or financial strength rating, as
applicable, as Lender shall, in its sole and absolute discretion, consent to,
from a Rating Agency (one of which, after a Securitization in which Standard
& Poor’s rates any securities issued in connection with such
Securitization, shall be Standard & Poor’s), but as to such rating from a
Rating Agency for any earthquake or flood coverage, such rating may be less
than “A” (or its equivalent) provided that such rating is reasonably acceptable
to Lender. Originals or certified copies of all insurance policies shall be
delivered to and held by Lender. All such policies (except policies for worker’s
compensation) shall name Lender, its successors and/or assigns as an additional
named insured, shall provide for loss payable to


 


50

















 


Lender (other than liability policies), its
successors and/or assigns and shall contain (or have attached):  (i) standard “non-contributory mortgagee”
endorsement or its equivalent relating, inter  alia, to recovery
by Lender notwithstanding the negligent or willful acts or omissions of
Borrower; (ii) a waiver of subrogation endorsement as to Lender; (iii) an
endorsement indicating that neither Lender nor Borrower shall be or be deemed
to be a co-insurer with respect to any casualty risk insured by such policies
and shall provide for a deductible per loss of an amount not more than the
lesser of (x) $100,000 and (y) five percent (5%) of the Adjusted Net Cash Flow
(other than for earthquake coverage, which may be up to 5% of the insured
value), and (iv) a provision that such policies shall not be canceled,
terminated, denied renewal or amended to materially reduce the scope or limits
of coverage, without at least thirty (30) days’ prior written notice to Lender
in each instance. Not less than ten (10) days prior to the expiration dates of
the insurance policies obtained pursuant to this Security Instrument, or as
soon as available, but in no event later than such date of expiration,
originals or certified copies of renewals of such policies (or certificates
evidencing such renewals) bearing notations evidencing the payment of premiums
or accompanied by other reasonable evidence of such payment (which premiums
shall not be paid by Borrower through or by any financing arrangement which
would entitle an insurer to terminate a policy) shall be delivered by Borrower
to Lender. Borrower shall not carry separate insurance, concurrent in kind or
form or contributing in the event of loss, with any insurance required under
this Article III.


 


(b)           If Borrower fails to maintain and deliver to
Lender the original policies or certificates of insurance required by this
Security Instrument, Lender may, at its option, procure such insurance, and
Borrower shall pay or, as the case may be, reimburse Lender for, all premiums
thereon promptly, upon demand by Lender, with interest thereon at the Default
Rate from the date paid by Lender to the date of repayment and such sum shall
constitute a part of the Debt.


 


(c)           Borrower shall notify Lender of the renewal
premium of each insurance policy and, if an Event of Default exists, Lender
shall be entitled to pay such amount on behalf of Borrower from the Basic
Carrying Costs Escrow Account.


 


(d)           The insurance required by this Security
Instrument may, at the option of Borrower, be effected by blanket and/or
umbrella policies issued to Borrower covering the Property provided that, in
each case, the policies otherwise comply with the provisions of this Security
Instrument and allocate to the Property, from time to time (but in no event
less than once a year), the coverage specified by this Security Instrument,
without possibility of reduction or coinsurance by reason of, or damage to, any
other property (real or personal) named therein. If the insurance required by
this Security Instrument shall be effected by any such blanket or umbrella
policies, Borrower shall furnish to Lender original policies or certified
copies thereof, or an original certificate of insurance together with
reasonable access to the original of such policy to review such policy’s
coverage of the Property, with schedules attached thereto showing the amount of
the insurance provided under such policies applicable to the Property.


 


Section 3.03. Assignment of Policies. (a)  Borrower hereby
assigns to Lender the proceeds of all insurance (other than worker’s
compensation and liability insurance) obtained pursuant to this Security
Instrument, all of which proceeds shall be payable to Lender as


 


51

















 


collateral and further security for the
payment of the Debt and the performance of Borrower’s obligations hereunder and
under the other Loan Documents, and Borrower hereby authorizes and directs the
issuer of any such insurance to make payment of such proceeds directly to
Lender. Except as otherwise expressly provided in Section 3.04 or elsewhere in
this Article III, Lender shall have the option, in its discretion, and without
regard to the adequacy of its security, to apply all or any part of the
proceeds it may receive pursuant to this Article in such manner as Lender may
elect to any one or more of the following: 
(i) the payment of the Debt, whether or not then due, in any proportion
or priority as Lender, in its discretion, may elect, (ii) the repair or
restoration of the Property, (iii) the cure of any Event of Default or (iv) the
reimbursement of the costs and expenses of Lender incurred pursuant to the
terms hereof in connection with the recovery of the Insurance Proceeds. Nothing
herein contained shall be deemed to excuse Borrower from repairing or maintaining
the Property as provided in this Security Instrument or restoring all damage or
destruction to the Property, regardless of the sufficiency of the Insurance
Proceeds, and the application or release by Lender of any Insurance Proceeds
shall not cure or waive any Default or notice of Default.


 


(b)           In the event of the foreclosure of this
Security Instrument or any other transfer of title or assignment of all or any
part of the Property in extinguishment, in whole or in part, of the Debt, all
right, title and interest of Borrower in and to all policies of insurance
required by this Security Instrument shall inure to the benefit of the
successor in interest to Borrower or the purchaser of the Property. If, prior
to the receipt by Lender of any proceeds, the Property or any portion thereof
shall have been sold on foreclosure of this Security Instrument or by deed in
lieu thereof or otherwise as a result of the exercise of Lender’s remedies
hereunder, or any claim under such insurance policy arising during the term of
this Security Instrument is not paid until after the extinguishment of the
Debt, and Lender shall not have received the entire amount of the Debt
outstanding at the time of such extinguishment, whether or not a deficiency
judgment on this Security Instrument shall have been sought or recovered or
denied, then the proceeds of any such insurance, to the extent of the amount of
the Debt not so received, shall be paid to and be the property of Lender,
together with interest thereon at the Default Rate until received, and the
reasonable attorney’s fees, costs and disbursements incurred by Lender in
connection with the collection of the proceeds shall be paid to Lender and
Borrower hereby assigns, transfers and sets over to Lender all of Borrower’s right,
title and interest in and to such proceeds. Notwithstanding any provisions of
this Security Instrument to the contrary, Lender shall not be deemed to be a
trustee or other fiduciary with respect to its receipt of any such proceeds,
which may be commingled with any other monies of Lender; provided, however,
that Lender shall use such proceeds for the purposes and in the manner
permitted by this Security Instrument. Any proceeds deposited with Lender shall
be held by Lender in an interest-bearing account, but Lender makes no
representation or warranty as to the rate or amount of interest, if any, which
may accrue on such deposit and shall have no liability in connection therewith.
Interest accrued, if any, on the proceeds shall be deemed to constitute a part
of the proceeds for purposes of this Security Instrument. The provisions of
this Section 3.03(b) shall survive the termination of this Security Instrument
by foreclosure, deed in lieu thereof or otherwise as a consequence of the
exercise of the rights and remedies of Lender hereunder after an Event of
Default.


 


Section 3.04. Casualty Restoration. (a)   (i)  In the event of any damage to or destruction
of the Property, Borrower shall give prompt written notice to Lender (which
notice


 


52

















 


shall set forth Borrower’s good faith
estimate of the cost of repairing or restoring such damage or destruction, or
if Borrower cannot reasonably estimate the anticipated cost of restoration,
Borrower shall nonetheless give Lender prompt notice of the occurrence of such
damage or destruction, and will diligently proceed to obtain estimates to
enable Borrower to quantify the anticipated cost and time required for such
restoration, whereupon Borrower shall promptly notify Lender of such good faith
estimate) and, provided that restoration does not violate any Legal
Requirements, Borrower shall promptly commence and diligently prosecute to
completion the repair, restoration or rebuilding of the Property so damaged or
destroyed to a condition such that the Property shall be at least equal in
value to that immediately prior to the damage to the extent practicable, in
compliance with all Legal Requirements and the provisions of all Leases, and in
accordance with Section 3.04(b) below. Such repair, restoration or rebuilding
of the Property is sometimes hereinafter collectively referred to as the “Work”.


 


(ii)           Borrower shall not adjust, compromise or
settle any claim for Insurance Proceeds without the prior written consent of
Lender, which shall not be unreasonably withheld or delayed, and Lender shall
have the right, at Borrower’s sole cost and expense, to participate in any
settlement or adjustment of Insurance Proceeds; provided, however, that, except
during the continuance of an Event of Default, Lender’s consent shall not be
required with respect to the adjustment, compromising or settlement of any
claim for Insurance Proceeds in an amount less than $1,000,000.


 


(iii)          Notwithstanding anything contained herein,
subject to Section 3.04(a)(iv), Lender shall apply any Insurance Proceeds which
it may receive towards the Work in accordance with Section 3.04(b) and the
other applicable sections of this Article III.


 


(iv)          If (A) an Event of Default exists, (B) Lender
is not reasonably satisfied that the Debt Service Coverage, after substantial
completion of the Work, will be at least equal to the Required Debt Service
Coverage, (C) more than thirty percent (30%) of the reasonably estimated fair
market value of the Property is damaged or destroyed, (D) Lender is not
reasonably satisfied that the Work can be completed six (6) months prior to
Maturity or (E) Lender is not reasonably satisfied that the Work can be
completed prior to the expiration of the insurance required pursuant to Section
3.01(a)(iii) (each, a “Substantial Casualty”), Lender shall have the
option, in its sole discretion, to apply any Insurance Proceeds it may receive
pursuant to this Security Instrument (less any cost to Lender of recovering and
paying out such proceeds incurred pursuant to the terms hereof and not
otherwise reimbursed to Lender, including, without limitation, reasonable
attorneys’ fees and expenses) to the payment of the Debt, without any
prepayment fee or charge of any kind, or to allow such proceeds to be used for
the Work pursuant to the terms and subject to the conditions of Section 3.04(b)
hereof and the other applicable sections of this Article III. If Lender elects
to apply any Insurance Proceeds it may receive pursuant to this Security
Instrument to the payment of the Debt, Borrower may prepay the balance of the
Debt without any prepayment fee or charge of any kind.


 


(v)           In the event that
Lender elects or is obligated hereunder to allow Insurance Proceeds to be used
for the Work, any excess proceeds remaining after completion of


 


53

















 


such Work shall be applied to the payment of the Debt without any
prepayment fee or charge of any kind.


 


(b)           If any Condemnation Proceeds in accordance
with Section 6.01(a), or any Insurance Proceeds in accordance with Section
3.04(a), are to be applied to the repair, restoration or rebuilding of the
Property, then such proceeds shall be deposited into a segregated
interest-bearing bank account at the Bank, which shall be an Eligible Account,
held by Lender and shall be paid out from time to time to Borrower as the Work
progresses (less any cost to Lender of recovering and paying out such proceeds,
including, without limitation, reasonable attorneys’ fees and costs allocable
to inspecting the Work and the plans and specifications therefor), subject to
Section 5.13 hereof and to all of the following conditions:


 


(i)            An Independent
architect or engineer selected by Borrower and reasonably acceptable to Lender
(an “Architect” or “Engineer”) or a Person otherwise reasonably
acceptable to Lender, shall have delivered to Lender a certificate estimating
the cost of completing the Work, and, if the amount set forth therein is more
than the sum of the amount of Insurance Proceeds then being held by Lender in
connection with a casualty and amounts agreed to be paid as part of a final
settlement under the insurance policy upon or before completion of the Work,
Borrower shall have delivered to Lender (A) cash collateral in an amount equal
to such excess, (B) an unconditional, irrevocable, clean sight draft letter of
credit, in form, substance and issued by a bank reasonably acceptable to
Lender, in the amount of such excess and draws on such letter of credit shall
be made by Lender to make payments pursuant to this Article III following
exhaustion of the Insurance Proceeds therefor or (C) a completion bond in form,
substance and issued by a surety company reasonably acceptable to Lender.


 


(ii)           If the cost of the Work is reasonably
estimated by an Architect or Engineer in a certification reasonably acceptable
to Lender to be equal to or exceed five percent (5%) of the Loan Amount, such
Work shall be performed under the supervision of an Architect or Engineer, it
being understood that the plans and specifications with respect thereto shall
provide for Work so that, upon completion thereof, the Property shall be at
least equal in replacement value and general utility to the Property prior to
the damage or destruction.


 


(iii)          Each request for payment shall be made on not
less than ten (10) days’ prior notice to Lender and shall be accompanied by a
certificate of an Architect or Engineer, or, if the Work is not required to be
supervised by an Architect or Engineer, by an Officer’s Certificate stating (A)
that payment is for Work completed in compliance with the plans and
specifications, if required under clause (ii) above, (B) that the sum requested
is required to reimburse Borrower for payments by Borrower to date, or is due
to the contractors, subcontractors, materialmen, laborers, engineers,
architects or other Persons rendering services or materials for the Work
(giving a brief description of such services and materials), and that when
added to all sums previously paid out by Lender does not exceed the value of
the Work done to the date of such certificate, (C) if the sum requested is to
cover payment relating to repair and restoration of personal property required
or relating to the Property, that title to the personal property items covered
by


 


54

















 


the request for payment is vested in Borrower (unless Borrower is
lessee of such personal property), and (D) that the Insurance Proceeds and
other amounts deposited by Borrower and held by Lender after such payment is
more than the estimated remaining cost to complete such Work; provided,
however, that if such certificate is given by an Architect or Engineer, such
Architect or Engineer shall certify as to clause (A) above, and such Officer’s
Certificate shall certify as to the remaining clauses above, and provided,
further, that Lender shall not be obligated to disburse such funds if Lender
determines, in Lender’s reasonable discretion, that Borrower shall not be in
compliance with this Section 3.04(b). Additionally, each request for payment
shall contain a statement signed by Borrower stating that the requested payment
is for Work satisfactorily done to date, except as otherwise set forth in such
statement.


 


(iv)          Each request for payment shall be accompanied
by waivers of lien, in customary form and substance, covering that part of the
Work for which payment or reimbursement is being requested and, if required by
Lender, a search prepared by a title company or licensed abstractor, or by
other evidence reasonably satisfactory to Lender that there has not been filed
with respect to the Property any mechanic’s or other lien or instrument for
retention of title relating to any part of the Work not discharged of record. Additionally,
as to any personal property covered by the request for payment, Lender shall be
furnished with evidence of Borrower having incurred a payment obligation
therefor and such further evidence reasonably satisfactory to assure Lender
that UCC filings therefor provide a valid first lien on the personal property
in favor of Lender.


 


(v)           Lender shall have the
right to inspect the Work at all reasonable times upon reasonable prior notice
and may condition any disbursement of Insurance Proceeds upon satisfactory
compliance by Borrower with the provisions hereof. Neither the approval by
Lender of any required plans and specifications for the Work nor the inspection
by Lender of the Work shall make Lender responsible for the preparation of such
plans and specifications, or the compliance of such plans and specifications of
the Work, with any applicable law, regulation, ordinance, covenant or
agreement.


 


(vi)          Insurance Proceeds shall not be disbursed
more frequently than once every thirty (30) days, unless otherwise agreed to by
Lender.


 


(vii)         Until such time as the Work has been
substantially completed, Lender shall not be obligated to disburse to Borrower
an amount (the “Retention Amount”) up to (A) until fifty percent (50%)
of the Work has been completed (as reasonably determined by Lender), ten
percent (10%) of the cost of the Work and (B) after fifty percent (50%) of the
Work has been completed (as reasonably determined by Lender), five percent (5%)
of the cost of the Work. Upon substantial completion of the Work, Borrower
shall send notice thereof to Lender and, subject to the conditions of Section
3.04(b)(i)-(iv), Lender shall disburse one-half of the Retention Amount to
Borrower; provided, however, that the remaining one-half of the Retention
Amount shall be disbursed to Borrower when Lender shall have received copies of
any and all final certificates of occupancy or other certificates, licenses and
permits required for the ownership, occupancy and operation of


 


55

















 


the Property in accordance with all Legal Requirements. Borrower hereby
covenants to diligently seek to obtain any such certificates, licenses and
permits.


 


(viii)        Upon failure on the part of Borrower promptly
to commence the Work or to proceed diligently and continuously to completion of
the Work, subject to Force Majeure, not to exceed sixty (60) days, which
failure shall continue after notice for thirty (30) days, Lender may apply any
Insurance Proceeds or Condemnation Proceeds it then or thereafter holds to the
payment of the Debt in accordance with the provisions of the Note; provided,
however, that Lender shall be entitled to apply at any time all or any portion
of the Insurance Proceeds or Condemnation Proceeds it then holds to the extent
necessary to cure any Event of Default.


 


(c)           If Borrower (i) within ninety (90) days
after the occurrence of any damage to the Property or any portion thereof (or
such shorter period as may be required under any Major Space Lease) shall fail
to submit to Lender for approval plans and specifications (if required pursuant
to Section 3.04(b)(ii) hereof) for the Work (approved by the Architect and (if
applicable) by all Governmental Authorities whose approval is required), (ii)
after any such plans and specifications are approved by all Governmental
Authorities, the Architect and Lender, shall fail to promptly commence such
Work, subject to Force Majeure not to exceed sixty (60) days, or (iii) shall
fail to diligently prosecute such Work to completion, subject to Force Majeure
not to exceed sixty (60) days, then, in addition to all other rights available
hereunder, at law or in equity, Lender, or any receiver of the Property or any
portion thereof, upon ten (10) Business Days’ prior notice to Borrower (except
in the event of emergency in which case no notice shall be required), may (but
shall have no obligation to) perform or cause to be performed such Work, and
may take such other steps as it reasonably deems advisable. Borrower hereby
waives, for Borrower, any claim, other than for gross negligence or willful
misconduct, against Lender and any receiver arising out of any act or omission
of Lender or such receiver pursuant hereto, and Lender may apply all or any
portion of the Insurance Proceeds (without the need to fulfill any other
requirements of this Section 3.04) to reimburse Lender and such receiver for
all costs not reimbursed to Lender or such receiver within ten (10) Business
Days of demand, together with interest thereon at the Default Rate from the
date such amounts are advanced until the same are paid to Lender or the
receiver.


 


(d)           Borrower hereby irrevocably appoints Lender
as its attorney-in-fact, coupled with an interest, to collect and receive any
Insurance Proceeds paid with respect to any portion of the Property or the
insurance policies required to be maintained hereunder, and to endorse any
checks, drafts or other instruments representing any Insurance Proceeds whether
payable by reason of loss thereunder or otherwise.


 


(e)           Notwithstanding the foregoing provisions of
this Section 3.04, upon the occurrence of any damage to or destruction of the
Property, provided that such damage or destruction is not a Substantial
Casualty, if in Lender’s reasonable judgment the cost of repair of or
restoration to the Property required as a result of any damage or destruction
is less than $250,000 in the aggregate and the Work can be completed in less
than six (6) months (but in no event beyond the date which is six (6) months
prior to the Maturity Date), then Lender, upon request by Borrower, shall
permit Borrower to apply for and receive the Insurance Proceeds


 


56

















 


directly from
the insurer (and Lender shall advise the insurer to pay over such Insurance
Proceeds directly to Borrower), to the extent required to pay for any such
Work, with any excess thereof to be promptly paid by Borrower to Lender to be
applied against the Debt, without any prepayment fee or charge of any kind.


 


Section 3.05. Compliance with Insurance
Requirements. Borrower promptly shall comply in all material respects with,
and shall cause the Property to comply in all material respects with, all
Insurance Requirements, even if such compliance requires structural changes or
improvements or would result in interference with the use or enjoyment of the Property
or any portion thereof, provided Borrower shall have a right to contest in good
faith and with diligence such Insurance Requirements provided (a) no Event of
Default shall exist during such contest and such contest shall not subject the
Property or any portion thereof to any lien or affect the priority of the lien
of this Security Instrument, (b) failure to comply with such Insurance
Requirements will not subject Lender or any of its agents, employees, officers
or directors to any civil or criminal liability, (c) such contest will not
cause any reduction in insurance coverage, (d) such contest shall not affect
the ownership, use or occupancy of the Property, (e) the Property or any part
thereof or any interest therein shall not be in any imminent danger of being
sold, forfeited or lost by reason of such contest by Borrower, (f) Borrower has
given Lender prompt notice of such contest and, upon request by Lender from
time to time, notice of the status of such contest by Borrower and/or
information of the continuing satisfaction of the conditions set forth in
clauses (a) through (e) of this Section 3.05, (g) upon a final determination of
such contest, Borrower shall promptly comply with the requirements thereof, and
(h) prior to and during such contest, if reasonably required by Lender,
Borrower shall furnish to Lender security satisfactory to Lender, in its
reasonable discretion, against loss or injury by reason of such contest or the
non-compliance with such Insurance Requirement (and if such security is cash,
Lender shall deposit the same in an interest-bearing account and interest
accrued thereon, if any, shall be deemed to constitute a part of such security
for purposes of this Security Instrument, but Lender (i) makes no
representation or warranty as to the rate or amount of interest, if any, which
may accrue thereon and shall have no liability in connection therewith and (ii)
shall not be deemed to be a trustee or fiduciary with respect to its receipt of
any such security and any such security may be commingled with other monies of
Lender). If Borrower shall use the Property or any portion thereof in any
manner which could permit the insurer to cancel any insurance required to be
provided hereunder, Borrower immediately shall obtain a substitute policy which
shall satisfy the requirements of this Security Instrument and which shall be
effective on or prior to the date on which any such other insurance policy
shall be canceled. Borrower shall not by any action or omission invalidate any
insurance policy required to be carried hereunder unless such policy is
replaced as aforesaid, or materially increase the premiums on any such policy
above the normal premium charged for such policy. Borrower shall cooperate with
Lender in obtaining for Lender the benefits of any Insurance Proceeds lawfully
or equitably payable to Lender in connection with the transaction contemplated
hereby.


 


Section 3.06. Event of Default During
Restoration. Notwithstanding anything to the contrary contained in this
Security Instrument including, without limitation, the provisions of this
Article III, if, at any time during any Work, or at any time that Lender is
holding or is entitled to receive any Insurance Proceeds pursuant to this
Security Instrument, a Default exists and is continuing (whether or not it
constitutes an Event of Default), Lender shall then have no


 


57

















 


obligation to disburse such proceeds for Work
and Lender shall have the right and option, to be exercised in its sole and absolute
discretion and election, with respect to the Insurance Proceeds, either to
retain and apply such proceeds in reimbursement for the actual costs, fees and
expenses incurred by Lender in accordance with the terms hereof in connection
with the adjustment of the loss and, if such Default becomes an Event of
Default, any balance toward payment of the Debt (without any prepayment fee or
charge of any kind) in such priority and proportions as Lender, in its sole
discretion, shall deem proper, or towards the Work, upon such terms and
conditions as Lender shall determine, or to cure such Default, or to any one or
more of the foregoing as Lender, in its sole and absolute discretion, may
determine. If Lender shall receive and retain such Insurance Proceeds, the lien
of this Security Instrument shall be reduced only by the amount thereof
received, after reimbursement to Lender of expenses of collection, and actually
applied by Lender in reduction of the principal sum payable under the Note in
accordance with the Note.


 


Section 3.07. Application of Proceeds to
Debt Reduction. (a) No damage to the Property,
or any part thereof, by fire or other casualty whatsoever, whether such damage
be partial or total, shall relieve Borrower from its liability to pay in full
the Debt and to perform its obligations under this Security Instrument and the
other Loan Documents.


 


(b)           If any Insurance Proceeds are applied to
reduce the Debt, Lender shall apply the same in accordance with the provisions
of the Note.


 


Section 3.08. Investment of Loss Proceeds. Notwithstanding
anything contained in this Security Instrument, including, without limitation,
this Article III, Section 5.03 or Article VI, in the event that Loss Proceeds
are to be deposited into an interest-bearing account pursuant to the terms
hereof, Lender shall, but only after receiving a written request therefor from
Borrower, which request must be given after the casualty or Taking with respect
to which the Loss Proceeds relate, invest, and reinvest Loss Proceeds from time
to time in Permitted Investments as instructed by Borrower (which instruction
may be made no more than one time per month), provided that (a) if
Borrower fails to so instruct Lender, Lender may (but shall not be obliged to)
invest or direct the Bank to invest and reinvest such balance in Permitted
Investments as Lender shall determine in its sole discretion and Borrower shall
not be entitled to any earnings thereon in excess of that which would be earned
if such sums were deposited into an interest-bearing account, (b) the
maturities of the Permitted Investments on Loss Proceeds shall, to the extent
such dates are ascertainable, be selected and coordinated to become due not
later than the day before any disbursements thereof must be made, (c) all such
Permitted Investments shall be held in the name and be under the sole dominion
and control of Lender, as secured party, and (d) no Permitted Investment shall
be made unless Lender shall retain a perfected first priority lien in such
Permitted Investment securing the Debt and all filings and other actions
necessary to ensure the validity, perfection, and priority of such lien have
been taken. All Loss Proceeds that are invested in a Permitted Investment are
deemed to be held in the Central Account for all purposes of this Security
Instrument and the other Loan Documents. Lender shall not have any liability
for any loss in investments of funds that are invested in Permitted Investments
whether Borrower or Lender selected such Permitted Investment in accordance
herewith and no such loss shall affect Borrower’s obligation to fund, or
liability for funding, any sums required to be invested hereunder. Borrower
agrees that Borrower shall include all such earnings on Loss Proceeds as income
of Borrower (and, if Borrower is a partnership, limited liability company or
other pass-through


 


58

















 


entity, the partners, members or
beneficiaries of Borrower, as the case may be) for federal and applicable state
and local tax purposes.


 


ARTICLE IV:  IMPOSITIONS


 


Section 4.01. Payment of Impositions,
Utilities and Taxes, etc. (a)  Borrower shall pay or cause to be paid
all Impositions at least five (5) days prior to the date upon which any fine,
penalty, interest or cost for nonpayment is imposed, and furnish to Lender,
upon request, receipted bills of the appropriate taxing authority or other
documentation reasonably satisfactory to Lender evidencing the payment thereof.
If Borrower shall fail to pay any Imposition in accordance with this Section
and is not contesting or causing a contesting of such Imposition in accordance
with Section 4.04 hereof, or if there are insufficient funds in the Basic
Carrying Costs Escrow Account to pay any Imposition, Lender shall have the
right, but shall not be obligated, to pay that Imposition, and Borrower shall
repay to Lender, on demand, any amount paid by Lender, with interest thereon at
the Default Rate from the date of the advance thereof to the date of repayment,
and such amount shall constitute a portion of the Debt secured by this Security
Instrument.


 


(b)           Borrower shall, prior to the date upon which
any fine, penalty, interest or cost for the nonpayment is imposed, pay or cause
to be paid all charges for electricity, power, gas, water and other services
and utilities in connection with the Property which are not solely the
obligations of tenants under Space Leases, and shall, upon request, deliver to
Lender receipts or other documentation reasonably satisfactory to Lender
evidencing payment thereof. If Borrower shall fail to pay any amount required
to be paid by Borrower pursuant to this Section 4.01 and is not contesting such
charges in accordance with Section 4.04 hereof, Lender shall have the right,
but shall not be obligated, to pay that amount, and Borrower will repay to
Lender, on demand, any amount paid by Lender with interest thereon at the
Default Rate from the date of the advance thereof to the date of repayment, and
such amount shall constitute a portion of the Debt secured by this Security Instrument.


 


(c)           Borrower shall pay all taxes, charges,
filing, registration and recording fees, excises and levies imposed upon Lender
by reason of or in connection with its ownership of any Loan Document or any
other instrument related thereto, or resulting from the execution, delivery and
recording of, or the lien created by, or the obligation evidenced by, any of
them, other than income, franchise and other similar taxes imposed on Lender
and shall pay all corporate stamp taxes, if any, and other taxes required to be
paid on the Loan Documents. If Borrower shall fail to make any such payment
within ten (10) Business Days after written notice thereof from Lender, Lender
shall have the right, but shall not be obligated, to pay the amount due, and
Borrower shall reimburse Lender therefor, on demand, with interest thereon at
the Default Rate from the date of the advance thereof to the date of repayment,
and such amount shall constitute a portion of the Debt secured by this Security
Instrument.


 


Section 4.02. Deduction from Value. In
the event of the passage after the date of this Security Instrument of any
Legal Requirement deducting from the value of the Property for the purpose of
taxation any lien thereon or changing in any way the Legal Requirements now in


 


59

















 


force for the taxation of this Security
Instrument and/or the Debt for federal, state or local purposes, or the manner
of the operation of any such taxes so as to adversely affect the interest of
Lender, or imposing any tax or other charge on any Loan Document, then Borrower
will pay such tax, with interest and penalties thereon, if any, within the
statutory period. In the event the payment of such tax or interest and
penalties by Borrower would be unlawful, or taxable to Lender or unenforceable
or provide the basis for a defense of usury, then in any such event, Lender
shall have the option, by written notice of not less than ninety (90) days, to
declare the Debt immediately due and payable, with no prepayment fee or charge
of any kind.


 


Section 4.03. No Joint Assessment. Borrower
shall not consent to or initiate the joint assessment of the Premises or the
Improvements (a) with any other real property constituting a separate tax lot
and Borrower represents and covenants that the Premises and the Improvements
are and shall remain a separate tax lot or (b) with any portion of the Property
which may be deemed to constitute personal property, or any other procedure
whereby the lien of any taxes which may be levied against such personal
property shall be assessed or levied or charged to the Property as a single
lien.


 


Section 4.04. Right to Contest. Borrower
shall have the right, after prior notice to Lender, at its sole expense, to
contest by appropriate legal proceedings diligently conducted in good faith,
without cost or expense to Lender or any of its agents, employees, officers or
directors, the validity, amount or application of any Imposition or any charge
described in Section 4.01(b), provided that (a) no Event of Default shall exist
during such proceedings and such contest shall not (unless Borrower shall
comply with clause (d) of this Section 4.04) subject the Property or any
portion thereof to any lien or affect the priority of the lien of this Security
Instrument, (b) failure to pay such Imposition or charge will not subject
Lender  or any of its agents,
employees, officers or directors to any civil or criminal liability, (c) the
contest suspends enforcement of the Imposition or charge (unless Borrower first
pays the Imposition or charge), (d) unless Borrower first pays the Imposition
or charge or the Basic Carrying Costs Escrow Account has or will have funds
sufficient to pay the same, plus any interest and penalties as may accrue in
connection therewith, if requested by Lender, Borrower shall, prior to and
during such contest, furnish to Lender security satisfactory to Lender, in its
reasonable discretion, against loss or injury by reason of such contest or the
non-payment of such Imposition or charge (and if such security is cash, Lender
shall deposit the same in an interest-bearing account and interest accrued
thereon, if any, shall be deemed to constitute a part of such security for
purposes of this Security Instrument, but Lender (i) makes no representation or
warranty as to the rate or amount of interest, if any, which may accrue thereon
and shall have no liability in connection therewith and (ii) shall not be
deemed to be a trustee or fiduciary with respect to its receipt of any such
security and any such security may be commingled with other monies of Lender),
(e) such contest shall not affect the ownership, use or occupancy of the
Property, (f) the Property or any part thereof or any interest therein shall
not be in any imminent danger of being sold, forfeited or lost by reason of
such contest by Borrower, (g) Borrower has given Lender notice of the
commencement of such contest and upon request by Lender, from time to time,
notice of the status of such contest by Borrower and/or confirmation of the continuing
satisfaction of clauses (a) through (f) of this Section 4.04, and (h) upon a
final determination of such contest, Borrower shall promptly comply with the
requirements thereof. Upon completion of any contest, Borrower shall
immediately pay the amount due, if any, and deliver to Lender proof of the
completion of the


 


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contest and payment of the amount due, if
any, following which Lender shall return the security, if any, deposited with
Lender pursuant to clause (d) of this Section 4.04. Borrower shall not pay any
Imposition in installments unless permitted by applicable Legal Requirements,
and shall, upon the request of Lender, deliver copies of all notices and bills
relating to any Imposition or other charge covered by this Article IV to
Lender.


 


Section 4.05. No Credits on Account of the
Debt. Borrower will not claim or demand or be entitled to any credit or
credits on account of the Debt for any part of the Impositions assessed against
the Property or any part thereof and no deduction shall otherwise be made or
claimed from the taxable value of the Property, or any part thereof, by reason
of this Security Instrument or the Debt. In the event such claim, credit or
deduction shall be required by Legal Requirements, Lender shall have the
option, by written notice of not less than ninety (90) days, to declare the
Debt immediately due and payable, and Borrower hereby agrees to pay such
amounts not later than ninety (90) days after such notice, without any prepayment
fee or charge of any kind.


 


Section 4.06. Documentary Stamps. If,
at any time, the United States of America, any State or Commonwealth thereof or
any subdivision of any such State shall require revenue or other stamps to be
affixed to the Note, this Security Instrument or any other Loan Document, or
impose any other tax or charges on the same, Borrower will pay the same, with
interest and penalties thereon, if any.


 


ARTICLE V:  CENTRAL CASH
MANAGEMENT


 


Section 5.01. Cash Flow. Borrower
hereby acknowledges and agrees that the Rents (which for the purposes of this
Section 5.01 shall not include security deposits from tenants under Leases held
by Borrower and not applied towards Rent) derived from the Property and (to the
extent required by Section 5.13) Loss Proceeds shall be utilized to fund the
Sub-Accounts to the extent required pursuant to the terms hereof. Borrower
shall cause Manager to collect all security deposits from tenants under valid
Space Leases, which shall be held by Manager, as agent for Borrower, or by
Borrower, in accordance with applicable law and the Space Leases. Borrower
shall cause all Rent which is due and payable to Borrower pursuant to the terms
of the Space Leases to be paid through automated clearing house funds (“ACH”)
or by Federal wire or by a check directly to the Rent Account. Borrower shall
give each tenant under a Lease an irrevocable direction in the form of Exhibit E attached hereto and made a part
hereof to deliver all rent payments made by tenants and other payments
constituting Rent directly to the Rent Account and shall deliver copies of such
letters to Lender within two (2) Business Days of the Closing Date. Notwithstanding
the foregoing, if any Rent is received by Borrower or Manager, then (a) such
amounts shall be held in trust for the benefit, and as the property, of Lender,
(b) such amounts shall not be commingled with any other funds or property of
Borrower or Manager and (c) Borrower or Manager shall deposit such amounts in
the Rent Account within two (2) Business Days of receipt or, provided no Event
of Default has occurred and is continuing, with respect to any Rents received
by Borrower or Manager in cash which relate to daily transient parking receipts
and which do not relate to parking receipts for Persons with month-to-month or
longer parking Leases, within ten (10) Business Days of receipt. Upon execution
of any Space Lease after the Closing Date, Borrower shall deliver to Lender a
copy of the irrevocable direction


 


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letter referred to above, the receipt of
which has been acknowledged by the tenant under such Space Lease, or shall
include the direction in such Space Lease. Pursuant to the Rent Account
Agreement of even date herewith, the bank in which the Rent Account is located
has been instructed that (a) prior to receipt of notice from Lender (a “Sweep
Notice”) that an Event of Default has occurred, or after revocation by
Lender of a Sweep Notice and prior to the issuance of a subsequent Sweep
Notice, all funds deposited in the Rent Account shall be transferred to the
Borrower Account not less often than one time per week, and (b) from and after
the receipt of a Sweep Notice from Lender, all funds deposited in the Rent
Account shall be automatically transferred through ACH or by Federal wire to
the Central Account prior to 1:00 p.m. (New York City time) on each Business
Day until receipt by such bank of notice from Lender revoking the Sweep Notice.
Lender may elect, after consultation with Borrower, to change the financial
institution in which the Central Account shall be maintained; however,
Lender shall give Borrower and the bank in which the Rent Account is located
not fewer than ten (10) Business Days’ prior notice of such change. All fees
and charges of the bank(s) in which the Rent Account or the Central Account is
located shall be paid by Borrower.


 


Section 5.02. Establishment of Accounts.
Lender has established the Escrow Accounts and the Central Account in the name
of Lender as secured party and Borrower has established the Rent Account in the
joint names of Lender, as secured party, and Borrower. The Escrow Accounts, the
Rent Account and the Central Account shall be under the sole dominion and
control of Lender and funds held therein shall not constitute trust funds. Borrower
hereby irrevocably directs and authorizes Lender to withdraw funds from the
Central Account, the Rent Account and the Escrow Accounts, all in accordance
with the terms and conditions of this Security Instrument. Borrower shall have
no right of withdrawal in respect of the Central Account, the Rent Account or
the Escrow Accounts. Each transfer of funds to be made hereunder shall be made
only to the extent that funds are on deposit in the Central Account or the
affected Sub-Account or Escrow Account, and Lender shall have no responsibility
to make additional funds available in the event that funds on deposit are
insufficient. The Central Account shall contain the Basic Carrying Costs
Sub-Account, the Debt Service Payment Sub-Account and the Recurring Replacement
Reserve Sub-Account, each of which accounts shall be Eligible Accounts or
book-entry sub-accounts of an Eligible Account (each a “Sub-Account” and
collectively, the “Sub-Accounts”) to which certain funds shall be
allocated and from which disbursements shall be made pursuant to the terms of
this Security Instrument. Sums held in the Escrow Accounts may be commingled
with other monies held by Lender.


 


Section 5.03. Permitted Investments. Upon
the written request of Borrower, Lender shall direct the Bank to invest and
reinvest any balance in the Central Account and the Escrow Accounts from time
to time in Permitted Investments as instructed by Borrower (which instruction
may be made no more than one time per month), provided that (a) if
Borrower fails to so instruct Lender, Lender shall, or if an Event of Default
exists, may invest or direct the Bank to invest and reinvest such balance in
Permitted Investments as Lender shall determine in its sole discretion except
that if this clause (a) is applicable because Borrower has failed to so
instruct the Lender then the Permitted Investments into which such funds shall
be invested shall be limited to the Permitted Investments listed in
subparagraph (a) of the definition of “Permitted Investments”, (b) the
maturities of the Permitted Investments on deposit in the Central Account
shall, to the extent such dates are ascertainable, be selected and coordinated
to become due not


 


62

















 


later than the day before any disbursements
from the applicable Sub-Accounts must be made, (c) all such Permitted
Investments shall be held in the name and be under the sole dominion and
control of Lender, as secured party, and (d) no Permitted Investment shall be
made unless Lender shall retain a perfected first priority lien in such
Permitted Investment securing the Debt and all filings and other actions
necessary to ensure the validity, perfection, and priority of such lien have
been taken. It is the intention of the parties hereto that the entire amounts
deposited in the Central Account and the Escrow Accounts (or as much thereof as
Lender may reasonably arrange to invest) shall at all times be invested in
Permitted Investments, and that the Central Account shall be a so-called “zero
balance” account. All funds in the Central Account that are invested in a
Permitted Investment are deemed to be held in the Central Account for all
purposes of this Security Instrument and the other Loan Documents. Lender shall
not have any liability for any loss in investments of funds in the Central
Account that are invested in Permitted Investments whether Borrower or Lender
selected such Permitted Investment in accordance herewith and no such loss
shall affect Borrower’s obligation to fund, or liability for funding, the
Central Account and each Sub-Account, as the case may be. Borrower agrees that
Borrower shall include all such earnings on the Central Account as income of
Borrower (and, if Borrower is a partnership, limited liability company or other
pass-through entity, the partners, members or beneficiaries of Borrower, as the
case may be) for federal and applicable state and local tax purposes.


 


Section 5.04. Servicing Fees. At the
option of Lender, the Loan may be serviced by a servicer (the “Servicer”)
selected by Lender and Lender may delegate all or any portion of its
responsibilities under this Security Instrument to the Servicer. Borrower shall
pay all reasonable servicing fees of Servicer, if any, charged in connection
with any disbursement of funds from the Escrow Accounts pursuant to the
Servicer’s then standard conditions and rates.


 


Section 5.05. Monthly Funding of
Sub-Accounts and Escrow Accounts. (a) On or before each Payment Date during
the term of the Loan, commencing on the first (1st) Payment Date occurring
after the month in which the Loan is initially funded, Borrower shall pay, or
cause to be paid, to the Central Account all sums required to be deposited in
the Sub-Accounts pursuant to this Section 5.05(a) and all funds transferred or
deposited into the Central Account shall be allocated among the Sub-Accounts as
follows and in the following priority:


 


(i)            first,
to the Basic Carrying Costs Sub-Account, until an amount equal to the Basic
Carrying Costs Monthly Installment for the applicable Interest Accrual Period
has been allocated to the Basic Carrying Costs Sub-Account;


 


(ii)           second,
to the Debt Service Payment Sub-Account, until an amount equal to the Required
Debt Service Payment for the Payment Date occurring in such Interest Accrual
Period has been allocated to the Debt Service Payment Sub-Account; and


 


(iii)          third,
to the Recurring Replacement Reserve Sub-Account, until an amount equal to the
Recurring Replacement Reserve Monthly Installment for such Interest Accrual
Period has been allocated to the Recurring Replacement Reserve Sub-Account.


 


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Provided that no Event of Default has
occurred and is continuing Lender agrees that in each Interest Accrual Period
any amounts deposited into or remaining in the Central Account after the
Sub-Accounts have been funded as set forth in this Section 5.05(a) with respect
to such Interest Accrual Period and any periods prior thereto, shall be
disbursed by Lender to Borrower on the Payment Date and on the third (3rd) day
(or, if such day is not a Business Day, the next succeeding Business Day) of
each month. The balance of the funds distributed to Borrower after payment of
all Operating Expenses by or on behalf of Borrower may be retained by Borrower.
After the occurrence, and during the continuance, of an Event of Default, no
funds held in the Central Account shall be distributed to, or withdrawn by,
Borrower, and Lender shall have the right to apply all or any portion of the
funds held in the Central Account or any Sub-Account or any Escrow Account to
the Debt in Lender’s sole discretion.


 


(b)           On
each Payment Date, Lender will direct the Bank in accordance with the
following:  (i) sums held in the Basic
Carrying Costs Sub-Account shall be transferred to the Basic Carrying Costs
Escrow Account, (ii) sums held in the Debt Service Payment Sub-Account,
together with any amounts deposited into the Central Account that are either
(x) Loss Proceeds that Lender has elected to apply to reduce the Debt in
accordance with the terms of Article III hereof or (y) excess Loss Proceeds
remaining after the completion of any restoration required hereunder, shall be
transferred to Lender to be applied towards the Required Debt Service Payment,
(iii) sums (if any) held in the Recurring Replacement Reserve Sub-Account shall
be transferred to the Recurring Replacement Reserve Escrow Account and (iv) the
excess, if any, to the Borrower Account.


 


Section 5.06. Payment of Basic Carrying
Costs. Borrower hereby agrees to pay all Basic Carrying Costs (without
regard to the amount of money in the Basic Carrying Costs Sub-Account or the
Basic Carrying Costs Escrow Account). At least ten (10) Business Days prior to
the due date of any Basic Carrying Costs, and not more frequently than once
each month with respect to Real Estate Taxes and once each month with respect
to insurance premiums, Borrower may notify Lender in writing and request that
Lender pay such Basic Carrying Costs on behalf of Borrower on or prior to the
due date thereof, and, provided that no Event of Default then exists and that
there are sufficient funds available in the Basic Carrying Costs Escrow
Account, Lender shall make such payments out of the Basic Carrying Costs Escrow
Account before same shall be delinquent. Together with each such request,
Borrower shall furnish Lender with bills and all other documents necessary, as
reasonably determined by Lender, for the payment of the Basic Carrying Costs
which are the subject of such request. Borrower’s obligation to pay (or cause
Lender to pay) Basic Carrying Costs pursuant to this Security Instrument shall
include, to the extent permitted by applicable law, Real Estate Taxes resulting
from future changes in law which impose upon Lender an obligation to pay any
such Real Estate Taxes or which otherwise adversely affect Lender’s interests.


 


Provided that no Event of Default exists, all
funds deposited into the Basic Carrying Costs Escrow Account shall be held by
Lender pursuant to the provisions of this Security Instrument and shall be
applied in payment of Basic Carrying Costs in accordance with the terms hereof.
Should an Event of Default exist, the sums on deposit in the Basic Carrying
Costs Sub-Account and the Basic Carrying Costs Escrow Account may be applied by
Lender in payment of any Basic Carrying Costs or may be applied to the payment
of the Debt or any other charges


 


64

















 


affecting all
or any portion of the Property as Lender in its sole discretion may determine; provided,
however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.


 


Section 5.07. Reletting Reserve Escrow
Account.


 


(a)           Borrower hereby agrees
to pay all Reletting Expenditures (without regard to the amount of money then
available in the Reletting Reserve Escrow Account). Provided that no Event of
Default has occurred and is continuing and that Lender has received a written
request from Borrower for payment or reimbursement of any costs incurred in
connection with any Reletting Expenditures (other than those expenses related to
Designated Leases, provided, however, in the event the term of a Designated
Lease is extended, renewed or the space demised thereunder is increased in
accordance with the terms of this Security Interest, Borrower may withdraw sums
in the Reletting Reserve Escrow Account for Reletting Expenditures related to
such extension, renewal or increase in space demised), including, without
limitation Special Reletting Expenditures, together with (1) unconditional lien
waivers (to the extent permitted by law and with respect to payments received
to date, if applicable), (2) if requested by Lender, and if the work is being
performed by Borrower, a statement from an Architect or Engineer or an Officer’s
Certificate, indicating that the Reletting Expenditures for which payment or
reimbursement is sought have been substantially completed in material
compliance with all Legal Requirements, (3) unless Borrower requests
disbursement by means of check payable jointly to Borrower and the applicable
vendor, copies of bills for such Reletting Expenditures for the portion due and
for which payment or reimbursement is sought, (4) unless the tenant has
undertaken the work which is the subject of the Reletting Expenditures, upon
final completion of such work, a tenant estoppel certificate from the tenant
leasing space in the Premises for whom the Reletting Expenditures were made (or
if (i) after using commercially reasonable efforts, Borrower is not able to
obtain the tenant estoppel certificate or (ii) such tenant is a Government Tenant,
a landlord estoppel certificate) which indicates, among other things, that the
tenant under such Space Lease is in occupancy, has accepted the demised
premises under such Space Lease and has paid all rents then due under the Space
Lease without abatement, suspension, deferment, diminution, reduction or other
allowances, except as provided in such Space Lease (and as to Government
Tenants the foregoing requirement shall apply only to “base” or “fixed” rent
other than “base” or “fixed” rent not paid due to incomplete paperwork), and
(5) such other documentation as may be reasonably requested by Lender to
establish that the Reletting Expenditures or portion thereof which are the
subject of such request have been substantially completed, all of which are reasonably
acceptable in form and substance to Lender, then Lender shall within five (5)
Business Days thereafter disburse to Borrower, to the extent of funds remaining
in the Reletting Reserve Escrow Account, any actual expenses incurred in
connection with such Reletting Expenditures provided that Borrower may make a
request for disbursement of sums from the Reletting Reserve Escrow Account no
more than once during any month and any request (other than the final request
for the applicable Reletting Expenditure) shall be in a minimum amount of
$25,000. With respect to any Reletting Expenditures (other than those related
to Designated Leases, provided, however, in the event the term of a Designated
Lease is extended, renewed or the space demised thereunder is increased in
accordance with the terms of this Security Interest, Borrower may withdraw sums
in the Reletting Reserve Escrow Account for Reletting Expenditures related to
such extension, renewal or increase in space demised)


 


65

















 


which relate to brokerage commissions, upon
the receipt of (unless Borrower requests disbursement by means of check payable
jointly to Borrower and the applicable broker) copies of bills for such
Reletting Expenditures for the portion due and for which payment or
reimbursement is sought, Lender shall disburse to Borrower any actual expenses
incurred in connection with such Reletting Expenditures out of the Reletting
Reserve Escrow Account. Notwithstanding anything to the contrary contained
herein, any disbursements made by Lender out of the Reletting Reserve Escrow
Account for Special Reletting Expenditures shall, if requested in writing by
Borrower, which request shall be accompanied by such written documentation
relating thereto as may reasonably be required by Lender, be deposited into the
Rent Account as if such sums were received by Borrower as Rent during the
calendar month after such request for disbursement is made by Borrower. Lender
shall not be required to make any disbursements out of the Reletting Reserve
Escrow Account if an Event of Default shall have occurred and is continuing, if
more than one such request is made in any month or if sufficient funds are not
available in the Reletting Reserve Escrow Account. Notwithstanding anything
contained in this Security Instrument, no sums on deposit in the Reletting
Reserve Escrow Account may be used in connection with Reletting Expenditures
incurred with respect to Designated Leases, provided, however, in the event the
term of a Designated Lease is extended, renewed or the space demised thereunder
is increased in accordance with the terms of this Security Interest, Borrower
may withdraw sums in the Reletting Reserve Escrow Account for Reletting
Expenditures related to such extension, renewal or increase in space demised.


 


(b)           All
funds deposited into the Reletting Reserve Escrow Account shall be held by
Lender pursuant to the provisions of this Security Instrument and, provided
that no Event of Default shall have occurred and be continuing, shall be
applied in payment of Reletting Expenditures. Should an Event of Default occur
and be continuing, the sums on deposit in the Reletting Reserve Escrow Account
may be applied by Lender in payment of any Reletting Expenditures or may be
applied to the payment of the Debt or any other charges affecting all or any
portion of the Property, as Lender, in its sole discretion, may determine; provided,
however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.


 


(c)           In
the event that Borrower holds any letters of credit as security for obligations
under Space Leases, within thirty (30) days (or if any letters of credit may
expire within such thirty (30) day period, prior to the expiration of such
letter of credit) of the occurrence of a monetary event of default or a
material non-monetary event of default under the related Space Lease, which
default is not cured within the applicable cure period thereunder, Borrower
shall present for draw and use all commercially reasonable efforts to draw the
full amount which it is entitled to draw under such letter of credit; provided,
however, Borrower shall not be obliged to draw on such letter of credit if (i)
Borrower has submitted to Lender a plan of action to resolve any event of
default which gave rise to Borrower’s right to draw on the applicable letter of
credit and Lender shall, in its reasonable discretion, have consented to such
plan or Borrower is precluded from making a draw on the applicable letter of
credit by applicable law, and (ii) the term of such letter of credit will not
expire prior to the implementation of such submitted plan. Borrower shall
deliver to Lender, within five (5) Business Days of receipt thereof, (x) all
security deposits which Borrower has the right to retain under a Space Lease
(including, without limitation, all sums drawn on letters of credit held as
security for obligations of tenants under


 


66

















 


Space Leases)
if the tenant thereunder is in default in the payment of base rent for at least
ninety (90) days and (y) all Rent paid by or on behalf of any lessee under a
Space Lease in whole or partial consideration for the termination, cancellation
or surrender of any Space Lease (including, without limitation, surrender or
cancellation fees, buy-out fees or reimbursements for tenant improvements or
leasing commissions), and in each such case ((x) or (y)) all such sums shall be
held in the Reletting Reserve Escrow Account and shall be disbursed therefrom
as set forth above. Notwithstanding the foregoing, security deposits and sums
drawn under a letter of credit in respect of Rent that was due and owing under
a Space Lease or amounts paid pursuant to clause (y) above if the relevant
space or part thereof has not been re-leased shall be transferred from the
Reletting Reserve Escrow Account to the Rent Account (unless an Event of
Default exists, in which event to the Central Account) and processed as Rent in
the month in which such Rent was due and owing (i.e., with respect to security
deposits delivered to Lender and any draw under a letter of credit pursuant to
this Section 5.07(c), no more than one month of pro-rated monthly rent with
respect to any Space Lease shall be so transferred to the Rent Account or
Central Account (as the case may be) each month unless otherwise consented to
in writing by Lender).


 


Section 5.08. Recurring Replacement
Reserve Escrow Account. Borrower hereby agrees to pay all Recurring
Replacement Expenditures with respect to the Property (without regard to the
amount of money then available in the Recurring Replacement Reserve Sub-Account
or the Recurring Replacement Reserve Escrow Account). Provided that Lender has
received written notice from Borrower at least five (5) Business Days prior to
the due date of any payment relating to Recurring Replacement Expenditures and
not more frequently than once each month, and further provided that no Event of
Default exists, that there are sufficient funds available in the Recurring
Replacement Reserve Escrow Account and Borrower shall have theretofore
furnished Lender with lien waivers (to the extent permitted by law and with
respect to payments received to date, if applicable), copies of bills, invoices
and other reasonable documentation as may be required by Lender to establish
that the Recurring Replacement Expenditures which are the subject of such
request represent amounts due for completed or partially completed capital work
and improvements performed at the Property, Lender shall make such payments out
of the Recurring Replacement Reserve Escrow Account.


 


Provided that no Event of Default exists, all
funds deposited into the Recurring Replacement Reserve Escrow Account shall be
held by Lender pursuant to the provisions of this Security Instrument and shall
be applied in payment of Recurring Replacement Expenditures. Should an Event of
Default exist, the sums on deposit in the Recurring Replacement Reserve
Sub-Account and the Recurring Replacement Reserve Escrow Account may be applied
by Lender in payment of any Recurring Replacement Expenditures or may be
applied to the payment of the Debt or any other charges affecting all or any
portion of the Property, as Lender in its sole discretion may determine; provided,
however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.


 


Section 5.09. Intentionally Omitted.


 


Section 5.10. Intentionally Omitted.


 


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Section 5.11. Intentionally Omitted.


 


Section 5.12. Performance of Engineering
Work. (a) Borrower shall promptly commence and
diligently thereafter pursue to completion (without regard to the amount of
money then available in the Engineering Escrow Account) the Required
Engineering Work prior to the three (3) month anniversary of the Closing Date,
subject to extension of the date for commencement and completion of the
Required Engineering Work as may be permitted by the applicable Governmental
Authority, in all cases subject to Force Majeure, but in no event shall
completion of the Required Engineering Work occur later than December 31, 2007.
After Borrower completes an item of Required Engineering Work or any portion
thereof, Borrower may submit to Lender an invoice therefor with (a) lien
waivers (to the extent permitted by law and with respect to payments received
to date, if applicable), (b) a statement from an Architect or Engineer,
reasonably acceptable to Lender, indicating that the portion of the Required
Engineering Work for which payment or reimbursement is sought has been
substantially completed in material compliance with all Legal Requirements and
(c) an Officer’s Certificate, reasonably acceptable to Lender, indicating that
the portion of the Required Engineering Work for which payment or reimbursement
is sought has been substantially completed in material compliance with all
Legal Requirements and Borrower has paid or will with the requested disbursement
pay all sums due in connection therewith. Notwithstanding the foregoing, in the
event Borrower does not obtain the item set forth in clause (b) above, Borrower
shall not be required to deliver such items to Lender. Lender shall, within
fifteen (15) days after Lender receives such item(s), although in no event more
frequently than once each month, reimburse such amount to Borrower from the
Engineering Escrow Account; provided, however, that Borrower
shall not be reimbursed more than the amount set forth on Exhibit D hereto as the amount allocated to
the portion of the Required Engineering Work for which reimbursement is sought.


 


(b)           All
funds deposited into the Engineering Escrow Account shall be held by Lender
pursuant to the provisions of this Security Instrument and, provided no Event
of Default shall have occurred and be continuing, shall be applied in payment
of costs incurred by Borrower in connection with the Required Engineering Work.
From and after the date all of the Required Engineering Work is completed,
Borrower may submit a written request, which request shall be delivered
together with (a) final lien waivers, (b) a statement from an Architect or
Engineer, as the case may be, reasonably acceptable to Lender, indicating that
all of the Required Engineering Work has been substantially completed in
material compliance with all Legal Requirements, and (c) an Officer’s
Certificate, reasonably acceptable to Lender, indicating that all of the
Required Engineering Work has been substantially completed in material
compliance with all Legal Requirements and Borrower has paid or will with the
requested disbursement pay all sums due in connection therewith. Notwithstanding
the foregoing, in the event Borrower does not obtain the item set forth in
clause (b) above, Borrower shall not be required to deliver such items to
Lender. Lender shall, within fifteen (15) days after Lender receives such
item(s), disburse any balance of the Engineering Escrow Account to Borrower. Should
an Event of Default exist, the sums on deposit in the Engineering Escrow
Account may be applied by Lender in payment of any Required Engineering Work or
may be applied to the payment of the Debt or any other charges affecting all or
any portion of the Property, as Lender in its sole discretion may determine; 


 


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provided,
however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.


 


Section 5.13. Loss Proceeds. In the
event of a casualty to the Property, unless Lender elects, or is required
pursuant to Article III hereof, to make all of the Insurance Proceeds available
to Borrower for restoration, Lender and Borrower shall cause all such Insurance
Proceeds to be paid by the insurer directly to the Central Account, whereupon
Lender shall, after deducting Lender’s costs of recovering and paying out such
Insurance Proceeds, including without limitation, reasonable attorneys’ fees,
apply the same to reduce the Debt in accordance with the terms of the Note; provided,
however, that if Lender elects, or is required, to make the Insurance
Proceeds available for restoration, all Insurance Proceeds in respect of rent
loss, business interruption or similar coverage shall be maintained in the
Central Account, to be applied by Lender in the same manner as Rent received
with respect to the operation of the Property; provided, further,
however, that in the event that the Insurance Proceeds with respect to
such rent loss, business interruption or similar insurance policy are paid in a
lump sum in advance, Lender shall hold such Insurance Proceeds in a segregated
interest-bearing escrow account, which shall be an Eligible Account, shall
estimate, in Lender’s reasonable discretion, the number of months required for
Borrower to restore the damage caused by the casualty, shall divide the
aggregate rent loss, business interruption or similar Insurance Proceeds by
such number of months, and shall disburse from such bank account into the Rent
Account each month during the performance of such restoration such monthly
installment of said Insurance Proceeds. In the event that Insurance Proceeds
are to be applied toward restoration, Lender shall hold such funds in a
segregated interest-bearing bank account at the Bank, which shall be an
Eligible Account, and shall disburse same in accordance with the provisions of
Section 3.04 hereof. Unless Lender elects, or is required pursuant to Section
6.01 hereof, to make all of the Condemnation Proceeds available to Borrower for
restoration, Lender and Borrower shall cause all such Condemnation Proceeds to
be paid to the Central Account, whereupon Lender shall, after deducting Lender’s
costs of recovering and paying out such Condemnation Proceeds, including
without limitation, reasonable attorneys’ fees, apply same to reduce the Debt
in accordance with the terms of the Note; provided, however, that
any Condemnation Proceeds received in connection with a temporary Taking shall
be maintained in the Central Account, to be applied by Lender in the same
manner as Rent received with respect to the operation of the Property; provided,
further, however, that in the event that the Condemnation
Proceeds of any such temporary Taking are paid in a lump sum in advance, Lender
shall hold such Condemnation Proceeds in a segregated interest-bearing bank
account, which shall be an Eligible Account, shall estimate, in Lender’s
reasonable discretion, the number of months that the Property shall be affected
by such temporary Taking, shall divide the aggregate Condemnation Proceeds in
connection with such temporary Taking by such number of months, and shall
disburse from such bank account into the Rent Account each month during the
pendency of such temporary Taking such monthly installment of said Condemnation
Proceeds. In the event that Condemnation Proceeds are to be applied toward
restoration, Lender shall hold such funds in a segregated interest-bearing bank
account at the Bank, which shall be an Eligible Account, and shall disburse
same in accordance with the provisions of Section 3.04 hereof. If any Loss
Proceeds are received by Borrower, such Loss Proceeds shall be received in
trust for Lender, shall be segregated from other funds of Borrower, and shall
be forthwith paid into the Central Account, or paid to Lender to hold in a
segregated interest-bearing bank account at the Bank, in each case


 


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to be applied or disbursed in accordance with
the foregoing. Any Loss Proceeds made available to Borrower for restoration in
accordance herewith, to the extent not used by Borrower in connection with, or
to the extent they exceed the cost of, such restoration, shall be deposited
into the Central Account, whereupon Lender shall apply the same to reduce the
Debt in accordance with the terms of the Note.


 


Section 5.14. Underwritten Rent Escrow
Account. Provided that no Event of Default has occurred and is continuing,
on each Payment Date set forth on Exhibit F,
attached hereto and made a part hereof, Lender shall transfer a sum equal to
the amount specified on Exhibit F
to the Rent Account from the Underwritten Rent Escrow Account. Should an Event
of Default occur and be continuing, sums on deposit in the Underwritten Rent
Escrow Account may be applied by Lender to the payment of the Debt or any other
charges affecting all or any portion of the Property, as Lender in its sole
discretion may determine; provided, however, that no such
application shall be deemed to have been made by operation of law or otherwise
until actually made by Lender as herein provided.


 


Section 5.15. Designated Lease Reserve
Escrow Account.


 


(a)           Borrower hereby agrees
to pay all expenses and other items for which funds have been placed in the
Designated Lease Reserve Escrow Account (collectively, the “Designated Lease
Expenses”) with respect to the Designated Leases (without regard to the
amount of money then available in the Designated Lease Reserve Escrow Account).
Provided that no Event of Default has occurred and is continuing and that
Lender has received a written request from Borrower for payment or
reimbursement of any costs incurred in connection with any Designated Lease
Expenses, together with (1) unconditional lien waivers (to the extent permitted
by law and with respect to payments received to date, if applicable), (2) if
requested by Lender, and if the work is being performed by Borrower, a
statement from an Architect or Engineer or an Officer’s Certificate, indicating
that the Designated Lease Expenses for which payment or reimbursement is sought
have been substantially completed in material compliance with all Legal
Requirements, (3) unless Borrower requests disbursement by means of check
payable jointly to Borrower and the applicable vendor, copies of bills for such
Designated Lease Expenses for the portion due and for which payment or
reimbursement is sought, (4) unless the tenant has undertaken the work which is
the subject of the Designated Lease Expenses, upon final completion of such
work, a tenant estoppel certificate from the tenant leasing space in the
Premises for whom the Designated Lease Expenses were made (or if after using
commercially reasonable efforts, Borrower is not able to obtain the tenant
estoppel certificate, a landlord estoppel certificate) which indicates, among
other things, that the tenant under such Space Lease is in occupancy, has
accepted the demised premises under such Space Lease and has paid all rents
then due under the Space Lease without abatement, suspension, deferment, diminution,
reduction or other allowances, except as provided in such Space Lease, and (5)
such other documentation as may be reasonably requested by Lender to establish
that the Designated Lease Expenses or portion thereof which are the subject of
such request have been substantially completed, all of which are reasonably
acceptable in form and substance to Lender, then Lender shall within five (5)
Business Days thereafter disburse to Borrower, to the extent of funds remaining
in the Designated Lease Reserve Escrow Account, any actual expenses incurred in
connection with such Designated Lease Expenses provided that Borrower may make
a request


 


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for disbursement of sums from the Designated
Lease Reserve Escrow Account no more than once during any month and any request
(other than the final request for the applicable Designated Lease Expenses and
the final disbursement for all Designated Lease Expenses shall also include
interest earned on the funds held in the Designated Lease Reserve Escrow
Account ) shall be in a minimum amount of $25,000. Notwithstanding anything to
the contrary herein, any disbursements made by Lender out of the Designated
Lease Reserve Escrow Account for rent credits due to the tenants (other than
the Merrill Tenant) under Designated Leases shall, if requested in writing by
Borrower, which request shall be accompanied by such written documentation
relating thereto as may reasonably be required by Lender, be deposited into the
Rent Account as if such sums were received by Borrower as Rent during the
calendar month after such request for disbursement is made by Borrower. Lender
shall not be required to make any disbursements out of the Designated Lease
Reserve Escrow Account if an Event of Default shall have occurred and is
continuing, if more than one such request is made in any month or if sufficient
funds are not available in the Designated Lease Reserve Escrow Account.


 


(b)           All
funds deposited into the Designated Lease Reserve Escrow Account shall be held
by Lender pursuant to the provisions of this Security Instrument and, provided
that no Event of Default shall have occurred and be continuing, shall be
applied in payment of Designated Lease Expenses. Should an Event of Default
occur and be continuing, the sums on deposit in the Designated Lease Reserve
Escrow Account may be applied by Lender in payment of any Reletting
Expenditures or may be applied to the payment of the Debt or any other charges
affecting all or any portion of the Property, as Lender, in its sole
discretion, may determine; provided, however, that no such
application shall be deemed to have been made by operation of law or otherwise
until actually made by Lender as herein provided.


 


ARTICLE VI:  CONDEMNATION


 


Section 6.01. Condemnation.
(a)  Borrower shall notify Lender
promptly of the commencement or threat of any Taking of the Property or any
portion thereof. Lender is hereby irrevocably appointed as Borrower’s
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain the proceeds of any such Taking and to make any compromise
or settlement in connection with such proceedings (subject to Borrower’s
reasonable approval, except during the existence of an Event of Default, in
which event Borrower’s approval shall not be required), subject to the
provisions of this Security Instrument; provided, however, that Borrower may
participate in any such proceedings and shall be authorized and entitled to
compromise or settle any such proceeding with respect to Condemnation Proceeds
in an amount less than five percent (5%) of the Loan Amount. Borrower shall
execute and deliver to Lender any and all instruments reasonably required in
connection with any such proceeding promptly after request therefor by Lender. Except
as set forth above, Borrower shall not adjust, compromise, settle or enter into
any agreement with respect to such proceedings without the prior consent of
Lender, which consent shall not be unreasonably withheld or delayed. All
Condemnation Proceeds are hereby assigned to and shall be paid to Lender to be
applied in accordance with the terms hereof. With respect to Condemnation
Proceeds in an amount in excess of five percent (5%) of the Loan Amount,
Borrower hereby authorizes Lender to compromise, settle, collect and receive
such Condemnation Proceeds, and to give proper receipts and acquittance
therefor, subject to,


 


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provided that no Event of Default has
occurred and is continuing, Borrower’s reasonable approval as set forth above.
Subject to the provisions of this Article VI, Lender may apply such
Condemnation Proceeds (less any cost to Lender of recovering and paying out
such proceeds, including, without limitation, reasonable attorneys’ fees and
disbursements and costs allocable to inspecting any repair, restoration or
rebuilding work and the plans and specifications therefor) toward the payment
of the Debt or to allow such proceeds to be used for the Work.


 


(b)           ‘Substantial Taking’
shall mean (i) a Taking of such  portion
of the Property that would, in Lender’s reasonable discretion, leave remaining
a balance of the Property which would not under then current economic
conditions, applicable Development Laws and other applicable Legal Requirements,
permit the restoration of the Property so as to constitute a complete, rentable
facility of the same sort as existed prior to the Taking, having adequate
ingress and egress to the Property, capable of producing a projected Debt
Service Coverage of not less than the Required Debt Service Coverage upon
substantial completion of the restoration of the Property, (ii) a Taking which
Lender is not reasonably satisfied could be restored within twelve (12) months
and at least six (6) months prior to the Maturity Date or (iii) a Taking of
more than fifteen percent (15%) of the reasonably estimated fair market value
of the Property.


 


(c)           In the case of a
Substantial Taking, Condemnation Proceeds shall be payable to Lender in
reduction of the Debt but without any prepayment fee or charge of any kind and,
if Lender elects to apply any Condemnation Proceeds it may receive pursuant to
this Security Instrument to the payment of the Debt, Borrower may prepay the
balance of the Debt without any prepayment fee or charge of any kind.


 


(d)           In the event of a
Taking which is not a Substantial Taking, Borrower at its sole cost and expense
(whether or not the award shall have been received or shall be sufficient for
restoration) shall proceed diligently to restore, or cause the restoration of,
the remaining Improvements not so taken, to maintain a complete, rentable,
self-contained fully operational facility of the same sort as existed prior to
the Taking in as good a condition as is reasonably possible. In the event of
such a Taking, Lender shall receive the Condemnation Proceeds and shall pay
over the same:


 


(i)            first, provided no Default shall
exist, to Borrower to the extent of any portion of the award as may be
necessary to pay the reasonable cost of restoration of the Improvements
remaining, and


 


(ii)           second, to Lender, in reduction of
the Debt without any prepayment premium or charge of any kind.


 


If one or more
Takings in the aggregate create a Substantial Taking, then, in such event, the
sections of this Article VI above applicable to Substantial Takings shall
apply.


 


(e)           In
the event Lender is obligated to or elects to make Condemnation Proceeds
available for the restoration or rebuilding of the Property, such proceeds
shall be disbursed in the manner and subject to the conditions set forth in
Section 3.04(b) hereof. If, in accordance with this Article VI, any
Condemnation Proceeds are used to reduce the Debt, they shall be applied in


 


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accordance
with the provisions of the Note. Borrower shall promptly execute and deliver
all instruments reasonably requested by Lender for the purpose of confirming
the assignment of the Condemnation Proceeds to Lender. Application of all or
any part of the Condemnation Proceeds to the Debt shall be made in accordance
with the provisions of Sections 3.06 and 3.07 hereof. No application of the
Condemnation Proceeds to the reduction of the Debt shall have the effect of
releasing the lien of this Security Instrument until the remainder of the Debt
has been paid in full. In the case of any Taking, Lender, to the extent that
Lender has not been reimbursed by Borrower, shall be entitled, as a first
priority out of any Condemnation Proceeds, to reimbursement for all costs, fees
and expenses reasonably incurred in the determination and collection of any
Condemnation Proceeds. All Condemnation Proceeds deposited with Lender pursuant
to this Section, until expended or applied as provided herein, shall be held in
accordance with Section 3.04(b) hereof and shall constitute additional security
for the payment of the Debt and the payment and performance of Borrower’s
obligations, but Lender shall not be deemed a trustee or other fiduciary with
respect to its receipt of such Condemnation Proceeds or any part thereof. All
awards so deposited with Lender shall be held by Lender in an Eligible Account,
but Lender makes no representation or warranty as to the rate or amount of
interest, if any, which may accrue on any such deposit and shall have no
liability in connection therewith. For purposes hereof, any reference to the
award shall be deemed to include interest, if any, which has accrued thereon.


 


ARTICLE VII:  LEASES AND RENTS


 


Section 7.01. Assignment. (a)   Borrower does
hereby bargain, sell, assign and set over unto Lender, all of Borrower’s
interest in the Leases and Rents. The assignment of Leases and Rents in this
Section 7.01 is an absolute, unconditional and present assignment from Borrower
to Lender and not an assignment for security and the existence or exercise of
Borrower’s revocable license to collect Rent shall not operate to subordinate
this assignment to any subsequent assignment. The exercise by Lender of any of
its rights or remedies pursuant to this Section 7.01 shall not be deemed to
make Lender a mortgagee-in-possession. In addition to the provisions of this
Article VII, Borrower shall comply with all terms, provisions and conditions of
the Assignment.


 


(b)           So
long as there shall exist and be continuing no Event of Default, Borrower shall
have a revocable license to take all actions with respect to all Leases and
Rents, present and future, including the right to collect and use the Rents,
subject to the terms of this Security Instrument and the Assignment.


 


(c)           In
a separate instrument, Borrower shall, as requested from time to time by
Lender, assign to Lender or its nominee by specific or general assignment, any
and all Leases, such assignments to be in form and content reasonably
acceptable to Lender, but subject to the provisions of Section 7.01(b) hereof. Unless
previously delivered to Lender, Borrower agrees to deliver to Lender, within
thirty (30) days after Lender’s request, a true and complete copy of every
Lease and, within fifteen (15) days after Lender’s request, a complete list of
the Leases, certified by Borrower to be true, accurate and complete and stating
the demised premises, the


 


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names of the
lessees, the Rent payable under the Leases and the date to which such Rents
have been paid.


 


(d)           The
rights of Lender contained in this Article VII, the Assignment or any other
assignment of any Lease shall not result in any obligation or liability of
Lender to Borrower or any lessee under a Lease or any party claiming through
any such lessee.


 


(e)           At
any time an Event of Default exists, the license granted hereinabove may be
revoked by Lender, and Lender or a receiver appointed in accordance with this
Security Instrument may enter upon the Property, and collect, retain and apply
the Rents toward payment of the Debt in such priority and proportions as Lender
in its sole discretion shall deem proper.


 


(f)            In
addition to the rights which Lender may have herein, during the existence of
any Event of Default, Lender, at its option, may require Borrower to pay
monthly in advance to Lender, or any receiver appointed to collect the Rents,
the fair and reasonable rental value for the use and occupation of such part of
the Property as may be used and occupied by Borrower and may require Borrower
to vacate and surrender possession of the Property to Lender or to such
receiver and, in default thereof, Borrower may be evicted by summary
proceedings or otherwise.


 


Section 7.02. Management of Property.


 


(a)           Borrower
shall manage the Property or cause the Property to be managed in a manner which
is consistent with the Approved Manager Standard. All Space Leases entered into
after the date hereof shall provide for rental rates comparable to then
existing local market rates and terms and conditions which constitute good and
prudent business practice and are consistent with prevailing market terms and
conditions, and shall be arm’s length transactions or, with respect to
Operating Leases, on terms which would be obtained in an arms-length
transaction. All Space Leases entered into after the date hereof shall be on a
form previously approved by Lender with such commercially reasonable changes as
are consistent with the standards of other similarly situated owners when
compared with terms and conditions of leases in similarly situated office
buildings in similar context at the time in question, taking into account, inter
alia, the type, creditworthiness and bargaining power of the prospective
tenant and the location and size of the space covered by the proposed Lease,
and shall provide that they are subordinate to this Security Instrument and
that the lessees thereunder attorn to Lender. Borrower shall deliver copies of
all Leases entered into after the Closing Date and amendments, modifications
and renewals of any Lease to Lender. All proposed Leases for the Property shall
be subject to the prior written approval of Lender, not to be unreasonably
withheld or delayed, provided, however that Borrower may enter into new leases
with unrelated third parties without obtaining the prior consent of Lender
provided that:  (i) the proposed leases
conform with the requirements of this Section 7.02; (ii) the space to be leased
pursuant to such proposed lease together with any space leased to a related
tenant under an existing Lease does not exceed 30,000 square feet; and (iii)
the term of the proposed lease, inclusive of all extensions and renewals, does
not exceed ten (10) years. Lender’s consent to any Lease, amendment,
modification, renewal or termination, if required pursuant to the terms of this
Security Instrument, shall be deemed given if the first correspondence from
Borrower to Lender requesting such approval is in an envelope marked “PRIORITY”
and contains a bold-faced, conspicuous legend at the top of the first page thereof


 


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stating that “IF
YOU FAIL TO RESPOND TO OR TO EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN
WRITING WITHIN SEVEN (7) BUSINESS DAYS, YOUR APPROVAL MAY BE DEEMED GIVEN”, and
is accompanied by the information and documents required above and any other
information reasonably requested by Lender in writing prior to the expiration
of such seven (7) Business Day period and, if Lender fails to respond or to
expressly deny such request for approval in writing within the seven (7)
Business Day period, a second notice 
requesting approval is delivered to Lender from Borrower in an envelope
marked “PRIORITY” containing a bold-faced, conspicuous legend at the top of the
first page thereof stating that “IF YOU FAIL TO RESPOND TO OR EXPRESSLY DENY
THIS REQUEST FOR APPROVAL IN WRITING WITHIN THREE (3) BUSINESS DAYS, YOUR
APPROVAL SHALL BE DEEMED GIVEN” and Lender fails to respond or to expressly
deny such request for approval within the three (3) Business Day period.


 


(b)           Borrower
(i) shall observe and perform all of its material obligations under the Leases
pursuant to applicable Legal Requirements and shall not do or permit to be done
anything to impair the value of the Leases as security for the Debt; (ii) shall
promptly send copies to Lender of all notices of default which Borrower shall
receive under the Space Leases; (iii) shall, consistent with the Approved
Manager Standard, enforce all of the terms, covenants and conditions contained
in the Leases to be observed or performed; (iv) shall not collect any of the
Rents under the Leases more than one (1) month in advance (except that Borrower
may collect in advance such security deposits as are permitted pursuant to
applicable Legal Requirements and are commercially reasonable in the prevailing
market); (v) shall not execute any other assignment of lessor’s interest in the
Leases or the Rents except as otherwise expressly permitted pursuant to this
Security Instrument; (vi) shall not cancel or terminate any of the Leases or
accept a surrender thereof in any manner inconsistent with the Approved Manager
Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or
transfer of all or any part of the Premises or the Improvements or of any
interest therein so as to effect a merger of the estates and rights of, or a
termination or diminution of the obligations of, lessees thereunder;
(viii) shall not, without Lender’s consent, which shall not be
unreasonably withheld, delayed or conditioned, alter, modify or change the
terms of any guaranty of any Major Space Lease or cancel or terminate any such
guaranty; (ix) shall, in accordance with the Approved Manager Standard, make
all reasonable efforts to seek lessees for space as it becomes vacant and enter
into Leases in accordance with the terms hereof; (x) shall not materially
modify, alter or amend any Major Space Lease without Lender’s consent, which
consent will not be unreasonably withheld, delayed or conditioned, except that
no consent shall be required for modifications or amendments entered into in
implementation of a right or option of the tenant under such Major Space Lease;
(xi) shall not modify, alter or amend any Property Agreement without Lender’s
consent, if such modification, alteration or amendment is reasonably likely to
have a Material Adverse Effect; and (xii) shall, without limitation to any
other provision hereof, execute and deliver at the request of Lender all such
further assurances, confirmations and assignments in connection with the
Property as are required herein and as Lender shall from time to time
reasonably require.


 


(c)           All
security deposits of lessees, whether held in cash or any other form, shall be
held in accordance with the Space Leases and applicable Legal Requirements. Following
the occurrence and during the continuance of any Event of Default, Borrower
shall, upon Lender’s


 


75

















 


request, if
permitted by applicable Legal Requirements, turn over the security deposits
(and any interest thereon) to Lender to be held by Lender in accordance with
the terms of the Leases and all Legal Requirements.


 


(d)           Lender
shall, upon request of Borrower and at Borrower’s sole cost and expense, enter
into a subordination, nondisturbance and attornment agreement (“SNDA”)
with any tenant under a Space Lease entered into in compliance with the
requirements of this Security Instrument. Any SNDA executed by Lender shall be
in Lender’s then standard form (with such reasonable and customary changes
thereto as may be acceptable to Lender, acting reasonably and in good faith)
which shall provide, among other things, that in the event Lender or any
purchaser at foreclosure shall succeed to Borrower’s interest in the Property,
the Space Lease with such tenant will remain in full force and effect and be
binding upon Lender or such purchaser and such tenant as though each were
original parties thereto.


 


(e)           If
requested by Lender, Borrower shall furnish, or shall cause the applicable
lessee to furnish, at Lender’s sole cost and expense, to Lender financial data
and/or financial statements in accordance with Regulation AB for any lessee of
the Property if, in connection with a Securitization, Lender expects there to
be, with respect to such lessee or any group of affiliated lessees, a
concentration within all of the mortgage loans included or expected to be
included, as applicable, in such Securitization such that such lessee or group
of affiliated lessees would constitute a Significant Obligor; provided,
however, that in the event the related Space Lease does not require the related
lessee to provide the foregoing information or the relevant lessee defaults in
its obligation to provide the same under its Space Lease, Borrower shall use
commercially reasonable efforts to cause the applicable lessee to furnish such
information.


 


(f)            Borrower
covenants and agrees with Lender that (i) the Property will be managed at all
times by Manager pursuant to the management agreement approved by Lender (the “Management
Agreement”), (ii) after Borrower has knowledge of a fifty percent (50%) or
more change in control of the ownership of Manager, Borrower will promptly give
Lender notice thereof (a “Manager Control Notice”) and (iii) the
Management Agreement may be terminated by Lender at any time for cause
(including, but not limited to, Manager’s gross negligence, misappropriation of
funds, willful misconduct or fraud) or at any time following (A) the occurrence
and during the continuance of an Event of Default, or (B) the receipt of a
Manager Control Notice, and a substitute managing agent shall be appointed by
Borrower, subject to Lender’s prior written approval, which shall not be
unreasonably withheld, conditioned or delayed and which may be conditioned
after a Securitization on, inter alia, a letter from each Rating Agency
confirming that any rating issued by the Rating Agency in connection with a
Securitization will not, as a result of the proposed change of Manager, be
downgraded from the then current ratings thereof, qualified or withdrawn. Borrower
may from time to time appoint a successor manager to manage the Property with
Lender’s prior written consent which consent shall not be unreasonably
withheld, conditioned or delayed, provided that any such successor manager
shall be a reputable management company and, if a Securitization shall have
occurred, each Rating Agency shall have confirmed in writing that any rating
issued by the Rating Agency in connection with a Securitization will not, as a
result of the proposed change of Manager, be downgraded from the then current
ratings thereof, qualified or withdrawn. Borrower further covenants and agrees
that Borrower shall require Manager (or any successor managers) to


 


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maintain at
all times during the term of the Loan worker’s compensation insurance as
required by Governmental Authorities.


 


(g)          Borrower
represents and warrants that no Franchise Agreement exists with respect to the
Property and covenants that Borrower will not enter into any Franchise
Agreement with respect to the Property without Lender’s prior consent.


 


ARTICLE VIII:  MAINTENANCE AND
REPAIR


 


Section 8.01. Maintenance and Repair of
the Property; Alterations; Replacement of Equipment. Borrower hereby
covenants and agrees:


 


(a)           Borrower
shall not (i) desert or abandon the Property, (ii) change the use of the
Property or cause or permit the use or occupancy of any part of the Property to
be discontinued if such discontinuance or use change would violate any zoning
or other law, ordinance or regulation; (iii) consent to or seek any lowering of
the zoning classification, or greater zoning restriction affecting the
Property; or (iv) convert the Property, or any portion thereof, to a
condominium or cooperative form of ownership.


 


(b)           Borrower
shall, at its expense, (i) take good care of the Property including grounds
generally, and utility systems and sidewalks, roads, alleys, and curbs therein,
and shall keep the same in good, safe and insurable condition and in compliance
with all applicable Legal Requirements, (ii) promptly make all required repairs
to the Property, above grade and below grade, interior and exterior, structural
and nonstructural, ordinary and extraordinary, unforeseen and foreseen, and
maintain the Property in a manner appropriate for the Property and (iii) not
commit or suffer to be committed any waste of the Property or do or suffer to
be done anything which will increase the risk of fire or other hazard to the
Property or impair the value thereof. Borrower shall keep the sidewalks,
vaults, gutters and curbs comprising, or adjacent to, the Property, reasonably
clean and free from dirt, snow, ice, rubbish and obstructions. All repairs made
by Borrower shall be made with first-class materials, in a good and workmanlike
manner, shall be equal or better in quality and class to the original work and
shall comply with all applicable Legal Requirements and Insurance Requirements.
To the extent any of the above obligations are obligations of tenants under
Space Leases or other Persons under Property Agreements, Borrower may fulfill
its obligations hereunder by causing such tenants or other Persons, as the case
may be, to perform their obligations thereunder. As used herein, the terms “repair”
and “repairs” shall be deemed to include all necessary replacements.


 


(c)           Borrower
shall not demolish, remove, construct, or, except as otherwise expressly
provided herein, restore, or alter the Property or any portion thereof or
permit any such demolition, removal, construction, restoration, addition or
alteration if the same would, upon completion of the work, diminish the value
of the Property without Lender’s prior written consent in each instance, which
consent shall not be unreasonably withheld or delayed.


 


(d)           Borrower
represents and warrants to Lender that (i) there are no fixtures, machinery,
apparatus, tools, equipment or articles of personal property attached or
appurtenant to, or located on, or used in connection with the management,
operation or maintenance by


 


77

















 


Borrower of
the Property, except for the Equipment and equipment leased by Borrower for the
management, operation or maintenance of the Property in accordance with the
Loan Documents; (ii) the Equipment and the leased equipment constitute all of
the fixtures, machinery, apparatus, tools, equipment and articles of personal
property necessary to the proper operation and maintenance by Borrower of the
Property; and (iii) all of the Equipment is free and clear of all liens, except
for the lien of this Security Instrument and the Permitted Encumbrances and the
rights of lessors under equipment leases entered into in accordance with the
terms of this Security Instrument. All right, title and interest of Borrower in
and to all extensions, improvements, betterments, renewals and appurtenances to
the Property hereafter acquired by, or released to, Borrower or constructed,
assembled or placed by Borrower in the Property, and all changes and
substitutions of the security constituted thereby, shall be and, in each such
case, without any further mortgage, encumbrance, conveyance, assignment or
other act by Lender or Borrower, shall become subject to the lien and security
interest of this Security Instrument as fully and completely, and with the same
effect, as though now owned by Borrower and specifically described in this
Security Instrument, but at any and all times Borrower shall execute and
deliver to Lender any documents Lender may reasonably deem necessary or
appropriate for the purpose of specifically subjecting the same to the lien and
security interest of this Security Instrument.


 


(e)           Notwithstanding
the provisions of this Security Instrument to the contrary, Borrower shall have
the right, at any time and from time to time, to remove and dispose of
Equipment which may have become obsolete or unfit for use or which is no longer
useful in the management, operation or maintenance of the Property. Borrower
shall promptly replace any such Equipment so disposed of or removed with other
Equipment of equal value and utility, free of any security interest or superior
title, liens or claims; except that, if by reason of technological or other
developments, replacement of the Equipment so removed or disposed of is not
necessary or desirable for the proper management, operation or maintenance of
the Property, Borrower shall not be required to replace the same. All such
replacements or additional equipment shall be deemed to constitute “Equipment”
and shall be covered by the security interest herein granted.


 


ARTICLE IX:  TRANSFER OR
ENCUMBRANCE OF THE PROPERTY


 


Section 9.01. Other Encumbrances. Except
for Permitted Encumbrances or other encumbrances approved by Lender, Borrower
shall not further encumber or permit the further encumbrance in any manner
(whether by grant of a pledge, security interest or otherwise) of the Property
or any part thereof or interest therein, including, without limitation, of the
Rents therefrom. In addition, Borrower shall not further encumber and shall not
permit the further encumbrance in any manner (whether by grant of a pledge,
security interest or otherwise) of Borrower or any direct or indirect interest
in Borrower except (a) the Mez Loan and the documents and agreements executed
and delivered in connection therewith, (b) as approved by Lender or (c) as
expressly permitted pursuant to this Security Instrument.


 


Section 9.02. No Transfer. Borrower
acknowledges that Lender has examined and relied on the expertise of Borrower
and, if applicable, each General Partner, in owning and operating properties
such as the Property in agreeing to make the Loan and will continue to rely on


 


78

















 


Borrower’s ownership of the Property as a
means of maintaining the value of the Property as security for repayment of the
Debt and Borrower acknowledges that Lender has a valid interest in  maintaining the value of the Property. Except
with respect to the Mez Loan, Borrower shall not Transfer, nor permit any
Transfer, without the prior written consent of Lender, which consent Lender may
withhold in its sole and absolute discretion. Lender shall not be required to
demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Debt immediately due and payable upon
a Transfer without Lender’s consent. This provision shall apply to every
Transfer regardless of whether voluntary or not, or whether or not Lender has
consented to any previous Transfer excluding any Mez Loan.


 


Section 9.03. Due on Sale. Lender may
declare the Debt immediately due and payable upon any Transfer in violation of
this Security Instrument (it being acknowledged that an involuntary Transfer
which is a lien and which is being contested in accordance with the terms of
this Security Instrument shall not constitute a Transfer or an Event of
Default) without regard to whether any impairment of its security or any
increased risk of default hereunder can be demonstrated. This provision shall
apply to every Transfer or further encumbrance of the Property or any part
thereof or interest in the Property or in Borrower regardless of whether
voluntary or not, or whether or not Lender has consented to any previous
Transfer or further encumbrance of the Property or interest in Borrower.


 


Section 9.04. Permitted Transfer. Notwithstanding
the foregoing provisions of this Article IX, a sale, conveyance or transfer of
the Property in its entirety (whether directly or indirectly) (hereinafter, “Sale”)
shall be permitted hereunder provided that each of the following terms and
conditions are satisfied:


 


(a)           no
Default is then continuing hereunder or under any of the other Loan Documents;


 


(b)           Lender
shall have, in its reasonable discretion, consented to the Sale, and, if the
proposed Sale is to occur at any time after a Securitization, each Rating
Agency shall have delivered written confirmation that any rating issued by such
Rating Agency in connection with the Securitization will not, as a result of
the proposed Sale, be downgraded from the then current ratings thereof,
qualified or withdrawn; provided, however, that no request for consent to the
Sale will be entertained by Lender if the proposed Sale is to occur within
sixty (60) days prior to any contemplated sale of the Loan by Lender in
connection with a Securitization;


 


(c)           Borrower
gives Lender written notice of the terms of the proposed Sale not less than
thirty (30) days before the date on which such Sale is scheduled to close and,
concurrently therewith, gives Lender (i) all such information concerning the
proposed transferee of the Property (hereinafter, “Buyer”) as Lender
would require in evaluating an initial extension of credit to a borrower and
(ii) a non-refundable application fee equal to $7,500;


 


(d)           Borrower
pays Lender, concurrently with the closing of such Sale, a non-refundable
assumption fee in an amount equal to $350,000 with respect to the first Sale or
one-half of one percent (0.5%) of the then outstanding principal balance of the
Loan for each subsequent Sale, in each case, together with all reasonable out-of-pocket
costs and expenses,


 


79

















 


including,
without limitation, reasonable attorneys’ fees, incurred by Lender in
connection with the Sale;


 


(e)           Buyer
assumes all of the obligations of Borrower under the Loan Documents and, prior
to or concurrently with the closing of such Sale, Buyer executes, without any
cost or expense to Lender, such documents and agreements as Lender shall
reasonably require to evidence and effectuate said assumption and delivers such
legal opinions as Lender may reasonably require;


 


(f)            Buyer
executes, without any cost or expense to Lender, new financing statements or
financing statement amendments and any additional documents reasonably
requested by Lender;


 


(g)           Borrower
or Buyer delivers to Lender, without any cost or expense to Lender, an
endorsement or endorsements to Lender’s title insurance policy insuring the
lien of this Security Instrument, extending the effective date of such policy
to the date of execution and delivery (or, if later, of recording) of the
assumption agreement referenced above in subparagraph (e) of this Section, with
no additional exceptions added to such policy (unless otherwise agreed to by
Lender), or a new title policy with no exceptions other than Permitted
Encumbrances and otherwise in form and substance reasonably acceptable to
Lender, insuring that fee simple title to the Property is vested in Buyer;


 


(h)           Borrower
executes and delivers to Lender, without any cost or expense to Lender, a
release of Lender, its officers, directors, employees and agents, from all
claims and liability relating to the transactions evidenced by the Loan
Documents, through and including the date of the closing of the Sale, which
agreement shall be in form and substance reasonably satisfactory to Lender and
shall be binding upon Buyer;


 


(i)            subject to the provisions of Section
18.32 hereof, such Sale is not construed so as to relieve Borrower of any
personal liability under the Note or any of the other Loan Documents for any
acts or events occurring or obligations arising prior to or simultaneously with
the closing of such Sale, and Borrower executes, without any cost or expense to
Lender, such documents and agreements as Lender shall reasonably require to
evidence and effectuate the ratification of said personal liability; provided
that, upon the closing of such Sale, if Borrower and Buyer have satisfied each
of the terms of this Section 9.04, as reasonably determined by Lender, Lender
shall release Borrower from all obligations arising after the closing of such
Sale;


 


(j)            such
Sale is not construed so as to relieve Guarantor of its obligations under any
guaranty or indemnity agreement executed in connection with the Loan and
Guarantor executes, without any cost or expense to Lender, such documents and
agreements as Lender shall reasonably require to evidence and effectuate the
ratification of each such guaranty agreement, provided that if Buyer or a party
associated with Buyer approved by Lender in its sole discretion assumes the
obligations of the current Guarantor under its guaranty arising after the
closing of such Sale and Buyer or such party associated with Buyer, as
applicable, executes, without any cost or expense to Lender, a new guaranty in
similar form and substance to the existing guaranty or an assumption of the
existing guaranty as required by Lender and otherwise reasonably


 


80

















 


satisfactory
to Lender, then Lender shall release the current Guarantor from all obligations
arising under its guaranty after the closing of such Sale; and


 


(k)           Buyer
is a Single Purpose Entity and Lender receives a non-consolidation opinion
relating to Buyer from Buyer’s counsel, which opinion is in form and substance
reasonably acceptable to Lender.


 


ARTICLE X:  CERTIFICATES


 


Section 10.01. Estoppel Certificates. (a) After request by Lender, Borrower, within fifteen (15)
days and at its expense, will furnish Lender with a statement, duly
acknowledged and certified, setting forth (i) the amount of the original
principal amount of the Note, and the unpaid principal amount of the Note, (ii)
the rate of interest of the Note, (iii) the date payments of interest and/or
principal were last paid, (iv) any offsets or defenses to the payment of the
Debt, and if any are alleged, the nature thereof, (v) that the Note and this
Security Instrument have not been modified or if modified, giving particulars
of such modification and (vi) to Borrower’s knowledge, that there has occurred
and is then continuing no Default or if Borrower knows that a Default exists,
the nature thereof, the period of time it has existed, and the action being
taken to remedy such Default.


 


(b)           Within
fifteen (15) days after written request by Borrower but not more than two times
in any Loan Year, Lender shall furnish to Borrower a written statement
confirming the amount of the Debt, the maturity date of the Note, the date to
which interest has been paid, the interest rate with respect to the Note, the
amount on deposit in each Escrow Account and, but solely in connection with a
Sale pursuant to Section 9.04 hereof, a Mez Loan or other Transfer with respect
to which Lender’s consent is required to be obtained, whether to Lender’s
actual knowledge a Default exists under the Loan Documents.


 


(c)           Borrower
shall use all reasonable efforts to obtain estoppel certificates from tenants
in form and substance reasonably acceptable to Lender, but, provided no Event
of Default has occurred and is continuing, in no event shall Borrower be
required to use reasonable efforts to deliver estoppel certificates more than
once during any Loan Year and only if Lender has a good faith reason for such
request.


 


ARTICLE XI:  NOTICES


 


Section 11.01. Notices. Any notice,
demand, statement, request or consent made hereunder shall be in writing and
delivered personally or sent to the party to whom the notice, demand or request
is being made by Federal Express or other nationally recognized overnight
delivery service, as follows and shall be deemed given when delivered
personally or one (1) Business Day after being deposited with Federal Express
or such other nationally recognized delivery service:


 


	
  If to Lender:

  	
   

  	
  Wachovia
  Bank, National Association

  
	
   

  	
   

  	
  Commercial
  Real Estate Services

  



 


81

















 


	
   

  	
   

  	
  8739
  Research Drive URP 4

  
	
   

  	
   

  	
  NC 1075

  
	
   

  	
   

  	
  Charlotte,
  North Carolina  28262

  
	
   

  	
   

  	
  Loan Number:
  502855645

  
	
   

  	
   

  	
  Attention:
  Portfolio Management

  
	
   

  	
   

  	
   

  
	
  with a copy
  to:

  	
   

  	
  Proskauer Rose LLP

  
	
   

  	
   

  	
  1585 Broadway

  
	
   

  	
   

  	
  New York, New York 10036

  
	
   

  	
   

  	
  Attn: David J. Weinberger, Esq.

  
	
   

  	
   

  	
   

  
	
  If to Borrower:

  	
   

  	
  To Borrower,
  at the address first written above,

  
	
   

  	
   

  	
   

  
	
  with a copy
  to:

  	
   

  	
  Goulston & Storrs, P.C.

  
	
   

  	
   

  	
  400 Atlantic Avenue

  
	
   

  	
   

  	
  Boston, Massachusetts 02110

  
	
   

  	
   

  	
  Attn: Robert J. Mack, Esq.

  



 


or such other
address as either Borrower or Lender shall hereafter specify by not less than
ten (10) days prior written notice as provided herein; provided, however, that
notwithstanding any provision of this Article to the contrary, such notice of
change of address shall be deemed given only upon actual receipt thereof. Rejection
or other refusal to accept or the inability to deliver because of changed
addresses of which no notice was given as herein required shall be deemed to be
receipt of the notice, demand, statement, request or consent.


 


ARTICLE XII:  INDEMNIFICATION


 


Section 12.01. Indemnification Covering
Property. In addition, and without limitation, to any other provision of
this Security Instrument or any other Loan Document, Borrower shall protect,
indemnify and save harmless Lender and its successors and assigns, and each of
their agents, employees, officers, directors, stockholders, partners and
members (collectively, “Indemnified Parties”) for, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, known or unknown, contingent or otherwise,
whether incurred or imposed within or outside the judicial process, including,
without limitation, reasonable attorneys’ fees and disbursements, imposed upon
or incurred by or asserted against any of the Indemnified Parties by reason of
(a) ownership of this Security Instrument, the Assignment, the Property or any
part thereof or any interest therein or receipt of any Rents; (b) any accident,
injury to or death of any person or loss of or damage to property occurring in,
on or about the Property or any part thereof or on the adjoining sidewalks,
curbs, parking areas, streets or ways; (c) any use, nonuse or condition in, on
or about, or possession, alteration, repair, operation, maintenance or
management of, the Property or any part thereof or on the adjoining sidewalks,
curbs, parking areas, streets or ways; (d) any failure on the part of Borrower
to perform or comply with any of the terms of this Security Instrument or the
Assignment; (e) performance of any labor or services or the furnishing of any
materials or other


 


82

















 


property in respect of the Property or any
part thereof; (f) any claim by brokers, finders or similar Persons claiming to
be entitled to a commission in connection with any Lease or other transaction
involving the Property or any part thereof; (g) any Imposition including,
without limitation, any Imposition attributable to the execution, delivery,
filing, or recording of any Loan Document, Lease or memorandum thereof; (h) any
lien or claim arising on or against the Property or any part thereof under any
Legal Requirement or any liability asserted against any of the Indemnified Parties
with respect thereto; (i) any claim arising out of or in any way relating to
any tax or other imposition on the making and/or recording of this Security
Instrument, the Note or any of the other Loan Documents; (j) a Default under
Sections 2.02(f), 2.02(g), 2.02(k), 2.02(t) or 2.02(w) hereof, (k) the failure
of any Person to file timely with the Internal Revenue Service an accurate Form
1099-B, Statement for Recipients of Proceeds from Real Estate, Broker and
Barter Exchange Transactions, which may be required in connection with the
Loan, or to supply a copy thereof in a timely fashion to the recipient of the
proceeds of the Loan; or (l) the claims of any lessee or any Person acting
through or under any lessee or otherwise arising under or as a consequence of
any Lease. Notwithstanding the foregoing provisions of this Section 12.01 to
the contrary, Borrower shall have no obligation to indemnify the Indemnified
Parties pursuant to this Section 12.01 for liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses relative to the
foregoing which result from Lender’s or any other Indemnified Party’s willful
misconduct or gross negligence. Any amounts payable to Lender by reason of the
application of this Section 12.01 shall constitute a part of the Debt secured
by this Security Instrument and the other Loan Documents and shall become due
and payable five (5) Business Days after receipt by Borrower of Lender’s
written demand therefor and shall bear interest at the Default Rate from the
date the liability, obligation, claim, cost or expense is sustained by Lender,
as applicable, until paid. The provisions of this Section 12.01 shall survive
the termination of this Security Instrument whether by repayment of the Debt,
foreclosure or delivery of a deed in lieu thereof, assignment or otherwise. In
case any action, suit or proceeding is brought against any of the Indemnified
Parties by reason of any occurrence of the type set forth in (a) through (l)
above, Borrower shall, at Borrower’s expense, resist and defend such action,
suit or proceeding or will cause the same to be resisted and defended by
counsel at Borrower’s expense for the insurer of the liability or by counsel
designated by Borrower (unless reasonably disapproved by Lender promptly after
Lender has been notified of such counsel); provided, however,
that nothing herein shall compromise the right of Lender (or any other
Indemnified Party) to appoint its own counsel at Borrower’s expense for its
defense with respect to any action which, in the reasonable opinion of Lender
or such other Indemnified Party, as applicable, presents a conflict or
potential conflict between Lender or such other Indemnified Party that would
make such separate representation advisable. Any Indemnified Party will give
Borrower prompt notice after such Indemnified Party obtains actual knowledge of
any potential claim by such Indemnified Party for indemnification hereunder. The
Indemnified Parties shall not settle or compromise any action, proceeding or
claim as to which it is indemnified hereunder without notice to Borrower. Notwithstanding
the foregoing, so long as no Event of Default has occurred and is continuing
and Borrower is resisting and defending such action, suit or proceeding as
provided above in a prudent and commercially reasonable manner, Lender and the
Indemnified Parties shall not be entitled to settle such action, suit or
proceeding, or claim the benefit of this Section 12.01 with respect to such
action, suit or proceeding, without the consent of Borrower not to be
unreasonably withheld, delayed or conditioned; provided,


 


83

















 


however, that (x) if
Borrower is not diligently defending such action, suit or proceeding in a
prudent and commercially reasonable manner as provided above, and Lender has
provided Borrower with thirty (30) days’ prior written notice, or shorter
period if mandated by the requirements of the applicable law, and opportunity
to correct such determination and Borrower fails to so correct to Lender’s
reasonable satisfaction within such thirty (30) day period, or (y) if failure
to settle could, in Lender’s reasonable judgment, expose Lender to criminal
liability, Lender may settle such action, suit or proceeding and claim the
benefit of this Section 12.01 with respect to the settlement of such action,
suit or proceeding.


 


ARTICLE XIII:  DEFAULTS


 


Section 13.01. Events of Default. The
Debt shall become immediately due at the option of Lender upon any one or more
of the following events (“Event of Default”):


 


(a)           if
the final payment or prepayment premium, if any, due under the Note shall not
be paid on Maturity unless such failure is caused solely as a result of Lender
failing to transfer sums on deposit in the Central Account to or from the
applicable Sub-Account or Escrow Account;


 


(b)           if
any monthly payment of interest and/or principal due under the Note (other than
the sums described in (a) above) shall not be fully paid on the date upon which
the same is due and payable thereunder unless such failure is caused solely as
a result of Lender failing to transfer sums on deposit in the Central Account
to or from the applicable Sub-Account or Escrow Account;


 


(c)           if
payment of any sum (other than the sums described in (a) above or (b) above)
required to be paid pursuant to the Note, this Security Instrument or any other
Loan Document shall not be paid when due and such failure continues for five
(5) days after Lender delivers written notice to Borrower that same is due and
payable thereunder or hereunder, unless such failure is caused solely as a
result of Lender failing to transfer sums on deposit in the Central Account to
or from the applicable Sub-Account or Escrow Account;


 


(d)           if
Borrower, Guarantor or, if Borrower or Guarantor is a partnership, any general
partner of Borrower or Guarantor, or, if Borrower or Guarantor is a limited
liability company, any member of Borrower or Guarantor, shall institute or
cause to be instituted any proceeding for the termination or dissolution of
Borrower, Guarantor or any such general partner or member;


 


(e)           if
(i) the original insurance policies or certificates are not delivered to Lender
as herein provided (provided, however, that if the insurance policies required
by this Security Instrument are maintained in full force and effect and Lender
receives either a certificate or original policies required by this Security
Instrument for each such insurance policy within the time periods specified in
this Security Instrument, then Borrower shall have five (5) days after notice
from Lender of Borrower’s failure to deliver the original policies or
certificates (whichever has not been delivered as required) to deliver same to
Lender before such failure becomes an Event of Default) or (ii) if the
insurance policies required hereunder are not kept in full force and effect as
herein provided unless such failure is caused solely as a result of Lender


 


84

















 


failing to
transfer sums on deposit in the Central Account to or from the applicable
Sub-Account or Escrow Account (no notice or cure period applies to this item
(ii));


 


(f)            if
Borrower or Guarantor attempts to assign its rights under this Security
Instrument or any other Loan Document or any interest herein or therein, or if
any Transfer occurs, other than in accordance with the provisions hereof;


 


(g)           if
any material representation or warranty of Borrower or Guarantor made herein or
in any other Loan Document or in any certificate, report, financial statement
or other instrument or agreement furnished to Lender shall prove to have been
false or misleading in any material respect as of the date made;


 


(h)           if
Borrower, Guarantor or any general partner of Borrower or Guarantor shall make
an assignment for the benefit of creditors or shall admit in writing its
inability to pay its debts generally as they become due;


 


(i)            if a receiver, liquidator or trustee
of Borrower, Guarantor or any general partner of Borrower or Guarantor shall be
appointed or if Borrower, Guarantor or their respective general partners shall
be adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any
similar federal or state law, shall be filed by or against, consented to, or
acquiesced in by, Borrower, Guarantor or their respective general partners or
if any proceeding for the dissolution or liquidation of Borrower, Guarantor or
their respective general partners shall be instituted; however, if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by Borrower, Guarantor or their respective general partners, as
applicable, upon the same not being discharged, stayed or dismissed within
ninety (90) days or if Borrower, Guarantor or their respective general partners
shall generally not be paying its debts as they become due;


 


(j)            if
Borrower shall be in default beyond any notice or grace period, if any, under
any other mortgage or deed of trust or security agreement covering any part of
the Property without regard to its priority relative to this Security
Instrument; provided, however, this provision shall not be deemed a waiver of
the provisions of Article IX prohibiting further encumbrances affecting the
Property or any other provision of this Security Instrument;


 


(k)           except
for Permitted Encumbrances, if the Property becomes subject (i) to any lien
which is superior to the lien of this Security Instrument, other than a lien
for real estate taxes and assessments not due and payable, or (ii) to any
mechanic’s, materialman’s or other lien which is or is asserted to be superior
to the lien of this Security Instrument, and such lien shall remain
undischarged (by payment, bonding, or otherwise) for thirty (30) days after
Borrower is notified of the filing thereof, unless contested in accordance with
the terms hereof;


 


(l)            if
Borrower discontinues the operation of the Property for reasons other than
repair or restoration arising from a casualty or condemnation for ten (10) days
or more;


 


(m)          any
material alteration, demolition or removal of any of the Improvements shall
occur in violation of this Security Instrument;


 


85
















 


(n)           if
Borrower consummates a transaction which would cause this Security Instrument
or Lender’s rights under this Security Instrument, the Note or any other Loan
Document to constitute a non-exempt prohibited transaction under ERISA or
result in a violation of a state statute regulating government plans subjecting
Lender to liability for a violation of ERISA or a state statute; or


 


(o)           if
a default shall occur under any of the other terms, covenants or conditions of
the Note, this Security Instrument or any other Loan Document, other than as
set forth in (a) through (n) above, for ten (10) days after notice from Lender
in the case of any default which can be cured by the payment of a sum of money,
or for thirty (30) days after notice from Lender in the case of any other
default or an additional ninety (90) days if Borrower is diligently and
continuously effectuating a cure of a curable non-monetary default, other than
as set forth in (a) through (n)  above.


 


Section 13.02. Remedies. (a) Upon the
occurrence and during the continuance of any Event of Default, Lender may, in
addition to any other rights or remedies available to it hereunder or under any
other Loan Document, at law or in equity, take such action, without notice or
demand, as it reasonably deems advisable to protect and enforce its rights
against Borrower and in and to the Property including, but not limited to, the
following actions, each of which may be pursued singly, concurrently or
otherwise, at such time and in such order as Lender may determine, in its sole
discretion, without impairing or otherwise affecting any other rights and
remedies of Lender hereunder, at law or in equity:  (i) declare all or any portion of the unpaid
Debt to be immediately due and payable; provided, however, that upon the
occurrence of any of the events specified in Section 13.01(i), the entire Debt
will be immediately due and payable without notice or demand or any other
declaration of the amounts due and payable; or (ii) bring an action to
foreclose this Security Instrument and without applying for a receiver for the
Rents, but subject to the rights of the tenants under the Leases, enter into or
upon the Property or any part thereof, either personally or by its agents,
nominees or attorneys, and dispossess Borrower and its agents and servants
therefrom, and thereupon Lender may (A) use, operate, manage, control, insure,
maintain, repair, restore and otherwise deal with all and every part of the
Property and conduct the business thereat, (B) make alterations, additions,
renewals, replacements and improvements to or on the Property or any part
thereof, (C) exercise all rights and powers of Borrower with respect to the
Property or any part thereof, whether in the name of Borrower or otherwise,
including, without limitation, the right to make, cancel, enforce or modify
Leases, obtain and evict tenants, and demand, sue for, collect and receive all
earnings, revenues, rents, issues, profits and other income of the Property and
every part thereof, and (D) apply the receipts from the Property or any part
thereof to the payment of the Debt, after deducting therefrom all expenses
(including, without limitation, reasonable attorneys’ fees and disbursements)
reasonably incurred in connection with the aforesaid operations and all amounts
necessary to pay the Impositions, insurance and other charges in connection
with the Property or any part thereof, as well as just and reasonable
compensation for the services of Lender’s third-party agents; or (iii) have an
appraisal or other valuation of the Property or any part thereof performed by
an Appraiser (and Borrower covenants and agrees it shall cooperate in causing
any such valuation or appraisal to be performed) and any cost or expense
incurred by Lender in connection therewith shall constitute a portion of the
Debt and be secured by this Security Instrument and shall be immediately due
and payable to Lender with interest, at the Default Rate,


 


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until the date of receipt by Lender; or (iv)
sell the Property or institute proceedings for the complete foreclosure of this
Security Instrument, or take such other action as may be allowed pursuant to
Legal Requirements, at law or in equity, for the enforcement of this Security
Instrument in which case the Property or any part thereof may be sold for cash
or credit in one or more parcels; or (v) with or without entry, and to the
extent permitted and pursuant to the procedures provided by applicable Legal
Requirements, institute proceedings for the partial foreclosure of this
Security Instrument, or take such other action as may be allowed pursuant to
Legal Requirements, at law or in equity, for the enforcement of this Security
Instrument for the portion of the Debt then due and payable, subject to the
lien of this Security Instrument continuing unimpaired and without loss of
priority so as to secure the balance of the Debt not then due; or (vi) sell the
Property or any part thereof and any or all estate, claim, demand, right, title
and interest of Borrower therein and rights of redemption thereof, pursuant to
power of sale or otherwise, at one or more sales, in whole or in parcels, in
any order or manner, at such time and place, upon such terms and after such
notice thereof as may be required or permitted by law, at the discretion of
Lender, and in the event of a sale, by foreclosure or otherwise, of less than
all of the Property, this Security Instrument shall continue as a lien on the
remaining portion of the Property; or (vii) institute an action, suit or
proceeding in equity for the specific performance of any covenant, condition or
agreement contained in the Loan Documents, or any of them; or (viii) recover
judgment on the Note or any guaranty either before, during or after (or in lieu
of) any proceedings for the enforcement of this Security Instrument; or (ix)
apply, ex  parte, for the appointment of a custodian, trustee,
receiver, keeper, liquidator or conservator of the Property or any part
thereof, irrespective of the adequacy of the security for the Debt and without
regard to the solvency of Borrower or of any Person liable for the payment of
the Debt, to which appointment Borrower does hereby consent and such receiver
or other official shall have all rights and powers permitted by applicable law
and such other rights and powers as the court making such appointment may
confer, but the appointment of such receiver or other official shall not impair
or in any manner prejudice the rights of Lender to receive the Rent with
respect to any of the Property pursuant to this Security Instrument or the
Assignment; or (x) require, at Lender’s option, Borrower to pay monthly in
advance to Lender, or any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of any portion of the
Property occupied by Borrower and may require Borrower to vacate and surrender
possession to Lender of the Property or to such receiver and Borrower may be
evicted by summary proceedings or otherwise; or (xi) without notice to Borrower
(A) apply all or any portion of the cash collateral in any Sub-Account and
Escrow Account, including any interest and/or earnings therein, to carry out
the obligations of Borrower under this Security Instrument and the other Loan
Documents, to protect and preserve the Property and for any other purpose
permitted under this Security Instrument and the other Loan Documents and/or
(B) have all or any portion of such cash collateral immediately paid to Lender
to be applied against the Debt in the order and priority set forth in the Note;
or (xii) pursue any or all such other rights or remedies as Lender may have
under applicable law or in equity; provided, however, that the provisions of
this Section 13.02(a) shall not be construed to extend or modify any of the
notice requirements or grace periods provided for hereunder or under any of the
other Loan Documents. Borrower hereby waives, to the fullest extent permitted
by Legal Requirements, any defense Borrower might otherwise raise or have by
the failure to make any tenants parties defendant to a foreclosure proceeding
and to foreclose their rights in any proceeding instituted by Lender.


 


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(b)           Any
time that an Event of Default exists, Lender shall have the power to sell the
Property or any part thereof at public auction, in such manner, at such time
and place, upon such terms and conditions, and upon such public notice as
Lender may deem best for the interest of Lender, or as may be required or
permitted by applicable law, consisting of advertisement in a newspaper of
general circulation in the jurisdiction and for such period as applicable law
may require and at such other times and by such other methods, if any, as may
be required by law to convey the Property in fee simple by Lender’s deed with
special warranty of title to and at the cost of the purchaser, who shall not be
liable to see to the application of the purchase money. The proceeds or avails
of any sale made under or by virtue of this Section 13.02, together with any
other sums which then may be held by Lender under this Security Instrument,
whether under the provisions of this Section 13.02 or otherwise, shall be
applied as follows:


 


First: 
To the payment of the third-party costs and expenses reasonably incurred
in connection with any such sale and to advances, fees and expenses, including,
without limitation, reasonable fees and expenses of Lender’s legal counsel as
applicable, and of any judicial proceedings wherein the same may be made, and
of all expenses, liabilities and advances reasonably made or incurred by Lender
under this Security Instrument, together with interest as provided herein on
all such advances made by Lender, and all Impositions, except any Impositions
or other charges subject to which the Property shall have been sold;


 


Second: 
To the payment of the whole amount then due, owing and unpaid under the
Note for principal and interest thereon, with interest on such unpaid principal
at the Default Rate from the date of the occurrence of the earliest Event of
Default that formed a basis for such sale until the same is paid;


 


Third: 
To the payment of any other portion of the Debt required to be paid by
Borrower pursuant to any provision of this Security Instrument, the Note, or
any of the other Loan Documents; and


 


Fourth: 
The surplus, if any, to Borrower unless otherwise required by Legal
Requirements.


 


Lender and any
receiver or custodian of the Property or any part thereof shall be liable to
account for only those rents, issues, proceeds and profits actually received by
it.


 


(c)           Lender
may adjourn from time to time any sale by it to be made under or by virtue of
this Security Instrument by announcement at the time and place appointed for
such sale or for such adjourned sale or sales and, except as otherwise provided
by any applicable provision of Legal Requirements, Lender, without further
notice or publication, may make such sale at the time and place to which the
same shall be so adjourned.


 


(d)           Upon
the completion of any sale or sales made by Lender under or by virtue of this
Section 13.02, Lender or any officer of any court empowered to do so, shall
execute and deliver to the accepted purchaser or purchasers a good and
sufficient instrument, or good and sufficient instruments, granting, conveying,
assigning and transferring all estate, right, title and


 


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interest in
and to the property and rights sold. Lender is hereby irrevocably appointed the
true and lawful attorney-in-fact of Borrower (coupled with an interest), in its
name and stead, to make all necessary conveyances, assignments, transfers and
deliveries of the property and rights so sold and for that purpose Lender may
execute all necessary instruments of conveyance, assignment, transfer and
delivery, and may substitute one or more Persons with like power, Borrower
hereby ratifying and confirming all that its said attorney-in-fact or such
substitute or substitutes shall lawfully do by virtue hereof. Nevertheless,
Borrower, if so requested by Lender, shall ratify and confirm any such sale or
sales by executing and delivering to Lender, or to such purchaser or purchasers
all such instruments as may be advisable, in the sole judgment of Lender, for
such purpose, and as may be designated in such request. Any such sale or sales
made under or by virtue of this Section 13.02, whether made under the power of
sale herein granted or under or by virtue of judicial proceedings or a judgment
or decree of foreclosure and sale, shall operate to divest all the estate,
right, title, interest, claim and demand whatsoever, whether at law or in
equity, of Borrower in and to the property and rights so sold, and shall, to
the fullest extent permitted under Legal Requirements, be a perpetual bar, both
at law and in equity against Borrower and against any and all Persons claiming
or who may claim the same, or any part thereof, from, through or under
Borrower.


 


(e)           In
the event of any sale made under or by virtue of this Section 13.02 (whether
made under the power of sale herein granted or under or by virtue of judicial
proceedings or a judgment or decree of foreclosure and sale), the entire Debt
immediately thereupon shall, anything in the Loan Documents to the contrary
notwithstanding, become due and payable.


 


(f)            Upon
any sale made under or by virtue of this Section 13.02 (whether made under the
power of sale herein granted or under or by virtue of judicial proceedings or a
judgment or decree of foreclosure and sale), Lender may bid for and acquire the
Property or any part thereof and in lieu of paying cash therefor may make
settlement for the purchase price by crediting upon the Debt the net sales
price after deducting therefrom the expenses of the sale and the costs of the
action.


 


(g)           No
recovery of any judgment by Lender and no levy of an execution under any
judgment upon the Property or any part thereof or upon any other property of
Borrower shall release the lien of this Security Instrument upon the Property
or any part thereof, or any liens, rights, powers or remedies of Lender
hereunder, but such liens, rights, powers and remedies of Lender shall continue
unimpaired until all amounts due under the Note, this Security Instrument and
the other Loan Documents are paid in full.


 


(h)           Upon
the exercise by Lender of any power, right, privilege, or remedy pursuant to
this Security Instrument which requires any consent, approval, registration,
qualification, or authorization of any Governmental Authority, Borrower agrees
to execute and deliver, or will cause the execution and delivery of, all
applications, certificates, instruments, assignments and other documents and
papers that Lender or any purchaser of the Property may be required to obtain
for such governmental consent, approval, registration, qualification, or
authorization and Lender is hereby irrevocably appointed the true and lawful
attorney-in-fact of Borrower (coupled with an interest), in its name and stead,
to execute all such applications, certificates, instruments,


 


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assignments
and other documents and papers if Borrower fails to do so within five (5)
Business Days of request therefor.


 


Section 13.03. Payment of Debt After
Default. If, during the continuance of any Event of Default, Borrower shall
tender payment of an amount sufficient to satisfy the Debt in whole or in part
at any time prior to a foreclosure sale of the Property, and if at the time of
such tender prepayment of the principal balance of the Note is not permitted by
the Note or this Security Instrument, Borrower shall, in addition to the entire
Debt, also pay to Lender a sum equal to (a) all accrued interest on the
Note and all other fees, charges and sums due and payable hereunder,
(b) all costs and expenses in connection with the enforcement of Lender’s
rights hereunder, and (c) a prepayment charge (the “Prepayment Charge”)
equal to the greater of (i) 1% of the Principal Amount which is prepaid
and (ii) the present value of a series of payments each equal to the
Payment Differential (as hereinafter defined) and payable on each Payment Date
over the remaining original term of the Note until the Payment Date occurring
six (6) months prior to the Maturity Date, discounted at the Reinvestment Yield
(as hereinafter defined) for the number of months remaining as of the date of
such prepayment to each such Payment Date and the Payment Date occurring six
(6) months prior to the Maturity Date. The term “Payment Differential” shall
mean an amount equal to (i) the Interest Rate less the Reinvestment Yield,
divided by (ii) twelve (12) and multiplied by (iii) the Principal Amount after
application of the constant monthly payment due under the Note on the date of
such prepayment, provided that the Payment Differential shall in no event be
less than zero. The term “Reinvestment Yield” shall mean an amount equal to the
lesser of (i) the yield on the U.S. Treasury issue (primary issue) with a
maturity date closest to the Payment Date occurring six (6) months prior to the
Maturity Date, or (ii) the yield on the U.S. Treasury issue (primary issue)
with a term equal to the remaining average life of the indebtedness evidenced
by the Note, with each such yield being based on the bid price for such issue
as published in the Wall Street Journal on the date that is fourteen (14) days
prior to the date of such prepayment set forth in the notice of prepayment (or,
if such bid price is not published on that date, the next preceding date on
which such bid price is so published) and converted to a monthly compounded
nominal yield. Failure of Lender to require any of these payments shall not
constitute a waiver of the right to require the same in the event of any
subsequent default or to exercise any other remedy available to Lender
hereunder, under any other Loan Document or at law or in equity. In the event
that any prepayment charge is due hereunder, Lender shall deliver to Borrower a
statement setting forth the amount and determination of the prepayment fee,
and, provided that Lender shall have in good faith applied the formula
described above, Borrower shall not have the right to challenge the calculation
or the method of calculation set forth in any such statement in the absence of
manifest error, which calculation may be made by Lender on any day during the
fifteen (15) day period preceding the date of such prepayment. Lender shall not
be obligated or required to have actually reinvested the prepaid principal
balance at the Reinvestment Yield or otherwise as a condition to receiving the
prepayment charge. If at the time of such tender, prepayment of the principal
balance of the Note is permitted, such tender by Borrower shall be deemed to be
a voluntary prepayment of the principal balance of the Note, and Borrower
shall, in addition to the entire Debt, also pay to Lender the applicable
prepayment consideration specified in the Note and this Security Instrument.


 


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Section 13.04. Possession of the Property.
Upon and during the continuance of any Event of Default and the acceleration of
the Debt or any portion thereof, Borrower, if an occupant of the Property or
any part thereof, upon demand of Lender, shall immediately surrender possession
of the Property (or the portion thereof so occupied) to Lender, and if Borrower
is permitted to remain in possession, the possession shall be as a month-to-month
tenant of Lender and, on demand, Borrower shall pay to Lender monthly, in
advance, a reasonable rental for the space so occupied and in default thereof
Borrower may be dispossessed. The covenants herein contained may be enforced by
a receiver of the Property or any part thereof. Nothing in this Section 13.04
shall be deemed to be a waiver of the provisions of this Security Instrument
making the Transfer of the Property or any part thereof without Lender’s prior
written consent an Event of Default.


 


Section 13.05. Interest After Default.
If any amount due under the Note, this Security Instrument or any of the other
Loan Documents is not paid within any applicable notice and grace period after
same is due, whether such date is the stated due date, any accelerated due date
or any other date or at any other time specified under any of the terms hereof
or thereof, then, in  such event,
Borrower shall pay interest on the amount not so paid from and after the date
on which such amount first becomes due at the Default Rate; and such interest
shall be due and payable at such rate until the earlier of the cure of all
Events of Default or the payment of the entire amount due to Lender, whether or
not any action shall have been taken or proceeding commenced to recover the
same or to foreclose this Security Instrument. All unpaid and accrued interest
shall be secured by this Security Instrument as part of the Debt. Nothing in
this Section 13.05 or in any other provision of this Security Instrument shall
constitute an extension of the time for payment of the Debt.


 


Section 13.06. Borrower’s Actions After
Default. During the existence of any Event of Default and immediately upon
the commencement of any action, suit or other legal proceedings by Lender to
obtain judgment for the Debt, or of any other nature in aid of the enforcement
of the Loan Documents, Borrower will (a) after receipt of notice of the
institution of any such action, waive the issuance and service of process and
enter its voluntary appearance in such action, suit or proceeding, and (b) if
required by Lender, consent to the appointment of a receiver or receivers of
the Property or any part thereof and of all the earnings, revenues, rents, issues,
profits and income thereof.


 


Section 13.07. Control by Lender After
Default. Notwithstanding the appointment of any custodian, receiver,
liquidator or trustee of Borrower, or of any of its property, or of the
Property or any part thereof, to the extent permitted by Legal Requirements,
Lender shall be entitled to obtain possession and control of all property now
and hereafter covered by this Security Instrument and the Assignment in
accordance with the terms hereof.


 


Section 13.08. Right to Cure Defaults.
(a) During the continuance of any Event of Default,
Lender or its agents may, but without any obligation to do so and without
notice to or demand on Borrower and without releasing Borrower from any
obligation hereunder, make or do the same in such manner and to such extent as
Lender may deem necessary to protect the security hereof. Lender and its agents
are authorized to enter upon the Property or any part thereof for such
purposes, or appear in, defend, or bring any action or proceedings to protect


 


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Lender’s interest in the Property or any part
thereof or to foreclose this Security Instrument or collect the Debt, and the
cost and expense thereof (including reasonable attorneys’ fees to the extent
permitted by law), with interest as provided in this Section 13.08, shall
constitute a portion of the Debt and shall be immediately due and payable to
Lender upon demand. All such costs and expenses incurred by Lender or its
agents in remedying such Event of Default or in appearing in, defending, or
bringing any such action or proceeding shall bear interest at the Default Rate,
for the period from the date so demanded to the date of payment to Lender. All
such costs and expenses incurred by Lender or its agents together with interest
thereon calculated at the above rate shall be deemed to constitute a portion of
the Debt and be secured by this Security Instrument.


 


(b)           If
Lender makes any payment or advance that Lender is authorized by this Security
Instrument to make in the place and stead of Borrower (i) relating to the
Impositions or tax liens asserted against the Property, Lender may do so
according to any bill, statement or estimate procured from the appropriate
public office without inquiry into the accuracy of the bill, statement or
estimate or into the validity of any of the Impositions or the tax liens or
claims thereof; (ii) relating to any apparent or threatened adverse title,
lien, claim of lien, encumbrance, claim or charge, Lender will be the sole judge
of the legality or validity of same; or (iii) relating to any other purpose
authorized by this Security Instrument but not enumerated in this Section
13.08, Lender may do so whenever, in its judgment and discretion, the payment
or advance seems necessary or desirable to protect the Property and the full
security interest intended to be created by this Security Instrument. In
connection with any payment or advance made pursuant to this Section 13.08,
Lender has the option and is authorized, but in no event shall be obligated, to
obtain a continuation report of title prepared by a title insurance company. The
payments and the advances made by Lender pursuant to this Section 13.08 and the
cost and expenses of said title report will be due and payable by Borrower on
demand, together with interest at the Default Rate, and will be secured by this
Security Instrument.


 


Section 13.09. Late Payment Charge. If
any portion of the Debt is not paid in full on or before the date on which it
is due and payable hereunder (other than the principal portion of the Debt due
on the Maturity Date), Borrower shall pay to Lender an amount equal to five
percent (5%) of such unpaid portion of the Debt (“Late Charge”) to
defray the expense incurred by Lender in handling and processing such
delinquent payment, and such amount shall constitute a part of the Debt.


 


Section 13.10. Recovery of Sums Required
to Be Paid. Lender shall have the right from time to time to take action to
recover any sum or sums which constitute a part of the Debt as the same become
due and payable hereunder (after the expiration of any grace period or the
giving of any notice herein provided, if any), without regard to whether or not
the balance of the Debt shall be due, and without prejudice to the right of Lender
thereafter to bring an action of foreclosure, or any other action, for a
default or defaults by Borrower existing at the time such earlier action was
commenced.


 


Section 13.11. Marshalling and Other
Matters. Borrower hereby waives, to the fullest extent permitted by law,
the benefit of all appraisement, valuation, stay, extension, reinstatement,
redemption (both equitable and statutory) and homestead laws now or hereafter
in force and all


 


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rights of marshalling in the event of any
sale hereunder of the Property or any part thereof or any interest therein. Further,
Borrower hereby expressly waives, to the extent permitted by law, any and all
rights of redemption from sale under any order or decree of foreclosure of this
Security Instrument on behalf of Borrower, whether equitable or statutory and
on behalf of each and every Person acquiring any interest in or title to the
Property or any part thereof subsequent to the date of this Security Instrument
and on behalf of all Persons to the fullest extent permitted by applicable law.


 


Section 13.12. Tax Reduction Proceedings.
If an Event of Default exists, Borrower shall be deemed to have appointed
Lender as its attorney-in-fact to seek a reduction or reductions in the
assessed valuation of the Property for real property tax purposes or for any
other purpose and to prosecute any action or proceeding in connection therewith.
This power, being coupled with an interest, shall be irrevocable for so long as
any part of the Debt remains unpaid and any Event of Default shall be
continuing.


 


Section 13.13. General Provisions
Regarding Remedies.


 


(a)           Right
to Terminate Proceedings. Lender may terminate or rescind any proceeding or
other action brought in connection with its exercise of the remedies provided
in Section 13.02 at any time before the conclusion thereof, as determined in
Lender’s sole discretion and without prejudice to Lender.


 


(b)           No
Waiver or Release. The failure of Lender to exercise any right, remedy or
option provided in the Loan Documents shall not be deemed a waiver of such
right, remedy or option or of any covenant or obligation contained in the Loan
Documents. No acceptance by Lender of any payment while an Event of Default
exists and no payment by Lender of any payment or obligation for which Borrower
is liable hereunder shall be deemed to waive or cure such Event of Default. No
sale of all or any portion of the Property, no forbearance on the part of
Lender, and no extension of time for the payment of the whole or any portion of
the Debt or any other indulgence given by Lender to Borrower or any other
Person, shall operate to release or in any manner affect the interest of Lender
in the Property or the liability of Borrower to pay the Debt. No waiver by
Lender shall be effective unless it is in writing and then only to the extent
specifically stated.


 


(c)           No
Impairment; No Releases. The interests and rights of Lender under the Loan
Documents shall not be impaired by any indulgence, including (i) any renewal,
extension or modification which Lender may grant with respect to any of the
Debt; (ii) any surrender, compromise, release, renewal, extension, exchange or
substitution which Lender may grant with respect to the Property or any portion
thereof; or (iii) any release or indulgence granted to any maker, endorser,
guarantor or surety of any of the Debt.


 


ARTICLE XIV:  COMPLIANCE WITH
REQUIREMENTS


 


Section 14.01. Compliance with Legal
Requirements. (a) Borrower shall promptly comply
with all present and future Legal Requirements, foreseen and unforeseen,
ordinary and extraordinary, whether requiring structural or nonstructural
repairs or alterations including,


 


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without limitation, all zoning, subdivision,
building, safety and environmental protection, land use and development Legal
Requirements, all Legal Requirements which may be applicable to the curbs
adjoining the Property or to the use or manner of use thereof, and all rent
control, rent stabilization and all other similar Legal Requirements relating
to rents charged and/or collected in connection with the Leases. Borrower
represents and warrants that (i) except as previously disclosed to Lender in
writing, the Property is in compliance in all material respects with all Legal
Requirements as of the date hereof, no notices of violations of any Legal
Requirements have been entered or received by Borrower and there is no basis
for the entering of such notices and (ii) any violations of Legal Requirements
with respect to the Property will not result in a Material Adverse Effect, be a
threat to the health and safety of any Person or impair Borrower’s ability to
collect any Rent.


 


(b)           Notwithstanding
anything to the contrary contained herein or in any of the other Loan
Documents, Borrower shall have the right to contest by appropriate legal
proceedings diligently conducted in good faith, without cost or expense to
Lender, the validity or application of any Legal Requirement and to suspend
compliance therewith if permitted under applicable Legal Requirements, provided
(i) failure to comply therewith may not subject Lender to any civil or criminal
liability, (ii) prior to and during such contest, if reasonably required by
Lender, Borrower shall furnish to Lender security reasonably satisfactory to
Lender, in its discretion, against loss or injury by reason of such contest or
non-compliance with such Legal Requirement, (iii) no Event of Default shall
exist during such proceedings and such contest shall not otherwise violate any
of the provisions of any of the Loan Documents, (iv) such contest shall not
(unless Borrower shall comply with the provisions of clause (ii) of this
Section 14.01(b)) subject the Property to any lien or encumbrance the
enforcement of which is not suspended or otherwise affect the priority of the
lien of this Security Instrument; (v) such contest shall not affect the
ownership, use or occupancy of the Property; (vi) the Property or any part
thereof or any interest therein shall not be in any imminent danger of being
sold, forfeited or lost by reason of such contest by Borrower; (vii) Borrower
shall give Lender prompt notice of the commencement of such proceedings and,
upon request by Lender, notice of the status of such proceedings and/or confirmation
of the continuing satisfaction of the conditions set forth in clauses (i) -
(vi) of this Section 14.01(b); and (viii) upon a final determination of such
proceeding, Borrower shall take all steps necessary to comply with any
requirements arising therefrom.


 


(c)           Borrower
shall at all times comply with all applicable Legal Requirements with respect
to the construction, use and maintenance of any vaults adjacent to the Property.
If by reason of the failure to pay taxes, assessments, charges, permit fees, franchise
taxes or levies of any kind or nature, the continued use of the vaults adjacent
to Property or any part thereof is discontinued, Borrower nevertheless shall,
with respect to any vaults which may be necessary for the continued use of the
Property, take such steps (including the making of any payment) to ensure the
continued use of vaults or replacements.


 


Section 14.02. Compliance with Recorded
Documents; No Future Grants. Borrower shall promptly perform and observe,
or cause to be performed and observed, all of the terms, covenants and
conditions of all Property Agreements and all things necessary to preserve
intact and unimpaired any and all appurtenances or other interests or rights
affecting the Property.


 


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ARTICLE XV:  PREPAYMENT


 


Section 15.01. Prepayment. (a)  Except as set forth in this Section 15.01 or
as otherwise specifically provided in the Loan Documents, no prepayment of the
Debt may be made in whole or in part.


 


(b)           Borrower may prepay
the Loan in whole or in part at any time on or after the Payment Date occurring
in August, 2008 in accordance with the following provisions:


 


(i)            Lender
shall have received from Borrower, not less than thirty (30) days’, nor more
than ninety (90) days’, prior written notice specifying the date proposed for
such prepayment and the amount which is to be prepaid.


 


(ii)           Borrower
shall also pay to Lender all interest due on the principal amount prepaid
through and including the last day of the Interest Accrual Period in which such
prepayment is being made, together with any and all other amounts due and owing
pursuant to the terms of the Note, this Security Instrument or the other Loan
Documents.


 


(iii)          Any
partial prepayment shall be in a minimum amount not less than $25,000 and shall
be in whole multiples of $1,000 in excess thereof.


 


(iv)          Intentionally omitted.


 


(v)           Any
partial prepayment of the Principal Amount, including, without limitation,
Unscheduled Payments, shall be applied to the installments of principal last
due hereunder and shall not release or relieve Borrower from the obligation to
pay the regularly scheduled installments of principal and interest becoming due
under the Note.


 


(vi)          Unless
the prepayment is the result of Lender applying Loss Proceeds to the Debt (in
which event, any such prepayment irrespective of when made shall be at par and
without any prepayment premium), in the event that the Loan is prepaid on or
subsequent to the Payment Date occurring in August, 2008 but prior to the
Payment Date in February, 2011, Borrower shall pay to Lender, together with
such prepayment and all other amounts due in connection therewith, a
non-refundable amount which shall be deemed earned by Lender upon the funding
of the Loan and shall not count to or be credited to payment of the Principal
Amount, any interest thereon or any other amounts payable under the Note, the
Security Instrument or any of the Loan Documents, equal to the Yield
Maintenance Premium.


 


ARTICLE XVI:  ENVIRONMENTAL
COMPLIANCE


 


Section 16.01. Covenants, Representations
and Warranties. (a) Borrower has not, at any
time, and, to Borrower’s best knowledge, except as set forth in the
Environmental Report, no other Person has at any time, handled, buried, stored,
retained, refined, transported, processed, manufactured, generated, produced,
spilled, allowed to seep, leak, escape or leach, or pumped, poured, emitted,
emptied, discharged, injected, dumped, transferred or otherwise disposed of or
dealt with Hazardous Materials on, to or from the Premises or any other real
property owned


 


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and/or occupied by Borrower, and Borrower
does not intend to and shall not use the Property or any part thereof or any
such other real property for the purpose of handling, burying, storing,
retaining, refining, transporting, processing, manufacturing, generating,
producing, spilling, seeping, leaking, escaping, leaching, pumping, pouring,
emitting, emptying, discharging, injecting, dumping, transferring or otherwise
disposing of or dealing with Hazardous Materials, except for use and storage
for use of heating oil, cleaning fluids, pesticides and other substances
customarily used in the operation of properties that are being used for the
same purposes as the Property is presently being used, provided such use and/or
storage for use is in compliance with the requirements hereof and the other
Loan Documents and does not give rise to liability under applicable Legal
Requirements or Environmental Statutes or be the basis for a lien against the
Property or any part thereof. In addition, without limitation to the foregoing
provisions, Borrower represents and warrants that, to the best of its
knowledge, except as set forth in the Environmental Report, there is no
asbestos in, on, over, or under all or any portion of the fire-proofing or any
other portion of the Property.


 


(b)           Borrower
knows of no seepage, leak, escape, leach, discharge, injection, release,
emission, spill, pumping, pouring, emptying or dumping of Hazardous Materials
into waters on, under or adjacent to the Property or any part thereof or any
other real property owned and/or occupied by Borrower, or onto lands from which
such Hazardous Materials might seep, flow or drain into such waters, except as
disclosed in the Environmental Report.


 


(c)           Borrower
shall not permit any Hazardous Materials to be handled, buried, stored,
retained, refined, transported, processed, manufactured, generated, produced,
spilled, allowed to seep, leak, escape or leach, or to be pumped, poured,
emitted, emptied, discharged, injected, dumped, transferred or otherwise
disposed of or dealt with on, under, to or from the Property or any portion
thereof at any time, except for use and storage for use of heating oil,
ordinary cleaning fluids, pesticides and other substances customarily used in
the operation of properties that are being used for the same purposes as the
Property is presently being used, provided such use and/or storage for use is
in compliance with the requirements hereof and the other Loan Documents and
does not give rise to liability under applicable Legal Requirements or be the
basis for a lien against the Property or any part thereof.


 


(d)           Borrower
represents and warrants that, except as set forth in the Environmental Report, no
actions, suits, or proceedings have been commenced, or are pending, or, to the
best knowledge of Borrower, are threatened with respect to any Legal
Requirement governing the use, manufacture, storage, treatment, transportation,
or processing of Hazardous Materials with respect to the Property or any part
thereof. Borrower has received no notice of, and, except as disclosed in the
Environmental Report, has no knowledge of, any fact, condition, occurrence or
circumstance which with notice or passage of time or both would give rise to a
claim under or pursuant to any Environmental Statute pertaining to Hazardous
Materials on, in, under or originating from the Property or any part thereof or
any other real property owned or occupied by Borrower or arising out of the
conduct of Borrower, including, without limitation, pursuant to any
Environmental Statute.


 


(e)           Other
than pursuant to the purchase and sale agreement pursuant to which Borrower
acquired the Property, a true, accurate and complete copy of which has been
delivered


 


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to Lender by
Borrower, Borrower has not waived any Person’s liability with regard to
Hazardous Materials in, on, under or around the Property, nor has Borrower
retained or assumed, contractually or by operation of law, any other Person’s
liability relative to Hazardous Materials or any claim, action or proceeding
relating thereto.


 


(f)            Subject
to Borrower’s right to contest in accordance with the terms hereof, in the
event that there shall be filed a lien against the Property or any part thereof
pursuant to any Environmental Statute pertaining to Hazardous Materials,
Borrower shall, within sixty (60) days or, in the event that the applicable
Governmental Authority has commenced steps to cause the Premises or any part
thereof to be sold pursuant to the lien, within fifteen (15) days, from the
date that Borrower receives notice of such lien, either (i) pay the claim and
remove the lien from the Property, or (ii) furnish a bond or other security
satisfactory to Lender in the amount of the claim out of which the lien arises.


 


(g)           Borrower
represents and warrants that (i) except as disclosed in the Environmental
Report, Borrower has no knowledge of any violation of any Environmental Statute
or any Environmental Problem in connection with the Property,  nor has Borrower been requested or required
by any Governmental Authority to perform any remedial activity or other
responsive action in connection with any Environmental Problem and
(ii) neither the Property nor any other property owned by Borrower is
included or, to Borrower’s best knowledge, proposed for inclusion on the
National Priorities List issued pursuant to CERCLA by the United States
Environmental Protection Agency (the “EPA”) or on the inventory of other
potential “Problem” sites issued by the EPA and has not otherwise been
identified by the EPA as a potential CERCLA site or included or, to Borrower’s
knowledge, proposed for inclusion on any list or inventory issued pursuant to
any other Environmental Statute, if any, or issued by any other Governmental
Authority. Borrower covenants that Borrower will comply in all material
respects with all Environmental Statutes affecting or imposed upon Borrower or
the Property.


 


(h)           Borrower
covenants that it shall promptly notify Lender of the presence and/or release
of any Hazardous Materials on the Property which requires reporting under any
Legal Requirements and of any request for information or any inspection of the
Property or any part thereof by any Governmental Authority with respect to any
Hazardous Materials on the Property and provide Lender with copies of such
request and any response to any such request or inspection. Borrower covenants
that it shall, in compliance with applicable Legal Requirements, conduct and
complete all investigations, studies, sampling and testing (and promptly shall
provide Lender with copies of any such studies and the results of any such
test) and all remedial, removal and other actions necessary to clean up and remove
all Hazardous Materials in, on, over, under, from or affecting the Property or
any part thereof in accordance with all such Legal Requirements applicable to
the Property or any part thereof to the reasonable satisfaction of Lender.


 


(i)            While an Event of Default exists
hereunder, and without regard to whether Lender shall have taken possession of
the Property or a receiver has been requested or appointed or any other right
or remedy of Lender has or may be exercised hereunder or under any other Loan
Document, Lender shall have the right (but no obligation) to conduct such
investigations, studies, sampling and/or testing of the Property or any part
thereof as Lender may, in its discretion,


 


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determine to
conduct, relative to Hazardous Materials. All costs and expenses incurred in
connection therewith including, without limitation, consultants’ fees and
disbursements and laboratory fees, shall constitute a part of the Debt and
shall, upon demand by Lender, be immediately due and payable and shall bear
interest at the Default Rate from the date so demanded by Lender until
reimbursed. Borrower shall, at its sole cost and expense, fully and
expeditiously cooperate in all such investigations, studies, samplings and/or
testings including, without limitation, providing all relevant information and
making knowledgeable people available for interviews.


 


(j)            Borrower
represents and warrants that, to the best of its knowledge, except as disclosed
in the Environmental Report, all paint and painted surfaces existing within the
interior or on the exterior of the Improvements are not flaking, peeling,
cracking, blistering, or chipping, and do not contain lead or are maintained in
a condition that prevents exposure of young children to lead-based paint, and
that the current inspections, operation, and maintenance program at the
Property with respect to lead-based paint is consistent with FNMA guidelines
and sufficient to ensure that all painted surfaces within the Property shall be
maintained in a condition that prevents exposure of tenants to lead-based paint.
To Borrower’s knowledge, except as disclosed in the Environmental Report, there
have been no claims for adverse health effects from exposure on the Property to
lead-based paint or requests for the investigation, assessment or removal of
lead-based paint at the Property.


 


(k)           Borrower
represents and warrants that, to its best knowledge and except in accordance
with all applicable Environmental Statutes and as disclosed in the
Environmental Report, (i) no underground treatment or storage tanks or pumps or
water, gas, or oil wells are or have been located about the Property,
(ii) no PCBs or transformers, capacitors, ballasts or other equipment that
contain dielectric fluid containing PCBs are located about the Property,
(iii) no insulating material containing urea formaldehyde is located about
the Property and (iv) no asbestos-containing material is located about the
Property.


 


Section 16.02. Environmental
Indemnification. Borrower shall defend, indemnify and hold harmless the
Indemnified Parties for, from and against any claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind
or nature, known or unknown, contingent or otherwise, whether incurred or
imposed within or outside the judicial process, including, without limitation,
reasonable attorneys’ and consultants’ fees and disbursements and
investigations and laboratory fees, arising out of, or in any way related to
any Environmental Problem, including without limitation:


 


(a)           the
presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release or threat of release of any Hazardous Materials in, on, over, under,
from or affecting the Property or any part thereof whether or not disclosed by
the Environmental Report;


 


(b)           any
personal injury (including wrongful death, disease or other health condition
related to or caused by, in whole or in part, any Hazardous Materials) or
property damage (real or personal) arising out of or related to any Hazardous
Materials in, on, over, under, from or affecting the Property or any part
thereof, whether or not disclosed by the Environmental Report;


 


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(c)           any
action, suit or proceeding brought or threatened, settlement reached, or order
of any Governmental Authority relating to such Hazardous Material, whether or
not disclosed by the Environmental Report; and/or


 


(d)           any
violation of the provisions, covenants, representations or warranties of
Section 16.01 hereof or of any Legal Requirement which is based on or in any
way related to any Hazardous Materials in, on, over, under, from or affecting
the Property or any part thereof, including, without limitation, the cost of
any work performed and materials furnished in order to comply therewith,
whether or not disclosed by the Environmental Report.


 


Notwithstanding the foregoing provisions of
this Section 16.02 to the contrary, Borrower shall have no obligation to
indemnify Lender or any other Indemnified Party for liabilities, claims,
damages, penalties, causes of action, costs and expenses relative to the
foregoing to the extent resulting from (A) any Indemnified Party’s willful
misconduct or gross negligence or (B) any Hazardous Materials initially placed
in, on or under the Property or any other condition relating to Hazardous
Materials created after foreclosure, delivery of a deed in lieu or other taking
of title to the Property by Lender or its successors and assigns. Any amounts
payable to Lender by reason of the application of this Section 16.02 shall be
secured by this Security Instrument and shall, upon demand by Lender, become
immediately due and payable and shall bear interest at the Default Rate from
the date so demanded by Lender until paid.


 


This indemnification shall survive the
termination of this Security Instrument whether by repayment of the Debt,
foreclosure or deed in lieu thereof, assignment, or otherwise; provided,
however, that this indemnification shall only run to the Indemnified Parties
and the first purchaser of the Property which is not an Affiliate of Lender. The
indemnity provided for in this Section 16.02 shall not be included in any
exculpation of Borrower or its principals from personal liability provided for
in this Security Instrument or in any of the other Loan Documents. Nothing in
this Section 16.02 shall be deemed to deprive Lender of any rights or remedies
otherwise available to Lender, including, without limitation, those rights and
remedies provided elsewhere in this Security Instrument or the other Loan
Documents.


 


ARTICLE XVII:  ASSIGNMENTS


 


Section 17.01. Participations and
Assignments. Lender shall have the right to assign this Security Instrument
and/or any of the Loan Documents, and to transfer, assign or sell
participations and subparticipations (including blind or undisclosed
participations and subparticipations) in the Loan Documents and the obligations
hereunder to any Person; provided, however, that no such participation shall
increase, decrease or otherwise affect either Borrower’s or Lender’s
obligations under this Security Instrument or the other Loan Documents.


 


ARTICLE XVIII:  MISCELLANEOUS


 


Section 18.01. Right of Entry. Lender
and its agents shall have the right to enter and inspect the Property or any
part thereof at all reasonable times, and, except in the event of an emergency,
upon reasonable notice and to inspect Borrower’s books and records and to make
abstracts and reproductions thereof.


 


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Section 18.02. Cumulative Rights. The
rights of Lender under this Security Instrument shall be separate, distinct and
cumulative and none shall be given effect to the exclusion of the others. No
act of Lender shall be construed as an election to proceed under any one
provision herein to the exclusion of any other provision. Lender shall not be
limited exclusively to the rights and remedies herein stated but shall be
entitled, subject to the terms of this Security Instrument, to every right and
remedy now or hereafter afforded by law.


 


Section 18.03. Liability. If Borrower
consists of more than one Person, the obligations and liabilities of each such
Person hereunder shall be joint and several.


 


Section 18.04. Exhibits Incorporated. The
information set forth on the cover hereof, and the Exhibits annexed hereto, are
hereby incorporated herein as a part of this Security Instrument with the same
effect as if set forth in the body hereof.


 


Section 18.05. Severable Provisions. If
any term, covenant or condition of the Loan Documents including, without
limitation, the Note or this Security Instrument, is held to be invalid,
illegal or unenforceable in any respect, such Loan Document shall be construed
without such provision.


 


Section 18.06. Duplicate Originals. This
Security Instrument may be executed in any number of duplicate originals and
each such duplicate original shall be deemed to constitute but one and the same
instrument.


 


Section 18.07. No Oral Change. The
terms of this Security Instrument, together with the terms of the Note and the
other Loan Documents constitute the entire understanding and agreement of the
parties hereto and supersede all prior agreements, understandings and
negotiations between Borrower and Lender with respect to the Loan. This
Security Instrument, and any provisions hereof, may not be modified, amended,
waived, extended, changed, discharged or terminated orally or by any act on the
part of Borrower or Lender, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.


 


Section 18.08. Intentionally Omitted.


 


Section 18.09. Headings; Construction of
Documents; etc. The table of contents, headings and captions of various
paragraphs of this Security Instrument are for convenience of reference only
and are not to be construed as defining or limiting, in any way, the scope or
intent of the provisions hereof. Borrower acknowledges that it was represented
by competent counsel in connection with the negotiation and drafting of this
Security Instrument and the other Loan Documents and that neither this Security
Instrument nor the other Loan Documents shall be subject to the principle of
construing the meaning against the Person who drafted same.


 


Section 18.10. Sole Discretion of Lender.
Whenever Lender exercises any right given to it to approve or disapprove, or
any arrangement or term is to be satisfactory to Lender, the decision of Lender
to approve or disapprove or to decide that arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of Lender and
shall be final and conclusive, except as may be otherwise specifically provided
herein.


 


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Section 18.11. Waiver of Notice and Jury
Trial. Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Security
Instrument or any of the other Loan Documents specifically and expressly
provides for the giving of notice by Lender to Borrower and except with respect
to matters for which Borrower is not, pursuant to applicable Legal
Requirements, permitted to waive the giving of notice. BORROWER AND LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT BY EITHER PARTY
HERETO.


 


Section 18.12. Covenants Run with the Land.
All of the grants, covenants, terms, provisions and conditions herein shall run
with the Premises, shall be binding upon Borrower and shall inure to the benefit
of Lender, subsequent holders of this Security Instrument and their successors
and assigns. Without limitation to any provision hereof, the term “Borrower”
shall include and refer to the borrower named herein, any subsequent owner of
the Property, and its respective heirs, executors, legal representatives,
successors and assigns. The representations, warranties and agreements
contained in this Security Instrument and the other Loan Documents are intended
solely for the benefit of the parties hereto, shall confer no rights hereunder,
whether legal or equitable, in any other Person and no other Person shall be
entitled to rely thereon.


 


Section 18.13. Applicable Law. THIS
SECURITY INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS APPLICABLE
TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE
UNITED STATES OF AMERICA.


 


Section 18.14. Security Agreement. (a)   (i)  This Security Instrument is both a real
property mortgage or deed of trust, as applicable, and a “security agreement”
within the meaning of the UCC. The Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Borrower in the Property. This Security Instrument is filed as a
fixture filing and covers goods which are or are to become fixtures on the
Property. Borrower by executing and delivering this Security Instrument has
granted to Lender, as security for the Debt, 
a security interest in the Property to the full extent that the Property
may be subject to the UCC (said portion of the Property so subject to the UCC
being called in this Section 18.14 the “Collateral”). If an Event of
Default shall exist, Lender, in addition to any other rights and remedies which
it may have, shall have and may exercise immediately and without demand, any
and all rights and remedies granted to a secured party upon default under the
UCC, including, without limiting the generality of the foregoing, the right to
take possession of the Collateral or any part thereof, and to take such other
measures as Lender may deem necessary for the care, protection and preservation
of the Collateral. Upon request or demand of Lender while an Event of Default
exists, Borrower shall, at its expense, assemble the Collateral and make it
available to Lender at a convenient place acceptable to Lender. Borrower shall
pay to Lender on demand any and all expenses, including reasonable legal
expenses and attorneys’ fees, incurred or paid by Lender in protecting its
interest in the Collateral and in enforcing its rights hereunder with respect
to the Collateral. Any disposition pursuant to the UCC of so much of the
Collateral as may constitute personal property shall be considered commercially
reasonable if made pursuant to a public sale which is advertised at least twice
in a newspaper in which sheriff’s sales are advertised in the county where the
Premises is located. Any notice of


 


101

















 


sale, disposition or other intended action by
Lender with respect to the Collateral given to Borrower in accordance with the
provisions hereof at least ten (10) days prior to such action, shall constitute
reasonable notice to Borrower. The proceeds of any disposition of the
Collateral, or any part thereof, may be applied by Lender to the payment of the
Debt in such priority and proportions as Lender in its discretion shall deem
proper. It is not necessary that the Collateral be present at any disposition
thereof. Lender shall have no obligation to clean-up or otherwise prepare the
Collateral for disposition.


 


(ii)           The mention in a financing statement
filed in the records normally pertaining to personal property of any portion of
the Property shall not derogate from or impair in any manner the intention of
this Security Instrument. Lender hereby declares that all items of Collateral
are part of the real property encumbered hereby to the fullest extent permitted
by law, regardless of whether any such item is physically attached to the
Improvements or whether serial numbers are used for the better identification
of certain items. Specifically, the mention in any such financing statement of
any items included in the Property shall not be construed to alter, impair or
impugn any rights of Lender as determined by this Security Instrument or the
priority of Lender’s lien upon and security interest in the Property in the
event that notice of Lender’s priority of interest as to any portion of the Property
is required to be filed in accordance with the UCC to be effective against or
take priority over the interest of any particular class of persons, including
the federal government or any subdivision or instrumentality thereof. No
portion of the Collateral constitutes or is the proceeds of “Farm Products”, as
defined in the UCC.


 


(iii)          If Borrower is at any time a
beneficiary under a letter of credit now or hereafter issued in favor of
Borrower and an Event of Default exists hereunder, Borrower shall promptly
notify Lender thereof and, at the request and option of Lender, Borrower shall,
pursuant to an agreement in form and substance satisfactory to Lender, either
(A) arrange for the issuer and any confirmer of such letter of credit to
consent to an assignment to Lender of the proceeds of any drawing under the
letter of credit or (B) arrange for Lender to become the transferee beneficiary
of the letter of credit, with Lender agreeing, in each case, that the proceeds
of any drawing under the letter to credit are to be applied as provided in this
Security Instrument.


 


(iv)          Borrower and Lender acknowledge that
for the purposes of Article 9 of the UCC, the law of the State of Illinois
shall be the law of the jurisdiction of the bank in which the Central Account
is located.


 


(v)           Lender may comply with any applicable
Legal Requirements in connection with the disposition of the Collateral, and
Lender’s compliance therewith will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral.


 


(vi)          Lender may sell the Collateral without
giving any warranties as to the Collateral. Lender may specifically disclaim
any warranties of title, possession, quiet enjoyment or the like. This
procedure will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.


 


(vii)         If Lender sells any of the Collateral
upon credit, Borrower will be credited only with payments actually made by the
purchaser, received by Lender and applied to the


 


102

















 


indebtedness
of Borrower. In the event the purchaser of the Collateral fails to fully pay
for the Collateral, Lender may resell the Collateral and Borrower will be
credited with the proceeds of such sale.


 


(b)           Borrower
hereby irrevocably appoints Lender as its attorney-in-fact, coupled with an
interest, to file with the appropriate public office on its behalf any
financing or other statements signed only by Lender, as secured party, or, to
the extent permitted under the UCC, unsigned, in connection with the Collateral
covered by this Security Instrument.


 


Section 18.15. Actions and Proceedings.
Lender has the right to appear in and defend any action or proceeding brought
with respect to the Property in its own name or, if required by Legal
Requirements, or, if in Lender’s reasonable judgment, it is necessary, in the
name and on behalf of Borrower, which Lender believes will adversely affect the
Property or this Security Instrument and to bring any action or proceedings, in
its name or in the name and on behalf of Borrower, which Lender, in its
discretion, decides should be brought to protect its interest in the Property.


 


Section 18.16. Usury Laws. This
Security Instrument and the Note are subject to the express condition, and it
is the expressed intent of the parties, that at no time shall Borrower be
obligated or required to pay interest on the principal balance due under the
Note at a rate which could subject the holder of the Note to either civil or
criminal liability as a result of being in excess of the maximum interest rate
which Borrower is permitted by law to contract or agree to pay. If by the terms
of this Security Instrument or the Note, Borrower is at any time required or
obligated to pay interest on the principal balance due under the Note at a rate
in excess of such maximum rate, such rate of interest shall be deemed to be
immediately reduced to such  maximum rate
and the interest payable shall be computed at such maximum rate and all prior
interest payments in excess of such maximum rate shall be applied and shall be
deemed to have been payments in reduction of the principal balance of the Note.
No application to the principal balance of the Note pursuant to this Section
18.16 shall give rise to any requirement to pay any prepayment fee or charge of
any kind due hereunder, if any.


 


Section 18.17. Remedies of Borrower. In
the event that a claim or adjudication is made that Lender has acted
unreasonably or unreasonably delayed acting in any case where by law or under the
Note, this Security Instrument or the Loan Documents, it has an obligation to
act reasonably or promptly, Lender shall not be liable for any monetary
damages, and Borrower’s remedies shall be limited to injunctive relief or
declaratory judgment.


 


Section 18.18. Offsets, Counterclaims and
Defenses. Any assignee of this Security Instrument, the Assignment and the
Note shall take the same free and clear of all offsets, counterclaims or
defenses which are unrelated to the Note, the Assignment or this Security
Instrument which Borrower may otherwise have against any assignor of this
Security Instrument, the Assignment and the Note and no such unrelated
counterclaim or defense shall be interposed or asserted by Borrower in any
action or proceeding brought by any such assignee upon this Security
Instrument, the Assignment or the Note and any such right to interpose or
assert any such unrelated offset, counterclaim or defense in any such action or
proceeding is hereby expressly waived by Borrower.


 


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Section 18.19. No Merger. If Borrower’s
and Lender’s estates become the same including, without limitation, upon the
delivery of a deed by Borrower in lieu of a foreclosure sale, or upon a
purchase of the Property by Lender in a foreclosure sale, this Security
Instrument and the lien created hereby shall not be destroyed or terminated by
the application of the doctrine of merger, and in such event Lender shall
continue to have and enjoy all of the rights and privileges of Lender as to the
separate estates; and, as a consequence thereof, upon the foreclosure of the
lien created by this Security Instrument, any Leases or subleases then existing
and created by Borrower shall not be destroyed or terminated by application of
the law of merger or as a result of such foreclosure unless Lender or any
purchaser at any such foreclosure sale shall so elect. No act by or on behalf
of Lender or any such purchaser shall constitute a termination of any Lease or
sublease unless Lender or such purchaser shall give written notice thereof to
such lessee or sublessee.


 


Section 18.20. Restoration of Rights. In
case Lender shall have proceeded to enforce any right under this Security
Instrument by foreclosure sale, entry or otherwise, and such proceedings shall
have been discontinued or abandoned for any reason or shall have been
determined adversely, then, in every such case, Borrower  and Lender shall be restored to their former
positions and rights hereunder with respect to the Property subject to the lien
hereof.


 


Section 18.21. Waiver of Statute of
Limitations. The pleadings of any statute of limitations as a defense to
any and all obligations secured by this Security Instrument are hereby waived
to the full extent permitted by Legal Requirements.


 


Section 18.22. Advances. This Security
Instrument shall cover any and all advances made pursuant to the Loan
Documents, rearrangements and renewals of the Debt and all extensions in the
time of payment thereof, even though such advances, extensions or renewals be
evidenced by new promissory notes or other instruments hereafter executed and
irrespective of whether filed or recorded. Likewise, the execution of this
Security Instrument shall not impair or affect any other security which may be
given to secure the payment of the Debt, and all such additional security shall
be considered as cumulative. The taking of additional security, execution of
partial releases of the security, or any extension of time of payment of the
Debt shall not diminish the force, effect or lien of this Security Instrument
and shall not affect or impair the liability of Borrower and shall not affect
or impair the liability of any maker, surety, or endorser for the payment of
the Debt.


 


Section 18.23. Application of Default Rate
Not a Waiver. Application of the Default Rate shall not be deemed to
constitute a waiver of any Default or Event of Default or any rights or
remedies of Lender under this Security Instrument, any other Loan Document or
applicable Legal Requirements, or a consent to any extension of time for the
payment or performance of any obligation with respect to which the Default Rate
may be invoked.


 


Section 18.24. Intervening Lien. To
the fullest extent permitted by law, any agreement hereafter made pursuant to
this Security Instrument shall be superior to the rights of the holder of any
intervening lien.


 


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Section 18.25. No Joint Venture or
Partnership. Borrower and Lender intend that the relationship created
hereunder be solely that of mortgagor and mortgagee or grantor and beneficiary
or borrower and lender, as the case may be. Nothing herein is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy
relationship between Borrower and Lender nor to grant Lender any interest in
the Property other than that of mortgagee, beneficiary or lender.


 


Section 18.26. Time of the Essence. Time
shall be of the essence in the performance of all obligations of Borrower
hereunder.


 


Section 18.27. Borrower’s Obligations
Absolute. Borrower acknowledges that Lender and/or certain Affiliates of
Lender are engaged in the business of financing, owning, operating, leasing,
managing, and brokering real estate and in other business ventures which may be
viewed as adverse to or competitive with the business, prospect, profits,
operations or condition (financial or otherwise) of Borrower. Except as set
forth to the contrary in the Loan Documents, all sums payable by Borrower
hereunder shall be paid without notice or demand, counterclaim, set-off,
deduction or defense and without abatement, suspension, deferment, diminution
or reduction, and the obligations and liabilities of Borrower hereunder shall
in no way be released, discharged, or otherwise affected (except as expressly
provided herein) by reason of:  (a) any
damage to or destruction of or any Taking of the Property or any portion
thereof; (b) any restriction or prevention of or interference with any use of
the Property or any portion thereof; (c) any title defect or encumbrance or any
eviction from the Premises or any portion thereof by title paramount or
otherwise; (d) any bankruptcy proceeding relating to Borrower, any General
Partner, or any guarantor or indemnitor, or any action taken with respect to
this Security Instrument or any other Loan Document by any trustee or receiver
of Borrower or any such General Partner, guarantor or indemnitor, or by any
court, in any such proceeding; (e) any claim which Borrower has or might have
against Lender; (f) any default or failure on the part of Lender to perform or
comply with any of the terms hereof or of any other agreement with Borrower; or
(g) any other occurrence whatsoever, whether similar or dissimilar to the
foregoing, whether or not Borrower shall have notice or knowledge of any of the
foregoing.


 


Section 18.28. Publicity. All
promotional news releases, publicity or advertising by Manager, Borrower or
their respective Affiliates through any media intended to reach the general
public shall not refer to the Loan Documents or the financing evidenced by the
Loan Documents, or to Lender or to any of its Affiliates without the prior
written approval of Lender or such Affiliate, as applicable, in each instance,
such approval not to be unreasonably withheld or delayed. Lender shall be
authorized to provide information relating to the Property, the Loan and
matters relating thereto to rating agencies, underwriters, potential securities
investors, auditors, regulatory authorities and to any Persons which may be
entitled to such information by operation of law and may use basic transaction
information (including, without limitation, the name of Borrower, the name and
address of the Property and the Loan Amount) in press releases or other
marketing materials.


 


Section 18.29. Securitization Opinions.
In the event the Loan is included as an asset of a Securitization by Lender or
any of its Affiliates, Borrower shall, within fifteen (15) Business Days after
Lender’s written request therefor, at Lender’s sole but reasonable cost and
expense,


 


105

















 


deliver opinions in form and substance and
delivered by counsel reasonably acceptable to Lender and each Rating Agency, as
may be reasonably required by Lender and/or the Rating Agency in connection
with such Securitization. Borrower’s failure to deliver the opinions required
hereby within such fifteen (15) Business Day period shall constitute an “Event
of Default” hereunder.


 


Section 18.30. Cooperation with Rating
Agencies. Borrower covenants and agrees that in the event the Loan is to be
included as an asset of a Securitization, Borrower shall, at the sole cost and
expense of Lender, provided that Lender shall only be obligated to reimburse
Borrower for reasonable and actual out-of-pocket third party costs incurred by
Borrower, (a) gather any information reasonably required by each Rating Agency
in connection with such a Securitization, (b) at Lender’s request, meet with
representatives of each Rating Agency to discuss the business and operations of
the Property, and (c) cooperate with the reasonable requests of each Rating
Agency and Lender in connection with all of the foregoing as well as in
connection with all other matters and the preparation of any offering documents
with respect thereto, including, without limitation, entering into any
amendments or modifications to this Security Instrument or to any other Loan
Document which may be requested by Lender to conform to Rating Agency or market
standards for a Securitization provided that no such modification shall modify (a)
the interest rate payable under the Note, (b) the stated maturity of the Note,
(c) the amortization of principal under the Note, (d) Section 18.32 hereof, (e)
any other economic term of the Loan or (f) any provision, the effect of which
would increase Borrower’s obligations or decrease Borrower’s rights under the
Loan Documents. Borrower acknowledges that the information provided by Borrower
to Lender may be incorporated into the offering documents for a Securitization
and, to the fullest extent permitted, Borrower irrevocably waives all rights,
if any, to prohibit such disclosures including, without limitation, any right
of privacy. Lender and each Rating Agency shall be entitled to rely on the
information supplied by, or on behalf of, Borrower and Borrower indemnifies and
holds harmless the Indemnified Parties, their Affiliates and each Person who
controls such Persons within the meaning of Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as same may be amended from
time to time, for, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, known or unknown, contingent or otherwise, whether incurred or imposed
within or outside the judicial process, including, without limitation,
reasonable attorneys’ fees and disbursements, that arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in such information or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated in such
information or necessary in order to make the statements in such information,
in light of the circumstances under which they were made, not misleading (collectively,
“Securities Liabilities”); provided, however, that Borrower will be
liable under the foregoing indemnity only to the extent that such Securities
Liabilities arise out of, or are based upon, any such untrue statement or
omission made therein in reliance upon, and in conformity with, information
furnished to Lender by or on behalf of Borrower or its Affiliates in connection
with the preparation of the disclosure documents or in connection with the
underwriting of the Loan; and provided further, however, that with respect to
information provided by third parties and with respect to statements made in
the disclosure documents that are based upon information provided by third
parties, Borrower will be liable only if Borrower or its Affiliates knew that such
information was false or omitted to state a material fact known to


 


106

















 


Borrower and necessary to make the statements
made, in light of the circumstances under which they were made, not misleading.


 


Section 18.31. Securitization Financials.
Borrower covenants and agrees that, upon Lender’s written request therefor in
connection with a Securitization, Borrower shall, at Lender’s sole cost and
expense, (a) promptly deliver audited financial statements and related
documentation prepared by an Independent certified public accountant that
satisfy securities laws and requirements for use in a public registration
statement (which may include up to three (3) years of historical audited (if
available) financial statements) and (b) if, at the time one or more Disclosure
Documents are being prepared in connection with a Securitization, Lender
expects that Borrower alone or Borrower and one or more of its Affiliates
collectively, or the Property alone or the Property and any other parcel(s) of
real property, together with improvements thereon and personal property related
thereto, that is “related”, within the meaning of the definition of Significant
Obligor, to the Property (a “Related Property”) collectively, will be a
Significant Obligor, Borrower shall furnish to Lender upon request (i) the
selected financial data relating to Borrower or the Property or, if applicable,
net operating income of the Property, required under Item 1112(b)(1) of
Regulation AB and meeting the requirements thereof, if Lender expects that the
principal amount of the Loan, together with any loans made to an Affiliate of
Borrower or secured by a Related Property that is included in a Securitization
with the Loan (a “Related Loan”), as of the cut-off date for such
Securitization may, or if the principal amount of the Loan together with any
Related Loans as of the cut-off date for such Securitization does, equal or
exceed ten percent (10%) (but less than twenty percent (20%)) of the aggregate
principal amount of all mortgage loans included or expected to be included, as
applicable, in the Securitization or (ii) the financial statements relating to
Borrower or the Property required under Item 1112(b)(2) of Regulation AB and
meeting the requirements thereof, if Lender expects that the principal amount
of the Loan together with any Related Loans as of the cut-off date for such
Securitization may, or if the principal amount of the Loan together with any
Related Loans as of the cut-off date for such Securitization does, equal or
exceed twenty percent (20%) of the aggregate principal amount of all mortgage
loans included or expected to be included, as applicable, in the Securitization.
Such financial data or financial statements required by clause (b) hereof shall
be furnished to Lender within ten (10) Business Days after notice from Lender
in connection with the preparation of Disclosure Documents for the
Securitization and, with respect to the data or financial statements required
pursuant to clause (b) hereof, (A) not later than forty-five (45) days after
the end of each fiscal quarter of Borrower and (B) not later than eighty-five
(85) days after the end of each Fiscal Year; provided, however, that Borrower
shall not be obligated to furnish financial data or financial statements
pursuant to clauses (A) or (B) of this sentence with respect to any period for
which a filing pursuant to the Securities Exchange Act of 1934 in connection
with or relating to the Securitization is not required.


 


Section 18.32. Exculpation. Notwithstanding
anything herein or in any other Loan Document to the contrary, except as
otherwise set forth in this Section 18.32 to the contrary, Lender shall not
enforce the liability and obligation of Borrower or (a) if Borrower is a
partnership, its constituent partners or any of their respective partners, (b)
if Borrower is a trust, its beneficiaries or any of their respective Partners
(as hereinafter defined), (c) if Borrower is a corporation, any of its
shareholders, directors, principals, officers or employees, or (d) if Borrower
is a limited liability company, any of its members (the Persons described in
the


 


107

















 


foregoing clauses (a) - (d), as the case may
be, are hereinafter referred to as the “Partners”) to perform and
observe the obligations contained in this Security Instrument or any of the
other Loan Documents by any action or proceeding wherein a money judgment shall
be sought against Borrower or the Partners, except that Lender may bring a
foreclosure action, action for specific performance, or other appropriate
action or proceeding (including, without limitation, an action to obtain a
deficiency judgment) solely for the purpose of enabling Lender to realize upon
(i) Borrower’s interest in the Property, (ii) the Rent to the extent received
by Borrower after (and during the existence of) an Event of Default and not
applied to Property-related expenses or sums due Lender under the Loan
Documents (all Rent covered by this clause (ii) being hereinafter referred to
as the “Recourse Distributions”) and (iii) any other collateral given to
Lender under the Loan Documents (the collateral described in the foregoing
clauses (i) - (iii) is hereinafter referred to as the “Default Collateral”);
provided, however, that any judgment in any such action or
proceeding shall be enforceable against Borrower and the Partners only to the
extent of any such Default Collateral. The provisions of this Section shall
not, however, (a) impair the validity of the Debt evidenced by the Note or in
any way affect or impair the lien of this Security Instrument or any of the
other Loan Documents or the right of Lender to foreclose this Security
Instrument following the occurrence of an Event of Default; (b) impair the right
of Lender to name Borrower as a party defendant in any action or suit for
judicial foreclosure and sale under this Security Instrument; (c) affect the
validity or enforceability of the Note, this Security Instrument, or any of the
other Loan Documents, or impair the right of Lender to seek a personal judgment
against Guarantor; (d) impair the right of Lender to obtain the appointment of
a receiver; (e) impair the enforcement of the Assignment; (f) impair the right
of Lender to bring suit for a monetary judgment with respect to losses incurred
by Lender by reason of fraud or intentional misrepresentation by Borrower in
connection with this Security Instrument, the Note or the other Loan Documents,
and the foregoing provisions shall not modify, diminish or discharge the
liability of Borrower with respect to same; (g) impair the right of Lender to
bring suit for a monetary judgment to obtain the Recourse Distributions
received by Borrower, and the foregoing provisions shall not modify, diminish
or discharge the liability of Borrower with respect to same; (h) impair the
right of Lender to bring suit for a monetary judgment with respect to losses
incurred by Lender by reason of Borrower’s misappropriation of tenant security
deposits, and the foregoing provisions shall not modify, diminish or discharge
the liability of Borrower with respect to same; (i) impair the right of Lender
to obtain Loss Proceeds due to Lender pursuant to this Security Instrument; (j)
impair the right of Lender to enforce the provisions of Sections 2.02(g),
12.01, 16.01 or 16.02, inclusive of this Security Instrument, even after
repayment in full by Borrower of the Debt, or to bring suit for a monetary
judgment against Borrower with respect to any obligation set forth in said
Sections; (k) prevent or in any way hinder Lender from exercising, or
constitute a defense, or counterclaim, or other basis for relief in respect of
the exercise of, any other remedy against any or all of the collateral securing
the Note as provided in the Loan Documents; (l) impair the right of Lender to
bring suit for a monetary judgment with respect to any losses incurred by
Lender by reason of misapplication or conversion by Borrower or any Affiliate
of Borrower of Loss Proceeds, and the foregoing provisions shall not modify,
diminish or discharge the liability of Borrower with respect to same; (m)
impair the right of Lender to sue for, seek or demand a deficiency judgment
against Borrower solely for the purpose of foreclosing the Property or any part
thereof, or realizing upon the Default Collateral; provided, however,
that any such deficiency judgment referred to in this


 


108

















 


clause (m) shall be enforceable against
Borrower only to the extent of any of the Default Collateral; (n) impair the
ability of Lender to bring suit for a monetary judgment with respect to losses
incurred by Lender by reason of physical damage, arson or physical waste to or
of the Property or, to the extent that there is sufficient cash flow, and unless
Borrower is contesting the same in accordance with Section 4.04, failure to pay
any Real Estate Taxes, or in lieu thereof, deposit a sum equal to any Real
Estate Taxes into the Basic Carrying Costs Sub-Account; (o) impair the right of
Lender to bring a suit for a monetary judgment with respect to losses incurred
by Lender by reason of the exercise of any right or remedy under any federal,
state or local forfeiture laws resulting in the loss of the lien of this
Security Instrument, or the priority thereof, against the Property as a result
of the criminal acts or omissions of Borrower or Guarantor or any Affiliates
thereof; (p) be deemed a waiver of any right which Lender may have under
Sections 506(a), 506(b), 1111(b) or any other provision of the Bankruptcy Code
to file a claim for the full amount of the Debt or to require that all
collateral shall continue to secure all of the Debt; (q) impair the right of
Lender to bring suit for monetary judgment with respect to any losses resulting
from any claims, actions or proceedings initiated by Borrower (or any Affiliate
of Borrower) alleging that the relationship of Borrower and Lender under the
Loan Documents is that of joint venturers, partners, tenants in common, joint
tenants or any relationship other than that of debtor and creditor; or (r)
impair the right of Lender to bring suit for a monetary judgment with respect
to losses incurred by Lender by reason of a voluntary Transfer in violation of
the provisions of Article IX hereof. The provisions of this Section 18.32 shall
be inapplicable to Borrower if (a) any proceeding, action, petition or filing
under the Bankruptcy Code, or any similar state or federal law now or hereafter
in effect relating to bankruptcy, reorganization or insolvency, or the arrangement
or adjustment of debts affecting Borrower, shall be filed by Borrower, or (b)
Borrower or Guarantor or any Affiliate of either of them shall collude to have
any such proceeding, action, petition or filing instituted against Borrower or
shall otherwise institute any proceeding for Borrower’s dissolution or
liquidation.


 


Section 18.33. Component Notes. Lender,
without in any way limiting Lender’s other rights hereunder, in its sole and
absolute discretion, shall have the right at any time to require Borrower to
execute and deliver “component” notes (including senior and junior notes) in
substitution for the Note, which notes may be paid in such order of priority as
may be designated by Lender, provided that (a) the aggregate principal amount
of such “component” notes shall equal the outstanding principal balance of the
Loan immediately prior to the creation of such “component” notes, (b) the
weighted average interest rate of all such “component” notes shall on the date
created equal the interest rate which was applicable to the Loan immediately
prior to the creation of such “component” notes, (c) the debt service payments
on all such “component” notes shall on the date created equal the debt service
payment which was due under the Note immediately prior to the creation of such “component”
notes, and (d) the other terms and provisions of each of the “component” notes
shall be identical in substance and substantially similar in form to the Loan
Documents. Borrower shall cooperate with all reasonable requests of Lender in
order to establish the “component” notes and shall execute and deliver such
documents as shall reasonably be required by Lender in connection therewith,
all in form and substance reasonably satisfactory to Lender, including, without
limitation, the severance of security documents if requested. Lender shall pay
Borrower’s reasonable expenses in connection with the execution and delivery of
such “component” notes. It shall be an Event of Default if 


 


109

















 


Borrower fails to comply with any of the
terms, covenants or conditions of this Section 18.33 after the expiration of
fifteen (15) Business Days after notice thereof.


 


Section 18.34. Certain Matters Relating to
Property located in the State of Illinois. With respect to the Property
which is located in the State of Illinois, notwithstanding anything contained
herein to the contrary:


 


(a)           COMPLIANCE WITH
ILLINOIS MORTGAGE FORECLOSURE LAW.


 


If any provision in this Security Instrument
is determined to be inconsistent with any provision of the Illinois Mortgage
Foreclosure Law (735 ILCS 5/15-1101 et seq., as amended) (the “IMFL”),
the provisions of the IMFL shall take precedence over the provisions of this
Security Instrument, but shall not invalidate or render unenforceable any other
provisions of this Security Instrument that can be construed in a manner
consistent with the IMFL.


 


If any provision of this Security Instrument
shall grant to Lender any rights or remedies upon an Event of Default which are
more limited than the rights that would otherwise be vested in Lender under the
IMFL in the absence of such provision, Lender shall be vested with the rights
granted in the IMFL to the full extent permitted by law.


 


Without limiting the generality of the foregoing,
all expenses incurred by Lender to the extent reimbursable under Sections
15-1510 and 15-1512 of the IMFL, whether incurred before or after any decree or
judgment of foreclosure, and whether enumerated in this Security Instrument,
shall be added to the Debt secured by this Security Instrument or by the
judgment of foreclosure.


 


Without limiting the generality of the
foregoing, this Security Instrument also secures all future advances including “Protective
Advances” (as defined in the IMFL) made pursuant to the terms of this Security
Instrument or the other Loan Documents made after this Security Instrument is
recorded, including but not limited to all monies so advanced by Lender in
accordance with the terms of this Security Instrument to (A) preserve or
restore the Property, (B) preserve the lien of this Security Instrument or the
priority thereof or (C) enforce this Security Instrument, and, to the full
extent permitted by Subsection (b)(5) of Section 15-1302 of the IMFL or other
law, shall be a lien from the time this Security Instrument is recorded.


 


(b)           WAIVER OF STATUTORY RIGHTS. BORROWER
ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS SECURITY INSTRUMENT IS A PART
IS A TRANSACTION WHICH DOES NOT INCLUDE EITHER AGRICULTURAL REAL ESTATE (AS
DEFINED IN SECTION 15-1201 OF THE IMFL), OR RESIDENTIAL REAL ESTATE (AS DEFINED
IN SECTION 15-1219 OF THE IMFL), AND TO THE FULL EXTENT PERMITTED BY LAW,
VOLUNTARILY AND KNOWINGLY WAIVES BORROWER’S RIGHTS AND THE RIGHTS OF EACH AND
EVERY PERSON ACQUIRING AN INTEREST IN OR TITLE TO THE PROPERTY OF ANY NATURE
WHATSOEVER SUBSEQUENT TO THE DATE OF THIS SECURITY INTEREST TO REINSTATEMENT
AND REDEMPTION AS ALLOWED UNDER SECTION 15-1601(B) OF THE IMFL, AND TO THE FULL
EXTENT PERMITTED BY


 


110

















 


LAW, THE BENEFITS OF ALL PRESENT AND FUTURE
VALUATION, APPRAISEMENT, HOMESTEAD, EXEMPTION, STAY, REDEMPTION AND MORATORIUM
LAWS UNDER ANY STATE OR FEDERAL LAW.


 


(c)           FIXTURE FILING. THIS
INSTRUMENT IS EFFECTIVE AND SHALL BE EFFECTIVE AS A FINANCING STATEMENT FILED
AS A FIXTURE FILING WITH RESPECT TO ALL GOODS WHICH ARE OR ARE TO BECOME
FIXTURES INCLUDED WITHIN THE PROPERTY AND IS TO BE FILED FOR RECORD OR
REGISTERED IN THE REAL ESTATE RECORDS OF THE COUNTY IN WHICH THE PREMISES IS
LOCATED. THE ADDRESS OF LENDER [SECURED PARTY] AND THE MAILING ADDRESS OF
BORROWER [DEBTOR] ARE SET FORTH WITHIN. A PHOTOGRAPHIC OR OTHER REPRODUCTION OF
THIS INSTRUMENT OR ANY FINANCING STATEMENT RELATING TO THIS INSTRUMENT SHALL BE
SUFFICIENT AS A FINANCING STATEMENT.


 


(d)           MAXIMUM AMOUNT
SECURED. Borrower and Lender intend that this Security Instrument shall
secure not only sums advanced as of the date hereof but also all advances
provided for in the Loan Documents; provided however that the maximum amount
secured by this Security Instrument shall in no event exceed $260,000,000.00.


 


(e)           BUSINESS LOAN. Borrower
represents and agrees that the obligations secured hereby constitute a business
loan within the purview of paragraph 1(c) of Section 4 of the Illinois Interest
Act, 815 ILCS 205/1 et seq., as amended, transacted solely for the purpose of
carrying on or acquiring the business of Borrower, and also constitutes a loan
secured by a mortgage which comes within the purview of subparagraph 1(l) of
said Section.


 


(f)            MATURITY DATE. The
maturity date of the Loan is the Payment Date occurring in August, 2011.


 


(g)           MORTGAGEE-IN-POSSESSION.
In addition to any provision of this Security Instrument authorizing Lender to
take or be placed in possession of the Premises, or for the appointment of a
receiver, Lender shall have the right, in accordance with Sections 5/15-1701
and 5/15-1702 of the IMFL, to be placed in possession of the Premises or at its
request to have a receiver appointed, and such receiver, or Lender, if and when
placed in possession, shall have, in addition to any other powers provided in
this Security Instrument, all powers, immunities and duties as provided for in
Sections 2/15-1701 and 5/15-1702 of the IMFL.


 


(h)           INSURANCE. Notwithstanding
the provisions of Article III hereof, if Borrower fails to provide Lender
evidence of the insurance coverages required pursuant to the provisions of this
Security Instrument, Lender may purchase such insurance at Borrower’s expense
to cover Lender’s interest in the Premises. The insurance may, but need not,
protect Borrower’s interest. The coverages that Lender purchases may not pay
any claim that Borrower makes or any claim that is made against Borrower in
connection with the Premises. Borrower may later cancel any insurance purchased
by Lender but only after providing Lender with evidence that Borrower has
obtained such insurance as required pursuant to Article III of this Security
Instrument. If Lender purchased insurance for the Premises, Borrower will be
responsible for the costs of such


 


111

















 


insurance, including, without limitation,
interest and any other charges which Lender may impose in connection with the
placement of the insurance, until the effective date of the cancellation and
the expiration of the insurance. The cost of the insurance may be added to the
Debt. The cost of the insurance may be more than the cost of the insurance
Borrower may be able to obtain on its own.


 


*  
*   *   *   *


 


112

















 


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


 


 


	
  Borrower’s

  	
  BORROWER:

  
	
  Organizational

  	
   

  
	
  Identification
  Number:

  	
  ONE
  FINANCIAL PLACE PROPERTY LLC,

  
	
  4136784

  	
  a Delaware
  limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BCSP IV
  Illinois Manager LLC,

  
	
   

  	
   

  	
  a Delaware
  limited liability company,

  
	
   

  	
   

  	
  its manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  BCSP IV U.S.
  Investments, L.P.,

  
	
   

  	
   

  	
   

  	
  a Delaware
  limited partnership,

  
	
   

  	
   

  	
   

  	
  its sole
  member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  BCSP REIT
  IV, Inc.,

  
	
   

  	
   

  	
   

  	
   

  	
  a Maryland
  corporation,

  
	
   

  	
   

  	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name: Nancy
  J. Broderick

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:
  Managing Director

  



 
















 


ACKNOWLEDGEMENT


 


	
  COMMONWEALTH
  OF MASSACHUSETTS

  	
  )

  
	
   

  	
  )
  ss

  
	
  COUNTY
  OF SUFFOLK

  	
  )

  



 


Then
personally appeared before me, on the    day of         ,
2006, the above named Nancy J. Broderick, the Managing Director of BCSP REIT
IV, Inc., the general partner of BCSP IV U.S. Investments, L.P., the sole
member of BCSP IV Illinois Manager LLC, the manager of One Financial Place
Property LLC, personally known to me to be (or who provided to me a
Massachusetts driver’s license evidencing that she is) the person whose name is
signed on the preceding document, and acknowledged the foregoing instrument to
be her free act and deed in her capacity as aforesaid and the free act and deed
of each of said entities.


 


 


	
   

  	
   

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
  My
  Commission Expires:

  



 

















 


EXHIBIT A


 


Legal Description of Premises


 

















 


Legal Description:


 


PARCEL 1:


 


THAT PART OF
PETER TEMPLE’S SUBDIVISION OF BLOCK 99, AND THAT PART OF THE SUBDIVISION OF
BLOCK 114 (TAKEN AS A TRACT, INCLUDING VACATED ALLEYS) ALL IN THE SCHOOL
SECTION ADDITION TO CHICAGO, IN THE NORTHEAST 1/4 OF SECTION 16, TOWNSHIP 39
NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN DESCRIBED AS FOLLOWS:


 


COMMENCING AT
THE NORTHEAST CORNER OF LOT 3 IN THE AFORESAID SUBDIVISION OF BLOCK 114; THENCE
SOUTH 0 DEGREES 00 MINUTES 23 SECONDS EAST (ALONG THE EAST LINE OF LOTS 3, 4,
9, 10 AND 15 IN SAID SUBDIVISION OF BLOCK 114) A DISTANCE OF 232.32 FEET TO THE
POINT OF BEGINNING OF THE TRACT HEREIN DESCRIBED; THENCE SOUTH 0 DEGREES 00
MINUTES 23 SECONDS EAST (ALONG THE EAST LINE OF LOTS 15, 16, 21 AND 22 IN SAID
SUBDIVISION OF BLOCK 114) A DISTANCE OF 133.22 FEET TO A POINT ON THE EAST LINE
OF LOT 22 WHICH IS 31.98 FEET NORTHERLY OF THE SOUTHEAST CORNER OF SAID LOT;
THENCE SOUTH 89 DEGREES 55 MINUTES 58 SECONDS WEST, A DISTANCE OF 215.15 FEET
TO A POINT ON THE WEST LINE OF LOT 24 IN PETER TEMPLE’S SUBDIVISION OF BLOCK 99
WHICH IS 31.18 FEET NORTHERLY OF THE SOUTHEAST CORNER OF SAID LOT; THENCE NORTH
0 DEGREES 01 MINUTES 21 SECONDS WEST (ALONG THE WEST LINE OF LOTS 24, 19, 18
AND 13 IN THE AFORESAID PETER TEMPLE’S SUBDIVISION OF BLOCK 99) A DISTANCE OF
134.17 FEET TO A POINT ON THE WEST LINE OF LOT 13 WHICH IS 232.32 FEET
SOUTHERLY OF THE NORTHWEST CORNER OF LOT 1 IN THE AFORESAID PETER TEMPLE’S
SUBDIVISION; THENCE SOUTH 89 DEGREES 48 MINUTES 43 SECONDS EAST (ALONG A LINE
DRAWN PARALLEL WITH THE NORTH LINE OF LOT 3 IN SAID SUBDIVISION OF BLOCK 114
AND ALSO PARALLEL WITH THE NORTH LINE OF LOT 1 IN THE AFORESAID PETER TEMPLE’S
SUBDIVISION OF BLOCK 99) A DISTANCE OF 215.19 FEET TO THE HEREINABOVE DESCRIBED
POINT OF BEGINNING, IN COOK COUNTY, ILLINOIS.


 


PARCEL 2:


 


THAT PART OF
PETER TEMPLE’S SUBDIVISION OF BLOCK 99, THAT PART OF THE SUBDIVISION OF BLOCK
114, AND THAT PART OF GEORGE MERRILL’S SUBDIVISION OF BLOCK 100, AND THAT PART
OF T. G. WRIGHT’S SUBDIVISION OF BLOCK 113 (TAKEN AS A TRACT, INCLUDING VACATED
ALLEYS) ALL IN THE SCHOOL SECTION ADDITION TO CHICAGO, IN THE NORTHEAST 1/4 OF
SECTION 16, TOWNSHIP 39 NORTH, RANGE 14 EAST OF


 

















 


THE THIRD
PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:


 


BEGINNING AT A
POINT ON THE EAST LINE OF LOT 22 IN THE SUBDIVISION OF BLOCK 114 WHICH IS 31.98
FEET NORTHERLY OF THE SOUTHEAST CORNER THEREOF; THENCE SOUTH 0 DEGREES 00
MINUTES 23 SECONDS EAST, 31.98 FEET TO THE SOUTHEAST CORNER OF SAID LOT 22;
THENCE SOUTH 89 DEGREES 51 MINUTES 16 SECONDS EAST, ALONG THE NORTH LINE OF LOT
1 IN T. G. WRIGHTS SUBDIVISION OF BLOCK 113, A DISTANCE OF 0.14 FEET TO THE
NORTHEAST CORNER OF SAID LOT; THENCE SOUTH 0 DEGREES 05 MINUTES 33 SECONDS
WEST, ALONG THE EAST LINE OF LOTS 1 AND 6 IN THE AFORESAID T. G. WRIGHT’S
SUBDIVISION OF BLOCK 113, A DISTANCE OF 94.83 FEET; THENCE SOUTH 89 DEGREES 55
MINUTES 40 SECONDS WEST, A DISTANCE OF 210.30 FEET TO A POINT ON THE WEST LINE
OF LOT 23 IN GEORGE MERRILL’S SUBDIVISION OF BLOCK 100 WHICH IS 95.63 SOUTHERLY
OF THE NORTHWEST CORNER OF LOT 24 IN SAID SUBDIVISION; THENCE NORTH 0 DEGREES
02 MINUTES 20 SECONDS WEST, ALONG THE WEST LINES OF THE AFORESAID LOTS 23 AND
24, A DISTANCE OF 95.63 FEET TO THE NORTHWEST CORNER OF SAID LOT 24 IN GEORGE
MERRILL’S SUBDIVISION OF BLOCK 100; THENCE NORTH 89 DEGREES 51 MINUTES 16
SECONDS WEST, ALONG THE SOUTH LINE OF LOT 24 IN PETER TEMPLE’S SUBDIVISION OF
BLOCK 99, A DISTANCE OF 4.77 FEET TO THE SOUTHWEST CORNER OF SAID LOT; THENCE
NORTH 0 DEGREES 01 MINUTES 21 SECONDS WEST, ALONG THE WEST LINE OF THE
AFORESAID LOT 24, A DISTANCE OF 31.18 FEET; THENCE NORTH 89 DEGREES 55 MINUTES
58 SECONDS EAST, A DISTANCE OF 215.15 FEET TO THE HEREINABOVE DESCRIBED POINT
OF BEGINNING, IN COOK COUNTY, ILLINOIS.


 


PARCEL 3:
 PARCEL 3 IS LISTED HERE IN SCHEDULE A FOR REFERENCE PURPOSES ONLY AND IS
NOT PART OF THE LAND INSURED HEREIN.


 


THAT PART OF
PETER TEMPLE’S SUBDIVISION OF BLOCK 99, AND THAT PART OF THE SUBDIVISION OF
BLOCK 114 (TAKEN AS A TRACT, INCLUDING VACATED ALLEYS) ALL IN THE SCHOOL SECTION
ADDITION TO CHICAGO, IN THE NORTHEAST 1/4 OF SECTION 16, TOWNSHIP 39 NORTH,
RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:


 


BEGINNING AT
THE NORTHEAST CORNER OF LOT 3 IN THE AFORESAID SUBDIVISION OF BLOCK 114; THENCE
SOUTH 0 DEGREES 00 MINUTES 23 SECONDS EAST (ALONG THE EAST LINE OF LOTS 3, 4,
9, 10 AND 15 IN SAID SUBDIVISION OF BLOCK 114) A DISTANCE OF 232.32 FEET;
THENCE NORTH 89 DEGREES 48 MINUTES 43 SECONDS WEST (ALONG A LINE DRAWN PARALLEL
WITH THE NORTH LINE OF LOT 3 IN SAID SUBDIVISION OF BLOCK 114 AND


 

















 


ALSO PARALLEL
WITH THE NORTH LINE OF LOT 1 THE AFORESAID PETER TEMPLE’S SUBDIVISION OF BLOCK
99) A DISTANCE OF 215.19 FEET TO THE WEST LINE OF LOT 13 IN SAID PETER TEMPLE’S
SUBDIVISION; THENCE NORTH 0 DEGREES 01 MINUTES 21 SECONDS WEST (ALONG THE WEST
LINE OF LOTS 13, 12, 7, 6 AND 1 IN THE AFORESAID PETER TEMPLE’S SUBDIVISION OF
BLOCK 99) A DISTANCE OF 232.32 FEET TO THE NORTHWEST CORNER OF LOT 1; THENCE
SOUTH 89 DEGREES 48 MINUTES 43 SECONDS EAST, 215.25 FEET TO THE HEREINABOVE
DESIGNATED POINT OF BEGINNING, IN COOK COUNTY, ILLINOIS.


 


PARCEL 3A:


 


EASEMENTS FOR
THE BENEFIT OF PARCEL 1, AFORESAID, AS SHOWN ON THE SURVEY OF LAND PREPARED BY
JOSEPH A. LIMA, REGISTERED PROFESSIONAL SURVEYOR FOR THE STATE OF ILLINOIS,
LICENSE NUMBER 3080, OF NATIONAL SURVEY SERVICE, INC. (SURVEYOR), SURVEY NUMBER
N-123180, LAST UPDATED ON MARCH 16, 2000, AS SET FORTH IN PARAGRAPH 1 B OF THE
GRANT OF EASEMENTS EXECUTED BY THE PENN CENTRAL CORPORATION, ET AL, DATED APRIL
3, 1981 AND RECORDED AS DOCUMENT NO. 26017406, AND AS AMENDED BY DOCUMENT
26382162 FOR THE PURPOSE OF PEDESTRIAN INGRESS AND EGRESS ON, OVER AND THROUGH
AN ENCLOSED CORRIDOR, AT LEAST 20 FEET WIDE, ALONG THE GEOGRAPHIC CENTER (PLUS
OR MINUS 5 FEET) ON A STRAIGHT LINE FROM THE NORTH BOUNDARY LINE TO THE SOUTH
BOUNDARY LINE OF THE FOLLOWING DESCRIBED REAL ESTATE LOCATED NORTH OF AND
ADJOINING THE LAND, SAID CORRIDOR TO BE IN THE “CHICAGO BOARD OF OPTIONS
EXCHANGE (CBOE) BUILDING” AND ANY IMPROVEMENTS CONSTRUCTED ON SAID ADJOINING
LAND FROM TIME TO TIME:


 


THAT PART OF
PETER TEMPLE’S SUBDIVISION OF BLOCK 99, AND THAT PART OF THE SUBDIVISION OF
BLOCK 114 (TAKEN AS A TRACT, INCLUDING VACATED ALLEYS) ALL IN THE SCHOOL
SECTION ADDITION TO CHICAGO, IN THE NORTHEAST 1/4 OF SECTION 16, TOWNSHIP 39 NORTH,
RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:


 


BEGINNING AT
THE NORTHEAST CORNER OF LOT 3 IN THE AFORESAID SUBDIVISION OF BLOCK 114; THENCE
SOUTH 0 DEGREES 00 MINUTES 23 SECONDS EAST (ALONG THE EAST LINE OF LOTS 3, 4,
9, 10 AND 15 IN SAID SUBDIVISION OF BLOCK 114) A DISTANCE OF 232.32 FEET;
THENCE NORTH 89 DEGREES 48 MINUTES 43 SECONDS WEST (ALONG A LINE DRAWN PARALLEL
WITH THE NORTH LINE OF LOT 3 IN SAID SUBDIVISION OF BLOCK 114 AND ALSO PARALLEL
WITH THE NORTH LINE OF LOT 1 IN THE AFORESAID PETER


 

















 


TEMPLE’S
SUBDIVISION OF BLOCK 99) A DISTANCE OF 215.19 FEET TO THE WEST LINE OF LOT 13
IN SAID PETER TEMPLE’S SUBDIVISION; THENCE NORTH 0 DEGREES 01 MINUTES 21
SECONDS WEST (ALONG THE WEST LINE OF LOTS 13, 12, 7, 6 AND 1 IN THE AFORESAID
PETER TEMPLE’S SUBDIVISION OF BLOCK 99) A DISTANCE OF 232.32 FEET TO THE
NORTHWEST CORNER OF LOT 1; THENCE SOUTH 89 DEGREES 48 MINUTES 43 SECONDS EAST,
215.25 FEET TO THE HEREINABOVE DESIGNATED POINT OF BEGINNING, IN COOK COUNTY,
ILLINOIS.


 


PARCEL 3B:


 


EASEMENT FOR
THE BENEFIT OF PARCEL 1, AFORESAID, AS SHOWN ON THE SURVEY OF LAND PREPARED BY
SURVEYOR, SURVEY NUMBER N-123180, LAST UPDATED ON MARCH 16, 2000 AS SET FORTH
IN THE RECIPROCAL UNDERGROUND CAISSON EASEMENT AGREEMENT RECORDED JULY 15, 1982
AS DOCUMENT 26290689 BETWEEN AMERICAN NATIONAL BANK AND TRUST COMPANY OF
CHICAGO AS TRUSTEE UNDER TRUST AGREEMENT DATED FEBRUARY 26, 1982 KNOWN AS TRUST
NUMBER 54793 AND EXCHANGE NATIONAL BANK OF CHICAGO AS TRUSTEE UNDER TRUST
AGREEMENT DATED APRIL 20, 1982 KNOWN AS TRUST NUMBER 39787 GRANTING THE RIGHT,
AUTHORITY AND EASEMENT TO CONSTRUCT AND MAINTAIN, IN CONNECTION WITH THE
CONSTRUCTION OF THE BUILDING LOCATED ON PARCEL 1, UNDERGROUND CAISSONS WHICH
ENCROACH UPON A PORTION OF THE UNDERGROUND WHICH UNDERLIES PARCEL 3, NOT TO
EXTEND NORTH OF A LINE WHICH LIES THREE FEET NORTH OF AND PARALLEL TO THE SOUTH
BOUNDARY OF PARCEL 3 NOR BE CONSTRUCTED ABOVE A HORIZONTAL PLANE WHOSE
UNDERGROUND DEPTH LEVEL IS THE LOWER OF THIRTY FIVE FEET BELOW CHICAGO CITY
DATUM, OR TEN FEET BELOW THE BOTTOM OF ANY PORTION OF THE FOUNDATION OF THE
CBOE BUILDING WHICH LIES ON PARCEL 3 AT OR SOUTH OF A LINE LYING THREE FEET
NORTH OF AND PARALLEL TO THE SOUTH BOUNDARY OF PARCEL 3, FALLING WITHIN THE
FOLLOWING DESCRIBED REAL ESTATE:


 


THAT PART OF
PETER TEMPLE’S SUBDIVISION OF BLOCK 99, AND THAT PART OF THE SUBDIVISION OF
BLOCK 114 (TAKEN AS A TRACT, INCLUDING VACATED ALLEYS) ALL IN THE SCHOOL
SECTION ADDITION TO CHICAGO, IN THE NORTHEAST 1/4 OF SECTION 16, TOWNSHIP 39
NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:


 


BEGINNING AT
THE NORTHEAST CORNER OF LOT 3 IN THE AFORESAID SUBDIVISION OF BLOCK 114; THENCE
SOUTH 0 DEGREES 00 MINUTES 23 SECONDS EAST (ALONG THE EAST LINE OF LOTS 3, 4,
9, 10 AND 15 IN SAID SUBDIVISION OF BLOCK 114) A DISTANCE OF 232.32 FEET;
THENCE NORTH 89


 

















 


DEGREES 48
MINUTES 43 SECONDS WEST (ALONG A LINE DRAWN PARALLEL WITH THE NORTH LINE OF LOT
3 IN SAID SUBDIVISION OF BLOCK 114 AND ALSO PARALLEL WITH THE NORTH LINE OF LOT
1 IN THE AFORESAID PETER TEMPLE’S SUBDIVISION OF BLOCK 99) A DISTANCE OF 215.19
FEET TO THE WEST LINE OF LOT 13 IN SAID PETER TEMPLE’S SUBDIVISION; THENCE
NORTH 0 DEGREES 01 MINUTES 21 SECONDS WEST (ALONG THE WEST LINE OF LOTS 13, 12,
7, 6 AND 1 IN THE AFORESAID PETER TEMPLE’S SUBDIVISION OF BLOCK 99) A DISTANCE
OF 232.32 FEET TO THE NORTHWEST CORNER OF LOT 1; THENCE SOUTH 89 DEGREES 48
MINUTES 43 SECONDS EAST, 215.25 FEET TO THE HEREINABOVE DESIGNATED POINT OF
BEGINNING, IN COOK COUNTY, ILLINOIS.


 


PARCEL 3C:


 


OPTIONS FOR
EASEMENTS FOR THE BENEFIT OF PARCEL 2, AFORESAID, AS SHOWN ON THE SURVEY OF
LAND PREPARED BY SURVEYOR, SURVEY NUMBER N-123180, LAST UPDATED ON MARCH 16,
2000, AS SET FORTH IN GRANT OF EASEMENTS, OPTIONS FOR EASEMENTS, OPTION TO
LEASE AND DECLARATION OF COVENANTS AND RESTRICTIONS CONTAINED IN INSTRUMENT
RECORDED APRIL 1, 1981 AS DOCUMENT 25824625 AND FIRST AMENDMENT RECORDED AS
DOCUMENT 26363994 MADE BY AND BETWEEN THE PENN CENTRAL CORPORATION, WILLIAM M.
GIBBONS, TRUSTEE OF THE PROPERTY OF CHICAGO, ROCK ISLAND AND PACIFIC RAILROAD
COMPANY AND THE REGIONAL TRANSPORTATION AUTHORITY FOR:


 


(A) AN
INTERIOR PEDESTRIAN EASEMENT ON, OVER AND THROUGH A STRIP OF PROPERTY TWENTY
FEET WIDE, ALONG THE GEOGRAPHIC CENTER OF PARCEL 3 (PLUS OR MINUS FIVE FEET OF
THE GEOGRAPHIC CENTER THEREOF) ON A STRAIGHT LINE FROM THE NORTH BOUNDARY OF
PARCEL 3 TO THE SOUTHERN BOUNDARY OF PARCEL 3 AND;


 


(B) A STREET
GRADE PEDESTRIAN EXTERIOR EASEMENT ALONG THE EAST OR WEST LINES OF PARCEL 3,
FALLING WITHIN THE FOLLOWING DESCRIBED REAL ESTATE:


 


THAT PART OF
PETER TEMPLE’S SUBDIVISION OF BLOCK 99, AND THAT PART OF THE SUBDIVISION OF
BLOCK 114 (TAKEN AS A TRACT, INCLUDING VACATED ALLEYS) ALL IN THE SCHOOL
SECTION ADDITION TO CHICAGO, IN THE NORTHEAST 1/4 OF SECTION 16, TOWNSHIP 39
NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:


 


BEGINNING AT
THE NORTHEAST CORNER OF LOT 3 IN THE AFORESAID SUBDIVISION OF BLOCK 114; THENCE
SOUTH 0 DEGREES 00 MINUTES 23 SECONDS EAST (ALONG THE EAST LINE OF LOTS 3, 4,
9, 10 AND 15 IN SAID


 

















 


SUBDIVISION OF
BLOCK 114) A DISTANCE OF 232.32 FEET; THENCE NORTH 89 DEGREES 48 MINUTES 43
SECONDS WEST (ALONG A LINE DRAWN PARALLEL WITH THE NORTH LINE OF LOT 3 IN SAID
SUBDIVISION OF BLOCK 114 AND ALSO PARALLEL WITH THE NORTH LINE OF LOT 1 IN THE
AFORESAID PETER TEMPLE’S SUBDIVISION OF BLOCK 99) A DISTANCE OF 215.19 FEET TO
THE WEST LINE OF LOT 13 IN SAID PETER TEMPLE’S SUBDIVISION; THENCE NORTH 0
DEGREES 01 MINUTES 21 SECONDS WEST (ALONG THE WEST LINE OF LOTS 13, 12, 7, 6
AND 1 IN THE AFORESAID PETER TEMPLE’S SUBDIVISION OF BLOCK 99) A DISTANCE OF
232.32 FEET TO THE NORTHWEST CORNER OF LOT 1; THENCE SOUTH 89 DEGREES 48
MINUTES 43 SECONDS EAST, 215.25 FEET TO THE HEREINABOVE DESIGNATED POINT OF
BEGINNING, IN COOK COUNTY, ILLINOIS.


 


PARCEL 4:


 


EASEMENTS FOR THE
BENEFIT OF PARCELS 1 AND 2, AFORESAID, AS SHOWN ON THE SURVEY OF LAND PREPARED
BY SURVEYOR, SURVEY NUMBER N-123180, LAST UPDATED ON MARCH 16, 2000 AS SET
FORTH IN PARAGRAPH 1(B) (III) OF THE DECLARATION OF COVENANTS, CONDITIONS AND
RESTRICTIONS FOR THE ESTABLISHMENT OF EXCHANGE CENTER PLAZA AND GRANT OF
EASEMENT FOR UNDERGROUND PARKING GARAGE EXECUTED BY THE CITY OF CHICAGO, ET AL,
DATED APRIL 11, 1983 RECORDED APRIL 14, 1983 AS DOCUMENT 26569966, AS
SUPPLEMENTED BY SUPPLEMENT DATED AUGUST 2, 1984 RECORDED AUGUST 7, 1984 AS
DOCUMENT 27204188 FOR THE PURPOSE OF THE CONSTRUCTION, OPERATION AND
MAINTENANCE OF AN UNDERGROUND PARKING GARAGE, ACCESS RAMPS AND UTILITY LINES ON
THE FOLLOWING DESCRIBED PARCEL:


 


THAT PART OF
BLOCK 99 IN SCHOOL SECTION ADDITION TO CHICAGO IN THE NORTHEAST 1/4 OF SECTION
16, TOWNSHIP 39 NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, BEING A
TRACT LYING BELOW PLUS 22.0 FEET, CHICAGO CITY DATUM, SAID TRACT BEING
DESCRIBED AS FOLLOWS:


 


BEGINNING AT
THE NORTHWEST CORNER OF LOT 1 IN PETER TEMPLE’S SUBDIVISION OF THE AFORESAID
BLOCK 99; THENCE NORTH 89 DEGREES 48 MINUTES 43 SECONDS WEST, 40.00 FEET TO THE
NORTHEAST CORNER OF LOT 1 IN COLE’S SUBDIVISION OF PART OF SAID BLOCK 99;
THENCE CONTINUING NORTH 89 DEGREES 48 MINUTES 43 SECONDS WEST, 85.83 FEET ALONG
THE NORTH LINE OF SAID LOT 1 IN COLE’S SUBDIVISION AND ALONG THE NORTH LINE OF
LOTS 1 AND 2 IN THE ASSESSOR’S DIVISION OF PART OF SAID BLOCK 99 AND ALONG THE
NORTH LINE OF MICAJAH GLASCOCK’S SUBDIVISION OF PART OF SAID BLOCK 99 TO A
POINT; THENCE SOUTH 0


 

















 


DEGREES 02
MINUTES 07 SECONDS EAST, 367.05 FEET TO THE POINT OF INTERSECTION WITH THE
WESTERLY EXTENSION OF A LINE DRAWN FROM A POINT ON THE EAST LINE OF LOT 22, IN
THE SUBDIVISION OF BLOCK 114 IN THE AFORESAID SCHOOL SECTION ADDITION TO
CHICAGO, SAID POINT BEING 31.98 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT
22 TO A POINT ON THE WEST LINE OF LOT 24, IN THE AFORESAID PETER TEMPLE’S
SUBDIVISION, SAID POINT BEING 31.18 FEET NORTH OF THE SOUTHWEST CORNER OF SAID
LOT 24; THENCE NORTH 89 DEGREES 55 MINUTES 58 SECONDS EAST ALONG SAID WESTERLY
EXTENSION, 125.75 FEET TO THE WEST LINE OF SAID LOT 24; THENCE NORTH 0 DEGREES
01 MINUTES 21 SECONDS WEST, 366.49 FEET ALONG THE WEST LINE OF LOTS 24, 19, 18,
13, 12, 7, 6 AND 1 IN SAID PETER TEMPLE’S SUBDIVISION TO THE HEREINABOVE
DESCRIBED POINT OF BEGINNING, IN COOK COUNTY, ILLINOIS.


 


PARCEL 5:


 


LOTS 1, 2 AND
3 IN COLE’S SUBDIVISION OF PART OF BLOCK 99 AND THAT PART OF LOTS 1 AND 2 IN
ASSESSOR’S DIVISION OF PART OF BLOCK 99 LYING NORTH OF A STRAIGHT LINE DRAWN
FROM THE NORTHWEST CORNER OF LOT 4 IN COLE’S SUBDIVISION AS AFORESAID TO A
POINT IN THE WEST LINE OF SAID LOT 2 IN SAID ASSESSOR’S DIVISION WHICH POINT IS
125.53 FEET SOUTH OF THE NORTHWEST CORNER OF SAID LOT 2 ALL IN BLOCK 99 IN
SCHOOL SECTION ADDITION TO CHICAGO IN THE NORTHEAST 1/4 OF SECTION 16, TOWNSHIP
39 NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, IN COOK COUNTY,
ILLINOIS.


 


PIN#:
17-16-241-025

PIN#: 17-16-241-049

PIN#: 17-16-242-018

PIN#: 17-16-242-019

PIN#: 17-16-242-020

PIN#: 17-16-242-022

PIN#: 17-16-242-023

PIN#: 17-16-242-024


 


440 South
LaSalle Street, Chicago, IL


 

















 


EXHIBIT B


 


SUMMARY OF RESERVES


 


	
  Reserve Items

  	
   

  	
  Initial Deposit Amount

  	
   

  	
  Monthly Installment

  Amount

  	
   

  
	
  Basic Carrying Costs

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •  Taxes

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  TBD

  	
   

  
	
  •  Insurance Premiums

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  TBD

  	
   

  
	
  Initial Engineering Deposits

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •  Immediate Repairs

  	
   

  	
  $

  	
  0

  	
   

  	
  Not Applicable

  	
   

  
	
  •  Environmental Remediation

  	
   

  	
  $

  	
  0

  	
   

  	
   

  	
   

  
	
  Recurring Replacement Reserve Monthly
  Installment

  	
   

  	
  $

  	
  4,000,000.00

  	
   

  	
  $

  	
  16,988.75

  	
   

  
	
  Reletting Reserve

  	
   

  	
  $

  	
  7,000,000.00

  	
   

  	
  Not Applicable

  	
   

  
	
  Underwritten Rent

  	
   

  	
  $

  	
  2,878,715.00

  	
   

  	
  Not Applicable

  	
   

  
	
  Designated Lease Escrow

  	
   

  	
  $

  	
  1,627,794.00

  	
   

  	
  Not Applicable

  	
   

  



 

















 


EXHIBIT C


 


Intentionally Omitted


 

















 


EXHIBIT D


 


Required Engineering Work


 


None.


 

















 


EXHIBIT E


 


Form of Direction Letter


 


One Financial Place Property LLC


c/o Beacon Capital Partners, LLC


One Federal Street, 26th Floor


Boston, Massachusetts 02110


 


July    , 2006


 


To:                              All Tenants


 


Re:                               Your lease (the “Lease”) at that certain property located at
One Financial Place, Chicago, Illinois (the “Property”)


 


Ladies and Gentlemen:


 


This letter shall constitute notice to you that One Financial Place
Property LLC, a Delaware limited liability company and the landlord under your
Lease (“Landlord”) has granted a
security interest in the Lease and all rents, additional rent and all other
monetary obligations to the landlord thereunder (collectively, “Rent”) in favor of its lender, Wachovia
Bank, National Association (“Lender”)
to secure certain of Landlord’s obligations to Lender. Landlord hereby
instructs and authorizes you to disregard any and all previous notices sent to
you in connection with Rent and hereafter to pay all Rent payable pursuant to
the Lease to ONE FINANCIAL PLACE PROPERTY LLC
at the following address:


 


Standard Mail:


One Financial
Place Property LLC


3083 Collections Center Drive


Chicago, IL  60693


 


Overnight Mail:


Bank of
America Lockbox Services


3083 Collections Center Drive


Chicago, IL  60693


 


Or, if you prefer to pay by wire transfer, please direct the wire for
Rent to:


 


Bank of America


ABA # 026-009-593


 

















 


Acct. Name: One Financial Place Property LLC-Rent

Acct. # 00-460-693-0729

Please be sure to reference Tenant’s Name in all wires


 


Landlord
hereby instructs and authorizes you to disregard any and all previous notices
sent to you in connection with all parking charges, if any, payable pursuant to
the Lease (the “Parking Rent”) and
hereafter to pay all Parking Rent to ONE
FINANCIAL PLACE PROPERTY LLC at the following address:


 


Standard Mail:


One Financial
Place Property LLC


3163 Collections Center Drive


Chicago, IL  60693


 


Overnight Mail:


Bank of America Lockbox Services


3163 Collections Center Drive


Chicago, IL  60693


 


Or, if you prefer to pay by wire transfer, please direct the wire for
Parking Rent to:


 


Bank of America


ABA # 026-009-593


Acct. Name: One Financial Place Property LLC-Parking


Acct. # 00-460-693-0732


Please be sure to reference Tenant’s Name in all wires


 


Please take particular care in making your checks payable to One
Financial Place Property LLC because only checks made payable to One Financial
Place Property LLC will be credited against sums due by you to Landlord. Until
otherwise advised in writing by Landlord and Lender (or its successor), you
should continue to make your payments for rent and other sums as directed by
the terms of this letter.


 


[Remainder of page intentionally left blank]


 


ii

















 


Thank you in advance for your cooperation.


 


	
   

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LANDLORD:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ONE FINANCIAL
  PLACE PROPERTY LLC,

  	
   

  
	
   

  	
  a Delaware
  limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  BCSP IV
  Illinois Manager LLC,

  
	
   

  	
   

  	
  a Delaware
  limited liability company,

  
	
   

  	
   

  	
  its manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  BCSP IV U.S.
  Investments, L.P.,

  	
   

  
	
   

  	
   

  	
   

  	
  a Delaware
  limited partnership,

  	
   

  
	
   

  	
   

  	
   

  	
  its sole member

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  BCSP REIT
  IV, Inc.,

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  a Maryland
  corporation,

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  its general
  partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name: Nancy
  J. Broderick

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:
  Managing Director

  	
   

  
								



 


iii

















 


EXHIBIT F


 


Underwritten Rent


 


	
  Month

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  August, 2006

  	
   

  	
  $

  	
  359,839.37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September, 2006

  	
   

  	
  $

  	
  359,839.37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October, 2006

  	
   

  	
  $

  	
  359,839.37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November, 2006

  	
   

  	
  $

  	
  359,839.37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December, 2006

  	
   

  	
  $

  	
  359,839.37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January, 2007

  	
   

  	
  $

  	
  359,839.37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  February, 2007

  	
   

  	
  $

  	
  359,839.37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March, 2007

  	
   

  	
  $

  	
  359,839.37

  	
   

  



 
















 


EXHIBIT G


 


Designated Leases


 


	
  Tenant

  	
   

  	
  Document

  	
   

  	
  Date

  	
   

  
	
  1.

  	
   

  	
  Merrill
  Lynch, Pierce, Fenner and Smith, Inc.

  	
   

  	
  7th
  Amendment to Lease

  	
   

  	
  3/31/2006

  	
   

  
	
   

  	
   

  	
  Merrill Lynch, Pierce, Fenner and Smith,
  Inc.

  	
   

  	
  6th
  Amendment to Lease

  	
   

  	
  12/1/2004

  	
   

  
	
   

  	
   

  	
  Merrill Lynch, Pierce, Fenner and Smith,
  Inc.

  	
   

  	
  5th
  Amendment to Lease

  	
   

  	
  1/16/2004

  	
   

  
	
   

  	
   

  	
  Merrill Lynch, Pierce, Fenner and Smith,
  Inc.

  	
   

  	
  4th
  Amendment to Lease

  	
   

  	
  12/24/1998

  	
   

  
	
   

  	
   

  	
  Merrill Lynch, Pierce, Fenner and Smith,
  Inc.

  	
   

  	
  3rd
  Amendment to Lease

  	
   

  	
  1/19/1995

  	
   

  
	
   

  	
   

  	
  Merrill Lynch, Pierce, Fenner and Smith,
  Inc.

  	
   

  	
  2nd
  Amendment to Lease

  	
   

  	
  12/1/1989

  	
   

  
	
   

  	
   

  	
  Merrill Lynch, Pierce, Fenner and Smith,
  Inc.

  	
   

  	
  1st
  Amendment to Lease

  	
   

  	
  4/15/1986

  	
   

  
	
   

  	
   

  	
  Merrill Lynch, Pierce, Fenner and Smith,
  Inc.

  	
   

  	
  Lease

  	
   

  	
  12/30/1983

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Bullwinkle
  & Associates

  	
   

  	
  2nd
  Amendment to Lease

  	
   

  	
  8/31/2004

  	
   

  
	
   

  	
   

  	
  Bullwinkle & Associates

  	
   

  	
  1st
  Amendment to Lease

  	
   

  	
  8/31/1999

  	
   

  
	
   

  	
   

  	
  Bullwinkle & Associates

  	
   

  	
  Lease

  	
   

  	
  5/1/1996

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Essex Radez,
  L.L.C.

  	
   

  	
  Storage
  Space Lease

  	
   

  	
  5/1/2006

  	
   

  
	
   

  	
   

  	
  Essex Radez,
  L.L.C.

  	
   

  	
  Lease

  	
   

  	
  12/01/2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  G Bar L.P.

  	
   

  	
  Lease

  	
   

  	
  9/15/2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Group One
  Trading, L.P.

  	
   

  	
  1st
  Amendment to Lease

  	
   

  	
  12/27/2004

  	
   

  
	
   

  	
   

  	
  Group One Trading, L.P.

  	
   

  	
  Lease

  	
   

  	
  2/22/2000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Kforce, Inc.
  (f/k/a Hall, Kinion & Associates, Inc.)

  	
   

  	
  1st
  Amendment to Lease

  	
   

  	
  11/29/2001

  	
   

  
	
   

  	
   

  	
  Kforce, Inc. (f/k/a Hall, Kinion &
  Associates, Inc.)

  	
   

  	
  Lease

  	
   

  	
  7/31/1997

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Midwest
  Generation EME, LLC.

  	
   

  	
  2nd
  Amendment to Lease

  	
   

  	
  6/1/2004

  	
   

  



 

















 


	
   

  	
   

  	
  Midwest Generation EME, LLC.

  	
   

  	
  Antenna
  License Agreement

  	
   

  	
  4/1/2003

  	
   

  
	
   

  	
   

  	
  Midwest Generation EME, LLC.

  	
   

  	
  1st
  Amendment to Lease

  	
   

  	
  12/12/2001

  	
   

  
	
   

  	
   

  	
  Midwest Generation EME, LLC.

  	
   

  	
  Lease

  	
   

  	
  8/18/1999

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Spot
  Trading, LLC.

  	
   

  	
  Amended and
  Restated Lease

  	
   

  	
  1/31/2006

  	
   

  
	
   

  	
   

  	
  Spot Trading, LLC.

  	
   

  	
  Lease

  	
   

  	
  9/15/2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Sunset
  Securities, LLC.

  	
   

  	
  Lease

  	
   

  	
  2/10/2006

  	
   

  



 


ii

















 


INDEX


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I:
  DEFINITIONS

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 1.01. Certain Definitions

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE II:
  REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 2.01. Payment of Debt

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 2.02. Representations, Warranties and Covenants of
  Borrower

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 2.03. Further Acts, etc

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 2.04. Recording of Security Instrument, etc

  	
   

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 2.05. Representations, Warranties and Covenants Relating
  to the Property

  	
   

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 2.06. Removal of Lien

  	
   

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 2.07. Cost of Defending and Upholding this Security
  Instrument Lien

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 2.08. Use of the Property

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 2.09. Financial Reports

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 2.10. Litigation

  	
   

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 2.11. Updates of Representations

  	
   

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE III:
  INSURANCE AND CASUALTY RESTORATION

  	
   

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 3.01. Insurance Coverage

  	
   

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 3.02. Policy Terms

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
  Section 3.03. Assignment of Policies

  	
   

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 3.04. Casualty Restoration

  	
   

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section 3.05. Compliance with Insurance Requirements

  	
   

  	
  57

  
	
   

  	
   

  	
   

  
	
  Section 3.06. Event of Default During Restoration

  	
   

  	
  57

  



 

















 


	
  Section 3.07. Application of Proceeds to Debt Reduction

  	
   

  	
  58

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV:
  IMPOSITIONS

  	
   

  	
  59

  
	
   

  	
   

  	
   

  
	
  Section 4.01. Payment of Impositions, Utilities and Taxes, etc

  	
   

  	
  59

  
	
   

  	
   

  	
   

  
	
  Section 4.02. Deduction from Value

  	
   

  	
  59

  
	
   

  	
   

  	
   

  
	
  Section 4.03. No Joint Assessment

  	
   

  	
  60

  
	
   

  	
   

  	
   

  
	
  Section 4.04. Right to Contest

  	
   

  	
  60

  
	
   

  	
   

  	
   

  
	
  Section 4.05. No Credits on Account of the Debt

  	
   

  	
  61

  
	
   

  	
   

  	
   

  
	
  Section 4.06. Documentary Stamps

  	
   

  	
  61

  
	
   

  	
   

  	
   

  
	
  ARTICLE V:
  CENTRAL CASH MANAGEMENT

  	
   

  	
  61

  
	
   

  	
   

  	
   

  
	
  Section 5.01. Cash Flow

  	
   

  	
  61

  
	
   

  	
   

  	
   

  
	
  Section 5.02. Establishment of Accounts

  	
   

  	
  62

  
	
   

  	
   

  	
   

  
	
  Section 5.03. Permitted Investments

  	
   

  	
  62

  
	
   

  	
   

  	
   

  
	
  Section 5.04. Servicing Fees

  	
   

  	
  63

  
	
   

  	
   

  	
   

  
	
  Section 5.05. Monthly Funding of Sub-Accounts and Escrow Accounts

  	
   

  	
  63

  
	
   

  	
   

  	
   

  
	
  Section 5.06. Payment of Basic Carrying Costs

  	
   

  	
  64

  
	
   

  	
   

  	
   

  
	
  Section 5.07. Reletting Reserve Escrow Account

  	
   

  	
  65

  
	
   

  	
   

  	
   

  
	
  Section 5.08. Recurring Replacement Reserve Escrow Account

  	
   

  	
  67

  
	
   

  	
   

  	
   

  
	
  Section 5.09. Intentionally Omitted

  	
   

  	
  67

  
	
   

  	
   

  	
   

  
	
  Section 5.10. Intentionally Omitted

  	
   

  	
  67

  
	
   

  	
   

  	
   

  
	
  Section 5.11. Intentionally Omitted

  	
   

  	
  68

  
	
   

  	
   

  	
   

  
	
  Section 5.12. Performance of Engineering Work

  	
   

  	
  68

  
	
   

  	
   

  	
   

  
	
  Section 5.13. Loss Proceeds

  	
   

  	
  69

  



 


ii

















 


	
  ARTICLE VI:
  CONDEMNATION

  	
   

  	
  71

  
	
   

  	
   

  	
   

  
	
  Section 6.01. Condemnation

  	
   

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII:
  LEASES AND RENTS

  	
   

  	
  73

  
	
   

  	
   

  	
   

  
	
  Section 7.01. Assignment

  	
   

  	
  73

  
	
   

  	
   

  	
   

  
	
  Section 7.02. Management of Property

  	
   

  	
  74

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII:
  MAINTENANCE AND REPAIR

  	
   

  	
  77

  
	
   

  	
   

  	
   

  
	
  Section 8.01. Maintenance and Repair of the Property; Alterations;
  Replacement of Equipment

  	
   

  	
  77

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX:
  TRANSFER OR ENCUMBRANCE OF THE PROPERTY

  	
   

  	
  78

  
	
   

  	
   

  	
   

  
	
  Section 9.01. Other Encumbrances

  	
   

  	
  78

  
	
   

  	
   

  	
   

  
	
  Section 9.02. No Transfer

  	
   

  	
  78

  
	
   

  	
   

  	
   

  
	
  Section 9.03. Due on Sale

  	
   

  	
  79

  
	
   

  	
   

  	
   

  
	
  Section 9.04. Permitted Transfer

  	
   

  	
  79

  
	
   

  	
   

  	
   

  
	
  ARTICLE X:
  CERTIFICATES

  	
   

  	
  81

  
	
   

  	
   

  	
   

  
	
  Section 10.01. Estoppel Certificates

  	
   

  	
  81

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI:
  NOTICES

  	
   

  	
  81

  
	
   

  	
   

  	
   

  
	
  Section 11.01. Notices

  	
   

  	
  81

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII:
  INDEMNIFICATION

  	
   

  	
  82

  
	
   

  	
   

  	
   

  
	
  Section 12.01. Indemnification Covering Property

  	
   

  	
  82

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII:
  DEFAULTS

  	
   

  	
  84

  
	
   

  	
   

  	
   

  
	
  Section 13.01. Events of Default

  	
   

  	
  84

  



 


iii

















 


	
  Section 13.02. Remedies

  	
   

  	
  86

  
	
   

  	
   

  	
   

  
	
  Section 13.03. Payment of Debt After Default

  	
   

  	
  90

  
	
   

  	
   

  	
   

  
	
  Section 13.04. Possession of the Property

  	
   

  	
  91

  
	
   

  	
   

  	
   

  
	
  Section 13.05. Interest After Default

  	
   

  	
  91

  
	
   

  	
   

  	
   

  
	
  Section 13.06. Borrower’s Actions After Default

  	
   

  	
  91

  
	
   

  	
   

  	
   

  
	
  Section 13.07. Control by Lender After Default

  	
   

  	
  91

  
	
   

  	
   

  	
   

  
	
  Section 13.08. Right to Cure Defaults

  	
   

  	
  92

  
	
   

  	
   

  	
   

  
	
  Section 13.09. Late Payment Charge

  	
   

  	
  92

  
	
   

  	
   

  	
   

  
	
  Section 13.10. Recovery of Sums Required to Be Paid

  	
   

  	
  92

  
	
   

  	
   

  	
   

  
	
  Section 13.11. Marshalling and Other Matters

  	
   

  	
  93

  
	
   

  	
   

  	
   

  
	
  Section 13.12. Tax Reduction Proceedings

  	
   

  	
  93

  
	
   

  	
   

  	
   

  
	
  Section 13.13. General Provisions Regarding Remedies.

  	
   

  	
  93

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV:
  COMPLIANCE WITH REQUIREMENTS

  	
   

  	
  93

  
	
   

  	
   

  	
   

  
	
  Section 14.01. Compliance with Legal Requirements

  	
   

  	
  94

  
	
   

  	
   

  	
   

  
	
  Section 14.02. Compliance with Recorded Documents; No Future
  Grants

  	
   

  	
  95

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV:
  PREPAYMENT

  	
   

  	
  95

  
	
   

  	
   

  	
   

  
	
  Section 15.01. Prepayment

  	
   

  	
  95

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI:
  ENVIRONMENTAL COMPLIANCE

  	
   

  	
  95

  
	
   

  	
   

  	
   

  
	
  Section 16.01. Covenants, Representations and Warranties

  	
   

  	
  98

  
	
   

  	
   

  	
   

  
	
  Section 16.02. Environmental Indemnification

  	
   

  	
  99

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVII:
  ASSIGNMENTS

  	
   

  	
  99

  



 


iv

















 


	
  Section 17.01. Participations and Assignments

  	
   

  	
  99

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVIII:
  MISCELLANEOUS

  	
   

  	
  99

  
	
   

  	
   

  	
   

  
	
  Section 18.01. Right of Entry

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.02. Cumulative Rights

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.03. Liability

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.04. Exhibits Incorporated

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.05. Severable Provisions

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.06. Duplicate Originals

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.07. No Oral Change

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.08. Intentionally Omitted.

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.09. Headings; Construction of Documents; etc

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.10. Sole Discretion of Lender

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.11. Waiver of Notice and Jury Trial

  	
   

  	
  101

  
	
   

  	
   

  	
   

  
	
  Section 18.12. Covenants Run with the Land

  	
   

  	
  101

  
	
   

  	
   

  	
   

  
	
  Section 18.13. Applicable Law

  	
   

  	
  101

  
	
   

  	
   

  	
   

  
	
  Section 18.14. Security Agreement

  	
   

  	
  101

  
	
   

  	
   

  	
   

  
	
  Section 18.15. Actions and Proceedings

  	
   

  	
  103

  
	
   

  	
   

  	
   

  
	
  Section 18.16. Usury Laws

  	
   

  	
  103

  
	
   

  	
   

  	
   

  
	
  Section 18.17. Remedies of Borrower

  	
   

  	
  103

  
	
   

  	
   

  	
   

  
	
  Section 18.18. Offsets, Counterclaims and Defenses

  	
   

  	
  103

  
	
   

  	
   

  	
   

  
	
  Section 18.19. No Merger

  	
   

  	
  104

  
	
   

  	
   

  	
   

  
	
  Section 18.20. Restoration of Rights

  	
   

  	
  104

  



 


v

















 


	
  Section 18.21. Waiver of Statute of Limitations

  	
   

  	
  104

  
	
   

  	
   

  	
   

  
	
  Section 18.22. Advances

  	
   

  	
  104

  
	
   

  	
   

  	
   

  
	
  Section 18.23. Application of Default Rate Not a Waiver

  	
   

  	
  104

  
	
   

  	
   

  	
   

  
	
  Section 18.24. Intervening Lien

  	
   

  	
  104

  
	
   

  	
   

  	
   

  
	
  Section 18.25. No Joint Venture or Partnership

  	
   

  	
  105

  
	
   

  	
   

  	
   

  
	
  Section 18.26. Time of the Essence

  	
   

  	
  105

  
	
   

  	
   

  	
   

  
	
  Section 18.27. Borrower’s Obligations Absolute

  	
   

  	
  105

  
	
   

  	
   

  	
   

  
	
  Section 18.28. Publicity

  	
   

  	
  105

  
	
   

  	
   

  	
   

  
	
  Section 18.29. Securitization Opinions

  	
   

  	
  105

  
	
   

  	
   

  	
   

  
	
  Section 18.30. Cooperation with Rating Agencies

  	
   

  	
  106

  
	
   

  	
   

  	
   

  
	
  Section 18.31. Securitization Financials

  	
   

  	
  107

  
	
   

  	
   

  	
   

  
	
  Section 18.32. Exculpation

  	
   

  	
  107

  
	
   

  	
   

  	
   

  
	
  Section 18.33. Component Notes

  	
   

  	
  109

  
	
   

  	
   

  	
   

  
	
  Section 18.34. Certain Matters Relating to Property located in the
  State of Illinois

  	
   

  	
  110

  



 


vi

















 


EXHIBITS


 


	
  EXHIBIT A

  	
   

  	
  Legal Description of Premises

  
	
  EXHIBIT B

  	
   

  	
  Summary Of Reserves

  
	
  EXHIBIT C

  	
   

  	
  Intentionally Omitted

  
	
  EXHIBIT D

  	
   

  	
  Required Engineering Work

  
	
  EXHIBIT E

  	
   

  	
  Form of Direction Letter

  
	
  EXHIBIT F

  	
   

  	
  Underwritten Rent

  
	
  EXHIBIT G

  	
   

  	
  Designated Leases

  



 


 


vii